Agenda Item No. 9
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: April 24, 2023 FROM: Matthew Bronson, City Manager
PREPARED BY: Matthew Bronson, City Manager
SUBJECT: Fire Services Update
RECOMMENDATION
Receive the final report of the Baker Tilly review of current and future needs for fire and emergency medical services and provide input and direction to staff on proposed service levels and staffing recommendations for fire services beginning in FY 2023-24 and a draft Joint Powers Authority agreement for an Amended and Restated Five Cities Fire Authority.
DISCUSSION
On February 27, 2023 the Council received a presentation of a review conducted by outside consulting firm Baker Tilly into fire and emergency services needs in Grover Beach and Arroyo Grande provided by the Five Cities Fire Authority (FCFA) Joint Powers Authority (JPA). This review was commissioned by both cities in October 2022 to provide an outside, third-party review of this important policy issue. The need for the review stemmed from the pending withdrawal of the Oceano Community Services District (OCSD) from FCFA on July 1, 2023 given the failure of Oceano Measure A-22 which would have generated additional funding for fire and emergency medical services in Oceano.
Baker Tilly’s scope included a service level analysis, staffing deployment options, fiscal analysis, and review of alternative service models and governance structure. This work included reviewing the financial impacts of OCSD’s departure from FCFA including their current funding contribution and whether it would be beneficial for FCFA to provide fire service to Oceano under a contractual fee-for-service arrangement. The Baker Tilly team working on this project was led by Rick Haydon, former City Manager in Santa Maria, and also included Larry Waterhouse, a former fire chief in several cities in Southern California. Baker Tilly was chosen given their work with service reviews elsewhere within the Central Coast and their ability to complete this study by early 2023 to inform decisions by the two cities.
This staff report provides an update to the Council following Baker Tilly’s presentation of preliminary findings and recommendations on February 27 and covers the following three topics:
• 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
A similar agenda item is scheduled in Arroyo Grande on April 25 so that the two City Councils can receive information and provide direction to staff on successive meeting nights to inform development of final agreements and budgets in preparation for the upcoming fiscal year.
Staff Report: Fire Services Update Page 2
April 24, 2023
Baker Tilly Fire Services Review Final Report
Baker Tilly’s presentation on February 27 included observations, findings, and recommendations for sustainable and responsive fire and emergency medical services along with associated costs for both Grover Beach and Arroyo Grande. Baker Tilly provided a similar presentation to the Arroyo Grande City Council on February 28. The recommendations are intended to be implemented beginning in FY 2023-24 to coincide with the withdrawal of OCSD from the FCFA.
Below were overall observations from Baker Tilly:
• 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.
More detailed observations were shown in the presentation slides regarding staffing levels, equipment, fire prevention activities, facilities, and other topics. Baker Tilly also noted in the presentation that given the limited resources and operational challenges, FCFA personnel should be commended for the services they provide the community. Staff would concur with these observations and the commendation to FCFA personnel for their work in serving Grover Beach residents and businesses.
Building on these observations and the operational and fiscal data collected, Baker Tilly provided the following recommendations to the two cities:
• Conduct a Community Risk Assessment and Standards of Coverage and adjust staffing to meet service area, community risk, and call volume
• Hire an additional battalion chief and place all battalion chiefs on shift schedules consistent with floor personnel
• Contract for fire marshal and fire inspection services, or fill those positions with FCFA employees
• Develop an inventory of all mission-critical equipment and apparatus, and establish an asset replacement schedule and fund it
• Develop a comprehensive operations policy and procedures manual • Restructure the governing board and create a five-person board, two from each city (an elected official and city manager) and one mutually agreed-upon board member; Fire Chief to report to one or both City Managers
• Assess the feasibility of a parcel tax or Mello-Roos assessment to help finance FCFA operational and capital costs
• Discuss with CalFire representatives the cost for providing fire prevention and suppression services and/or enter into discussions with City of Pismo Beach representatives to expand the current regional fire authority model
• Work on resolving and strengthening interagency relationships and collaboration • Develop either an agreement to contract-back fire service for the Oceano area or create a fourth amendment to the JPA, thereby allowing OCSD to continue to be part of the FCFA until LAFCO can render a divestiture decision
Staff Report: Fire Services Update Page 3
April 24, 2023
Following the presentation and subsequent discussion, the Council provided direction to staff to develop an updated two-city JPA for fire services between Arroyo Grande and Grover Beach and for the JPA to provide service to Oceano in a contractual fee-for-service arrangement on a temporary basis until the LAFCO divestiture process concludes. Consistent direction was provided by the Arroyo Grande City Council. There was no explicit direction from the Council on other aspects of the findings and recommendations though several Council Members expressed concern about combining elected officials and city managers on a restructured governing board given the difference in roles.
After the Council presentations, Baker Tilly developed a report documenting their work and providing additional details and context behind their recommendations. Staff received an initial draft of this report in March and provided this draft to the FCFA Chief and fire union leadership for their feedback prior to sharing edits with Baker Tilly. Baker Tilly subsequently provided the cities with a final report which is shown as Attachment 1. The final report generally contains similar recommendations as the February presentation with the following exceptions:
• Modification of governing board recommendation to keep with only elected officials serving on this body rather than a combination of elected officials and city managers • Removal of recommendation on working with CAL FIRE on potential service provision given the likely inability to reduce costs compared with current FCFA costs along with the loss of local control
• Addition of three “scenarios” under which contract service is provided to Oceano to estimate projected FCFA costs and agency contributions:
o Scenario 1: OCSD stays under contract with FCFA for up to another year at their total property tax revenue amount
o Scenario 2: OCSD stays under contract with FCFA for an indefinite term with OCSD’s funding capped at their total property tax revenue amount. o Scenario 3: OCSD stays under contract with FCFA for an indefinite term with appropriate County financial support.
• Three options for staffing plans (low, medium, and high cost) are shown within each scenario to show varying costs and resulting agency contributions Staff is seeking any questions or comments from Council on the final report. Staff’s recommendations on implementing the recommendations from Baker Tilly on service delivery, staffing, and governance will be covered in the following sections of this report.
Proposed Service Level and Staffing Recommendations Beginning in FY 2023-24 Building on the Baker Tilly report, staff in both Grover Beach and Arroyo Grande believes Scenario 1 is the most likely scenario beginning on July 1, 2023, given the direction from both Councils to provide contract service to Oceano on a temporary basis to coincide with the timing of the LAFCO divestiture process. Staff in the two cities further believes that the “low cost” Staffing Plan A-4 (two 3-person companies and one 2-person company) is the most cost-effective and responsive plan at this time to provide a higher level of service at a more manageable cost. The following page shows the staffing configuration and position additions by year of this Staffing Plan A-4 along with the financial impacts in tables excerpted from the Baker Tilly report:
Staff Report: Fire Services Update Page 4
April 24, 2023
PLAN A-4
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total
FY
24 FY
25 FY
26 FY
29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal C 0 0
Inspector - PT C 0 0
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 3 9 0
Engineer 3 3 3 9 2 2
Firefighter 3 3 6 0
Total 6 9 9 6 0 30 3 0.5 0 0 3.5
C = Fire Marshal and Inspector functions provided by contract service (assumes $100,000) Staffing Plan A-4 adds 3.5 FTE positions to FCFA over the next two fiscal years including 1.0 FTE Battalion Chief, 2.0 FTE Engineer positions, and 0.5 FTE Administrative position. The staffing increase in this plan enables FCFA to provide a 24-hour 2-person third company in contrast to the current staffing model where a third company is frequently not available given staffing limitations. Baker Tilly recommends this approach of using a 2-person company for this temporary contract period during the LAFCO divestiture process. If FCFA later chooses to provide ongoing service to Oceano, Baker Tilly recommends a different staffing model for three 3-person companies (Staffing Plan A-2) which would come at a higher cost.
Below is the estimated financial impact from Staffing Plan A-4 with dollar amounts in thousands (original chart is shown as Table 13 in the Baker Tilly report in Attachment 1):
The Ctiy’s
However, the significant contribution increase required by the two cities even under this “low cost” plan will lead to reductions in other General Fund expenditures over the next five years unless additional revenues are generated to support fire services.
One recommended modification to these costs is delaying efforts to obtain new fire prevention contract services for at least one year in the interest of minimizing immediate cost increases.
Inspection services that are not currently being performed by the FCFA would be performed in Staff Report: Fire Services Update Page 5
April 24, 2023
Grover Beach and Arroyo Grande by their respective building services contractors rather than by an FCFA contractor, which will decrease the total costs identified in the table above by $100,000 (a reduction of $58,000 to Arroyo Grande and $42,000 to Grover Beach). This cost for the City would be reflected in the FY 2023-25 budget along with associated revenues as these services are cost-covered by building fees. This approach would be revisited in 2024 based on need and funding availability for increased prevention services.
As part of this Staffing Plan A-4, the City’s contribution to FCFA would increase from $2.02 million in the current FY 2022-23 to $2.77 million in the upcoming FY 2023-24 or a total increase of approximately $750,000. This is a significant increase of 37% over one year though considering that contributions have been fixed since FY 2019-20, this increase annualized over a four-year period is approximately 9% per year. The City’s contribution amount for FY 2023-24 is also lower than originally estimated ($3.07 million) for this Staffing Plan in the February 27th presentation.
This lower amount is primarily due to a one-time funding transfer of $887,000 from Arroyo Grande to FCFA in FY 2023-24 (shown in “Other Revenue”) to reimburse prior year pension unfunded accrued liability costs which should have been paid by Arroyo Grande.
Under this scenario, FCFA would contract with OCSD to provide fire and emergency medical service to Oceano for one year from July 1, 2023 to June 30, 2024 while the LAFCO divestiture process was underway. This process was initiated this January and is expected to take 9-12 months to complete through early 2024. Below are recommended terms for this contract:
• Term: 12 months to provide sufficient time for completion of the LAFCO divestiture process.
• Cost: At least $1,211,000, which is the funding amount that Baker Tilly identified as available to the OCSD for fire service through its current share of property tax revenue. • Scope of Service: Fire and emergency response services, including the minimal fire prevention services currently provided by the FCFA.
• Location: Station 3 may be utilized by the FCFA to serve its entire service territory, including Oceano, if deemed appropriate. Baker Tilly identified deficiencies at Station 3 that may make use of this station by FCFA staff unadvisable. FCFA should retain the ability to determine where to station its staff regardless of any contract to serve Oceano.
As part of this proposed contract, OCSD would pay its current contribution amount ($1.2 million) which reflects all of the district’s share of property tax revenue from property owners within Oceano reported by Baker Tilly. Staff notes that this payment amounts to an effective 14% share of FCFA costs for the next fiscal year which is a lower percentage than the percentage in the current fiscal year (16%). A cost based on this 16% percentage would be approximately $1.4 million while a cost based on the percentage specified in the current Third Amendment to the JPA Agreement (20%) would be $1.7 million.
However, OCSD is unable to fund any additional costs beyond their $1.2 million share of property tax revenue given the failure of their tax measures and the County is not in a position to make up this difference for next fiscal year for a service they are not currently responsible for. In addition, in the short term, the $1.2 million payment from OCSD in FY 2023-24 mitigates the increased City costs for fire services along with the pension transfer payment mentioned previously. However, if at the conclusion of the LAFCO process in early 2024, the County requests further contract service to Oceano, staff recommends charging an amount that more fully covers the costs of Oceano service beginning in FY 2024-25. Such a payment for Oceano is identified in Scenario 3 in the Baker Tilly report and would be $1.7 million in FY 2024-25 under Staffing Plan A-4 with a resulting City contribution of $2.86 million. Staff notes that, if the cities then increased staffing Staff Report: Fire Services Update Page 6
April 24, 2023
levels to three 3-person companies, all the contribution or payment levels would correspondingly increase as shown in the Baker Tilly report under Staffing Plan A-2.
Staff is seeking input and direction on this fire service level and staffing recommendation along with the terms of a proposed contract with OCSD. Pending Council direction, staff in Grover Beach will work with staff in Arroyo Grande to develop a one-year contract with OCSD for fire and emergency medical service and bring this contract to both Councils along with the OCSD Board for approval by the end of this fiscal year.
Draft JPA Agreement for an Amended and Restated FCFA
Lastly, staff is seeking input and direction on a draft agreement for an Amended and Restated Joint Powers Authority covering Arroyo Grande and Grover Beach. The draft agreement (shown in Attachment 2) including exhibits builds on the recommendations from Baker Tilly in creating an updated governance structure that better meets the needs of a two-city fire services JPA. In developing this draft agreement, staff researched and spoke with city managers in 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) Below is a table summarizing key elements of these three JPAs:
Agency JPA Members Board Executive
Management
Cost
Allocation
Central
Marin Fire
Department
• City of
Larkspur
• Town of
Corte
Madera
• 4-member Fire
Council made
up of 2
members of
each agency’s
council
• One vote
required from
each city/town
to approve any
item
• Management
Committee
made up of
the City/Town
Managers of
each party
• In practice,
one City/Town
Manager acts
as CEO for
signatory
purposes and
rotates this
role based on
which agency
the Chair is
from at that
time
• Fire Chief
reports to
Management
Committee,
which appoints
the Chief
• 50/50 split of all
costs
Staff Report: Fire Services Update Page 7
April 24, 2023
Central
County Fire
Department
• City of
Burlingame
• City of
Hillsborough
• 4-member
Board made
up of 2
members of
each agency’s
council
• One vote
required from
each city to
approve any
item
• Chief
Administrative
Officer, which
is one of the
two City
Managers and
rotates based
on which
agency Board
Chair is from
for that time
• In practice,
CAO confers
with City
Manager of the
other city
before making
substantive
decisions
• Fire Chief
reports to
CAO, who
appoints Chief
• All costs and
revenues split
60/40, with
60% allocated
to Burlingame
and 40% to
Hillsborough
LivermorePleasanton
Fire
Department
• City of
Livermore
• City of
Pleasanton
• 4-member
Board made
up of 2
members of
each agency’s
council
• Majority vote
required to
take action
• Impasse
matters may
be submitted
to the two city
councils, which
will consider
the matter
independently
first, and, if still
at impasse,
then consider
the matter at a
joint city
council
meeting of the
two cities
• Joint Executive
Directors
consisting of
the two City
Managers of
each city
• Policy
establishes the
powers that
must be
exercised and
the decisions
must be made
jointly, and
which may be
exercised and
made by one
of the Joint
Executive
Directors with
notice to the
other
• Fire Chief
reports to the
Joint Executive
Directors, who
appoint the
Chief
• Cost allocation
plan lists
category of
costs
• Costs split
differently
depending on
category
• Most costs
split 50/50,
except for a
portion of
suppression
costs and postemployment
liability costs
Staff Report: Fire Services Update Page 8
April 24, 2023
Of the three agencies, staff believes the first two are the most relevant for Arroyo Grande and Grover Beach given relative similarity in combined population of the two cities (Livermore and Pleasanton in contrast have a combined population of 164,000). However, staff learned useful and relevant examples from the three agencies which informed the development of the draft JPA agreement. Below are key provisions of the draft agreement:
• Authority governance. There will be a four-member Board of Directors to provide policy oversight of the Authority. The Board will have a Chair and Vice Chair, meet at least quarterly, and consist of two representatives of each city with the Chair and Vice Chair appointed from each respective city. This structure differs from the Baker Tilly recommendation on the governing board, though this structure is used in the other three JPA agencies researched and staff believes it is a relevant model for FCFA. While an even number of Board members could produce a deadlocked vote, none of the other agencies indicated this had happened with their respective Boards and the potential for this to occur provided further impetus for the Board to reach a consensus. • Executive management. The agreement calls for the executive management of the Authority to be vested in a two-person Management Committee made up of the current City Manager for both Member Agencies. The Management Committee shall hire, terminate, and provide executive management of the Fire Chief who in turn will be responsible for operational management of the Authority. While both City Managers will be part of the Management Committee, one of the City Managers will serve as the Chief Executive Officer (CEO) to carry out decisions of the Management Committee and act on urgent matters as needed. The CEO role will rotate between the City Managers at the same annual frequency as the Board Chair and Vice Chair roles so the Chair and CEO would be from the same city. This executive management structure is recommended by Baker Tilly and used by the other JPA agencies. It is also similar to a standard City Manager/Department Head reporting relationship used in both cities. • Other Authority positions. The agreement continues the current assignment of the Director of Administrative Services for Arroyo Grande serving as the Authority Treasurer. The Board and Management Committee, in consultation with the Fire Chief, shall appoint or designate a Secretary who shall serve at the pleasure of the Board and be the official custodian of records for the Authority. The Board would also appoint an attorney to serve as legal counsel for the Authority. Employees of the Authority would officially be employees of Arroyo Grande, as they are under the current agreement, but will be assigned to the Authority through an agreement between Arroyo Grande and the Authority.
The Authority will use Arroyo Grande’s CalPERS contract for Authority employees. • Fire stations, other real property, and equipment. Similar to the current arrangement, buildings and structures owned by Member Agencies may be utilized for the Authority’s use but shall remain the property of the respective Member Agency. Each Member Agency shall be responsible for maintenance and insurance of Member Agency buildings.
