Minute Action
AGENDA ITEM: 26
Date: January 3, 2024
Subject:
San Bernardino Council of Governments Services and Member Dues and Amendment No. 4 to Joint Powers Authority Agreement Recommendation:
That the Board, acting as the San Bernardino Associated Governments:
A. Accept Council of Governments (COG) Ad Hoc Committee recommendation to increase work capacity, including adding staff, and increasing the budget of the San Bernardino COG (SBCOG) by increasing the cost to each agency by the 50% Population/50% General Fund Tax Revenues per Table 2 (attached).
B. Approve Amendment No. 4 to the Agreement for the Joint Exercise of Powers relative to the San Bernardino Associated Governments, SANBAG JPA to amend language concerning the method by which member agency dues are assessed, as proposed in Exhibit 1 (attached).
Background:
On July 5, 2023, San Bernardino Council of Governments (SBCOG) staff brought forth a Council of Governments (COG) work plan update to the SBCOG Board of Directors (Board). This work plan is marked as Exhibit 2 and is attached to this report. This item was previously heard at the June 14, 2023 General Policy Committee (GPC) meeting. Following the discussion at GPC, staff was directed to add a recommendation to the July 5, 2023 Board meeting agenda to establish an Ad Hoc Committee (Ad Hoc) to discuss expanding the capacity of the COG and increasing the dues paid by the member agencies. Since August 2023, the COG Ad Hoc has met monthly and has provided staff with direction over the last three months that has resulted in this item, which could lead to a subsequent recommendation.
Since 2018, the COG has relied on the funds from the Property Assessed Clean Energy / Home Energy Renovation Opportunity program to supplement COG dues and has implemented several programs through the 2018 work plan (Exhibit 3). These have included the creation and implementation of the Emergency Communication Nurse System, research and preparation for creation of a Housing Trust, and grant research and writing. Based on discussion at the July 5, 2023 Board meeting and pursuant to the Board’s authorization, the Ad Hoc Committee has discussed the COG, its budget, and potential additional services that could be offered.
The August COG Ad Hoc meeting included a presentation of research completed which analyzed the programs and budgets of the San Gabriel Valley Council of Governments (SGVCOG), Western Riverside Council of Governments (WRCOG), and the Coachella Valley Association of Governments (CVAG). Staff completed a comparison of programs and fund sources of these sister agencies and how SBCOG compares, which showed that the funds received by those sister agencies allowed them to have large programs with a broad reach. Minimal funds and staff for SBCOG limits the agency’s ability to provide a broader set of services and programs for its member agencies. In addition, the other COGs tend to have both a set of general services (or baseline services), offered to all participating jurisdictions, as well as subscription services provided to a smaller set of jurisdictions who opt-in to benefit from each service.
The September Ad Hoc discussion included a presentation of options for increased COG services and COG budget at two different levels. The Ad Hoc identified the baseline increase as the starting point for consideration. This includes increasing COG staff to three, as well as consultant support, all of which will carry out the functions of project management, liaison, regional advocacy, and grant writer/coordinator. This would increase the annual COG Budget to $1.5 million and three staff for a baseline of services from the current $658,000 and 1.3 staff. The Ad Hoc is recommending that the increase to $1.5 million of revenue for baseline services, plus an increase based on the lesser of the Consumer Price Index or 2% annual adjustment to cover the regular increases in cost, be incorporated into the SBCOG budget planning process for Fiscal Year (FY) 2024/2025 and every year thereafter. This would not include revenue from grant‑funded projects or subscription services. For example, calendar years 2024 and 2025 will be seeing a large increase in grant dollars from the Regional Early Action Program 2.0 (REAP 2.0) being funded through the California Department of Housing and Community Development (HCD) and the Southern California Association of Governments (SCAG).
The October Ad Hoc discussion concerned the allocation of costs to the SBCOG member jurisdictions. Staff provided three alternative scenarios to the Ad Hoc regarding the distribution of COG baseline costs across jurisdictions:
100% Population
100% Fund Sales and Property Tax Revenues Received
50% Population/50% Fund Sales and Property Tax Revenues Received Table 1 attached, shows the shares of the $1.5 million in annual COG dues that would be assessed based on the three methods listed above. The table also includes the current jurisdiction‑level dues assessments and the increase that would occur under the three scenarios. The Ad Hoc recommended the 50% Population / 50% Fund Sales and Property Tax Revenues as the proposed cost allocation method, which is shown in Table 2 attached to this item. Recommendation A reflects the Ad Hoc’s recommendation to approval of the COG Ad Hoc’s recommendation and increase staff incrementally over two years. This will give SBCOG an opportunity to hire staff, establish an SBCOG work plan, and contract with consulting firms.
