Fire Services UpdateApril 24, 2023
GROVERBEACH.ORG
Background
GROVERBEACH.ORG
February 27th Council presentation of Baker Tilly fire services review Review commissioned by Arroyo Grande and Grover Beach given pending withdrawal of Oceano Community Services District (OCSD) from Five Cities Fire Authority (FCFA) Baker Tilly scope included service level analysis, staffing options, fiscal analysis, and review of alternative service models and governance structure Three topics covered tonight in update:
Baker Tilly fire services review final report
Proposed service level and staffing recommendations beginning in FY 2023-24 Draft JPA agreement for an Amended and Restated FCFA
Similar agenda item in Arroyo Grande on April 25 so staff can receive direction from Councils to inform final agreements and budgets
Baker Tilly Report
GROVERBEACH.ORG
Overall Observations
Recent annual financial contributions from participating agencies have not sufficiently financed the total operational costs of the FCFA The need for an ongoing dedicated revenue stream to fully finance the operational and capital costs of the FCFA is paramount Calls for service for the existing service population are consistent with industry standards though public service (non-emergent) calls are relatively high FCFA faces numerous operational challenges resulting in personnel feeling stressed Divestiture or deactivation of OCSD fire service responsibility will not be a simple or quick matter to resolve
Baker Tilly Report
GROVERBEACH.ORG
Recommendations
Baker Tilly Report
GROVERBEACH.ORG
Recommendations
Baker Tilly Report
GROVERBEACH.ORG
Council direction:
Develop updated two-city JPA for fire services between Arroyo Grande and Grover Beach Provide service to Oceano in contractual fee-for-service arrangement on temporary basis Consistent direction provided by Arroyo Grande City Council Baker Tilly provided draft report for review before submitting final report for agency information Generally similar recommendations as shown in February with a few exceptions
Baker Tilly Report
GROVERBEACH.ORG
Changes/Additions in Report
Modifying governing board recommendation to keep with only elected officials Removal of recommendation on working with CAL FIRE on potential service provision given inability to reduce costs and loss of local control Addition of three scenarios under which contract service to Oceano is provided:
Scenario 1: OCSD stays under contract for up to another year with funding capped at total property tax amount Scenario 2: OCSD stays under contract for indefinite term with funding capped at total property tax amount Scenario 3: OCSD stays under contract for indefinite term with additional funding from County Three options for staffing plans (low, medium, high cost) for each scenario Staff believes Scenario 1 is most likely scenario and Staffing Plan A-4 is most cost-effective and responsive plan to provide better service at manageable cost
Service Level and Staffing
GROVERBEACH.ORG
Additional 3.5 FTE positions
1.0 FTE Battalion Chief
2.0 FTE Engineers
0.5 FTE Admin
Provides two 3-person companies and 24-hour 2-person company Third company currently not always available given staffing 2-person company recommended for temporary Oceano coverage 3-person company recommended for long-term contract
Fire prevention work to be done by the two cities to reduce costs
Service Level and Staffing
GROVERBEACH.ORG
Service Level and Staffing
GROVERBEACH.ORG
City’s FY 2023-24 contribution would be $2.77 million or $750,000 increase (lower than Baker Tilly report given fire prevention contract) 37% increase from FY 2022-23 though annually 9% per year since FY 2019-20 Lower increase than originally projected by Baker Tilly primarily due to one-time pension liability funding transfer from Arroyo Grande FCFA would contract with OCSD to provide fire and emergency medical service to Oceano for FY 2023-24 during LAFCO process Recommended terms for Oceano contract:
12-month timeframe
Approximately $1.2 million in cost which is Oceano’s projected property tax revenue Fire and emergency medical services including minimal fire prevention FCFA would provide response from any station not just Station 3 given station deficiencies
Service Level and Staffing
GROVERBEACH.ORG
OCSD is unable to fund further costs and County not in a position to make up difference for service they are not yet responsible for Benefit from OCSD payment to mitigate Member Agency costs next year along with service level benefit Higher payment recommended to be charged for any future Oceano service if County takes over fire responsibility after LAFCO process $1.7 million would be payment amount in FY 2024-25 to more fully cover costs of Oceano service Costs would correspondingly increase if cities eventually increased staffing of third company to three-people
Draft JPA Agreement
GROVERBEACH.ORG
Staff researched other two-city fire services JPAs in California including:
Central Marin Fire Department (Town of Corte Madera and City of Larkspur) Central County Fire Department (Cities of Burlingame and Hillsborough with contract service provided to City of Millbrae) Livermore-Pleasanton Fire Department (Cities of Livermore and Pleasanton) Central Marin and Central County were most relevant given population sizes but useful examples from all three to inform development of draft JPA agreement
Draft JPA Agreement
GROVERBEACH.ORG
Authority governance
Four-member Board of Directors with two Council representatives from each city and Chair and Vice Chair appointed from respective cities Chair and Vice Chair rotate annually
Quarterly meetings focused on general policy oversight of the Authority Potential for deadlocked vote though has not occurred in other agencies and provides further incentive to reach consensus
Draft JPA Agreement
GROVERBEACH.ORG
Executive management
Executive management of authority vested in Management Committee comprised of City Managers for both agencies Management Committee shall hire, terminate, and oversee Fire Chief who is responsible for operational management of Authority One City Manager shall serve as Chief Executive Officer for immediate and time-sensitive items (rotating annual role with Chair) Similar to standard City Manager/Department Head reporting relationship
Draft JPA Agreement
GROVERBEACH.ORG
Other Authority positions
Arroyo Grande Director of Administrative Services serves as Authority Treasurer Secretary and legal counsel would also be appointed by Board and Management Committee Authority employees would remain officially Arroyo Grande employees assigned to Authority Fire stations, other real property, and equipment
Buildings and property used by Authority but remain property of Member Agencies All equipment owned by Member Agencies shall remain property of each agency but Authority can acquire equipment for use by Authority Principal office remains at Station 1 in Arroyo Grande
Fiscal Impact
GROVERBEACH.ORG
FY 2023-24 cost to City of $2.77 million for recommended service level and staffing along with projected FY 2024-25 cost of $2.86 million Approximately $750,000-850,000 higher than City’s current cost of $2 million Proposed FY 2023-25 budget under development absorbs cost in FY 2023-24 by reducing General Fund capital project funding and using unallocated American Rescue Plan Act funds However, annual deficits and necessary use of reserves to balance budget projected beginning in FY 2024-25 as fire and other costs increase City faces significant unfunded infrastructure needs such as major street repair, street maintenance, and equipment and facility improvements
Fiscal Impact
GROVERBEACH.ORG
Unless additional revenues were generated, closing projected long-term funding gap would require:
Reductions in General Fund capital or operating expenditures Precipitous declines in reserves available for emergencies or unforeseen needs Neither scenario is sustainable or enables the City to address community priorities Staff will share further financial information at May 8th budget update including recommendations in FY 2023-25 budget
Recommendation
GROVERBEACH.ORG
Receive fire services update including final report of Baker Tilly review of fire and emergency medical services needs Provide input and direction on the following:
Proposed service level and staffing recommendations beginning FY 2023-24 including Oceano contract Draft Joint Powers Authority agreement
Pending Council direction, staff would take the following actions:
Finalize service level and staffing recommendations in City budget Work with Arroyo Grande on Oceano contract and final JPA agreement for approval in June
Questions and Comments
Fire Services Update
GROVERBEACH.ORG