Similarly, all equipment owned by Member Agencies shall remain the property of each Member Agency but may be utilized by the Authority. The Authority may acquire any equipment or other personal property for the Authority’s use. The Authority’s principal business and governance office will remain at the Authority’s Station 1 in Arroyo Grande. • Cost-sharing and budget. The agreement retains the Member Agency funding formula which is currently based on population, service calls, and number of stations and personnel. Based on this formula, Arroyo Grande would pay 58% of FCFA costs and Grover Beach would pay 42%. The formula would be re-evaluated by the Member Agencies at least every two years prior to the Agencies’ respective biennial budget adoption. The agreement also states that the Board initially adopt a budget within 30 days Staff Report: Fire Services Update Page 9
April 24, 2023
of execution of this Amended and Restated JPA and annually adopt a budget prior to April 30 in order for Member Agencies to review and incorporate contract costs into their respective fiscal year budgets.
• New members and membership withdrawal. The agreement provides the ability to admit new Member Agencies to the Authority. New members may only be admitted with unanimous approval from the Board and governing bodies of each Member Agency. There is also language allowing withdrawal of membership with continued payment of its share of liabilities incurred by the Authority.
Staff is seeking input and direction on this draft agreement for an Amended and Restated Joint Powers Authority. Pending Council direction, staff in Grover Beach and Arroyo Grande will finalize the agreement and bring it back to both Councils for approval by the end of the fiscal year.
FISCAL IMPACT
The cost to the City of the recommended service level and staffing for fire services for FY 2023- 24 is $2.77 million with an FY 2024-25 projected cost of $2.86 million. These costs are approximately $750,000-850,000 higher than the City’s current cost of approximately $2 million.
The proposed FY 2023-25 budget under development absorbs this cost in FY 2023-24 by reducing General Fund capital project expenditures and allowing unallocated American Rescue Plan Act funds to be used as general revenues while still funding select high-priority budget items.
However, beginning in FY 2024-25, budget projections indicate annual deficits and a necessary use of reserves to balance the budget as costs for fire services and other service and operating needs continue to increase. The City also faces significant unfunded infrastructure needs such as major street repair, street maintenance, equipment replacement and facility improvements.
Closing this projected long-term funding gap would require reductions in other General Fund operating or capital expenditures or precipitous declines in reserves unless additional revenues are generated, such as through a revenue measure. Staff will share further financial information during the May 8th budget update including highlighting recommendations that will be submitted in the FY 2023-25 proposed budget, which will be considered by the Council in June.
ALTERNATIVES
The Council has the following alternatives to consider:
1) Receive a fire services update including the final report of the Baker Tilly review to assess current and future needs for fire and emergency medical services and provide input and direction to staff on proposed service level and staffing recommendations beginning in FY 2023-24 and a draft Joint Powers Authority agreement for an Amended and Restated Five Cities Fire Authority; or
2) Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. Baker Tilly Fire Service Final Report
2. Draft Agreement for an Amended and Restated Joint Powers Authority April 2023
Five Cities Fire Authority
Analysis of Fire Services
Attachment 1
1730 MADISON ROAD • CINCINNATI, OHIO 45206 • 513 861 5400 • BAKERTILLY.COM April 13, 2023
Mr. Matthew Bronson
City Manager
City of Grover Beach
154 S. Eighth Street
Grover Beach, CA 93433
Dear Mr. Bronson:
Baker Tilly is pleased to transmit this report on our assessment of the Five Cities Fire Authority (FCFA). The focus of this engagement was to provide an overall assessment of the financial impacts associated with the departure of the Oceano Community Services District (OCSD) from the FCFA based on OCSD’s initiation of the divestiture process with the San Luis Obispo County Local Agency Formation Commission (LAFCO). In this report, we identified staffing and fire service options and developed options for a new governance structure. In all, our report includes 18 recommendations for organization enhancements and efficiencies. In addition, we also created a user-friendly and multi-faceted fiscal model for the FCFA and the cities of Arroyo Grande and Grover Beach to use in their respective budget forecasting. This fiscal model will be provided to you separate from this report.
Our review found that the FCFA has done a commendable job in providing basic fire suppression service to its partner agencies, given its limited financial resources, constrained operating budget, and organizational challenges. While the FCFA is an improvement over the previous separate city department model, like other small fire agencies, the FCFA has many operational challenges. However, we feel that we have made several recommendations in this report to help the FCFA address the challenges.
We appreciate the FCFA staff and staff from the cities of Arroyo Grande and Grover Beach for providing us with a variety of information and for having very candid discussions with our team members. In addition, we valued the feedback we received from both the Arroyo Grande City Council and the Grover Beach City Council on our observations and preliminary recommendations presentation, and please be advised that this report provides updated data based on information we received since those presentations were made.
Sincerely,
Carol Jacobs
Managing Director
Analysis of Fire Services
Table of Contents Baker Tilly
i
Table of Contents
Executive Summary .................................................................................................................................. 1 Major Observations .......................................................................................................................... 1 Organization of the Document ....................................................................................................... 2 Background ................................................................................................................................................ 3 Project Approach ....................................................................................................................................... 4 Interviews .......................................................................................................................................... 4 Interview Themes ........................................................................................................................ 5 Document Review ............................................................................................................................ 5 Service Level Analysis ............................................................................................................................. 6 Fire Chief’s Recommended Staffing Plans ........................................................................................ 19 Plan A – Incremental staffing increase with a 4th Company in FY 2029 ............................... 19 Plan B – An immediate staff increase of 12 and adding a 4th Company in FY 2027 ............ 19 Fiscal Analysis ......................................................................................................................................... 21 Alternative Models ................................................................................................................................. 37 Maintain the JPA pooled FCFA structure to serve the two cities and possibly provide short-term or longer-term service to Oceano via contract ........................................................ 37 Revert to stand alone independent city fire departments ........................................................ 40 Contract out service delivery to CALFIRE ................................................................................. 40 One City to contract for fire service delivery with the other City ........................................... 41 Regional Consolidation ................................................................................................................. 41 Governance Structure ............................................................................................................................. 43 Conclusion ................................................................................................................................................ 44 Attachment A – List of Recommendations ......................................................................................... 45 Analysis of Fire Services
Table of Contents Baker Tilly
ii
Tables
Table 1. First Alarm Residential Staff Assignments .......................................................................... 7 Table 2. Current FY 2022-23 Budgeted Staffing .................................................................................. 8 Table 3. Comparison of FCFA Service Area and Staffing Model to Nearby Agencies ............... 9 Table 4. Annual Calls for Service1 ....................................................................................................... 10 Table 5. Plan A – Incremental staffing increase with 4th Company in FY 2029 ......................... 19 Table 6. Plan B – Immediate staff increase of 12 with 4th Company in FY 2027 ........................ 20 Table 7. Total Cost .................................................................................................................................. 20 Table 8. Percentage Allocation of Contributions Between Member Agencies ........................... 23 Table 9. Plan A-2 Staffing Configuration and Additions by Year ................................................. 25 Table 10. Plan A-3 Staffing Configuration and Additions by Year ............................................... 25 Table 11. Plan A-4 Staffing Configuration and Additions by Year ............................................... 26 Table 12. Plan A-5 Staffing Configuration and Additions by Year ............................................... 27 Table 13. Low-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-4 ($ in 000) 28 Table 14. Medium-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-3 ($ in 000) 28
Table 15. High-Cost Option: FCFA forecast under OCSD scenario 1/staffing Plan A-2 ($ in 000) 29
Table 16. Low-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-4 ($ in 000) 30
Table 17. Medium-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-3 ($ in 000) 30
Table 18. High-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-2 ($ in 000) 31
Table 19. Low-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-4 ($ in 000) 32
Table 20. Medium-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-3 ($ in 000) 32
Table 21. High-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-2 ($ in 000) 33
Table 22. FY 2024 Contribution by Cities and Increase Over FY 2023 ($ in 000) ......................... 34 Table 23. Plan A-4 Two Three-Person and One Two-Person Companies Without Added County Funding Support ($ in 000) ..................................................................................................... 38 Table 24. Plan A-2 – Three Three-Person Companies Without Added County Funding Support ($ in 000) .................................................................................................................................... 39 Analysis of Fire Services
Table of Contents Baker Tilly
iii
Table 25. Plan A-5 – Two 3-Person Engine Companies, Added Battalion Chief and Contracted Prevention Services, Service Only the Two Cities, Without OCSD ($ in 000) ............................ 39 Figures
Figure 1. FCFA Expense versus Revenue Assuming no OCSD, Current Staffing Levels, and Continued Flat City Contributions ...................................................................................................... 24 Figure 2. Projected Costs for FCFA and Nearby Cities ($ in 000) ................................................... 34 Figure 3. Range of FCFA Contributions by Cities Through FY 2029 ($ in 000) ........................... 35 Figure 4. Regional Map1 ......................................................................................................................... 42
Analysis of Fire Services
Executive Summary Baker Tilly
1 Executive Summary
Baker Tilly was engaged by the cities of Arroyo Grande and Grover Beach to assist with an analysis of fire services provided by the Five Cities Fire Authority (FCFA).
The objective of this engagement was to:
• Provide an assessment of the financial impacts of the departure of the Oceano Community Services District (OCSD) from the FCFA; • Provide the options available to the FCFA to address the financial gap as a result of OCSD’s withdrawal from the FCFA; and • Recommend a new governance structure upon the departure of OCSD.
Major Observations
Through our data gathering and analysis, we made numerous detailed observations described further in this report. Major observations that informed our recommendations are provided below.
• The need for an ongoing dedicated revenue source to finance operational and capital costs. With the exception of grant funding and state strike team reimbursements, all operations and capital expenses are financed directly by participating agencies.
Each agency makes a financial contribution based on a predetermined funding allocation amount; however, recent annual financial contributions have not sufficiently financed operations or capital costs. Consequently, a dedicated revenue source is both needed and warranted.
• The divestiture of OCSD fire service responsibility will take time to resolve. The process for divestiture was initiated by the OCSD Board of Directors on January 11, 2023, and now the San Luis Obispo Local Agency Formation Commission (LAFCO) will
decide on this matter. However, this decision will not be made before the end of this fiscal year; thus, options for fire service in the Oceano area will need to be explored.
• The FCFA does not meet National Fire Protection Association (NFPA) 1710 standards. NFPA sets standards for fire suppression, emergency medical operations, and special operations through Analysis of Fire Services
Executive Summary Baker Tilly
2 NFPA 1710 which requires, amongst other things, four-person response units with a total of 17 personnel required for structure fires. FCFA does not meet this standard.
• The FCFA faces numerous operational challenges. Operational challenges include inconsistent staffing levels on all units, insufficient resources devoted to training (especially high-risk/low frequency calls), the lack of a dedicated revenue source to help finance operations and capital costs, inadequate fire prevention programs and managerial oversight, and an outdated
communication system.
• A Standards of Cover and Community Risk Assessment are needed. Both a Standards of Cover and Community Risk
Assessment are essential for determining the appropriate staffing and deployment needs of the agency. A Standards of Cover report would identify response time objectives, establish standards for measuring the effectiveness of department resources, and evaluating the deployment of those resources. A Community Risk Assessment would provide the FCFA with recommendations of how to prepare their community to respond to emergency events and develop community resilience.
• The number of calls for service for the existing service population is consistent with industry standards; however, public service or non-emergent calls represent 40% of total calls, which is relatively high compared to surrounding agencies. For example, the percentage of non-emergent calls in surrounding agencies are Paso Robles 19.1%, Morro Bay 20.2%, San Luis Obispo 23.8%, and Atascadero 30.7%. It is our understanding that the reporting software has a coding issue that needs to be addressed and may result in an increase in emergency medical calls and a
corresponding decrease in non-emergent calls.
Organization of the Document
The remainder of this report is organized into the following major sections:
• Background
• Project Approach
• Service Level Analysis
• Fire Chief’s Recommended Staffing Plans
• Fiscal Analysis
• Alternative Models
• Governance Structure
• Conclusion
Analysis of Fire Services
Background Baker Tilly
3 Background
In 2004, the cities of Arroyo Grande and Grover Beach initiated a partnership to provide fire services. This partnership included sharing personnel such as a fire chief and training officer and was later expanded to include equipment sharing, a consolidation of their reserve firefighter programs, and a change in how 9-1-1 calls were dispatched with the closest fire resource responding regardless of community boundaries. In 2009, the Oceano Community Services District joined the partnership leading to a complete consolidation of the fire departments on July 9, 2010, and the establishment of the Five Cities Fire Authority.
The Five Cities Fire Authority serves a 10 square mile area, which includes the communities of Arroyo Grande, Grover Beach, and Oceano, with a population of approximately 38,000. The area is served by three fire stations. The mission of the Five Cities Fire Authority is “to provide the highest level of service possible by mitigating threats to life, property, and the environment while meeting the growing needs of our communities.” After a special tax measure failed in the Oceano Community Services District (OCSD) in June 2022, the OCSD took action to withdraw from the Five Cities Fire Authority effective June 30, 2023. As a result, Grover Beach and Arroyo Grande requested an assessment of the financial impacts associated with the OCSD’s departure and the staffing and fire service options available in order to continue to provide fire prevention and suppression services to their respective communities be prepared by an independent third party.
Analysis of Fire Services
Project Approach Baker Tilly
4 Project Approach
In 2015, the fire chief performed a Strengths, Weakness, Opportunities, and Threats (SWOT) analysis of the FCFA. Later, in 2017, the FCFA Board hired a consultant to assist the Board with the development of a Five-Year Strategic Plan that assessed the agency’s staffing, equipment, personnel deployment, and resource needs. This previous work provided Baker Tilly with background information and context for this engagement.
Baker Tilly also obtained additional information through interviews and review of operations-related documents which informed the recommendations in this report.
Interviews
To inform our analysis, Baker Tilly conducted individual and group interviews with the following:
1. CALFIRE representatives
2. City Managers
3. City finance directors
4. FCFA command staff
5. FCFA firefighters’ union representatives which included captains, engineers and firefighters
6. Former FCFA Board Members
7. OCSD General Manager
8. San Luis Obispo County Fire Chief
9. San Luis Obispo County Local Agency Formation Commission (LAFCO) Executive Director
The purpose of the interviews was to obtain insight on:
• Strengths, weaknesses, and opportunities for improvement inside and outside the organization;
• Organization structure and staffing;
• Interagency collaboration and communication;
• Technology systems and staff development opportunities; • Financial management and reporting; and
• Assessment of best practices.
Analysis of Fire Services
Project Approach Baker Tilly
5 Interview Themes
The following major themes emerged from our interviews. • FCFA personnel take great pride in the service they provide and are passionate about enhancing service levels.
• The departure of OCSD is a concern from a fire service delivery and funding perspective.
• Board members, city management, fire command staff, and floor personnel are concerned about the availability of funding to properly finance operations and capital costs.
• According to floor personnel, they are overworked and stressed due to operational challenges and lack of resources.
• A low level of collaboration exists between FCFA personnel and the JPA member agencies which has caused frustration amongst floor personnel leading to a lack of harmony and mutual understanding in the workplace.
• Continued consolidation of fire resources from neighboring agencies makes the most sense rather than having standalone city fire departments.
Document Review
Baker Tilly reviewed a wide range of documents to help inform our analysis. The documents are listed below.
• Budgeting and financial-related information including CalPERS Actuarial Reports
• CALFIRE Emergency Command Center Contract
• CALFIRE Pismo Beach Contract
• Citygate Pismo Beach Analysis
• Calls for service data and associated call volume information • Emergency Command Center Three Year Data Run by Unit
• FCFA Joint Powers Agreements and associated amendments • La Verne Fire Department Community Risk
Assessment/Standards of Cover
• NFPA 1500 Firefighter Safety and Wellness
• NFPA 1710 Standard for Deployment
• NFPA 1730 Community Risk/Fire Prevention
• Public Protection Classification Summary Report by the Insurance Services Office
• Santa Maria Fire Department Community Risk
Assessment/Standards of Cover
• Special District Fire Projection Study
• Strategic planning and associated fire study documents • Various FCFA operations documents
Analysis of Fire Services
Service Level Analysis Baker Tilly
6 Service Level Analysis
Since 2010, the FCFA has provided fire prevention and suppression service to the cities of Arroyo Grande, Grover Beach, and the unincorporated area of Oceano. Their service area boundary covers almost 10 square miles. FCFA serves a population of over 38,000 and personnel respond from three separate fire stations.
The FCFA has a total of 26.5 full-time equivalent (FTE) budgeted positions. The FY 2022-23 annual budgeted revenues are $6.3 million with $6.9 million in appropriations resulting in budgeted deficit of $616,000.
The annual capital budget for the FCFA is slightly over $250,000. This represents an increase from prior years, which averaged about $100,000 per year over the last three years. The FCFA does not currently have an established asset replacement program for equipment and apparatus which makes it challenging to replace mission-critical assets when needed. In addition, there is no current long-term capital plan for fire station renovations or improvements.
Given their limited financial resources, the FCFA provides basic fire suppression service to the community and maintains a positive relationship with the public. There also exists a non-profit group called “Friends of the Five Cities Fire Authority” that is made up of community volunteers designed to help provide additional funding to the agency as well as support its goal of providing effective fire protection services to the residents of the central coast. The FCFA model enables the cities to provide fire protection services in a cost-effective manner. The department could be characterized as a home-grown department with many local employees. The majority of those in a supervisory capacity have been promoted through the ranks of the organization. Like many small fire agencies, the operational design and organization make the FCFA unique while also creating challenges for service delivery which are discussed later in this report.
Because of the topography and vast service boundaries of the FCFA, automatic and mutual aid resources have lengthy response times. As such, the FCFA does not currently meet the National Fire Protection Association (NFPA) standards for fire suppression, emergency medical Analysis of Fire Services
Service Level Analysis Baker Tilly
7 operations, and special operations as outlined in NFPA 1710 for public career fire organizations. Specifically, the daily unit staffing is not at the required level to meet this standard. NFPA requires four personnel on each unit with 17 personnel required for structure fires within 8 minutes of being dispatched. Rather than being at the required 17 personnel, the FCFA has only 11 personnel, thus requiring assistance from other outside fire agencies to properly attack a structure fire as illustrated in Table 1 below.
