CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 24 Section Name: {{section.name}} Account Number: 10-2315 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Human Resources Department
MEETING DATE: July 28, 2025
SUBJECT:
Finance and Human Resources Services for San Mateo Consolidated Fire Department – Agreement RECOMMENDATION:
Approve an agreement between the City of San Mateo and the San Mateo Consolidated Fire Department for Finance and Human Resources services for a five-year term beginning August 1, 2025, and ending June 30, 2030, with estimated compensation to the City in the amount of $6,147,039.18; and authorize the City Manager to execute the Agreement in substantially the form presented.
BACKGROUND:
Since 2018, the City has provided administrative services relating to finance and human resources to San Mateo Consolidated Fire Department (SMC Fire) to support SMC Fire’s operations. On April 14, 2021, the City and SMC Fire extended the agreement for these services to June 30, 2026. In spring of 2024, the Fire Board requested an analysis of the existing contract with the City for Finance and Human Resources (HR) support. The Fire Chief hired an outside consultant, DKG Consultants, to review the contract and alternatives for meeting this service need. In the resulting report, DKG Consultants recommended that SMC Fire remain with the City for these services. In addition, the consultant recommended that SMC Fire and the City work together on a new contract with a revised scope of services and detailed cost proposal.
DKG Consultants assisted with this work and together the City and SMC Fire developed a new contract with an updated scope of services and a revised payment structure (“Agreement”). The effective date for the new Agreement is August 1, 2025. This Agreement will supersede the previous agreement.
The core services provided by the City to SMC Fire remains largely the same with a few adjustments within the contract.
The City has been providing HR and Finance support with cost recovery payments of about $840,000 annually to SMC Fire since its formation. This amount was based on original staffing estimates equivalent to the cost of approximately 4.0 FTE.
While reviewing the scope of services provided by the City, DKG Consultants found that the City has actually been providing closer to 5.0 FTE in staffing to SMC Fire over the last few years. At the same time, DKG consultants found that to better meet service expectations for SMC Fire, the City would need to provide closer to 6.0 FTE in staffing to support the contract. Thus, the cost recovery payment for the first year of the updated contract, listed in the Agreement as $1,139,000, is based on a cost estimate of various staff time needed to support SMC Fire from both Departments which equates to about 6.0 FTE. This new staffing allocation more properly reflects the service levels needed to meet contract expectations between the City and SMC Fire.
Based on the above, staff recommends for Council to approve this Agreement between the City and SMC Fire for finance and human resources services.
BUDGET IMPACT:
The revenue from the new agreement to the City will be $1,139,000 in fiscal year 2025-26. This is an increase of $265,930
CITY OF SAN MATEO
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over the fiscal year 2025-26 amount in the current contract. This aligns expectations between SMC Fire and the City with respect to service delivery. The amount payable under each year of the agreement, which increases 4% annually, is as follows: Fiscal Year (FY) 2025-26: $1,139,000 FY 2026-27: $1,184,600 FY 2027-28: $1,231,900 FY 2028-29: $1,281,200 FY 2029-30: $1,332,500. Due to the timing of the agreement, we will be using the original agreement ($873,070.12) to calculate the July cost of services and the new agreement ($1,139,000) for the remaining 11 months of the fiscal year. The revised amount for Fiscal Year 2025-26 will be $1,116,839.18.
ENVIRONMENTAL DETERMINATION:
Approval of this agreement is not a project subject to CEQA, because the provision of finance and human resources services to SMC Fire is an administrative activity which will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Agreement
STAFF CONTACT
Yumi Maeda, Senior Human Resource Analyst
[email protected]
(650) 522-7279