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Report to Council - History of Current Fire JPA - Feb 22, 2010

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City of San Carlos
Council Staff Report

Council/RDA Meeting Date: February 22, 2010

Item Title: Report to City Council - History of the Current Belmont-San Carlos Fire Department Joint Powers Authority

Background

At the February 8, 2010 City Council Meeting, Vice Mayor Omar Ahmad asked the Staff to prepare an Overview and History of the Current Belmont-San Carlos Fire Department Joint Powers Authority (JPA).  Vice Mayor Ahmad indicated that 3 of the 5 members of the City Council were not on the City Council at the time of the creation of the original Fire JPA in 1979 or when it was amended in June 2006 or further amended in April 2007.


Formation of South County Fire Authority

In 1978, the City of San Carlos and the Belmont Fire Protection District (BFPD) each operated its own Fire Department and staffed three fire stations in their service area.  With the passage of Proposition 13 in 1978 and the subsequent revenue loss it caused in both agencies, both San Carlos and BFPD each closed one fire station that year (O’Neil Avenue & 5th Street in Belmont and Industrial Road & Brittan Avenue – now the site of Office Depot).

In 1979, the City of San Carlos and the Belmont Fire Protection District (BFPD) signed a Joint Powers Authority (JPA) that created the South County Fire Authority (SCFA).  The JPA was effective on July 1, 1979 and SCFA continued in that form until later amendments in 2006 and 2007. 

Under this structure, SCFA provided fire services to the City of San Carlos, the Belmont Fire Protection District, the Harbor Industrial Area and Redwood Shores (until a fire station was built in that area – see below).  The San Carlos service area matches the City’s boundaries while the BFPD service area includes unincorporated portions of the County in the Belmont Sphere of Influence set by LAFCO and the Harbor Industrial Area (HIA).  Members of the Belmont City Council also serve as the Board Members of the Belmont Fire Protection District.

Funding for the SCFA annual budget came from an annual service fee paid by each partner agency.  The annual service fee was equally divided between the City of San Carlos and the BFPD.  The San Carlos share of the annual fee came from the City General Fund while the BFPD share came from a portion of the property tax dedicated to the Belmont Fire Protection District. 

SCFA was managed by a Fire Chief who was hired, evaluated and managed by the Management Committee.  The Management Committee consisted of the City Managers of San Carlos and Belmont.  SCFA also had a Fire Board made up of two Council Members from San Carlos and two Board Members from the BFPD.  The Fire Board met monthly and carried out the functions of a JPA Board including approval of the annual budget, labor agreements and purchases and Requests for Proposals above the spending authority level of the Fire Chief and Management Committee.

Contract Fire Services for Redwood Shores

Fire services for Redwood Shores were provided under a contract between the City of Redwood City and SCFA for an amount that reached $750,000 per year.  These funds were used as a funding source for SCFA’s Capital Budget.  The revenue enabled the JPA to rebuild the stations on Laurel Street in San Carlos and at Ralston & Granada in Belmont as well as improvements at the two other stations.

At one point, there were discussions between SCFA and Redwood City about building a joint Redwood Shores/SCFA station that was near the border of Redwood Shores and the SCFA Station at Ralston Avenue and Granada in Belmont.  These discussions were unsuccessful and the proposed station to serve both areas was not agreed to and constructed. 

The Redwood Shores arrangement continued until a Fire Station was constructed by Redwood City in Redwood Shores.  At that point, the service arrangement ended and SCFA coverage of Redwood Shores switched to service under the Countywide Mutual Aid agreement with no compensation to SCFA.

2003 Ballot Measure “I” – Fire Parcel Tax

In 2003, SCFA was facing budget challenges due to the loss of the Redwood Shores contract revenues as well as a downturn in revenue due to the “dot com crash” in 2000 and subsequent years.  To provide needed revenue to the SCFA Fire JPA, the Fire Board placed a parcel tax for Fire Services on the November 2003 ballot.  The measure needed a 2/3 vote for passage but only received a 62% Yes vote.

Prior to the measure going on the ballot, the Fire Board stated that the failure of the revenue measure would mean the loss of the fifth company – a fully staffed fire company made up of 9 sworn fire employees as well as 2 non-sworn staff.  When the measure did not pass, the Fire Board moved ahead and cut the 9 sworn positions and 2 non-sworn positions and the fifth fire company was eliminated.

Belmont Special Fire Financial Project Subcommittee Report

In February 2004, the BFPD appointed the Belmont Special Fire Financial Project Subcommittee and asked this group to explore Belmont’s long-term Fire Service Options.  The subcommittee was chaired by Finance Committee Chair Warren Lieberman and included John Violet, Belmont City Treasurer, Howard Mason, Belmont City Treasurer (retired), Susanna Korn, Belmont Finance Commissioner, Robert Ledoux, Belmont Finance Commissioner and Michael Galvin, San Carlos City Treasurer (serving as an ex-officio member).

The subcommittee’s report was issued on November 24, 2004.  In summary, the Belmont Subcommittee recommended that:

  • The South County Fire Authority should bring a proposed 5 year Fire Suppression Assessment to the voters "as soon as practical".
  • The Belmont Fire Protection District should provide a notice to the South County Fire Authority of their intention to withdraw from South County Fire Authority by January 1, 2006.
  • The Belmont Fire Protection District should transition to a Contract for Services, assuming acceptable terms, with a neighboring city or other large service provider for fire protection services within the District such as the City of San Mateo or the California Department of Forestry (CDF).

Notice of Intent to Leave the Fire JPA


Following through with the subcommittee report, in December 2004 the BFPD sent a notice to the City of San Carlos and the South County Fire Authority of their intent to leave the Authority at the end of June 2006.  After receiving the notice from the BFPD, the San Carlos City Attorney (Bob Lanzone) recommended that the San Carlos City Council adopt and send a similar notice to preserve its rights under the Fire JPA.  The San Carlos Council did take that action at their last meeting in December 2004.


During that meeting, the San Carlos representatives on the SCFA JPA Board (Council members Don Eaton and Mike King) made this statement:

“Wednesday evening, the South County Fire Authority Board of Directors met to discuss a report and presentation regarding funding fire services in Belmont.  As the two Council representatives on the South County Fire Authority Board, we thought it is important to share this information with the full City Council and the community.

Some of the matters raised by the Belmont Subcommittee report have been discussed by the South County Fire Authority Board over the last few months.  Both of us are supportive of efforts to explore opportunities for merging with other Fire Service Agencies or Contracts for Services if such efforts result in maintaining Fire Services for San Carlos.  We feel that these options can be explored by both cities through the South County Fire Authority or separately if the Fire Authority is dissolved at some point.

 

In terms of funding, today South County Fire Authority costs are shared equally by Belmont and San Carlos.  The Belmont share of South County Fire costs is paid for through a property tax levy (20%) in the unincorporated portion of the Harbor Industrial Area (HIA) and the City of Belmont that flows to the Belmont Fire Protection District.  The San Carlos share is paid for from the City’s General Fund.

 

In recent years, the increased cost of Fire Department services has made it difficult for both cities to fully fund the department.  Last year, a proposed parcel tax for Fire Services was defeated even though it received a 62% Yes vote (the measure needed a 2/3 vote for passage).  The proposed Fire Services Assessment (similar to the ones recently passed in Pacifica and Millbrae) would be subject to a protest hearing process and would need a majority affirmative vote for adoption.” 

Exploring Fire Service Options from Neighboring Fire Agencies

In January 2005, Fire Chief Lowden was asked to begin exploring options for Fire Services for San Carlos and Belmont by the SCFA Fire Board.  He talked to other fire agencies in San Mateo County about expanding the South County Fire Authority JPA to include their agencies.  Chief Lowden received no interest from the other fire agencies in this concept.