Table 1. First Alarm Residential Staff Assignments
Assignment Standard FCFA1
Incident Commander 1 22
Pump Operator 1 1
Fire Attack 2 2
Back-Up Crew (BUC) 1 2 2
Attack/BUC Support 2
Victim Search & Rescue 2
Ladders and Ventilation 2 2
Truck Operator 1
Rapid Intervention Crew (RIC) 4 22
Subtotal 17 11
1When Oceano is open, there exists 1 additional Fire Engineer 2Automatic Aid - One Battalion Chief, One Engine Company with staffing of two The NFPA 1710 requirement is based on operational studies conducted by the NFPA and the National Institute of Standards and Technology (NIST) on fireground and emergency medical services field experiments.
These experiments defined the number and types of tasks specific fire personnel are required to perform for successful outcomes during fire and emergency medical service (EMS) calls for service. They compare staffing of two, three, four, and five firefighters with varying arrival times of each apparatus. In addition, there is a Cal OSHA regulation in place requiring four personnel to be on scene and available for rescue before entering a hazardous environment. With the current FCFA configuration and staffing model this is not easily met, and the only permitted exception is entry to rescue a victim.
With regards to the current NFPA standard, Table 2 on the following page compares the NFPA standard with the current complement of FCFA.
Analysis of Fire Services
Service Level Analysis Baker Tilly
8 Table 2. Current FY 2022-23 Budgeted Staffing
Current
Station Companies
A/P/T1 Arroyo Grover 3rd 4th Total
Chief 1 1
Admin 1.5 1.5
Fire Marshal 0
Prevent Spec 0
EMS Coord 0
Batt Chief 2 2
Captain 3 3 3 9
Engineer 3 3 1 7
Firefighter 3 3 6
Total 4.5 9 9 4 26.5
1 A/P/T = Administration/Prevention/Training
Of the 26.5 full-time equivalent (FTE) positions, 22 FTEs are sworn positions that provide a three-company deployment with two threeperson companies (one assigned to each City) and one two-person company on "B" shift only that is assigned to the Oceano area. In addition, there are 2.5 FTE positions assigned to administration (including the fire chief), along with 2 battalion chiefs, as illustrated in Table 2.
While the FCFA has a three-company deployment, because of the current staffing pattern illustrated in Table 2 above, the FCFA unit assigned to Oceano is out of service approximately 66% of the time. Taking this unit out of service puts a greater demand on the two remaining units. The logical result is an increase in simultaneous calls and dependance on automatic and mutual aid.
The constant staffing provision in the current memorandum of understanding (MOU) is two positions short of staffing all three units every day. The delivery of safe and efficient fire suppression and emergency service is based on the time and weight of responding resources, leading to effective mitigation. The varying and low level of staffing puts firefighters and the public at greater risk of injury and contributes to a low level of incident control and desired outcomes. If funding was not an issue, the ideal staffing would be for all front-line engines and trucks to be staffed by four full-time sworn personnel. And while this staffing model has proven to be the safest and most effective way to mitigate emergencies, many agencies are unable to provide this level of service. In fact, agencies of similar size and call volumes to FCFA commonly use a staffing pattern of three per unit as illustrated in Table 3.
Analysis of Fire Services
Service Level Analysis Baker Tilly
9 Table 3. Comparison of FCFA Service Area and Staffing Model to Nearby Agencies Agency Population
Area (Square
Miles)
Fire
Stations
2022 calls
for Service Staffing Model
FCFA w/ OCSD (Plan A-4)1 38,154 9.65 3 4,154 Two three-person companies and one two-person squad
FCFA w/o OCSD (Plan A-5) 31,000 8.15 2 3,326 Two three-person companies2
Pismo Beach 8,000 13.5 2 2,487 Two two-person companies Atascadero 30,500 26.13 2 3,453 Two three-person companies Lompoc 43,800 11.67 2 4,201 Two three-person companies
and one two-person squad
Paso Robles 31,759 19.65 23 4,748 Two three-person companies and a two-person squad
1 The FCFA calls for service are from 2021; calls for 2022 have not yet been received. 2 Calls for service do not reflect mutual aid as data was not provided by jurisdiction. 3 Fire Station 3 is currently under construction with an estimated completion date of summer 2023. The fire station at the airport is not staffed.
The management complement in the FCFA consists of two battalion chiefs and a fire chief. Currently, the work schedules for the two battalion chiefs do not align with the three shift schedules of suppression personnel resulting in communication challenges. Furthermore, program management and oversight responsibilities are currently being delegated to floor personnel. While this is not uncommon in smaller fire agencies that have limited management resources, it is an inefficient practice and leads to communication and operational issues.
Recommendation 1. Add an additional battalion chief to
the full-time complement of management personnel and
assign each battalion chief to a shift schedule.
There is an immediate need for an additional battalion chief to balance program oversight and operational responsibilities. This was cited in the 2017 Strategic Plan and has yet to be addressed. Once an additional battalion chief is hired, all battalion chiefs should then convert to the 56- hour shift schedule to provide better operational safety through consistent and timely command and control on emergency scenes.
During our engagement, Baker Tilly also noted that most administrative and operational programs necessary to run the department have been subordinated to captains with a battalion chief being the liaison for management and oversight. While the captains may be capable of managing these tasks, the additional responsibilities and required time commitment limit their ability to effectively complete their Analysis of Fire Services
Service Level Analysis Baker Tilly
10 responsibilities and address issues related to their respective crews resulting in miscommunication and uncertainty. The addition of a battalion chief will position the command staff to lead the organization by setting goals, assist with policy development, identifying needs, developing plans, monitoring performance, and creating systems of accountability.
Future Staffing Priorities
As the organization continues to grow and the service population increases, a training officer/emergency medical services (EMS) coordinator, a full-time fire inspector, and an additional fire unit may be necessary to assure administrative compliance, unit coverage, and response capabilities. However, we do not foresee this type of increased staffing being needed in the near future based on the average annual growth in calls for the two cities. As illustrated in Table 4, the average annual growth in calls in the cities from 2012 to 2021 is 3.6%.
Table 4. Annual Calls for Service1
Year
Arroyo
Grande
Grover
Beach
Cities
Total
Annual
Change OCSD
Grand
Total
Annual
Change
2012 1,521 903 2,424 18.10% 513 2,937
2013 1,537 882 2,419 -0.20% 515 2.934 -0.10%
2014 1,562 908 2,470 2.10% 573 3,043 3.72%
2015 1,724 1,084 2,808 13.70% 528 3.336 9.63%
2016 1,824 1,152 2,976 6.00% 521 3.497 4.83%
2017 1,987 1,198 3,185 7.00% 583 3,768 7.75%
2018 1,856 1,098 2,954 -7.30% 566 3,520 4.58%
2019 1,814 1.049 2,863 -3.10% 570 3.433 -2.47%
2020 1,964 1,077 3041 6.20% 712 3.753 9.32%
2021 2,125 1,201 3326 9.40% 631 3,957 5.44%
CAGR2 3.79% 3.22% 3.58% 2.33% 3.37%
1 These numbers do not include automatic or mutual aid since we were only provided that information for partial years. 2 Compound annual growth rate.
Table 4 reflects the annual calls for service over the last ten years. Since Baker Tilly only received automatic or mutual aid data for the last three years and not the entire ten-year period, we did not include any automatic or mutual aid data in the above table as that would have skewed the annual compounded growth rate analysis. However, it should be noted that the average automatic or mutual aid calls during the last three-year period were not significant – reflecting less than five percent of total call volume.
Analysis of Fire Services
Service Level Analysis Baker Tilly
11 It was difficult for Baker Tilly to analyze call utilization and track productive and non-productive work hours, as neither the FCFA nor the City of Arroyo Grande’s Accounting Services Division track working hours by category. Accordingly, a recognized best practice in fire service is a staffing program that documents and displays daily staffing hours and locations. Such a program tracks and audits all hours charged to the individual employees and can be set up by specific categories for the type of work performed or leave taken. This allows the administrative staff to track all hours charged to daily staffing and specific events or programs in the FCFA budget, providing for immediate oversight and recognition of abnormal or unexpected hours used or accrued. The accounting of all hours by category can also provide for a more accurate budget forecast.
Recommendation 2. Acquire a staffing program to
manage and track all working and nonworking hours for
all FCFA personnel.
Another best practice is to know unit hour availability. Currently, the FCFA does not utilize a program to track activities and hours daily for each unit. Reliable data and statistics are necessary to evaluate the true time spent on calls for fire personnel to determine unit hour utilization.
While these numbers are available from the CALFIRE Emergency Command Center, they could be more easily accessed in a daily unit history program. Daily workload including fire prevention, training, station and apparatus maintenance, and public education are also tracked in these types of programs and is then demonstrated in a unit hour availability summary in addition to the unit hour utilization.
Recommendation 3. Improve the ability to track
company activity by developing or purchasing a program
capable of tracking all unit and personnel activity,
including apparatus and equipment.
The 2017 Strategic Plan recommended conducting an
operational/financial analysis of the FCFA as well as a Standards of Cover. This will assist in determining whether current service levels adequately address the service demand. In addition, a Community Risk Assessment is also warranted.
Recommendation 4. Conduct a Standards of Cover and
Community Risk Assessment to determine the
appropriate level of service to provide the community.
The Standards of Cover would be created using data provided by FCFA and others used to determine the current levels of response performance as quantified statistics. From this analysis, factors will be identified that Analysis of Fire Services
Service Level Analysis Baker Tilly
12 would influence response performance and opportunities for delivery system improvement. The Standards of Cover would identify response time objectives, standards for measuring the effectiveness of department resources, and the deployment of those resources. A Standards of Cover is a best practice, and the report should be consistent with the format recommended by the Center for Public Safety Excellence, Community Risk Assessment: Standards of Cover, 6th Edition.
A Community Risk Assessment is based on numerous factors, including socioeconomic status, household composition, minority status and language, population and density, housing types, local land use and development, and the geography and natural hazards present throughout the community. These factors affect the number and type of resources, both personnel and apparatus, necessary to control or mitigate an emergency. A community risk assessment provides relevant information to the FCFA with recommendations of how to prepare their community to respond to emergency events and develop community resilience.
Both a Standards of Cover and Community Risk Assessment are essential for determining the appropriate staffing and deployment needs of the agency and should be performed by an outside independent third-party consultant. For planning purposes, we have added $50,000 to the FY 2023-24 FCFA budget forecast as an estimate for the cost of such a study.
Clerical and Administrative Support Staff
In the FY 2022-23 budget, there are 1.5 positions identified as administrative. As the organization continues to grow and the fire prevention program creates a more robust fee service program, there will eventually be a need to increase the current complement of staff to two full-time positions. It should be noted that in the fire chief’s proposed staffing plans, he recommends increasing the one part-time clerical staff to full-time in FY 2024-25. For planning and staff projection purposes, we have included the fire chief’s recommendation in our alternative staffing models later in this report.
Analysis of Fire Services
Service Level Analysis Baker Tilly
13 Fire Prevention and Community Risk Reduction
Currently, member agencies use their building official or contract building official for new construction plan review, permit requests, and field inspections. These building officials are identified as fire marshals.
Baker Tilly believes the position of a state-certified fire marshal as a position within the FCFA is necessary to conduct state-mandated fire inspections, as well as high-hazard occupancy inspections. These are technical inspections that take several hours each and require specialized training and education to interpret and enforce the appropriate Uniform Fire Code sections.
The FCFA is responsible for approximately 1,900 annual fire prevention inspections: 200 multi-unit and hotel inspections, 50 new business inspections, 1,500 annual business inspections, and roughly 30 plan check inspections. The FCFA is also responsible for over 165 state-mandated inspections such as schools, hospitals, care facilities, high-rise, and highhazard occupancies that require specialized permits. Currently, over 70% of business inspections are not being conducted. Consequently, fire prevention is not currently being supported at an acceptable level which creates a risk and liability concern.
There is a justifiable need for two positions responsible for fire prevention activities. The annual small business inspection load is approximately 1,500, which would normally be assigned to the field units. However, due to the low level of field staffing and unit availability, these inspections have not been done. In communities that have low field staffing levels, fire prevention is as equally important as fire suppression. One of the most effective ways to reduce fire calls is to have a strong prevention presence in the community. The result is a greater understanding of the community’s hazards/risks and mitigating contributory factors before they become a call for service. For these reasons, a full-time fire marshal position and a part-time inspector are warranted. However, due to the FCFA’s limited financial resources, contracting for these services would be more economical.
Recommendation 5. Contract for fire marshal and fire
inspection services.
Baker Tilly also recommends completion of NFPA 1730 Standard on Organization and Deployment of Fire Prevention Inspection and Code Enforcement, Plan Review, Investigation, and Public Education Operations. This document provides a structured process to guide a fire prevention professional to work through a prevention-based community Analysis of Fire Services
Service Level Analysis Baker Tilly
14 risk assessment. Once the NFPA 1730 Standard is completed and/or the standards of cover or community risk assessment has been performed, a more thorough understanding of prevention staffing needs would be identified and would serve as the basis to guide future fire prevention needs.
Departmental Training
A battalion chief manages fire related training. Each employee is responsible for entering their training hours into an automated program as they complete the hours. The battalion chief has audit and oversight responsibilities to assure compliance standards. FCFA currently meets mandatory hourly requirements for the county and state.
FCFA contracts with a nurse educator to manage the requirements of the Local Emergency Medical Services Area (LEMSA) quality assurance review process and reporting while providing the required continuing education to remain an EMS provider. This arrangement addresses the requirements, but there is an ongoing commitment for staff oversight, control, and scheduling of this program.
Providing training on all shifts and dealing with the logistical issues such as identifying and obtaining permission to use various sites for training are challenging. Currently, OCSD provides a site for the ventilation prop and coordinates fire hydrant use for water flow evolutions. These are two of the most crucial functions that require reoccurring training. They are high risk/low frequency manipulative evolutions. Pumping water through hose lines and master stream appliances along with ventilation of a roof structure are critical to the mission of saving lives and property within the first few minutes of a fire. When OCSD is no longer a partner, the nearest option for this type of training is in Lompoc. Logistically, this is impractical due to driving time and a lack of coverage units for the FCFA. With limited options for local training sites there is little opportunity for live fire training. In most organizations these evolutions are conducted with a staff of evaluators on a routine basis. Staffing a reserve unit with overtime personnel or asking for a cover unit from CALFIRE would be the only option to meet the time commitment necessary for this type of training. We commend the FCFA for being highly active in the San Luis Obispo Training Officers group as well as having representatives on many special operations teams and oversight working groups within the County fire system. However, we noted that there is less than $15,000 budgeted annually for agency training, which is low, even for a smaller agency.
Recommendation 6. Increase the amount budgeted
annually for departmental training.
Analysis of Fire Services
Service Level Analysis Baker Tilly
15 Additional funding for securing training sites and staffing is necessary in order to properly provide the necessary training staff, especially suppression personnel, need.
During our interviews with FCFA union representatives, they voiced their concern that leadership development and succession planningrelated training was not afforded to floor personnel.
There are skill-set requirements for each position in the suppression ranks, but there is frustration in the lack of funding for the necessary technical training required of floor personnel that is not provided by FCFA. Their MOU allows for educational and training reimbursement only if funding is available, and there is not enough budgeted to address this demand. This has resulted in a financial cost for anyone taking a promotional exam that requires additional certifications. Additionally, there does not appear to be any leadership programs offered to floor personnel to encourage and develop the future leaders of the organization.
Recommendation 7. Develop a comprehensive training
program to address succession planning, and increase the budget for tuition reimbursement, thereby allowing
employees to complete the necessary certifications and
education required to advance through the ranks.
Management positions in FCFA should also be included in any leadership and management training opportunities offered by partner agencies to their managers and department heads.
Building and Facilities
During our onsite visit to the FCFA facilities, it was noted that the Oceano station is not in alignment with modern fire service standards or response criteria. The temporary housing unit is currently too far away from where the apparatus room is located, resulting in delayed response times during emergency calls, i.e., increased turnout times (time from dispatch to leaving the station). Turnout times should be no more than 60 seconds for emergency medical calls and 80 seconds for fire calls.
Recommendation 8. Move the OCSD station housing
closer to the apparatus room.
The OCSD station’s administrative office is also in the same physical location as the fire apparatus and equipment. This is an unsafe and unhealthy working condition, as employee workstations should not be in close proximity or exposed to diesel exhaust and byproducts, or carcinogens.
Analysis of Fire Services
Service Level Analysis Baker Tilly
16 Recommendation 9. Install a sealed door and/or wall to separate the office and living quarters from the
apparatus room and turnout storage areas.
Currently, there are no female firefighters in the FCFA which is not unusual for a smaller agency. Modern station design creates privacy and personal space for each member on duty.
Recommendation 10. Assess the living quarters to
determine if creating separate quarters for female
firefighters is feasible.
Evaluating and planning for modification to existing facilities to create separate living quarters for female firefighters would demonstrate the commitment of the organization to creating a supportive and inclusive work environment and would enhance recruitment of candidates.
During our visits to each station, we learned that the Motorola radio system platform upgrade has been budgeted and will be addressed soon.