Recommendation B is to approve amending the Joint Powers Authority (JPA) Agreement in order to implement Recommendation A. The existing JPA Agreement specifies the particular method by which member agencies are to be assessed for membership dues. Currently, that method is to utilize a formula of 50% population/ 50% assessed valuation. As previously discussed, that method of assessment is outdated and would be burdensome to many agencies across the region. Staff completed a comparison for the Ad Hoc’s review showing the cost to the member agencies if member dues assessments were to be made with the existing formula. Table 3 attached shows this analysis. In order to change the method and move forward with the Ad Hoc’s preferred method of assessing member agency dues, the JPA Agreement must be amended.
Staff has received direction from the COG Board Ad Hoc on how to proceed with the amendment language and what ought to be included in the provisions regarding assessing member agency dues. Discussions with the Ad Hoc included concerns that sales and property taxes are set by policy in the legislature. If the legislature decides to change how it allocates tax revenues to local agencies in the future, or a large shift in population occurs, the Board would have the authority to adjust as needed without needing to amend the JPA Agreement again. In an effort to provide the Board of Directors flexibility in the future, should the method for assessing member agency dues need to change again, proposed Amendment No. 4 removes the specific formula and instead requires Board-approved policy to be followed in assessing member agency dues. The proposed amendment language is attached to this item as Exhibit 1.
The policy referred to above, which will set the formula method, will be constructed following the approval of the amendment by the member agencies. It will include language that sets assessments reflecting the direction of the COG Board Ad Hoc. Language which will likely be considered may include the following:
Assessments shall be computed on an annual basis as follows to create a minimum $1,500,000 annual budget:
a. a base assessment whereby the prior year’s base assessment is adjusted based on the annual percentage change in population of each signatory member plus the annual percentage change in assessed valuation of each signatory member added together and divided by two (2) to arrive at the annual increase; and b. the additional assessment adopted in Fiscal Year 2015/2016 of $133,418 (or approximately $5,337 per each signatory member due to rounding); and c. the additional assessment adopted in Fiscal Year 2021/2022 of $200,000 (or $8,000 per each signatory member) for Fiscal Year 2024/2025, escalated every Fiscal Year thereafter of the lower of Consumer Price Index (CPI) or 2%; and d. a further assessment to fund any gap between the Board-approved annual budget and the total of the assessments set forth in a., b., and c., above. In determining the amount of said gap, no grant moneys shall be considered. This “gap” assessment shall be based one-half on the population of each signatory member and one-half on the combined General Fund property tax and General Fund base sales tax revenue rate of each signatory member, where “base sales tax” means the statewide sales tax and is exclusive of any additional local sales taxes, escalated every Fiscal Year thereafter of the lower of Consumer Price Index (CPI) or 2%; and e. further assessments to fund optional or subscription programs and projects beyond those identified in the annual budget will be assessed on a cost-allocation basis to fund the cost of the program or project.
Should the Board of Directors approve these recommendations, all member agencies of the JPA will need to approve and execute the Amendment for the dues increase. Staff is working toward a deadline of April 30, 2024, to complete this process so as to allow both SBCOG and the member agencies an opportunity to budget appropriately for the upcoming fiscal year.
Following execution of the Amendment by all member agencies, staff will work through an Ad Hoc of the Board and of the City/County Managers’ Technical Advisory Committee to identify program and project priorities and amend the approved work plan.
Financial Impact:
This item has no financial impact on the Fiscal Year 2023/2024 Budget. The financial impact will be included in the Fiscal Year 2024/2025 Budget.
Reviewed By:
The COG Ad Hoc Committee directed staff to bring this item directly to the Board for consideration so this item has not received prior policy or technical advisory committee review. SBCOG General Counsel has reviewed this item.
Responsible Staff:
Monique Reza-Arellano, Chief of COG and Equity Programs Board of Directors Agenda Item
January 3, 2024
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San Bernardino Council of Governments
Entity: San Bernardino Council of Governments
Attachment 3
Approved
Board of Directors
Date: January 3, 2024
Witnessed By: