Agenda Item No. 11
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: December 5, 2022 FROM: Matthew Bronson, City Manager
PREPARED BY: Matthew Bronson, City Manager
SUBJECT: Five Cities Fire Authority Update
RECOMMENDATION
Receive an update on the Five Cities Fire Authority (FCFA) including implementation of the wind down period related to the Oceano Community Services District withdrawal from the FCFA along with a fire services review in conjunction with the City of Arroyo Grande and provide input to staff.
BACKGROUND
On July 25, 2022, the Council received an update from staff about the results of the Oceano Fire Tax Measure A-22 which was on the ballot for Oceano voters in the June 2022 primary election.
This measure would have assessed a parcel tax on Oceano properties to generate an additional $422,000 annually for fire and emergency medical services in Oceano. Measure A-22 failed to gain the required 2/3 majority similar to a previous measure in 2020 which triggered a 12-month “wind down” process defined by the Third Amendment to the Joint Exercise of Powers Agreement (shown in Attachment 1). This process culminates in Oceano’s withdrawal of membership in the Five Cities Fire Authority (FCFA) effective July 1, 2023. Below are the major work program tasks during this wind down period as defined in the Third Amendment:
• Establish distribution of assets of the Joint Powers Authority (JPA) • Establish obligations of the JPA including:
o Lease payments on equipment and apparatus
o Unfunded PERS liabilities for disassociating or withdrawing member agency o Other employment-related liabilities
• Post and determine reconciliation of assets and liabilities with any party owing funds to the other(s) paying such funds to the appropriate agencies other(s) paying such funds to the appropriate agencies
These tasks are currently underway by the FCFA staff in consultation with the FCFA Managers Group comprised of the City/General Managers of the three member agencies (Arroyo Grande, Grover Beach, and Oceano). Fire Chief Lieberman will be at the December 5th meeting and can provide further information on this work done by FCFA which is expected to conclude by early 2023 to inform policy decisions about the organizational structure and service delivery of FCFA beginning on July 1, 2023. The Managers Group will continue to meet regularly during the rest of this fiscal year to oversee the implementation of the wind down process and the expected dates of completion for each work program task. In addition, staff would defer to the Council’s representative on the FCFA Board (Mayor Lee) to provide further information on this process from the Board perspective.
Staff Report: Five Cities Fire Authority Update Page 2
December 5, 2022
In addition to and related to the wind down period, there is a separate process underway between the remaining FCFA member agencies (cities of Grover Beach and Arroyo Grande) at the staff level about the desired level of fire and emergency medical services and funding needs in the respective communities. The discussions are being led by the City Managers of the two cities along with the FCFA Fire Chief and Treasurer and to date have included several work sessions about current and projected FCFA call volume, staffing and equipment needs including a replacement ladder truck, and initial cost estimates. Call volume in Arroyo Grande and Grover Beach has increased by an average of 4.8% annually over the past 10 years. As of November 30, 2022, FCFA call volume is 6.7% over 2021 and initial projections over the next 10 years show a continued average increase of 4.8% annually or a cumulative 60% increase.
However, the FCFA budget has not changed since FY 2019-20 given the Third Amendment which locked in member contributions in June 2020 at the beginning of the COVID-19 pandemic and was also predicated on Oceano’s future tax measure in 2022 which ultimately failed. Though the City had previously increased its funding to transition part-time reserve firefighters to full-time positions, the FCFA budget has become constrained at the same time that both costs and service needs have increased. This is particularly challenging when multiple calls are received in the FCFA service area. Mutual aid from other agencies can assist when available but such resources cannot be relied upon to respond to all calls. In addition, firefighter workload has increased significantly which impacts not only service response but also employee health and retention.
This fire services review is an important initiative for the City to ensure responsive and effective fire and emergency medical services as part of the Public Safety Major City Goal. Though some level of grant funding may be a possibility, there will be a budgetary implication to this work which will inform the Council’s identification of FY 2023-25 Council Goals and the resulting two-year budget. Given the importance of this issue and potential costs involved, the Arroyo Grande and Grover Beach City Managers have jointly engaged an outside consultant (Baker Tilly, formerly Management Partners) to conduct an analysis of fire services for the two cities and provide service and funding recommendations. The Baker Tilly team working on this project has extensive experience in fire services and is led by Rick Haydon, former City Manager in Santa Maria. Mr.
Haydon is familiar with the local area and previously led a review of the City’s police services in 2018 and is currently leading a review of other City services that will be presented to the Council in January. Baker Tilly’s analysis will include the financial impacts of OCSD’s departure from FCFA including their current $1.1 million funding contribution and whether it would be beneficial for FCFA to offer fire service to Oceano under a contractual fee-for-service arrangement.
Baker Tilly’s analysis will be completed in February with the results subsequently shared with the City Councils in Arroyo Grande and Grover Beach along with recommendations from both the consultant and staff. Staff will seek Council’s direction at that time about fire service needs and funding relative to Council Goals and other funding needs for City services. The City’s financial condition will also inform this discussion with the updated five-year financial forecast and midyear budget review presented to Council on February 14, 2023. Pending Council’s direction, staff would work with Arroyo Grande on mutually agreeable fire service levels and related governance and contractual documents to go into effect on July 1, 2023. Staff will continue to share regular updates with the Council prior to the presentation of the fire services analysis in early 2023.
FISCAL IMPACT
There is no fiscal impact to this agenda item. The subsequent presentation of the fire services analysis will identify projected costs of fire services needs.
Staff Report: Five Cities Fire Authority Update Page 3
December 5, 2022
ALTERNATIVES
The Council has the following alternatives to consider:
1. Receive an update on the Five Cities Fire Authority (FCFA) including implementation of the wind down period related to the Oceano Community Services District withdrawal from the FCFA along with a fire services review in conjunction with the City of Arroyo Grande and provide input to staff; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Third Amendment to Joint Exercise of Powers Agreement Attachment 1