However, we also discovered that the existing station alerting system needs repair at station 1 and upgrading is needed at stations 1 and 2 to allow for multi-unit dispatch. The phone system is an analog system and fails during significant rain occurrences. A voice over internet protocol (VoIP) system allows for greater clarity and dependability than the analog system. Increased functionality enhances efficiency by allowing call forwarding, routing, recording, online meetings, app integration, and can reduce ongoing costs as opposed to traditional infrastructure and hardware.
Recommendation 11. Allocate appropriate funding to
repair and/or upgrade the station alerting systems and
the existing phone system.
Vehicles and Equipment
Currently, there is no option for local routine maintenance of agency apparatus or vehicles. FCFA personnel must schedule all repairs and maintenance with a vendor in Paso Robles. This creates both a financial and operational burden on the agency. A firefighter must drive the apparatus, along with personnel following in a different vehicle, in order to transport the firefighter back to the station. Depending on traffic this could take up to two hours of overtime for each or require taking a unit out of service. While major repairs must be done at the vendor’s, regular maintenance and minor repairs could be done by either a qualified local vendor or by the City of Grover Beach’s mechanic. We learned that the fire chief is researching a mobile mechanic for the routine maintenance service. A mobile maintenance service is a more effective way to address Analysis of Fire Services
Service Level Analysis Baker Tilly
17 routine maintenance and minor repairs of fire vehicles rather than driving them out of the area.
Recommendation 12. Request proposals from local
vendors, as well as the City of Grover Beach, to perform minor repairs and regular maintenance on agency vehicles.
FCFA staff should compare any maintenance service proposals with the cost for the City of Grover Beach to perform similar maintenance services.
Since the City of Grover Beach is a participating member of the FCFA, collaborating on vehicle repairs could be a viable alternative. However, should it be decided to have the City of Grover Beach assist in minor repairs, it is recommended that the mechanic obtain their California State Fire Training Emergency Vehicle Technician 1 (EVT) certification. Any collaboration between agency partners and the FCFA could assist in increasing the organization’s efficiency and effectiveness.
During our engagement, concern regarding the lack of interagency collaboration was expressed, leading to a lack of harmony and mutual understanding in the workplace. Opportunities exist to open the lines of communication between partner agencies and Baker Tilly recommends steps in this direction.
Recommendation 13. Strengthen interagency
relationships and collaboration between FCFA personnel
and member agencies.
The 2017 Strategic Plan discussed the need for a vehicle replacement program; however, the agency still does not have one. The fire chief is to be commended for using Office of Emergency Service (OES) funding and other creative measures to fund vehicle repairs and obtain replacement vehicles when possible. However, an established vehicle replacement program and the funding of it is still needed.
Recommendation 14. Develop an equipment replacement
fund for all mission critical equipment and apparatus.
We reviewed the agency’s written operational policies and procedures and concluded additional work in this area is needed. This topic was also addressed in the 2017 Strategic Plan. Currently, the FCFA staff are in the process of transferring the existing documents to Lexipol, an electronic records system. While some progress has been made, there are only about 30 established policies and procedures in place, and according to floor personnel, some are either not current or are in direct conflict with one another.
Analysis of Fire Services
Service Level Analysis Baker Tilly
18 Recommendation 15. Develop a comprehensive policy
and procedures manual, building upon efforts currently
underway.
Analysis of Fire Services
Fire Chief’s Recommended Staffing Plans Baker Tilly
19 Fire Chief’s Recommended Staffing Plans
At the onset of this engagement, the fire chief provided Baker Tilly with two proposed staffing models that he would like to implement over the next several years. For the purposes of illustration, we refer to these plans as Plan A and Plan B.
Plan A – Incremental staffing increase with a 4th Company in FY 2029 The fire chief’s Plan A adds a total of 22.5 FTE new positions over the next six years and a 4th engine company in FY 2029 as illustrated in Table 5 below.
Table 5. Plan A – Incremental staffing increase with 4th Company in FY 2029 PLAN A
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY24 FY25 FY26 FY29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal 1 1 1 1
Prevent Spec 1 1 1 1
EMS Coordinator 1 1 1 1
Batt Chief 3 3 1 1
Captain 1 3 3 3 3 13 1 3 4
Engineer 3 3 3 3 12 2 3 5
Firefighter 3 3 3 6 15 3 6 9
Total 10 9 9 9 12 49 6 2.5 2 12 22.25
We have reviewed and researched the FCFA 2017 Strategic Plan and other supporting documents. As the organization continues to grow and the community expands, a training officer/emergency medical services coordinator, a full-time fire inspector, and a fourth company may be necessary to assure administrative compliance, unit coverage, and response capabilities. However, as was cited in the 2017 Strategic Plan, Community Risk Assessment/Standards of Cover (CRA/SOC) study would need to be conducted to identify the type of resource, fire station location, and staffing levels to suit the communities’ needs.
Plan B – An immediate staff increase of 12 and adding a 4th Company in FY 2027
Plan B is a more aggressive staffing plan that adds a total of 24.5 FTE positions over the next four years and a 4th engine company in FY 2027 Analysis of Fire Services
Fire Chief’s Recommended Staffing Plans Baker Tilly
20 as illustrated in Table 6 below. While the fire chief’s plan also called for an additional company in FY 2032, these proposed staffing increases are beyond the scope of our forecast period and are therefore not included in Table 6 or in cost estimates.
Table 6. Plan B – Immediate staff increase of 12 with 4th Company in FY 2027 PLAN B
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 27 Total
Chief 0
Deputy Chief 1 1 1 1
Admin 2 2 0.5 0.5
Fire Marshal 1 1 1 1
Prevent Spec 2 2 2 2
EMS Coordinator 1 1 1 1
Battalion Chief 3 3 1 1
Captain 3 3 3 3 13 4 4
Engineer 3 3 3 3 12 2 3 5
Firefighter 4 4 4 3 15 6 3 9
Total 10 10 10 10 9 51 12.5 12 24.5
As indicated above, Baker Tilly recommends completing a CRA/SOC before considering either of these plans, Plan A or Plan B. And while our assessment did not allow us the ability to analyze unit hour utilization, consecutive call patterns, and overall community risk assessment, a standards of cover report would allow for this assessment. However, based on the information we have reviewed, including current run loads and type of calls, it is our position that a fourth company is not currently warranted at this time.
Costs associated with these two plans are substantial, as illustrated in Table 7 below. In fact, operating costs would double in about five years under Plan A with costs doubling in four years under Plan B.
Table 7. Total Cost
FY 22
Actual
FY 23
Budget
FY 24
Estimate
FY 25
Estimate
FY 26
Estimate
FY 27
Estimate
FY 28
Estimate
FY 29
Estimate
Plan A $6,771 $7,214 $9,119 $10,120 $11,700 $11,805 $12,415 $15,512 Plan B $6,771 $7,214 $10,203 $10,874 $11,905 $14,729 $15,051 $15,592 Analysis of Fire Services
Fiscal Analysis Baker Tilly
21 Fiscal Analysis
Both cities of Arroyo Grande and Grover Beach will face significant increases in fire contributions to the FCFA, even if fire staffing remains at its current level, for three reasons:
• Contributions have remained fixed for four years while FCFA expenditures have continued to rise. This is unsustainable. The only reason that FCFA is not already in deficit is that actual expenditures have come in around $310,000 under budget per year over the past three years;
• OCSD intends to withdraw from FCFA and that will reduce FCFA revenues by $1,138,000, with the potential of no corresponding reduction in FCFA expenditures to serve the two remaining members; and
• FCFA expenditures will rise further due to the need to increase salaries to a level that allows for the recruitment and retention of personnel as well as CalPERS investment losses that will continue to increase pension contributions.
As part of this engagement, Baker Tilly has prepared a user-friendly and multi-faceted fiscal model for FCFA and the two cities, which can be used to run numerous scenarios showing the impact on all three agencies given various outcomes regarding the following key variables:
• OCSD: Their intention is to leave the FCFA effective July 1, 2023.
On January 11, 2023, the OCSD Board approved the initiation of the divestiture process with the San Luis Obispo Local Agency Formation Commission (LAFCO). The OCSD’s divestiture
application was received by LAFCO on February 6, 2023.
Divestiture is a discretionary action on the part of LAFCO. Part of that process will likely involve commissioning a study of OCSD’s options. This study, together with the LAFCO decision-making process, may take 6-12 months. If the decision is for another agency to take on the responsibility of providing fire service to the Oceano area, that transition may take another 12 to 18 months.
Therefore, OCSD may be dependent upon FCFA for fire service for another year or two. The OCSD contribution of $1,138,000 is approximately equal to their current property tax revenue. Their property tax revenue is what they would give up should the County take over responsibility for providing fire service.
Therefore, FCFA could likely expect to receive at least an amount Analysis of Fire Services
Fiscal Analysis Baker Tilly
22 comparable to OCSD’s property tax revenue for each additional year OCSD remains either a member of FCFA or contracts back fire service, if not more. The forecast currently assumes OCSD is no longer a member effective July 1, 2023, but the first step is determining whether OCSD remains or contracts back services with FCFA, and when.
• Staffing: The FCFA fire chief has proposed two options for increases in station staffing, administration, fire prevention, and training, based on OCSD remaining in FCFA. Since staffing is the main cost driver, it will be a major determinant of the future level of city contributions. Thus, the FCFA Board must determine the appropriate level of staffing, with or without OCSD, given the current trend in call volume. Baker Tilly has examined several alternative staffing packages, and the fiscal model can select any one of these options (the fire chief’s two plans and Baker Tilly’s five plans) and show the resulting cost impact over time. The current forecast assumes the lowest staffing cost option (Baker Tilly plan A-5, which assumes the FCFA not providing any first responder fire service to the Oceano community, reducing staffing to two 3-person companies, adding a battalion chief, and contracting for fire marshal and fire inspector services). • Salaries: FCFA staff appear to be below the average level of salaries for comparable agencies within the central coast region.
Inflation has been high for two years, but while long-term estimates assume the CPI will fall back to the 2 to 3% range, this recent inflationary rise adds pressure to increase wage levels.
Salaries are a meet and confer item, but it seems reasonable to assume annual increases in excess of the Federal Reserve’s inflation goal of 2%. The fiscal model can select wage growth amounts by year, and the forecast is based on salary and benefits as recommended by the City of Arroyo Grande’s director of administrative services who serves as the FCFA finance director.
This increase includes COLAs, merit/step increases, and savings from employee turnover.
• Reserves: An appropriate reserve level must be identified and maintained for FCFA. While contribution levels are a known quantity, the major risk is that higher costs may be incurred that are not reimbursed by the state for wildfire strike team related overtime. The fiscal model assumes that contributions are set to maintain a 10% reserve for FCFA over time.
• Grants: The potential exists for SAFER grants to be received from the federal government to offset the cost of eligible new staffing increases. SAFER grants are competitive, and thus their receipt is Analysis of Fire Services
Fiscal Analysis Baker Tilly
23 not guaranteed. They also offset costs for only three years and after that FCFA must maintain that higher staffing level and absorb the resulting cost. Thus, these grants are short term, and not an ongoing benefit. However, if qualifying staff increases are going to be approved, even the short-term benefit would help offset the rise in contribution levels that would otherwise be required to be financed by the FCFA. The fiscal model can show the impact of SAFER grants based on proposed staffing increases, but the current forecast assumes no receipt of such grants. • Cost Allocation: Costs are currently allocated between member agencies based one-third on population, one-third calls for service and one-third on station staffing levels. There are also direct allocations regarding HazMat and debt service costs. The fiscal model assumes these allocation factors are updated for recent population and service calls, and to omit the OCSD.
Consequently, the resulting allocation is between only the two cities, and would result in a small percentage shift from Grover Beach to Arroyo Grande, as shown in Table 8 below.
Table 8. Percentage Allocation of Contributions Between Member Agencies Cost Allocation
Share
Current
w/OCSD
Revised
w/OCSD
Current
w/o OCSD
Revised
w/o OSCD
Arroyo Grande 45.01% 44.99% 56.16% 57.65%
Grover Beach 35.14% 32.23% 43.84% 42.35%
Oceano CSD 19.85% 22.68% 0.00% 0.00%
Total 100.00% 100.00% 100.00% 100.00%
• OCSD Obligations: The third amendment to the current FCFA agreement provides for the possible departure of OCSD and a negotiation that would define a contribution by OCSD for unfunded liability, equipment, and debt service contributions upon leaving FCFA. These amounts are unknown at this time and thus excluded from the forecast and, while unlikely to make a major difference in the ongoing level of contribution by the two cities, this financial obligation may result in an increase in reserves.
Given these assumptions, FCFA costs will continue to rise, and the loss of OCSD reduces revenues by $1,138,000. Figure 1 shows the resulting impact of current staffing with no change in city contribution levels (solid red line) compared to costs (see bars, split between staffing and all other costs). Even when other revenues such as state reimbursements for strike Analysis of Fire Services
Fiscal Analysis Baker Tilly
24 team overtime are added in (dotted red line), total revenues are expected to fall below the anticipated expenditures in FY 2022-23 and well below those in the next two fiscal years.
Figure 1. FCFA Expense versus Revenue Assuming no OCSD, Current Staffing Levels, and Continued Flat City Contributions
Clearly, continuing the flat contributions by the two cities is not sustainable. Absent new FCFA funding, the contributions from member agencies will have to increase to fill the gap. The impact on the two cities can be determined by the factors entered in the FCFA fiscal model. There are many potential scenarios to consider using the forecast assumptions noted above, but the two most important are what happens with OCSD, and what level of staffing is proposed for FCFA. The two issues are interwoven in that if OCSD is to be serviced, there will have to be a higher staffing level. However, at the two recent council meetings by the two cities on the issue of fire services, it was also proposed that staffing be increased even if OCSD is not being serviced.
Accordingly, we have prepared three scenarios involving OCSD, and under each scenario we show the impact of a high, medium, and low level of staffing. These plans do not include the fourth engine company, training captain, EMS coordinator, and deputy chief that are contained in the Fire Chief’s Plans A and B. However, they do include an additional battalion chief, as well as fire prevention services and clerical support.
The potential levels of staffing included in these three scenarios are shown in the following four tables.
Analysis of Fire Services
Fiscal Analysis Baker Tilly
25 Plan A-2 provides three 3-person companies, an additional battalion chief, contractual costs associated with fire marshal/fire inspector services, and an additional 0.5 FTE clerical position. A-2 staffing is shown in Table 9.
Table 9. Plan A-2 Staffing Configuration and Additions by Year PLAN A-2
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal C 0 0
Inspector - PT C 0 0
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 3 9 0
Engineer 3 3 3 9 2 2
Firefighter 3 3 3 9 3 3
Total 6 9 9 9 0 33 6 0.5 0 0 6.5
C = Fire Marshal and Inspector functions provided by contract service (assumes $100,000) Plan A-3 provides two 3-person companies and one 2-person company, an additional battalion chief, a fire marshal, a half-time fire inspector, and an additional 0.5 FTE clerical position. A-3 staffing is shown in Table 10.
Table 10. Plan A-3 Staffing Configuration and Additions by Year PLAN A-3
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal 1 1 1 1
Inspector - PT 0.5 0.5 0.5 0.5
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 3 9 0
Engineer 3 3 3 9 2 2
Firefighter 3 3 6 0
Total 7.5 9 9 6 0 31.5 3 1 1 0 5
Analysis of Fire Services
Fiscal Analysis Baker Tilly
26 Plan A-4 provides two 3-person companies and one 2-person company, an additional battalion chief, and fire marshal/fire inspector services pursuant to a contract and an additional 0.5 FTE clerical position. And while the FCFA has chosen to run a similar two-person staffing model for the OCSD area, it should be noted that staffing an engine with two personnel might not be considered a best practice in an urban fire organization. A-4 staffing is shown in Table 11.
Table 11. Plan A-4 Staffing Configuration and Additions by Year PLAN A-4
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal C 0 0
Inspector - PT C 0 0
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 3 9 0
Engineer 3 3 3 9 2 2
Firefighter 3 3 6 0
Total 6 9 9 6 0 30 3 0.5 0 0 3.5
C = Fire Marshal and Inspector functions provided by contract service (assumes $100,000) Plan A-5 provides the lowest level of staffing: two 3-person companies, an additional battalion chief, fire marshal/fire inspector services pursuant to a contract and an additional 0.5 FTE clerical position. This staffing model would only be an option if just the two cities were being served and not providing first responders fire service in the Oceano area. In addition, it should be noted that this staffing model results in the elimination of 2.5 FTE positions. A-5 staffing is shown in Table 12.
Analysis of Fire Services
Fiscal Analysis Baker Tilly
27 Table 12. Plan A-5 Staffing Configuration and Additions by Year PLAN A-5
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal C 0 0
Inspector - PT C 0 0
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 9 -3 -3
Engineer 3 3 9 -1 -1
Firefighter 3 3 6 0
Total 6 9 9 0 0 24 -3 0.5 0 0 -2.5
C = Fire Marshal and Inspector functions provided by contract service (assumes $100,000) The OCSD scenarios depend upon the outcome of the LAFCO process as well as whether San Luis Obispo County might provide a long-term fire service solution for the Oceano area. In addition, providing fire service to the Oceano area would be in excess of the OCSD’s property tax revenue, so the question is whether the County would be willing to augment the funding FCFA receives on behalf of OCSD in an amount beyond the property tax revenue of the OCSD.
Scenario 1. OCSD stays under contract with FCFA for up to another year, then leaves.
This is a likely outcome given the 6 to 12 months a LAFCO decision is expected to take. The payment to FCFA would be the amount OCSD receives in property tax. No OCSD revenue would be received in FY 2024-25 and thereafter. The three preferred staffing levels proposed for this scenario are as follows:
• Low Cost: Plan A-4 (two 3-person companies and one 2-person company, contract prevention staff) shown in Table 13
• Medium Cost: Plan A-3 (two 3-person companies and one 2- person company, in-house prevention staff) shown in Table 14 • High Cost: Plan A-2 (three 3-person companies, contract prevention staff) shown in Table 15
Analysis of Fire Services
Fiscal Analysis Baker Tilly
28 Table 13. Low-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-4 ($ in 000) Note that in this and subsequent forecast tables, Other Revenue for FY23 includes a one-time $887,401 transfer from the City of Arroyo Grande to reimburse prior year pension unfunded accrued liability (UAL) costs which should have been paid by the city. Other revenue also includes inspection fees (expected to increase in FY24 due to more inspections being conducted), fire prevention program revenues, and strike team reimbursements. (NOTE – this financial information and associated tables have been updated since the City Council presentations in late February.) Table 14. Medium-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-3 ($ in 000) Analysis of Fire Services
Fiscal Analysis Baker Tilly
29 Table 15. High-Cost Option: FCFA forecast under OCSD scenario 1/staffing Plan A-2 ($ in 000) Scenario 2. OCSD stays under contract with FCFA for an indefinite term with OCSD’s funding capped at their total property tax revenue amount.
This could be the outcome if LAFCO and the County decline to assign a new fire service provider for OCSD. The payment to FCFA would be limited to the amount OCSD receives in property tax, which is less than the proportion that would be assigned if OCSD remained a member of FCFA, and it is assumed that no additional funding is provided by the County. The three preferred staffing levels proposed for this scenario are as follows:
• Low Cost: Plan A-4 (two 3-person companies and one 2-person company, contract prevention staff) shown in Table 16
• Medium Cost: Plan A-3 (two 3-person companies and one 2- person company, in house prevention staff) shown in Table 17 • High Cost: Plan A-2 (three 3-person companies, contract prevention staff) shown in Table 18
However, should the FCFA provide first responder fire services to the Oceano area for an indefinite period, Baker Tilly recommends Plan A-2 as the ideal staffing deployment.
Analysis of Fire Services
Fiscal Analysis Baker Tilly
30 Table 16. Low-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-4 ($ in 000) Table 17. Medium-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-3 ($ in 000) Analysis of Fire Services
Fiscal Analysis Baker Tilly
31 Table 18. High-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-2 ($ in 000) Scenario 3. OCSD stays under contract with FCFA for an indefinite term with appropriate county financial support.
This could be the outcome if LAFCO and the County decline to assign a new fire service provider for OCSD, and the County agrees to supplement the payment to the FCFA so that an amount equal to the proportional allocation to the two cities is paid. The three preferred staffing levels proposed for this scenario are as follows:
• Low Cost: Plan A-4 (two 3-person companies and one 2-person company, and contract fire prevention) shown in Table 19 • Medium Cost: Plan A-3 (two 3-person companies and one 2- person company, in house prevention staff) shown in Table 20 • High Cost: Plan A-2 (three 3-person companies, contract prevention staff) shown in Table 21
However, as with Scenario 2, should the FCFA provide first responder fire services to the Oceano area for an indefinite period, Baker Tilly recommends Plan A-2 as the ideal staffing deployment.
Analysis of Fire Services
Fiscal Analysis Baker Tilly
32 Table 19. Low-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-4 ($ in 000) Table 20. Medium-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-3 ($ in 000) Analysis of Fire Services
Fiscal Analysis Baker Tilly
33 Table 21. High-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-2 ($ in 000) For the purpose of comparison, we examined the trend in fire costs of nearby cities to those of FCFA. Figure 2 compares projected FCFA costs under staffing plans A-4 and A-5, and its current level of staffing, to the projected costs for Paso Robles, Lompoc, Atascadero, and Pismo Beach.
Note that Pismo Beach only has 2-person companies, and under its special “Amador Plan” contract with CALFIRE, one of its fire companies is considered a “state asset” that responds to wildfires as needed, resulting in Pismo Beach paying less as a result. We have been informed that any future CALFIRE contract arrangement will no longer include the Amador Plan provision resulting in higher contractual costs.
Analysis of Fire Services
Fiscal Analysis Baker Tilly
34 Figure 2. Projected Costs for FCFA and Nearby Cities ($ in 000) For budget planning purposes, Table 22 shows the FY 2023-24 impact on the two cities depending on the OCSD scenario and the corresponding preferred FCFA staffing plan. Scenarios 1 and 2 have the same effect in FY 2023-24, but Scenario 2 results in a lower burden on the cities in future years.
Table 22. FY 2024 Contribution by Cities and Increase Over FY 2023 ($ in 000) Plan
FY 2024 Contribution Increase from FY 2023 Table
Number Arroyo Grande Grover Beach Arroyo Grande Grover Beach OCSD stays for a limited period of time - up to 12 months (Scenario 1):
Plan A-4 $3,796 $2,812 $1,215 $797 13
Plan A-3 $3,733 $2,766 $1,152 $751 14
Plan A-2 $4,098 $3,034 $1,517 $1,019 15
OCSD stays for an indefinite period with a capped financial contribution (Scenario 2):
Plan A-4 $3,796 $2,812 $1,215 $797 16
Plan A-3 $3,733 $2,766 $1,152 $751 17
Plan A-2 $4,098 $3,034 $1,517 $1,019 18
OCSD stays with financial contribution from the County (Scenario 3):
Plan A-4 $3,621 $2,633 $1,040 $618 19
Plan A-3 $3,463 $2,490 $882 $475 20
Plan A-2 $3,748 $2,695 $1,167 $680 21
Analysis of Fire Services
Fiscal Analysis Baker Tilly
35 Figure 3 shows the range of potential FCFA contribution levels by the two cities through FY 2028-29, depending on OCSD scenario and preferred FCFA staffing level. The low level is Staffing Plan A-4 with OCSD Scenario 3 (County support), and the high level is Staffing Plan A-2 with no service to OCSD.
Figure 3. Range of FCFA Contributions by Cities Through FY 2029 ($ in 000) The actual impact on the two cities will depend upon:
• Whether FCFA obtains a new revenue source that would allow city contributions to increase slowly over time and avoid the shock of a large increase in contribution starting in FY 2023-24. • Lacking added FCFA revenue, whether each city can get approval of increased revenues for itself. The revenue generating capacity and voter preferences has varied between the two cities in the past, so their respective revenue-generating capacities may differ.
The local voter-approved sales tax in Grover Beach is 1.5%, and in Arroyo Grande it is 0.5% (and in that city a recent ballot measure to increase the tax another 1.0% was narrowly defeated in 2022). • Lacking additional revenue, each city would make its own judgments about the priority of non-fire services, and the areas in which to make expenditure reductions. On a short-term basis each has capacity to defer capital projects. Arroyo Grande has its local sales tax in a separate fund which could bear a greater share than it presently contributes; however, that would be at the expense of other services. However, this is not a sustainable long-term Analysis of Fire Services
Fiscal Analysis Baker Tilly
36 strategy as the cities must continue to invest in the upkeep of its transportation, parks, and public building infrastructure.
One revenue option is a parcel tax or a Mello-Roos assessment that would provide a dedicated funding source for FCFA, but this requires a twothirds voter approval. A 2020 California Court of Appeals ruling currently allows for a majority vote if the tax is enacted through the voter initiative process, but an initiative planned for the ballot in November 2024 seeks to repeal that ruling retroactively. Of the 29 parcel tax ballot measures placed on the November 2022 ballot statewide by a local nonschool agency, 14 were successful, eight of which were tax renewals, and six were new taxes. Such a parcel tax would require an annual inflation adjustment that would allow it to address higher fire costs over time. The timing of such a vote is an issue as higher contributions are needed starting FY 2023-24, and there is a lag time getting onto the next property tax bill.
Another revenue option is a sales tax. If imposed by the FCFA, it would be a special tax and require a two-thirds voter approval. The maximum allowed in a district comprising both cities would be a 0.5% rate, because Grover Beach accounts for 1.5% of the 2.0% local sales tax capacity available under state law, and the rate would need to be uniform across both cities. Of the 10 special sales tax ballot measures placed on the November 2022 ballot statewide (requiring a two-thirds vote), four were successful and six failed. If a 0.5% tax were placed on the same ballot independently by both cities, it could be done as a general tax for each, as has previously been done in both cities.
Recommendation 16. Assess the viability and potential
of a revenue enhancement measure to adequately finance
the operational and capital needs of the FCFA.
Analysis of Fire Services
Alternative Models Baker Tilly
37 Alternative Models
The FCFA has done a commendable job in providing basic fire suppression services to its partner agencies given the limited financial resources, constrained operating budget, and organizational challenges.
With OCSD submitting an application for divestiture of fire service responsibilities, FCFA is entering a period of uncertainty. It will take from 6 to 12 months for LAFCO to take action on this application and longer for the successor fire service provider in Oceano to come on-line. LAFCOs analysis will inform the options available, but the list of alternatives is not that long. They include:
1. Maintain the JPA pooled FCFA structure to serve the two cities (Plan A-5) and possibly provide limited term (Plan A-4) or longerterm service (Plan A-2) to service the Oceano community via contract;
2. Revert to two stand-alone independent city fire departments;
3. Contract out service delivery to CALFIRE;
4. Dispense with the JPA structure and simply have one city (Grover Beach) contract for fire service delivery with Arroyo Grande (currently the employer);
5. Pursue a broader regional service delivery model to include Pismo Beach and/or the Nipomo area.
Baker Tilly recommends Option 1 in the near / medium term with a focus on Option 5 in the longer term to maximize regional efficiencies.
Each Option is reviewed in more detail below.
Maintain the JPA pooled FCFA structure to serve the two cities and possibly provide short-term or longer-term service to Oceano via contract Providing Service to Oceano on a Short-Term Basis
This is essentially the status quo condition. Since it is not likely that OCSD will be able to obtain approval for its divestiture application by the end of June 2023, it will likely have to provide fire services into the next fiscal year. The easiest way to provide for this would be via a contract with FCFA whereby the Authority would provide staffing at the Oceano Analysis of Fire Services
Alternative Models Baker Tilly
38 station commensurate with what OCSD could afford, which is assumed to be the level of their property tax revenue. This would likely result in a two-person company at the Oceano station on a 24/7 basis. This option would be an enhancement of the existing service as the Oceano station is only staffed 1/3 of the time. This alternative staffing option (Plan A-4) provides two 3-person companies (one in each city) and one two-person unit (in Oceano), plus a battalion chief and contract for fire marshal and inspection services. This staffing model is being recommended as a temporary measure until a permanent decision of fire service for the Oceano community can be determined. The cost for this alternative is reflected in Table 23 below.
Table 23. Plan A-4 Two Three-Person and One Two-Person Companies Without Added County Funding Support ($ in 000)
However, it should be noted that the above level of service is not consistent with what Baker Tilly would find satisfactory on a longer-term basis, but it may have to suffice until LAFCO determinations are finalized and a successor service provider is ready to step in with additional funding.
Baker Tilly believes the JPA structure is worth keeping in place, mostly to support a future broader regional service provider, perhaps with the County to include both Oceano and Nipomo or with these latter two stations and the City of Pismo Beach.
Providing Service to Oceano on a Longer-Term Basis
Should a decision be made resulting in the FCFA providing fire service to the Oceano community on a more permanent basis, then Baker Tilly would recommend a three 3-person company deployment (Plan A-2).
This deployment would provide a 3-person company at each station Analysis of Fire Services
Alternative Models Baker Tilly
39 (Arroyo Grande, Grover Beach and Oceano). This deployment would be more consistent with industry practices and would result in the following costs as illustrated in Table 24.
Table 24. Plan A-2 – Three Three-Person Companies Without Added County Funding Support ($ in 000) Providing Service to Only the Two Cities
Based on call volume, Baker Tilly would recommend a two 3-person company deployment to service the two cities (Arroyo Grande and Grover Beach) until such time a Standards of Cover can be performed and determine the staffing and station location for a two-station model.
The cost for this model is depicted in Table 25 and includes an additional battalion chief and contracting for fire marshal and inspection services.
Table 25. Plan A-5 – Two 3-Person Engine Companies, Added Battalion Chief and Contracted Prevention Services, Service Only the Two Cities, Without OCSD ($ in 000) Analysis of Fire Services
Alternative Models Baker Tilly
40 It should be noted that with a two-engine company model, receiving a strike team and overhead reimbursement might be challenging, given staffing resources. Therefore, to be conservative, we have excluded both strike team overtime costs and associated state reimbursements from Plan A-5. Should FCFA staff want to adjust this amount prospectively, this can easily be adjusted in their fiscal model.
Revert to stand alone independent city fire departments Under this alternative, the JPA would be dissolved, and the cities would revert to independent non blended services. This would result in cost increases as currently shared services would have to be delivered on an independent non-shared basis. Management, support and training costs would increase - leaving no economies of scale. Consequently, Baker Tilly does not believe that having individual, stand-alone fire departments in each city is a viable alternative for fire protection and suppression services from both a cost and operational perspective. And since the shared services arrangement has worked well for over ten years, Baker Tilly believes this would be a step backwards.
Contract out service delivery to CALFIRE
The State Department of Forestry and Fire Protection, otherwise known as CALFIRE, is the largest fire department in California, and it commonly provides services via a cooperative agreement to local governments.
Currently, CALFIRE serves the following local governments via a cooperative agreement:
• 31 out of 58 counties (including San Luis Obispo County) • 39 out of 482 cities (including Pismo Beach in SLO County and 19 cities in Riverside County)
• 25 fire districts
• 42 special districts
CALFIRE is very experienced with wildland interface and rural areas and much of its service area tends to be in such areas. Generally, it provides less contract services in more urbanized areas. Large fire service providers either via contract or via a tax share agreement to urbanized cities include the Orange County Fire Authority, the Los Angeles County Fire Protection District, and the San Bernardino County Fire Protection District. Collectively, these large fire service providers serve far more cities than does CALFIRE.
CALFIRE might be willing to provide a bid to FCFA for services, but in the view of Baker Tilly it is unlikely to reduce costs relative to current FCFA costs. In addition, contracting with CALFIRE would reduce local Analysis of Fire Services
Alternative Models Baker Tilly
41 control relative to the shaping of service levels and other similar matters.
CALFIRE is not a common choice for California cities when it comes to a service provider. It is much more common for counties to work with CALFIRE. This probably reflects the rural/urban split mentioned above.
One City to contract for fire service delivery with the other City Should the JPA structure cease to exist at some point in the future, since all FCFA employees are technically employees of the City of Arroyo Grande, another alternative delivery model could have the City of Grover Beach contracting for fire service from the City of Arroyo Grande. This would not be a unique arrangement as cities throughout the State contact for various municipal services with neighboring jurisdictions. For example, the cities of Pacific Grove and Carmel both contract for fire service with the City of Monterey, and Stanford University contracts for fire service with the City of Palo Alto. And while shifting fire service to one city may address a number of operational and organizational issues, it would also shift a lot of liability and financial risks to one city as well; namely, Arroyo Grande. Consequently, should the cities decide to explore this alternative service delivery model, more extensive fiscal and operational assessment would be warranted.
Regional Consolidation
Regionalizing service delivery can often result in savings from economies of scale in such areas as management, technology, and specialized services. In the fire service, local service delivery from neighborhood fire stations typically does not change much in terms of staffing or apparatus types, although improvements in training, career opportunities, and some support services can be found. Most savings will be from shared support services, and overall management and regional consolidation is becoming quite common in the fire service. The primary reason is obtaining economies of scale in operations primarily in management and technical areas. Currently, the Orange County Fire Authority serves 23 of the 34 cities in the County and approximately 2 million out of the 3.2 million of the residents of the County. The even larger Los Angeles County Fire Protection District serves 57 out of the 88 cities in that county either via contract or by tax share.
Regional fire service delivery makes intuitive sense in the Five Cities area of southern San Luis Obispo County, because it is a geographically distinct area being composed of a broad coastal plain running north from the Santa Barbara County line to Pismo Beach where the coastal mountains march down to the Pacific Ocean and force Highway 1/101 to turn inland. The map on the following page shows the five fire stations Analysis of Fire Services
Alternative Models Baker Tilly
42 found in this region. Two are operated under cooperative agreement by CALFIRE for the County of San Luis Obispo and the City of Pismo Beach, and three are operated by FCFA.
Pursuing this type of regional consolidation would enable the area to maximize economy of scale savings for management and technology while also growing local control via the FCFA JPA.
Figure 4. Regional Map1
1Map provided by the County of San Luis Obispo
As was mentioned previously, the OCSD has initiated a divestiture application with the San Luis Obispo LAFCO. This process is expected to take 6 to 12 months. Public input will be solicited as part of the process, and it is quite possible LAFCO will decide to retain a consultant to explore fire service options.
There will be a period of uncertainty as the OCSD pursues the divestiture process since fire service delivery for Oceano will be in limbo, but during the study process OCSD will be responsible for continuing to deliver services to the best of its ability. FCFA has determined that it will provide contract services to the OCSD during the interim, which is certainly a good approach, given the circumstances. FCFA is not under any statutory obligation to deliver services via contract but, given its long running partnership with the OCSD, some support will probably be expected by LAFCO and the County, and such support will build support for a regional approach in the future. FCFA is certainly free to advocate for the benefits of a regional approach as LAFCO processes the divestiture application.
Analysis of Fire Services
Governance Structure Baker Tilly
43 Governance Structure
The current governing board of the FCFA consists of three members, an elected official from each member agency. With the departure of the OCSD from the FCFA, we recommend restructuring the board to consist of either a five-member or three-member board made up of equal representation from each city and a mutually agreed-upon board member. Some examples of a mutually agreed-upon board member could consist of:
• A rotating member of the public;
• The San Luis Obispo County fire chief;
• A representative of the San Luis Obispo County
administrative office; or
• A rotating member of the Board of Supervisors from
Districts 3 and 4.
Recommendation 17. Restructure the FCFA Board to
consist of either a five-member or three-member board.
In addition, the fire chief currently reports to the three-member FCFA Board (which is comprised of elected officials from each member agency). Having the fire chief, who routinely deals with administrative and operational matters, report directly to three elected officials is not an effective reporting structure and it creates operational challenges, the least of which is no direct supervisory oversight and limited communication abilities due to Brown Act restrictions. Instead, Baker Tilly recommends that the fire chief report directly to either one or both city managers.
Recommendation 18. Reorganize the reporting
relationship of the fire chief and have that position
report directly to either one or both city managers.
Analysis of Fire Services
Conclusion Baker Tilly
44 Conclusion
The FCFA has had its share of operational and organizational challenges over the last several years, and while there have been prior assessment reports and studies on its operations, because of limited financing, no significant recommendations from these reports and/or studies have been implemented to date. Now, with the imminent department of the OCSD and the potential loss of $1.1 million in annual revenue contributions, decisive operational decisions by the cities of Arroyo Grande and Grover Beach are in order.
Baker Tilly has completed an assessment of the financial impacts associated with the departure of the OCSD and has put forward realistic staffing and fire service delivery options for consideration by key stakeholders. The assessment concludes that maintaining a regional service delivery approach makes sense for the cities of Arroyo Grande and Grover Beach, and indeed, building on it in time, if possible, would be a net benefit. We also believe that a new dedicated revenue source is necessary to support fire service delivery and that a joint parcel tax may be a good opportunity for the FCFA to pursue. Action on this should be considered no later than the summer of 2024 for possible consideration at the general election in November 2024. Making these efforts will build support for a possible revenue measure in 2024.
Analysis of Fire Services
Attachment A – List of Recommendations Baker Tilly
45 Attachment A – List of Recommendations
Recommendation 1. Add an additional battalion chief to the full-time complement of management personnel and assign each battalion chief to a shift schedule.
Recommendation 2. Acquire a staffing program to manage and track all working and nonworking hours for all FCFA personnel.
Recommendation 3. Improve the ability to track company activity by developing or purchasing a program capable of tracking all unit and personnel activity, including apparatus and equipment.
Recommendation 4. Conduct a Standards of Cover and Community Risk Assessment to determine the appropriate level of service to provide the community.
Recommendation 5. Contract for fire marshal and fire inspection services.
Recommendation 6. Increase the amount budgeted annually for departmental training.
Recommendation 7. Develop a comprehensive training program to address succession planning, and increase the budget for tuition reimbursement, thereby allowing employees to complete the necessary certifications and education required to advance through the ranks.
Recommendation 8. Move the OCSD station housing closer to the apparatus room.
Recommendation 9. Install a sealed door and/or wall to separate the office and living quarters from the apparatus room and turnout storage areas.
Recommendation 10. Assess the living quarters to determine if creating separate quarters for female firefighters is feasible.
Recommendation 11. Allocate appropriate funding to repair and/or upgrade the station alerting systems and the existing phone system.
Recommendation 12. Request proposals from local vendors, as well as the City of Grover Beach, to perform minor repairs and regular maintenance on agency vehicles.
Recommendation 13. Strengthen interagency relationships and collaboration between FCFA personnel and member agencies.
Recommendation 14. Develop an equipment replacement fund for all mission critical equipment and apparatus.
Recommendation 15. Develop a comprehensive policy and procedures manual, building upon efforts currently underway.
Recommendation 16. Assess the viability and potential of a revenue enhancement measure to adequately finance the operational and capital needs of the FCFA.
Recommendation 17. Restructure the FCFA Board to consist of either a five-member or three-member board.
Recommendation 18. Reorganize the reporting relationship of the fire chief and have that position report directly to either one or both city managers. 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
AMENDED AND RESTATED
JOINT EXERCISE OF POWERS AGREEMENT
OF
THE FIVE CITIES FIRE AUTHORITY
This JOINT EXERCISE OF POWERS AGREEMENT (the “Agreement” or “JPA”) is dated this __ day of ____, 2023, for reference purposes only, and is entered into by and between the undersigned Member Agencies. The undersigned Member Agencies, the Cities of Arroyo Grande and Grover Beach, may be referred to herein individually as “Member Agency” and collectively as “Member Agencies” or “Members.”
RECITALS
A. The City of Arroyo Grande (“Arroyo Grande”) and the City of Grover Beach (“Grover Beach”), (collectively, “Member Agencies”) have the authority under California law to provide fire protection, emergency medical and related services within their respective jurisdictions.
B. Each Member Agency is a public agency authorized and empowered to contract with the other Member Agency for the joint exercise of powers under the Joint Exercise of Powers Act, Sections 6500, et seq., of the California Government Code (the “Act”).
C. Each Member Agency is a local public entity, and are municipalities in contiguous geographical proximity, having similar fire protection needs, and a history of coordination and cooperation between each other.
D. By jointly exercising fire protection, emergency medical and related services, each Member Agency is able to achieve cost savings and operational efficiencies for the benefit of the persons residing in the Member Agencies’ respective service areas.
E. On June 7, 2010, the Member Agencies, desirous of improving the quality and level of fire suppression and emergency medical service delivery within their communities through the sharing of resources and expertise, entered into a Joint Powers Authority Agreement (the “JPA”) and have operated as Five Cities Fire Authority pursuant to the terms and conditions in that agreement since that time. Under that agreement, the Member Agencies have shared fire services, allowing for cost savings and operational efficiencies in providing fire services to the public.
Consolidation of such fire services into a single public entity has allowed for an efficient fire protection organization significant command and administrative benefits, and a net-decrease in operational costs with a concurrent increase in operational efficiency.
F. The Oceano Community Services District was previously a member of the JPA, but voluntarily exited the JPA in June 2023 due to an inability to meet its contribution obligations under the JPA.
G. The Member Agencies have now determined the specific terms of the 2010 agreement should be amended so that this Amended and Restated Joint Powers Agreement accurately reflects the Authority's current structure and operations.
Attachment 2
65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
NOW, THEREFORE, for and in consideration of the mutual covenants and conditions hereinafter stated the Member Agencies agree as follows:
1. Recitals. The recitals above are true and correct, and are hereby incorporated into the terms of this Agreement as though fully set forth herein.
2. Term. The term of this Agreement shall commence as of the date the Member Agencies have fully executed this Agreement and continue until terminated pursuant to the terms of this Agreement.
3. Definitions. Except where the context otherwise clearly requires, the following words and phrases shall have the meanings specified below:
“Act” shall mean the Joint Exercise of Powers Act of the State of California, commencing with California Government Code Section 6500, as now existing or as may hereinafter be amended or supplemented.
“Agreement” shall mean this Joint Exercise of Powers Agreement by and between the Member Agencies, as supplemented, amended and/or restated from time to time. “Authority” shall mean the Five Cities Fire Authority, a joint powers authority created by this Agreement in accordance with the Act, made up of the Member Agencies, the Cities of Arroyo Grande and Grover Beach.
“Authority Area” means that geographic area encompassing the total combined jurisdictional boundaries of the Member Agencies, as lawfully changed from time to time. “Board” or “Board of Directors” means the governing body of the Authority as established by this Agreement.
“Board member” or “Director” means a member of the governing body of the Authority. “Fiscal Year” means July 1 of one year through June 30 of the following year. “Formation Date” means the date when the Authority was originally created, June 7, 2010.
4. Creation of Authority.
4.1 Authority Created. The Authority was created as a public entity on June 7, 2010 as the “Five Cities Fire Authority” by operation of the prior Joint Powers Authority agreements.
The Authority was and is formed pursuant to the provisions of Article 1, Chapter 5, Division 7, Title 1 (commencing with Section 6500) of the Government Code of the State of California, which authorizes two or more public agencies, by a joint powers agreement entered into respectively by them and authorized by their legislative or governing bodies, to exercise jointly any power or powers common to the member agencies. The Authority shall be a public entity separate from the Member Agencies and is responsible for the administration of this agreement. 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
The debts, liabilities and obligations of the Authority shall be the debts, liabilities and obligations of the Authority alone and not of one or more of the Member Agencies. (a) Confirmation of Authority Name. The Authority is known as the “Five Cities Fire Authority.”
4.2 Notices. Within thirty (30) days after execution of this Amended and Restated Agreement, the Authority shall cause a notice of such amendment to be prepared and filed with the office of the California Secretary of State containing the information required by California Government Code § 6503.5. Within ten (10) days after execution of this Amended and Restated Agreement, the Authority shall cause an amended statement of information concerning the Authority, as required by California Government Code § 53051, to be filed with the office of the California Secretary of State and with the County Clerk, of any change in facts as required by Government Code § 53051(a).
4.3 Authority Area. The geographic boundaries of the Authority (“Authority Area”) shall be coextensive with those of the Member Agencies, as lawfully changed from time to time.
4.4 Other Joint Powers Agreements Superseded. As of the Effective Date of this Agreement, any prior JPA agreements and/or amendments of the Five Cities Fire Authority shall have no further force and effect.
4.5 Bylaws. The Board may adopt bylaws and any other regulations, policies, or procedures for the operation of the Authority not inconsistent with State constitutional, statutory, or decisional case law or the California Code of Regulations.
4.6 Purpose. The purpose of this Agreement is to jointly exercise fire protection, emergency medical, and related services. The purpose shall be accomplished, in the manner set forth in this Agreement. The Member Agencies each possess the powers necessary or convenient for the accomplishment of such purposes.
(a) Through the Authority and its governing body, the Member Agencies shall collaborate, cooperate and seek to determine ways in which the Member Agencies and the citizens residing within the Authority Area can benefit from joint services. (b) The Authority shall provide fire protection, emergency medical, and related services within the Member Agencies.
(c) The Member Agencies shall jointly benefit through the sharing of resources, which may include but is not limited to the sharing of executive and/or administrative staff. Among other public benefits, the Member Agencies shall receive reduced costs and more efficient services through the sharing of such resources. (d) The purposes of this Agreement shall not be construed as limiting, and the Authority, and the Board shall be authorized to further define the means by which the joint exercise of services may be accomplished.
65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
(e) The Authority may, if approved by the Member Agencies, accept new Parties to this Agreement, and the purposes of this Agreement shall include the provision of fire protection, emergency medical, and related services within the territorial jurisdiction of any new Parties. The purposes of this Agreement shall apply to any new Parties.
5. Powers of Authority.
5.1 The Authority shall exercise the powers common to the Member Agencies, powers otherwise permitted under the Act, and powers necessary to accomplish the purposes of this Agreement.
5.2 The Authority is hereby authorized, in its own name, to do all acts necessary, convenient and appropriate for the exercise of the foregoing powers for the purposes set forth in this Agreement and to do any or all of the following:
(a) Setting and adopting policies, including the scope of the Management Committee’s authority under Section 7.1.
(b) Adopting an annual budget.
(c) Employing personnel, consultants, advisors and independent contractors, setting parameters for labor negotiations, and ratifying labor agreements. (d) Entering into contracts, leases and other agreements, which may include, but are not limited to, a contract for administrative and fiscal services and a contract with a Certified Public Accountant for annual audit services or mutual aid or automatic response agreements or contracts for service to other jurisdictions. (e) Applying for; receiving and disbursing grants, loans or other aids from any private or public agency.
(f) Setting fees for service where permitted by law.
(g) Receiving, disbursing and investing funds.
(h) Purchasing and holding title to property, and obtaining leaseholds, licenses, and other interests in property, including the authority to acquire, dispose of, construct, manage, maintain or operate any building, works or improvements. (i) Issuing revenue bonds pursuant to California Government Code Section 6540, et seq.
(j) Obtaining in its own name all necessary permits, licenses, opinions and rulings.
(k) Expending funds of the Authority only for the purpose of carrying out the provisions of this Agreement as they now exist or may hereafter be amended. Such powers shall 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
be exercised in the manner provided in the Act subject only to such restrictions as set forth in this Agreement or other applicable law.
(l) Suing and being sued in its own name.
(m) Carrying out and enforcing all of the provisions of this Agreement. (n) To incur debts, liabilities or obligations, which do not constitute a debt, liability or obligation of any Member Agency;
(o) To receive gifts, contributions and donations of property, funds, services and other forms of assistance from persons, firms, corporations, and governmental entities, provided that the Authority consents to such gifts, contributions and donations; (p) To fix the compensation, if any, paid to the Board of Directors, Secretary, Treasurer, Controller and Attorney, in compliance with all applicable laws; (q) To prescribe the duties, compensation and other terms and conditions of employment of other agents, officers and employees;
(r) To adopt reasonable rules and regulations for the conduct of the day-today operations of the Authority; (s) To apply for, accept, receive and disburse grants, loans and other aid; (t) To invest money in the treasury, pursuant to Government Code section 6505.5, that is not required for the immediate necessities of the Authority, as the Authority determines advisable, in the same manner and on the same conditions as local agencies, pursuant to Section 53601 of the Government Code;
(u) To exercise any and all powers which are provided for in the Act and in Government Code section 6584 et. seq. including, without limitation Government Code section 6588, as they exist on the Effective Date of this Agreement or may hereafter be amended. (v) Other powers and duties incidental to those enumerated herein.
5.3 Manner of Exercise of Powers. The powers of the Authority shall be limited only by the terms of this Agreement, the Act, and applicable law, as amended from time to time. The laws of the State of California applicable and common to general law cities shall govern the Authority in the manner of exercising its powers common between the cities, subject to such restrictions as are applicable to the City of Arroyo Grande in the manner of exercising such powers, as required by Government Code section 6509.
6. Governance.
6.1 Board of Directors. The Authority shall be governed by a four-member Board of Directors (collectively “Board,” individually “Board member” or “Director”). Each Member Agency may appoint Board members, as follows: two (2) elected city councilmembers, which 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
may but is not required to include the Mayor from each Member Agency. Each of the four (4) Authority Board members, and any alternates, shall be appointed as determined by the respective Member Agencies’ City Councils and any applicable local policies. All the power and rights of the Authority shall be exercised by the Board, subject to the rights reserved by the Member Agencies as set forth in this Agreement; provided, however, that the Board may delegate such powers and authority to committees, sub-committees, the Management Committee, and others as the Board deems appropriate.
6.2 Compensation. Directors may receive such compensation from the Authority for services as may from time to time be established by the Board, subject to the limits of applicable law. Directors shall be reimbursed for necessary and actual expenses incurred in the conduct of the Authority’s official business as permitted by law and by policies adopted by the Board.
6.3 Board Officers, Alternating Member Agency Term. In the interest of full representation between the two Member Agencies, the role of Board Chair and Vice Chair shall alternate between the two Member Agencies as follows:
(a) A Board member from one of the two Member Agencies shall serve as Board Chair over a one-year term (“Chair Term”). During each Chair Term, the Vice Chair shall be selected from a different Member Agency than that of the Board Chair, ensuring the Vice Chair serves a city council that is not part of the City organization on which the Board Chair serves.
(b) Following each one-year Chair Term, the Chair and Vice Chair shall alternate between the two Member Agencies, so at all times the Board Chair and Vice Chair shall be from the separate Member Agencies.
(c) The Chair, or in the Chair’s absence the Vice Chair, shall preside at and conduct all meetings of the Board and execute agreements and other official instruments on behalf of the Authority. In the absence or inability of the Chair to act, the Vice Chair shall act as Chair. In the absence of the Chair and the Vice Chair, the absent members may appoint a different member of the Board to serve as an alternate. (d) The procedure for selecting the Board Chair and Vice Chair shall be set forth within the Authority’s adopted by-laws or other adopted Authority policy as soon as practical.
6.4 Meetings of the Board.
(a) Annual Meeting. The Board shall hold an annual meeting to review the services provided by the Authority and to approve a budget, and shall hold regular meetings at least quarterly, on a schedule adopted pursuant to subsection 6.4(d) below. The Board may hold additional regular meetings as determined by the Board and may adopt such procedures and resolutions for conducting such meetings and other business as the Board deems appropriate.
Alternatively the Board may establish an executive or other committee to hold regular meetings. (b) Conduct of Meetings. All meetings of the Board including, without limitation, regular, adjourned regular, and special meetings shall be called, noticed and 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
12609-0001 \1234376v1.doc -3-
conducted in accordance with the provisions of the Ralph M. Brown Act, Sections 54950 et seq. of the California Government Code.
(c) Quorum. A simple majority of the Board shall constitute a quorum for the purpose of transacting business. The affirmative vote of a majority of the quorum shall be required for the Authority to take any action and must include at least one affirmative vote from one Board member from each Member Agency, except: (i) where different voting requirements are provided for by applicable law or local Authority policies; and (ii) approval of budgets, issuance of any bonds, exercise of eminent domain, and incurrence of any debts, liabilities, obligations, certificates of participation or other evidence of indebtedness shall require an affirmative vote of the majority of the membership of the Board subject to any specific, adopted or applicable Authority purchasing policy. This section shall not prohibit the Board from delegating the authority to purchase goods and services, including goods and services consistent with any adopted or applicable Authority purchasing policy, specified herein. (i) In the absence of a quorum at any meeting of the Board, a majority of the directors present, or the Chair in the absence of all directors, or the secretary may adjourn the meeting from time to time without further notice, but no other business may be transacted. (d) Location and Date. The Board shall meet at the Principal Governance and Business Office as set forth in Section 9 of this Agreement, or at such other place as may be designated by the Board for its regular, adjourned regular, and special meetings consistent with this Agreement. The dates upon which, and the hour and place at which, any regular meeting shall be held shall be fixed by resolution of the Board and a copy of such resolution shall be provided to each Member Agency.
(e) Agendas and Minutes. The Board may select, appoint, or employ a secretary to keep or cause to be kept, at the principal business office, the principal governance office, or such other place as the Board may order, a book or electronic copy of minutes of all meetings of the Board and its committees as required by law, with the time and place of holding, whether regular or special, the notice thereof given, the names of those present at the meetings, and the proceedings thereof. As soon as practicable after each meeting, the secretary shall cause a copy of the minutes to be forwarded to each director of the Board, and to the Member Agencies. The secretary need not be a director and shall serve at the pleasure of the Board.
6.5 Board Committees
(a) Committees. The Board may create any standing or ad hoc committees as it sees fit. The Board may delegate to any committee the authority to approve any action or transact any business of the Board, except for business that is required by this Agreement to be approved by the full Board.
(b) Actions of Full Board. Approval of budgets, issuance of any bonds, exercise of eminent domain, and incurrence of any debts, liabilities, obligations, certificates of participation or other evidence of indebtedness as may be set forth in the Authority’s effective purchasing policy and any legislative actions as defined by State law shall require an action of the full Board and shall not be delegated to any Board committees. 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
(c) Procedures. Except for exempt ad hoc committees, all meetings of committees including, without limitation, regular, adjourned regular, and special meetings shall be called, noticed and conducted in accordance with the provisions of the Ralph M. Brown Act, Sections 54950 et seq. of the California Government Code. Committees shall maintain minutes of their proceedings.
6.6 Bylaws. The Board may adopt bylaws and any other regulations, policies, or procedures for the operation of the Authority.
7. Executive Officers and Personnel
7.1 Management Committee. The management of the Authority shall vest in a Management Committee made up of the current City Manager for both Member Agencies or the City Managers of any Member Agencies added to this Agreement. The Management Committee shall be participants in, and oversee all non-Management Committee Executive Officers, and any Executive Officers’ responsibilities as set forth in this Agreement. The Management Committee shall have the power, subject to any Board direction or Board-adopted policies:
(a) To execute any contract up to an amount consistent with any ordinance or rules adopted by the Board establishing the Authority’s purchasing policies and procedures, and/or policies for capital costs of special services, equipment, materials, supplies, maintenance, or repair that involves an expenditure by the Authority within budgetary limits approved by the Board (“Board purchasing policies”);
(b) To hire, terminate, and oversee the performance of the Fire Chief; (c) To expend funds of the Authority subject to any Board purchasing policies and enter into contracts, whenever required for the immediate preservation of the public protection, health, or safety;
(d) To sell any personal property of the Authority up to a value consistent with the Board’s purchasing policies;
(e) To support the Board as determined by the Board in labor negotiations and management;
(f) To administer the priorities and policies established by the Board for fire services of the Authority;
(g) To perform such other duties as may be assigned by the Board, and to report at such times and concerning such matters as the Board may require.
7.2 Executive Officers. The executive officers of the Authority shall include the Management Committee, the Chief Executive Officer, the Fire Chief, the Treasurer, the Auditor/Controller, and such other executive offices as created by the Board. All executive officers shall report to the Management Committee, and the acting Chief Executive Officer. 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
(a) Chief Executive Officer. The Chief Executive Officer will be the City Manager from the Management Committee that is employed by the same Member Agency from which the current Board Chair serves as a city councilmember. The Chief Executive Officer shall alternate automatically, serving during the same Chair Term that the Board Chair serves on the Chief Executive Officer’s Member Agency city council. The Chief Executive Officer shall carry out the decisions of the Management Committee and act as the signatory for the Authority on all actions requiring approval of the Management Committee. (b) Fire Chief. The Fire Chief shall be responsible for the proper and efficient operation of the Authority as is or hereafter may be placed in his or her charge, or under his or her jurisdiction or control, pursuant to the provisions of this Agreement, or of any ordinance, resolution, bylaw or minute order of the Board. The Management Committee shall appoint and oversee the performance of the Fire Chief. The Fire Chief, as an at will employee of the Authority, shall report to the Management Committee and Chief Executive Officer, and by extension the Board, on all of the following, in a manner prescribed by the Board in consultation with the Management Committee:
(i) Plan, coordinate, supervise, and evaluate the Authority’s operations, and conduct day-to-day operations of the Authority; (ii) Supervise and manage Authority fire personnel;
(iii) Coordinate and supervise training of fire personnel; (iv) Make recommendations to the Management Committee and Board on Authority operations;
(v) Establish policies and procedures of the Authority to implement directives from the Board and the Management Committee; (vi) In conjunction with the Treasurer, prepare an annual budget for submission to the Management Committee and the Board;
(c) Treasurer. The Director of Administrative Services of Arroyo Grande shall be the Authority Treasurer. The Authority Treasurer shall perform such duties as are set forth in this Agreement and any other duties specified by the Board or as required by the Act, and shall perform the duties specified in Government Code sections 6505 and 6505.5, as amended from time to time. The Authority Treasurer shall be the depositary of funds and shall have custody of all money of the Authority, from whatever source. (i) The Board may at any time select, employ, or appoint a new or different Authority Treasurer who shall be: (1) the Treasurer or Finance Director of one of the Member Agencies; (2) a certified public accountant; or (3) such other officer or employee of one of the Member Agencies as the Board shall deem qualified to act as the Authority Treasurer, so long as permitted by law.
(d) Auditor/Controller. The Authority Auditor or Authority Controller shall be the same officer or employee of the City serving as the Authority Treasurer. The Authority 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
Auditor or Authority Controller shall perform such duties as are set forth in this Agreement and any other duties specified by the Board or as required by the Act. (i) The Board may at any time select, employ, or appoint a new or different Authority Auditor or Authority Controller who shall be: (1) the auditor or controller of one of the Member Agencies; or (2) such other officer or employee of one of the Member Agencies as the Authority shall deem qualified to act as Authority Auditor or Authority Controller, so long as permitted by law.
(e) Secretary. The Board shall appoint, or designate to the Management Committee in consultation with the Fire Chief to appoint a Secretary who shall serve at the pleasure of the Board. The Secretary shall be the official custodian of records for the Authority, make all filings requested by the Board and legally required, and be responsible for agendas and meeting minutes as provided in Section 6.4(f) of this Agreement.
7.3 Official Bond. Pursuant to Government Code section 6505.1, the public officer, officers or persons who have charge of, handle or have access to any property of the Authority shall file an official bond in an amount of $25,000, unless fixed by the Parties to this Agreement in a different amount by unanimous decision of the Board.
7.4 Other Officers and Staff
(a) Attorney for Authority. The Attorney for the Authority shall be appointed by the Board of Directors. The Attorney for the Authority or a designated deputy shall attend all meetings of the Board of Directors; provided, however, that the absence of the Authority Attorney shall not affect the validity of any meeting. The Attorney shall perform such other duties the Board of Directors specifies.
(b) Officers and Professional Services. The Board may select, appoint, or employ any other officers, or professional and expert services as may be necessary or appropriate to accomplish the purposes of this Agreement, including but not limited to, legal counsel, financial consultants, accountants, engineers, architects, contractors, appraisers and any other consultants and advisors, which may be a corporation, partnership, firm or individual. The Board may delegate to the Fire Chief or to a committee the authority to hire officers and professional services.
(c) Employees of Authority. Employees of the Authority are (i) those individuals employed by Arroyo Grande, but assigned to the Authority between the Authority and Arroyo Grande referenced in Exhibit A of this Agreement; and (ii) those individuals employed directly by the Authority. The Parties’ governing bodies may meet in closed sessions for the purpose of providing input to the Board regarding the terms of compensation for Authority employees.
(d) Shared Resources. The Board may contract with a Member Agency, or its officers, to provide necessary administrative services to the Authority as appropriate. All personnel employed by the individual Member Agencies shall remain employees of their respective Member Agency unless and until the Authority affirmatively employs such personnel 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
pursuant to its powers. No express or implied employment contract between any Member Agency employee and the Authority exists as a result of this Agreement.
7.5 Interference Prohibited. The Board and the Member Agencies shall deal with the administrative services of the Authority (which includes the Authority’s Treasurer, Auditor/Controller and Secretary) only through the Management Committee who may delegate to the Fire Chief and their responsibility set forth herein, except for the purpose of inquiry.
Neither the Board, the governing body of any Member Agency, nor any individual members of either shall give orders to any subordinate of the Fire Chief.
7.6 Rules and Regulations. The Board shall forthwith adopt rules and regulations and perform all other acts necessary so that the Authority may hire personnel.
8. Equipment and Facilities.
8.1 Fire Stations and Other Real Property
(a) Member Agency Buildings and Structures. Buildings and structures owned by Member Agencies may be utilized for the Authority’s use, but shall remain the property of the respective Member Agency. Each Member Agency shall be responsible for the maintenance and insurance of Member Agency buildings. The Authority shall not directly own, maintain, or insure any existing building or structure, unless the Authority and a Member Agency expressly agree in writing that the Authority accepts ownership, responsibility for maintenance, or responsibility to insure a particular building or structure. Any building constructed or owned by the Authority after the Formation Date shall be the property of the Authority, and in the event of dissolution of the Authority, shall be disposed of as provided in this Agreement. (i) Maintenance By Members. The respective Members owning a fire station shall be responsible for the maintenance, repair, replacement, and improvements to the building structure, mechanical systems, electrical, plumbing, and exterior infrastructure (i.e., roof coverings, driveway, etc.). The Members are not responsible for (i) the maintenance or repair of any systems that have been installed by the Authority and are unique to fire service operations (e.g., dispatch/radio systems, computer networks, etc.), and (ii) the cost of performing any such maintenance or repairs caused by the negligence of the Authority or its employees, agents, servants, licensees, contractors, or invitees.
(ii) Maintenance By Authority. The Authority shall be responsible for routine maintenance of fire stations, interior decorating, landscaping, and fire alarm systems. The Authority is also responsible for the maintenance, repair, replacement, and improvements of the dispatch telecommunication systems and all systems that have been installed by the Authority which are unique to fire service operations (e.g., dispatch/radio systems, computer networks, etc.).
(b) Contributions of Real Property. Either Member Agency may contribute real property to the Authority for the Authority’s use. The Member Agency owning the interest in the real property shall continue to own said interest, unless the Member Agencies and Authority agree otherwise. The Board and the Member Agency owning the interest shall agree on the terms of the contribution.
65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
(c) Lease or Purchase of Additional Stations. The Authority shall be authorized to lease, purchase, or obtain any other interest in real property for the Authority’s uses.
8.2 Equipment and Other Personal Property
(a) Equipment Provided by Member Agencies. As soon as reasonably practicable, the Authority shall inventory all equipment owned by the Member Agencies that is available for the Authority’s use. All Member Agency equipment shall remain the property of that Member Agency, unless the Member Agencies otherwise agree. The Member Agency may contribute additional equipment for the Authority’s use upon terms agreed between the Member Agencies and the Authority. The Authority may rent or borrow equipment from the Member Agencies for temporary use. All equipment owned by the Authority or subject to an equipment lease for financing purposes, shall remain the property of the Authority. (b) Acquisition of Equipment. The Authority may acquire any equipment or other personal property for the Authority’s use.
8.3 Separate Property of the Parties. Exhibit C, attached and incorporated by reference, establishes the property which is owned by a Member Agency and not the Authority, notwithstanding that the Authority may use that property.
9. Principal Offices.
9.1 Principal Governance and Business Office. The principal business office and governance office of the Authority at the date this Agreement is effective shall be Authority’s Station 1, at 140 Traffic Way, Arroyo Grande, California, 93420, (“Principal Office”) or as otherwise determined by the Board. The Board may change the Principal Office, from time to time, and from one location to another, within the Authority Area. Any change shall be noted by the Authority Secretary and reflected in Authority document, but shall not be considered an amendment to this Agreement.
10. Financial Provisions.
10.1 Administrative services shall be provided by, and allocated between the Member Agencies as shown on Exhibit A, attached and incorporated by reference to this Agreement.
10.2 Operation and capital improvements costs shall be allocated among the jurisdictions in accordance with the cost-sharing formula in Exhibit B, adopted by the Board and the governing bodies of the Member Agencies, and attached and incorporated by reference into this Agreement.
10.3 Member Agencies will be billed quarterly by the Authority Treasurer, in accordance with the provisions of Exhibit A and B. Member Agencies agree to pay the invoices on a quarterly basis.
10.4 Capital Purchases. Capital purchases that solely benefit a Member Agency shall be funded by that Member Agency. All other capital purchases shall be funded on terms 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
established by the Board. The funding of capital purchases that are not budgeted shall be separately approved by each Local Sub-Committee.
10.5 Budget.
(a) The Board shall initially adopt a budget within 30 days of execution of this Amended and Restated JPA. The Board shall adopt a budget for maintenance and operation costs, and costs of special services in time to allow review by the Member Agencies prior to April 30th of each fiscal year. The Authority’s fiscal year shall be July 1 to June 30. Each Member Agency shall prepare its own annual budget for capital costs related to Authority services. Subject to the exception provided below in Section 10.5(b), no expenditures may be made by or on behalf of the Authority unless authorized by a budget or budget amendment approved by the Board.
10.6 Invoicing. Upon completion of the initial budget, and thereafter at such other intervals as determined appropriate by the Board, the Authority shall determine the amount of the budget expenses payable during the ensuing period pursuant to each Member Agency’s share of expenses required by this Agreement, and the budget approved by the Board. The Authority shall submit to each Member Agency an invoice showing the Member Agency’s share for the applicable period together with a calculation of the Member Agency’s share. Each Member Agency shall pay to the Authority the amount invoiced within 30 days after the date of the invoice. Any amount not paid within 60 days of the date of an invoice shall be delinquent.
10.7 Default and Delinquency. Any Member Agency which defaults in its obligation to pay or advance any amounts due pursuant to this Agreement after such amounts have become delinquent shall be deemed to have waived and relinquished any rights and benefits it may have under this Agreement. Any defaulting Member Agency shall be liable to the Authority for interest on the unpaid amount at the rate of 10% per annum, or the maximum rate allowed by law if it is less than 10% per annum, until the overdue invoice amount is paid in full. If the Agreement is terminated, then the defaulting Member Agency shall remain liable for payment of its share of debts, liabilities and obligations under this Agreement incurred prior to the date of termination, plus interest.
10.8 Accounting. The Authority shall maintain strict accountability of all funds, receipts and expenses, and shall keep and maintain appropriate records and accounts of all funds, receipts and expenses under this Agreement in accordance with generally accepted accounting practices for California public agencies and the requirements of the Act. The Authority shall allow any Member Agency, or any of its employees, accountants, attorneys or agents to review, inspect, copy and audit any such records and accounts.
10.9 Record of Contributions. The Authority shall maintain records of all fire prevention and suppression equipment, medical equipment, and associated property and assets contributed by each Member Agency and by the Authority, including any staff resources contributed to the Authority.
65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
10.10 Audit. The records and accounts of the Authority shall be audited annually by an independent certified public accountant and copies of such audit reports shall be filed with the State and each Member Agency pursuant to the requirements of Section 6505 through 6505.6 of the Government Code. The audit shall conform to generally accepted auditing standards. Such report shall be filed within 12 months after the end of the fiscal year or years under examination, and no later than fifteen (15) days after receipt of such audit reports by the Authority.
10.11 Expenditures. The Board shall establish and comply with a system and procedure for the review and approval of Authority expenditures and claims and the drawing and signing of Authority warrants or checks. All expenditures shall be consistent with the approved budget, except as otherwise determined by the Board.
11. Debts, Liabilities, Obligations. Subject to all applicable laws, including but not limited to Government Code section 6508.1, all debts, liabilities, and obligations of the Authority shall be those of the Authority, and do not constitute debts, liabilities, or obligations of any one or more of the Member Agencies. The responsibilities and obligations of each Member Agency to this Agreement shall be solely as provided in this Agreement, or as provided in supplemental agreements or amendments as shall be executed by the Member Agencies. As required by law, the Member Agencies are liable for CalPERS liability of the Authority as follows:
11.1 The Authority shall use the City of Arroyo Grande’s CalPERS contract for Employees of the Authority.
11.2 If a Member Agency withdraws from the Authority, the withdrawing Member Agency shall be liable for, and upon demand shall promptly pay, its share of the existing and/or contingent liabilities of the Agency as of the effective date of the withdrawal. The withdrawing Member Agency’s share of liabilities shall bear the same relationship to the whole as its annual contribution for the operation of the Authority bears to the whole of all annual contributions.
11.3 If a Member Agency withdraws from the Authority, but the Authority does not dissolve or terminate, and the Authority has established a plan of periodically paying down part of its unfunded accrued pension liability (“UAPL”) debt to CalPERS, the withdrawing Member Agency shall continue to be liable, and to promptly pay thereafter to Authority upon being billed, its share of the Authority’s UAPL based upon its prior years of membership. The withdrawn Member Agency’s share of such UAPL expense shall be the determined according to the same formula used by the Authority to allocate such costs during the final year of the withdrawing Member Agency’s membership.
