Grover Beach City Council
June 12, 2023

FCFA JPA Agreement,
Board Representatives,
& Oceano Agreements
June 12, 2023
GROVERBEACH.ORG
Background
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• April 24th Council update on fire and emergency medical services following Baker Tilly study presentation on February 27th • Review commissioned given withdrawal of Oceano Community Services District (OCSD) from Five Cities Fire Authority (FCFA)
• Council update also outlined proposed fire service level and staffing and draft JPA Agreement which received Council support
• Four topics covered tonight in update:
• Final JPA Agreement
• Appointment of Council representatives to reconstituted FCFA Board • Proposed agreements with OCSD on temporary service and pension liabilities • FCFA service levels and budget for FY 2023-25
• Similar agenda item in Arroyo Grande on June 13 so Councils can take actions on successive nights in preparation for new fiscal year
Draft JPA Agreement
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• Authority governance
• Four-member Board with two Council representatives from each city and Chair and Vice Chair appointed from respective cities • Chair and Vice Chair rotate annually
• Quarterly meetings focused on general policy oversight of the Authority • Executive management
• Executive management of authority vested in Management Committee comprised of City Managers for both agencies
• Management Committee shall hire, terminate, and oversee Fire Chief who is responsible for operational management of Authority
• One City Manager shall serve as Chief Executive Officer for immediate and time-sensitive items (rotating annual role with Chair)
Draft JPA Agreement
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• Other Authority positions
• Arroyo Grande Director of Administrative Services serves as Authority Treasurer
• Secretary and legal counsel would also be appointed by Board and Management Committee
• Authority employees would remain officially Arroyo Grande employees assigned to Authority
• Fire stations, other real property, and equipment
• Buildings and property used by Authority but remain property of Member Agencies
• All equipment owned by Member Agencies shall remain property of each agency but Authority can acquire equipment for use by Authority • Principal office remains at Station 1 in Arroyo Grande Draft JPA Agreement
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• Cost-sharing and budget
• Retains Member Agency funding formula based on population, service calls, and stations/personnel
• Arroyo Grande pays 58% of FCFA costs while Grover Beach pays 42% • Funding formula re-evaluated by Member Agencies every two years • JPA Board must initially adopt budget within 30 days of agreement execution and annually adopt budget prior to April 30
• New members
• New members can be admitted to FCFA with unanimous approval from Board and governing body of each Member Agency
• Membership withdrawal allowed with continued payment of share of liabilities incurred by FCFA
Council Representatives to FCFA Board
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• Pending JPA Agreement adoption, initial action for Council is to appoint representatives to reconstituted FCFA Board (can be Mayor or Council Members)
• Effective with initial meeting on June 22 with subsequent appointment on annual basis as part of Council’s appointments to outside groups
• Council may also appoint alternate to serve if one or more appointed City representatives are unavailable
Proposed Agreements with OCSD
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Services Agreement
• FCFA would contract with OCSD to provide fire and emergency medical service to Oceano for FY 2023-24 during LAFCO process • Terms in draft agreement:
• 12-month timeframe
• Cost of $1.15 million which is Oceano’s current share of property tax revenue • Fire and emergency medical services including minimal fire prevention • FCFA would provide response from Stations 1 or 2 given deficiencies in Station 3
Proposed Agreements with OCSD
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Services Agreement
• OCSD payment for FY 2023-24 reflects lower share of FCFA costs than current year but OCSD unable to fund additional costs • Higher payment recommended to be charged for future Oceano service if County takes over fire responsibility after LAFCO process • $2.1 million is estimated payment amount for FY 2024-25 which includes 3-person staffing for all three companies
• Agreement to be considered by OCSD Board and FCFA Board Proposed Agreements with OCSD
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Liabilities Agreement
• Addresses OCSD’s ongoing obligations for CalPERS pension liabilities since FCFA formation
• OCSD’s share of liabilities offset by its share of FCFA assets and fund balance
• Based on 2021 FCFA liabilities from CalPERS, OSCD payment may be $20,000 annually for 20-25 years though covered by OCSD’s share of FCFA assets
• Agreement to be considered by OCSD Board and FCFA Board Service Level and Staffing
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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
• Additional 3.5 FTE positions
• 1.0 FTE Battalion Chief
• 2.0 FTE Engineers
• 0.5 FTE Admin
• Two 3-person companies and
24x7 2-person company
• Fire prevention work to be done
by the cities temporarily
• New positions filled initially
through OT and acting roles
Fiscal Impact
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• FY 2023-24 cost to City of $2.77 million for recommended service level and staffing and projected FY 2024-25 cost of $2.86 million • $750,000-850,000 higher than City’s current cost of $2 million • Proposed FY 2023-25 budget absorbs cost in FY 2023-24 by reducing General Fund capital project funding and using unallocated American Rescue Plan Act funds
• However, annual deficits and necessary use of reserves to balance budget beginning in FY 2024-25 as fire and other operating and infrastructure costs increase
Recommendation
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• Approve JPA Agreement for Amended and Restated
FCFA
• Appoint Council representatives to the reconstituted
FCFA Board
• Provide policy direction on agreements with OCSD for
temporary service and pension liabilities
Questions and Comments
Fire Services Update
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Service Level and Staffing
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Service Levels and Budget
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Overall Observations
• Recent annual financial contributions from participating agencies have not sufficiently financed the total operational costs of the FCFA • The need for an ongoing dedicated revenue stream to fully finance the operational and capital costs of the FCFA is paramount
• Calls for service for the existing service population are consistent with industry standards though public service (non-emergent) calls are relatively high • FCFA faces numerous operational challenges resulting in personnel feeling stressed
• Divestiture or deactivation of OCSD fire service responsibility will not be a simple or quick matter to resolve
Baker Tilly Report
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Recommendations
Baker Tilly Report
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Recommendations
Baker Tilly Report
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• Council direction:
• Develop updated two-city JPA for fire services between Arroyo Grande and Grover Beach
• Provide service to Oceano in contractual fee-for-service arrangement on temporary basis
• Consistent direction provided by Arroyo Grande City Council • Baker Tilly provided draft report for review before submitting final report for agency information
• Generally similar recommendations as shown in February with a few exceptions
Baker Tilly Report
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Changes/Additions in Report
• Modifying governing board recommendation to keep with only elected officials • Removal of recommendation on working with CAL FIRE on potential service provision given inability to reduce costs and loss of local control • Addition of three scenarios under which contract service to Oceano is provided:
• Scenario 1: OCSD stays under contract for up to another year with funding capped at total property tax amount • Scenario 2: OCSD stays under contract for indefinite term with funding capped at total property tax amount • Scenario 3: OCSD stays under contract for indefinite term with additional funding from County • Three options for staffing plans (low, medium, high cost) for each scenario • Staff believes Scenario 1 is most likely scenario and Staffing Plan A-4 is most cost-effective and responsive plan to provide better service at manageable cost