CITY OF LAGUNA NIGUEL
CITY COUNCIL AGENDA ITEM
To: Honorable Mayor and Council Members
FROM: Tamara S. Letourneau, City Manager
DATE: May 2, 2023
SUBJECT: Ending the Proclaimed Coastal Fire Emergency
RECOMMENDATION
Staff recommends that the City Council adopt Resolution No. 2023-1424, terminating the local emergency in connection with the Coastal Fire and amend the Fiscal Year 2022- 2023 Operating Budget, appropriating $113,552.74 from the General Fund Reserve for Financial and Economic Uncertainty to the General Fund Contingency.
BACKGROUND
The Coastal Fire started in Aliso and Wood Canyons Wilderness Park at approximately 2:45 pm on May 11, 2022. Unfortunately, strong winds shifted the wildfire toward the Coronado Pointe neighborhood in the City of Laguna Niguel. Fueled by thick brush, strong winds, and steep topography, the fire prompted a mandatory evacuation of 900 homes within several hours. The Orange County Fire Authority, along with multiple partner agencies, began to protect life and structure within the threatened areas with ground and air support while the Orange County Sheriff's Department led the evacuation.
In total, thirty-two (32) structures were impacted, with twenty (20) residential structures destroyed or rendered uninhabitable and twelve (12) additional residential structures with varying degrees of damage. No lives were lost in the City of Laguna Niguel as a result of the fire. During the following days, resources remained on scene to aggressively attain 100% containment which was accomplished on May 17, 2022. In total, 200 acres were burned.
On May 11, 2022, the City Manager, acting in her capacity as the Director of Emergency Services, declared the existence of a legal emergency due to the Coastal Fire. Pursuant to Government Code Section 8630 (California Emergency Services Act) and Division 15 of Title 11 of the Laguna Niguel Municipal Code ("Emergency Preparedness"), the City Council ratified the City Manager's declaration of the local emergency on May 17, 2022, by adopting Resolution No. 2022-1388 (Attachment A). Government Code Section 8630 and Resolution No. 2022-1388 required the City Council to review the local emergency within sixty (60) days of ratification to determine whether the conditions surrounding the local emergency still exist.
On July 19, 2022, the City Council adopted Resolution No. 2022-1402 extending the existence of the local emergency because of the remaining cleanup to residential properties and surrounding areas, rebuilding operations, and a pending Fire Management Assistance Grant (FMAG) Program reimbursement claim (Attachment B). Extending the local emergency supported the City Council Goal 1 (Public Safety) of the Strategic Plan.
ANALYSIS
As the City approaches the one-year anniversary of the Coastal Fire, it is now the appropriate time to terminate the existence of the local emergency. Staff has prepared Resolution No. 2023-1424, which, if adopted, would terminate the local emergency and amend the Fiscal Year 2022-2023 Operating and Capital Improvement Program (CIP) Budget.
Local Emergency
Resolution No. 2023-1424, if adopted, would terminate the local emergency declared on May 17, 2022, effective immediately (Attachment C). This action would terminate the emergency duties, and powers afforded to the City Manager, in her capacity as Director of Emergency Services, set forth in Resolution No. 2022-1388, ratifying the existence of a local emergency as permitted by the Laguna Niguel Municipal Code Section 11-15-6 (A)(1). Staff will continue to work with the Coronado Pointe community to assist in recovery efforts, including the concierge service approach the Community Development Department continues to take in assisting with rebuilding efforts.
Budget Adjustment
Throughout the declared emergency, staff has proactively tracked expenditures for all purchases related to the Coastal Fire response. The City has incurred $113,553 in expenses for emergency supplies, additional labor costs, professional services, traffic control, street-sweeping, fencing and barricading of damaged/destroyed homes, and other miscellaneous emergency costs. Staff has applied for reimbursement through the Fire Management Assistance Grant (FMAG) program provided by the Federal Emergency Management Agency (FEMA). This is a lengthy process that can take several years before funds are reimbursed. To date, all expenses related to the Coastal Fire have been paid from the City's General Fund. The City's adopted Financial Reserves Policy provides for, upon the City Council's approval, the transfer of funds from Financial Reserves for Financial and Economic Uncertainty for unforeseen circumstances that may require an expenditure of such amounts, including natural disasters (Attachment D).