11.4 The withdrawing Member Agency shall also be liable for any additional Authority expenses as of the effective date of the withdrawal that exclusively benefit the withdrawing Member Agency as well as 100% of any early termination fees that accrue due to the withdrawal of the Member Agency.
11.5 Until such time that the Authority utilizes a different contract approved by its Board, if the City of Arroyo Grande dissolves, terminates, or ends its contractual relationship with CalPERS(“the triggering events”), Government Code sections 6508.1 and 6508.2 will require all existing Member Agencies, and certain past Member Agencies, to each assume 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
individual financial responsibility for its proportionate share of the UAPL then in effect. By joining Authority, each Member Agency promises and represents that upon occurrence of a triggering event: (i) it will undertake this obligation when requested by either CalPERS or the Authority; and (ii) that unless the Board determines differently, the proportionate share each Member Agency will assume shall be based upon the same formula used to determine each Member Agency’s share of the Authority’s last periodic UAPL payment to CalPERS in the year prior to the triggering event.
11.6 Prior to Execution. The debts, liabilities and obligations of each Member Agency in existence or accrued as of the full execution of this Agreement shall remain the debts, liabilities and obligations of that Member Agency and shall not be assumed by or transferred to the Authority. After the execution of this Agreement by both Member Agencies, however, any existing debt, liability or obligation of the Member Agencies may be expressly approved or accepted by the Authority by a formal written action of the Board.
11.7 Fire Engines 2 and 3 Equipment Lease Payments. Notwithstanding any other provisions of this Agreement to the contrary, the Parties mutually agree and understand that as a result of any dissociation, withdrawal or termination of this Agreement, no Party will be obligated for future payment lease obligations for any Engine that does not remain in the custody, control, and possession of that Member Agency.
12. Indemnity and Hold Harmless; Insurance.
12.1 Indemnification of Member Agencies. The Authority shall indemnify, defend and hold harmless the Board of Directors, the individual Member Agencies, and their members, officers, directors, employees and agents from and against any and all liability, loss, damages, expenses, costs (including, without limitations, costs and fees of litigation or arbitration) of every nature, arising out of any act or omission related to this Agreement, any individual Member Agency, or their members, officers, directors, employees and agents.
12.2 Indemnification for Prior/Separate Acts. Each Member Agency (Indemnifying Member Agency) shall defend, indemnify and hold harmless the Authority, each Director, the other Member Agency, and the Authority and each Member Agency’s respective Council or governing board members, officers, agents and employees, from any and all claims, losses, damages, costs, injuries and liabilities of every kind, including attorney’s fees and expert’s fees, arising directly or indirectly from the Indemnifying Member Agency’s acts or omissions occurring prior to the effective date of this Agreement’s initial Effective Date of June 7, 2010 or otherwise outside the scope of this Agreement.
12.3 Insurance. The Authority shall acquire insurance protection as is necessary to protect the interests of the Authority and the Member Agencies. The premiums for insurance acquired by the Authority, as well as any anticipated funds necessary to pay for self-insured retentions and deductibles for insurance, shall be determined based upon actuarial studies and included in the budget. Any adjustments to the budget to pay for insurance premiums, selfinsured retentions, and deductibles shall be prepared by the Management Committee for presentation to the Board of Directors for consideration and approval. 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
12.4 Survival. These defense, indemnification, and hold harmless obligations shall survive and continue in full force and effect after withdrawal of any Member Agency from this Agreement or termination of this Agreement for any reason with respect to any negligent acts, errors or omissions that occurred before the date of such withdrawal or termination.
13. Termination.
13.1 Termination.
(a) When there are only two Member Agencies in the Authority, either Member Agency may unilaterally terminate the Agreement with an effective termination date of June 30 of any Fiscal Year, provided that written notice is provided to, and received by, the Authority and the other Member Agency by the terminating Member Agency no later than June 30 of the prior Fiscal Year, as expressed by vote of the governing body of the terminating Member Agency. Any terminating Member Agency shall be obligated to pay that Member Agency’s contributions for the Fiscal Year ending on the effective date of termination. (b) The Member Agencies may all jointly agree by written consent to terminate the Agreement, as expressed by resolution of the governing boards of all Member Agencies (passed by vote of the membership of the governing body of each Member Agency).
Such termination shall provide for adequate time to wind-up the affairs of the Authority and distribute any assets pursuant to this Agreement. The Member Agencies shall be obligated to pay their contributions until the effective date of termination.
13.2 Disposition of Member Agencies’ Property Upon Termination. Any property that was acquired by either Member Agency prior to entering this Agreement, and that is required either by this Agreement or by any subsequent act or Agreement to remain the property of the Member Agency, shall be returned to the Member Agency upon termination of this Agreement.
Exhibit C lists the separate property of the Member Agencies, but a Member Agency may prove that it, and not the Authority, owns certain property by providing documentation establishing such ownership. If property is not listed in Exhibit C, and no documentation establishes ownership of that property, the property will be presumed to be owned by the Authority.
13.3 Disposition of Authority Property Upon Termination. Upon termination of this Agreement, the assets and property of the Authority shall be distributed as follows (a) First, if either Member Agency is in default of its obligation to pay or advance any amounts due to Authority pursuant to this Agreement, then any funds or assets of the defaulting Member Agency shall be applied to the Authority in satisfaction of any such delinquency.
(b) Second, any other funds on hand shall be used to liquidate and wind-up the affairs of the Authority.
65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
(c) Third, any surplus funds on hand remaining after satisfaction of subsections (a) and (b) above shall then be returned to the Member Agencies in proportion to their proportional financial contributions made to the Authority. (d) Fourth, any property acquired by either Member Agency prior to entering this Agreement shall be returned to the Member Agency which owned the property at the Formation Date; provided, however, that if any such property has been substantially improved, repaired or modified by Authority funds, it shall be distributed pursuant to subsection (e) below. (e) Fifth, any remaining property and assets shall be divided and distributed amongst the Member Agencies pursuant to separate agreement of the Member Agencies entered into at that time. If such subsequent agreement is not successfully negotiated and agreed to within a reasonable period of time, then the remaining property and assets shall be sold and the net proceeds from any sale shall be distributed among the Member Agencies in proportion to their financial and equipment contributions made to the Authority during the operation of this Agreement and any ancillary agreements.
14. Conflict Resolution. The Member Agencies agree that any and all disputes, claims or controversies between the Member Agencies arising out of or relating to performance of this Agreement, shall be resolved pursuant to the conflict resolution provisions as follows:
14.1 The Member Agencies shall first meet and attempt in good faith to negotiate and resolve any dispute arising out of or relating to this Agreement, subject to subsequent approval of any such resolution by the respective governing boards. The Member Agencies may, in each Member Agency’s respective discretion, appoint either an alternative representative of the governing body or an ad hoc committee constituting less than a quorum of the governing body to meet and attempt in good faith to negotiate and resolve any dispute arising out of or relating to this Agreement, subject to subsequent approval of any such resolution by the respective governing boards.
14.2 If the matter is not resolved by negotiation pursuant to Section 14.1 above, then the Member Agencies agree that the matter shall be submitted to mediation within a reasonable period of time after receipt of a written request from one Member Agency to the other Member Agency requesting such mediation. The Member Agencies shall cooperate with one another in selecting a mediator and in scheduling the mediation proceedings. Should the Member Agencies be unable to agree upon a mediator, they shall agree upon a mediation service and shall have that service select a mediator for them. The Member Agencies agree that they shall participate in the mediation in good faith and that they will share equally in the costs of mediation. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the Member Agencies, their agents, employees, experts and attorneys, and by the mediator or any employees of the mediator, are confidential, privileged and inadmissible for any purpose, including impeachment, in any litigation or other proceeding involving the Member Agencies, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.
14.3 If the matter is not resolved by negotiation pursuant to Section 14.1 above, or by subsequent mediation pursuant to Section 14.2 above, then the Member Agencies may submit 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
the matter to binding or non-binding arbitration, but only if both Member Agencies agree to submit the particular controversy to arbitration. Neither Member Agency shall have a right to submit any controversy to arbitration without the other Member Agency’s consent.
15. New Members.
15.1 Addition of New Members. The Authority may set the terms and conditions for admitting new members (a “New Member Agency”) that it deems appropriate either by amendment to this Agreement or the Bylaws. New members may only be admitted with unanimous approval of the Board and the governing bodies of each Member Agency. Approved new Members shall execute a copy of this Agreement, as amended, and shall thereafter be subject to all terms and conditions contained herein.
15.2 Construction. The terms of this Agreement shall be construed so as to apply to new Members the same as to the initial Member Agencies to the Agreement. New Members shall have the rights and obligations accorded to “Members” or “Member Agencies (whether singular or plural) under this Agreement.
15.3 Cost Share. Prior to the acceptance of any New Member Agency, the proposed New Member Agency shall pay an amount, as determined by the Board, for the proposed New Member Agency’s fair share of any start-up costs or other initial investments incurred by the Authority to admit the New Member Agency.
15.4 Funding of Services. The Authority shall not provide any fire protection or related services within a New Member Agency’s geographic area unless and until the New Member Agency deposits sufficient funds to cover the estimated costs of services for a period of time as determined by the Board, to be not less than six (6) months.
16. Withdrawal. Notwithstanding any other provision of this Agreement, any Member Agency may withdraw from the Authority by providing the Authority with written notice of its intent to withdraw consistent with Section 13.1 of this Agreement, Termination. This includes providing written notice no later than June 30 of any Fiscal Year, a continuing obligation to pay that Member Agency’s contributions for the Fiscal Year ending on the effective date of termination, and following Section 13.1.b. for the procedure where the Members Agency may jointly agree by written consent on the withdrawal of a Member Agency. A withdrawal from the Authority constitutes a withdrawal of that Member Agency’s representatives from the Board of Directors.
17. Effect of Withdrawal. The withdrawal of a Member Agency shall not terminate its responsibility to contribute its share of any obligation incurred by the Authority, including amounts determined by the Board for (1) liabilities and claims accrued during the time the agency was a Member Agency or (2) budgeted expenses for the Fiscal Year in which notice of intent to withdraw is given. Except as the withdrawing Member Agency may agree, in writing, with the Board, the withdrawing Member Agency shall automatically relinquish all rights as a Member Agency under this Agreement, on the effective date of the withdrawal. Upon termination of this Agreement, a Member Agency that has withdrawn will be treated like all other Member Agencies for purposes of disbursement of Authority assets, unless otherwise 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
agreed in writing and the remaining Member Agencies of the Authority can maintain the name “Five Cities Fire Authority.”
18. Conflict of Interest Code. The Authority adopts as it Conflict of Interest Code the Fair Political Practices Commission Model Conflict of Interest Code with appropriate substitution regarding references to the Board and Authority officers.
19. General Provisions.
19.1 Integration. This Agreement constitutes the sole, final, complete, exclusive and integrated expression and statement of the terms of this contract among the Member Agencies concerning the subject matter addressed herein, and supersedes all prior negotiations, representations or agreements, either oral or written, that may be related to the subject matter of this Agreement, except those other documents that are expressly referenced in this Agreement.
19.2 Headings. The section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.
19.3 Consents. Whenever any consent and/or approval is required under this Agreement from any Member Agency, said consent and/or approval shall not be unreasonably withheld.
19.4 Construction and Interpretation. It is agreed and acknowledged by the Member Agencies that this Agreement has been arrived at through negotiation, and that each Member Agency has had a full and fair opportunity to revise the terms of this Agreement. Consequently, the normal rule of construction that any ambiguities are to be resolved against the drafting Member Agency shall not apply in construing or interpreting this Agreement.
19.5 Waiver. The waiver at any time by any Member Agency of its rights with respect to a default or other matter arising in connection with this Agreement shall not be deemed a waiver with respect to any subsequent default or matter.
19.6 Remedies Not Exclusive. The remedies provided in this Agreement are cumulative and not exclusive, and are in addition to any other remedies that may be provided by law or equity. The exercise by either Member Agency of any remedy under this Agreement shall be without prejudice to the enforcement of any other remedy.
19.7 Severability. The invalidity, illegality or unenforceability of any provision of this Agreement shall not render the other provisions unenforceable, invalid or illegal.
19.8 Successors and Assigns. Except as otherwise provided by law, the rights and duties of the Member Agencies under this Agreement shall not be assigned or delegated without the prior written consent of the other Member Agency. Any attempt to assign or delegate such rights or duties in contravention of this Agreement shall be null and void. Any approved assignment or delegation shall be consistent with the terms of any contracts, resolutions, indemnities and other obligations of the Authority then in effect, and may be subject to such 65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
additional reasonable conditions of approval imposed by the Member Agency approving the assignment or delegation.
19.9 No Third Member Agency Beneficiaries. This Agreement shall not be construed to create any third party beneficiaries. This Agreement is for the sole benefit of the Member Agencies, and their permitted successors, transferees and assignees, and no other person or entity shall be entitled to rely upon or receive any benefit from this Agreement or any of its terms.
19.10 Amendment. This Agreement may be modified or amended only by a subsequent written agreement approved by the governing board of each Member Agency and executed by both Member Agencies pursuant to the terms and conditions of this Agreement.
19.11 Governing Law and Venue. Except as otherwise required by law, this Agreement shall be interpreted, governed by, and construed under the laws of the State of California. The County of Riverside shall be the venue for any litigation concerning the enforcement or construction of this Agreement.
19.12 Attorney Fees. In the event any legal action is brought to enforce or construe this Agreement, the prevailing party shall be entitled to an award of reasonable attorney fees, expert witness and consulting fees, litigation costs and costs of suit.
19.13 Notice. Any notice, demand, invoice or other communication required or permitted to be given under this Agreement shall be in writing and either served personally or sent by prepaid, first class U.S. mail to the City Clerk and City Attorney of each Member Agency.
Any notice or other communication served by personal delivery shall be deemed received when actually delivered. Any notice or other communication shall be deemed as received three days after deposit in United States mail, postage prepaid, return receipt requested.
19.14 Counterparts. This Agreement may be executed by the Member Agencies in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. [signature page follows]
65501.00001\41161259.15
DRAFT FOR NEGOTIATIONS PURPOSES
IN WITNESS WHEREOF, the Member Agencies hereto have executed this Joint Exercise of Powers Agreement as of the date last executed as set forth below.
CITY OF GROVER BEACH
By
Mayor,
Dated
ATTEST:
By
City Clerk
APPROVED AS TO FORM:
City Attorney
CITY OF ARROYO GRANDE
By
Mayor
Dated
ATTEST:
By
City Clerk
APPROVED AS TO FORM:
City Attorney
65501.00001\41215817.1
EXHIBIT A
ADMINISTRATIVE SERVICES
Administrative services shall be provided to the Authority by the Members as follows:
1. Personnel. All personnel working for the Authority will be employed by the City of Arroyo Grande. Personnel, benefits, payroll, and workers compensation matters shall be administered by Arroyo Grande subject to a written agreement between the Authority and the City of Arroyo Grande. The City of Arroyo Grande shall assign all fire service employees on a full-time basis to carry out the functions of this Agreement.
Furthermore, under such written agreement, the City of Arroyo Grande will assign all of its responsibilities of the appointment, promotion, management, training, supervision, evaluation, discipline, and termination of employees as well as labor negotiations with represented employees to the Authority under the Authority’s chain of command and decision making process.
2. Finance. The City of Arroyo Grande shall provide financial services. Financial services shall include the provision of payroll, accounts payable, and accounts receivable services, as well as, any financial reporting and auditing services that may be required.
3. Information Technology. The City of Arroyo Grande shall provide information technology services. Information Technology shall include monitoring and maintaining the company computer systems, installation and configuration of hardware and software, and solving technical issues as they arise.
4. Indirect Contribution. Payment for the services as described in Exhibit A shall be the responsibility of the Member providing the services as referenced in Exhibit A. The payment for such services by said agencies shall be recognized as an indirect contribution made by the respective agency. All indirect contributions shall be recognized in the Authority's budget as a contribution from the respective agency and shall be deducted from the contributing agency's proportional allocation of costs for the operation of the Authority. 65501.00001\41215817.1
EXHIBIT B
FUNDING FORMULA
Effective July 1, 2023, each Member Agency shall pay for the ongoing costs of the Five Cities Fire Authority according to the following formula to be calculated annually when the budget is prepared:
1. 58% of the total costs shall be paid by the City of Arroyo Grande;
2. 42% of the total costs shall be paid by the City of Grover Beach.
Any revenue received by the Authority, such as through a contract for service, reimbursements received for strike team deployment or automatic aid, grant funding, or fees for service, shall reduce the total costs that are then allocated to the Member Agencies according to the above formula.
The funding formula contained herein shall be reevaluated by the Member Agencies at least every two years, prior to the Member Agencies’ biennial budget adoption. 65501.00001\41215817.1
EXHIBIT C
INVENTORY OF SEPARATE PROPERTY OF THE
MEMBER AGENCIES
The following inventory of each Member Agency will become the property and responsibility of the Authority, including but not limited to maintenance, insurance, and replacement:
Arroyo Grande Grover Beach
Engine 6691 – 2007 Pierce Type I Engine Bauer Air-Fill Compressor – GB Station Rescue 6652 – 1996 E-One Rescue
Utility 6632 – 1995 Ford F-250 Pick-Up
65501.00001\41215817.1
EXHIBIT D
The following map identifies the service areas of the Member Agencies for the JPA.
Contractual services provided to areas outside of these Member Agencies are not depicted on this map.