As part of the City's Mid-Year Budget Update on February 7, 2023, the City Council approved additions to the Capital Improvement Program for Fiscal Year 2022-2023. As a result of those actions, the adopted budget appropriation for All Funds for Fiscal Year 2022-23 was $61,909,638. The total General Fund appropriation remained at the original adopted total of $47,688,332. To account for the additional funds appropriated from the General Fund Reserve for Financial and Economic Uncertainty to the General Fund contingency, staff recommends increasing the adopted budget appropriations for All Funds to $62,023, 191.
Resolution No. 2023-1424 amends the Fiscal Year 2023-2024 Operating and Capital Improvement Program Budget by transferring $113,553 from the General Fund Reserve for Financial and Economic Uncertainty to the General Fund contingency and increase the adopted budget appropriations for All Funds from $61,909,638 to $62,023, 191.
FISCAL REVIEW
Based on the current budgeted revenues and expenditures for Fiscal Year 2022-2023, the General Fund Reserves estimated balance at June 30, 2023, is $44.0 million. The proposed budget amendment would reduce the projected June 30, 2023, General Fund Reserve Balance to $43.9 million while the City seeks reimbursement through the Fire Management Assistance Grant (FMAG) for Coastal Fire expenses.
General Fund Reserves
Estimated Balance at Revised Estimate
Reserves June 30, 2023 Balance at June 30,
2023
Total General Fund Reserves $44,020,372 $43,906,819
Per the City's Financial Reserves policy, included as Attachment D, the City is required to maintain a Reserve for Financial and Economic Uncertainty of no less than 50% of annual General Fund operating expenditures. With this amendment, the City's estimated General Fund reserves represent approximately 92% of the amended estimated expenditures of $47,801,885. The City will continue to comply with the City's adopted Financial Reserves Policy.
LEGAL REVIEW
The City Attorney has reviewed and approved this report and resolution as to form.
CONCLUSION
Staff recommends that the City Council adopt Resolution No. 2023-1424, terminating the local emergency in connection with the Coastal Fire and Amending the Fiscal Year 2022- 2023 Operating Budget, appropriating $113,553 from the General Fund Reserve for Financial and Economic Uncertainty to the General Fund Contingency.
Jemas Setonseau
Tamara S. Letourneau Nicholas Ghirelli
City Manager Interim City Attorney
Cata Martin AI-
Justin J. Martin Trevor Agrelius
Deputy City Manager Finance Director
Kenn X. O Comman
Kevin X. O'Connor
Management Assistant
Attachments:
A. Resolution No. 2022-1388
B. Resolution No. 2022-1402
C. Resolution No. 2023-1424
D. Financial Reserves Policy
ATTACHMENT A
Resolution No. 2022-1388
RESOLUTION NO. 2022-1388
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA NIGUEL
RATIFYING THE DIRECTOR OF EMERGENCY SEVICES' PROCLAMATION OF THE
EXISTENCE OF LOCAL EMERGENCY DUE TO THE COASTAL FIRE UNDER GOVERNNMENT CODE SECTION 8630 AND DIVISION 15 OF TITLE 11 OF THE LAGUNA NIGUEL MUNCIPAL CODE ("EMERGENCY PREPAREDNESS")
WHEREAS, Government Code Section 8630 authorizes the City Council, or an official designated by ordinance of the City Council, to proclaim the existence of a local emergency; and
WHEREAS, Laguna Niguel Municipal Code Section 11-15-5 (a), adopted as Ordinance 94-75, designates the City Manager as the Director of Emergency Services for the City of Laguna Niguel; and
WHEREAS, pursuant to Laguna Niguel Municipal Code Section 11-15-6 (a)(1), the Director of Emergency Services is specifically empowered to proclaim the existence or threatened existence of a local emergency, as defined in Government Code Section 8558(c), if the City Council is not in session, subject to ratification by the City Council within seven days thereafter; and
WHEREAS, the Director of Emergency Services did proclaim the existence of a local emergency within the City of Laguna Niguel on the 11th day of May, 2022 due to the existence of, and threats posed to the City by, the Coastal Fire; and WHEREAS, the City Council was not in session and could not immediately be called into session on the date that the Director of Emergency Services made her proclamation; and
WHEREAS, Government Coode Section 8558(c) defines a local emergency, in relevant part, as "the duly proclaimed existence of conditions of disaster or of extreme peril to the safety of persons and property within the territorial limits of a county, city and county, or city, caused by conditions such air pollution, fire or other conditions, other than conditions resulting from a labor controversy, which are or are likely to be beyond the control of the services, personnel, equipment, and facilitates of that political subdivision and require the combined forces of other political subdivisions to combat"; and WHEREAS, the safety, health, and well-being of persons within the territorial limits of the City of Laguna Niguel is of the highest priority; and WHEREAS, the mobilization of local resources, ability to coordinate interagency response, accelerate procurement of vital supplies, use mutual aid, and allow for future reimbursement by the state and federal government will be critical to successfully responding to the Coastal Fire; and
Resolution No. 2022-1388 Page 2
WHEREAS, the City Council does hereby find that the above described conditions of extreme peril did warrant and necessitate the proclamation of the existence of a local emergency by the Director of Emergency Services.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of Laguna Niguel, that the Proclamation of the Existence of a Local Emergency by the Director of Emergency Services of the City of Laguna Niguel due to the Coastal Fire under Government Code Section 8630 and Chapter 11-15 of the Laguna Niguel Municipal Code ("Emergency Preparedness"), as issued on May 11, 2022, is hereby ratified and confirmed.
IT IS FURTHER RESOLVED AND ORDERED that within the next sixty (60) days, a report on the most recent conditions of emergency and disaster be presented to this City Council so that this City Council may determine whether conditions of emergency and disaster still exist; and
IT IS FURTHER RESOLVED AND ORDERED that the local emergency shall be deemed to continue to exist until its termination is proclaimed by the City Council.
PASSED AND ADOPTED this 17th day of May, 2022.
Dain Bennawer
Elaine Gennawey, Mayor
ATTEST:
RMs
Thy Merritt, Deputy City Clerk
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF ORANGE )SS
CITY OF LAGUNA NIGUEL)
1, Thy M. Merritt, Deputy City Clerk of the City of Laguna Niguel, California, do hereby certify that the foregoing is Resolution No. 2022-1388, which was adopted at a regular meeting of the City Council of the City of Laguna Niguel, California, held on May 17, 2022, by the following vote:
AYES: Council Members Jennings, Minagar, and Sharma; Mayor Pro Tem Rains, and Mayor Gennawey.
NOES: None.
ABSTENTIONS: None.
ABSENT: None.
Thy M. Merritt
Deputy City Clerk
ATTACHMENT B
Resolution No. 2022-1402
RESOLUTION NO. 2022-1402
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF LAGUNA NIGUEL
REAFFIRMING AND EXTENDING A PROCLAMATION OF LOCAL EMERGENCY AS
A RESULT OF THE COASTAL FIRE
WHEREAS, Conditions of extreme peril to the safety of persons and property arose within the City of Laguna Niguel, caused by the Coastal Fire which began on May 11,2022; and
WHEREAS, Multiple residential properties were destroyed by fire rendering them uninhabitable, with extensive damage to hillside slopes directly adjacent to residential neighborhood; and
WHEREAS, Section 11-15-6 of Division 15 of Title 11 of the Laguna Niguel Municipal Code empowers the City Manager/Director of Emergency Services to proclaim the existence or threatened existence of a local emergency when the City is affected or likely to be affected by a public calamity and the City Council is not in session, subject to ratification by the City Council within seven days; and WHEREAS, The City Manager/Director of Emergency Services duly and responsibly proclaimed the existence of a local emergency on May 11, 2022; and WHEREAS, The City Council on May 17, 2022, adopted Resolution No. 2022- 1388 ratifying the proclamation of the local emergency by the City Manager/Director of Emergency Services; and
WHEREAS, Government Code Section 8630 and Resolution No. 2022-1388 provide that the City Council is required to review the local emergency within sixty (60) days of ratification to determine whether the conditions surrounding the local emergency still exist.
NOW, THEREFORE, BE IT RESOLVED AND ORDERED, the local emergency is hereby reviewed, and the declaration of a local emergency remains valid and necessary due to the ongoing cleanup to residential properties and surrounding areas, rebuilding operations, and being coupled with the pending Fire Management Assistance Grant (FMAG) Program reimbursement claim.
IT IS FURTHER RESOLVED AND ORDERED that the local emergency shall be deemed to continue to exist until its termination is proclaimed by the City Council.
PASSED, APPROVED, AND ADOPTED this 19th day of July, 2022.
Laine Hermaily
Elaine Gennawey, Mayor
ATTEST:
o l
Marissa Asistin, City Clerk
CERTIFICATION
STATE OF CALIFORNIA
COUNTY OF ORANGE )SS
CITY OF LAGUNA NIGUEL
I, Marissa J. Asistin, City Clerk of the City of Laguna Niguel, California, do hereby certify that the foregoing is Resolution No. 2022-1402, which was adopted at a regular meeting of the City Council of the City of Laguna Niguel, California, held on July 19, 2022, by the following vote:
AYES: Council Members Jennings, Minagar, and Sharma; Mayor Pro Tem Rains, and Mayor Gennawey.
NOES: None.
ABSTENTIONS: None.
ABSENT: None.
Marissa J. Asistin
City Clerk
ATTACHMENT C
Resolution No. 2023-1424
RESOLUTION NO. 2023-1424
A RESOLUTION OF THE CITY COUNCIL OF LAGUNA NIGUEL, CALIFORNIA, TERMINATING THE LOCAL EMERGENCY DECLARED ON MAY 17, 2022 DUE TO THE COASTAL FIRE, AND AMENDING THE FISCAL YEAR 2022-2023 OPERATING
AND CAPITAL IMPROVEMENT PROGRAM BUDGET
WHEREAS, Conditions of extreme peril to the safety of persons and property arose within the City of Laguna Niguel, caused by the Coastal Fire, which began on May 11, 2022; and
WHEREAS, Multiple residential properties were destroyed by fire, rendering them uninhabitable, with extensive damage to hillside slopes directly adjacent to residential neighborhoods; and
WHEREAS, Section 11-15-6 of Division 15 of Title 11 of the Laguna Niguel Municipal Code empowers the City Manager/Director of Emergency Services to proclaim the existence or threatened existence of a local emergency when the City is affected or likely to be affected by a public calamity and the City Council is not in session, subject to ratification by the City Council within seven days; and WHEREAS, on May 11, 2022, in response to the Coastal Fire, the Director of Emergency Services for the City of Laguna Niguel issued a proclamation of Local Emergency due to the Coastal Fire; and
WHEREAS, the Director of Emergency Services stated that the ability to mobilize local resources, coordinate interagency response, accelerate procurement of vital supplies, use mutual aid, and seek future reimbursement by the State and Federal governments would be critical to successfully respond to the Coastal Fire; and WHEREAS, the Director of Emergency Services proclaimed that the safety, health, and well being of persons within the territorial limits of the City of Laguna Niguel is of the highest priority; and
WHEREAS, on May 17, 2022, the Laguna Niguel City Council ratified the Proclamation of Local Emergency by adopting Resolution No. 2022-1388, which identified conditions of extreme peril warranting and necessitating the proclamation of the existence of a local emergency by the Director of Emergency Services; and WHEREAS, Government Code Section 8630 and Resolution No. 2022-1388 provide that the City Council is required to review the local emergency within sixty (60) days of ratification to determine whether the conditions surrounding the local emergency still exist; and
WHEREAS, on July 19, 2022, the Laguna Niguel City Council adopted Resolution No. 2022-1402, ordering the local emergency remains valid and necessary due to the ongoing cleanup to residential properties and surrounding areas, rebuilding operations, and being coupled with the pending Fire Management Assistance Grant (FMAG) Program reimbursement claim; and
WHEREAS, the City Council has executed due diligence and has determined that the conditions of extreme peril presented by the Coastal Fire have been abated to such a degree as to warrant the termination of the local emergency; and WHEREAS, on June 7, 2022, the City Council adopted Resolution No. 2022-1390, approving the Operating Budget and City Capital Improvement Program for Fiscal Year 2022-2023, and establishing the appropriations for All Funds at $60,059,638 and found that such budgets were sound plans for the financing of required City operations, services, and capital improvements; and
WHEREAS, on February 7, 2023, the City Council approved Fiscal Year 2022- 2023 budget amendments totaling $1,850,000 in capital expenditures, increasing the appropriations for All Funds for Fiscal Year 2022-2023 at $61,909,638; and WHEREAS, throughout the proclaimed local emergency, the City has incurred $113,553 in expenses necessary for the response and recovery of the Coastal Fire Emergency; and
WHEREAS, the City's sound financial management includes the practices and discipline of maintaining adequate reserve funds for known and unknown contingencies as outlined in the City's adopted Financial Reserves Policy; and WHEREAS, the City desires to offset the Coastal Fire costs by amending the Fiscal Year 2022-2023 Operating and Capital Improvement Program (CIP) Budget, appropriating $113,553 from the General Fund Reserve for Financial and Economic Uncertainty to the General Fund Contingency.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of Laguna Niguel as follows:
1. The City Council hereby proclaims that the local emergency declared on May 11, 2022, by the Director of Emergency Services, which was ratified by the City Council on May 17, 2022, via Resolution No. 2022-1388, and extended by the City Council on July 19, 2022, via Resolution No. 2022-1402, is hereby terminated.
2. The City Council approves the budget adjustment by appropriating $113,553 from the General Fund Reserve for Financial and Economic Uncertainty to the General Fund Contingency (100-06-5100).
3. The City Council recognizes the additional $113,553 in the General Fund Contingency and increases the established adopted budget appropriations for All Funds to $62,023, 191.
4. This Resolution shall be effective immediately upon adoption by the City Council.
PASSED, APPROVED and ADOPTED this 2nd day of May 2023.
Kelly Jennings, Mayor
ATTEST:
Marissa J. Asistin, City Clerk
ATTACHMENT D
Financial Reserves Policy
FINANCIAL RESERVES POLICY COUNCIL POLICY
Adopted: 716/2004
Last Revised: 6/1/2021
A. Fiscal stability is an important factor for all cities. Sound financial management includes the practice and discipline of maintaining adequate reserve funds for known and unknown contingencies. Such contingencies and occurrences include, but are not limited to:
• Cash flow requirements
• Economic uncertainties including downturns in the local, state or national economy
• Local emergencies and natural disasters
• Loss of major revenue source
• Unanticipated operating or capital expenditures
• Uninsured losses
• Tax refunds
• Future capital projects
• Vehicle and equipment replacement
• Capital asset and infrastructure repair and replacement The establishment of prudent financial reserve policies is important to ensure the long-term financial health of the City.
B. Applicability
This policy will apply to the City General Fund.
C. Reserve for Financial and Economic Uncertainty
The City will maintain a Reserve for Financial and Economic Uncertainty equal to no less than 50% of annual General Fund operating expenditures. City Council approval shall be required before expending any portion of the Reserve for Financial and Economic Uncertainty. Unforeseen circumstances that may require an expenditure of such amounts include, but are not limited to natural disasters, unforeseen deficiencies of a major revenue source, or unexpected operating or capital expenditures.
If any circumstances noted above occur, and the Reserve for Financial and Economic Certainty falls below the City Council policy designated level of 50% of annual General Fund operating expenditures, all excess Unassigned fund balance in future years shall first be used to replenish the Reserve for Financial and Economic Uncertainty until it reaches the policy designated level of 50% of General Fund operating expenditures. The City Council shall replenish the 1 of 3
Reserve for Financial and Economic Uncertainty prior to expending unassigned fund balance for other purposes.
D. Reserve for Compensable Accrued Unused Vacation and Sick Leave The City will maintain a Reserve for Compensable Accrued Unused Vacation and Sick Leave based on estimated long-term liabilities on June 30 of each fiscal year.
E. Reserve for Other Post-Employment Benefits
The City will maintain a Reserve for Other Post-Employment Benefits (OPEB) equal to 60% of the OPEB liability on June 30 of each fiscal year.
F. Reserve for Unfunded Pension Liability
The City will fund a Reserve for Unfunded Pension Liability, in the form of a Section 115 Pension Trust. A contribution to the trust shall be considered annually by the City Council during the budget process.
G. Reserve for Deferred Maintenance, Capital Assets, and Infrastructure Replacement
The City will maintain a Reserve for Deferred Maintenance, Capital Assets and Infrastructure Replacement. After allocating General Fund balance to the Reserve for Financial and Economic Uncertainty and City Council designated projects and purposes, any remaining fund balance shall be apportioned to the Reserve for Deferred Maintenance, Capital Assets and Infrastructure Replacement as follows: 75% to Streets and 25% to Other Capital Assets and Infrastructure. It is the long-term goal of the City to build and maintain this reserve in an amount equal to the estimated replacement cost of all City capital assets and deferred maintenance at the end of their design life and to use this reserve for such replacement.
H. City Council Designation of Reserves
The City Council may designate portions of General Fund unreserved fund balance for future capital projects, continuing or carry-over appropriations from prior fiscal years for operating or capital expenditures, or any other municipal purpose that the City Council deems prudent or necessary.
I. Annual Adjustment of Reserve Levels
Reserve levels will be adjusted annually in accordance with this policy. Reserve levels will be set at the end of each fiscal year in conjunction with the preparation of the City annual financial statements.
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J. Annual Review of Policy
The City Council shall annually review the Financial Reserve Policy, and consider such changes, if any, that it deems appropriate. Such review shall occur in conjunction with the review and adoption of the annual City Budget and Capital Improvement Program.
K. Comprehensive Annual Financial Report
In accordance with generally accepted accounting principles and practices, all classifications of General Fund balance will appear in the Notes to Financial Statements of the Comprehensive Annual Financial Report and be classified in accordance with GASB 54.
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