Lowden then began work on a request from all 4 Fire Board Members that he obtain Fire Service proposals from the neighboring fire departments – City of San Mateo Fire Department, the California Department of Forestry (CDF) and the City of Redwood City Fire Department – for contract fire services.  The Fire Chief, who previously had managed the Reno Metro Region Fire Agency as well as SCFA, was also asked to study the fire service options available to SCFA and to act as a consultant to both San Carlos and BFPD as they explored their options.

4 Proposals for Contract Fire Department Services

When the proposals for contract fire services were due in May 2005, the three neighboring fire agencies (San Mateo, CDF & Redwood City) all responded as did a fourth fire agency in the area (Menlo Fire Protection District).  After these proposals were received, Staff from both cities jointly met with the four neighboring agencies to review and discuss the options that SCFA had for such services. 

The initial proposals envisioned continuing the same level of Fire Services at the four SCFA stations.  Since each agency had two of the SCFA stations, the cost of service from each of the neighboring fire agencies was the same for both San Carlos and BFPD.

During this process, the Fire Board Members from Belmont indicated that since the South County Fire Authority was being dissolved, they felt that each City should study and work on the proposals separately rather than discuss and work on them jointly through the South County Fire Board structure.  While this was at variance with the vision that the San Carlos Council Members voiced of working together and keeping the 4 fire companies together, the Fire Services process has proceeded on that basis.

The four proposals were analyzed and all four fire agencies were deemed responsive to the Request for Proposals.  There was a significant difference in the potential cost of these services and in October 2005, Staff recommended moving ahead with two of the proposals – City of San Mateo and CDF.  A comparison of the costs of the City’s share of Fire JPA costs (using the 50/50 formula then in effect) and the various proposals is shown below:

 

Cost of Services Comparison - October 2005

Agency

Option

Annual Cost

California Dept of Forestry (CDF)

CDF Standard Proposal

$3,682,091

California Dept of Forestry (CDF)

“Red Circle”/Frozen Salary Option

$4,245,823

San Carlos Fire Costs (Projected)

With Feb 2006 Budget Cut

$4,647,000

South County Fire Authority

Current Cost (2005-06)

$4,826,000

City of Redwood City

Model 5 (Lower Service Level)

$4,837,006

City of San Mateo

San Carlos + Belmont Option

$4,866,805

City of San Mateo

One Agency Only Option

$4,958,716

City of Redwood City

Model 6 (Comp Service Level)

$5,113,804

City of Redwood City

Model 3

$5,192,889

Menlo Park Fire Protection District

San Carlos + Belmont Option

$5,200,000

South County Authority Firefighters

Proposal based on property values

$5,612,185

City of Redwood City

Model 4

$5,904,656

City of Redwood City

Model 2

$6,260,539

 At that Council meeting, there was also a discussion of the “hurdles” that the two parent agencies disagreed over.  These were:

  1. Belmont would like to pay less than San Carlos for South County Fire Services.
  2. There is disagreement with the County over the level of reimbursement for South County’s provision of Hazardous Materials Team services.
  3. There is disagreement regarding the $200,000+ per year charge that Belmont assesses South County Fire Authority for Finance and Human Resources services.

The City Council elected to continue the item until later in the year and to continue the review of all four fire department proposals - rather than narrowing the field to two agencies at this meeting.

Amended & Restated JPA for Belmont-San Carlos Fire Department

In December 2005, the City Council appointed Council members Bob Grassilli and Matt Grocott to the South County Fire Authority Board.  They participated in four "2x2 Committee" meetings in late 2005 and early 2006 with two Council Members from the City of Belmont to study issues and funding formulas related to South County Fire.

In February 2006, the City Council voted to continue to obtain fire services from the South County Fire Authority rather than pursue one of the four proposals for Fire Services from neighboring fire agencies.  In June 2006, an amended and restated Joint Powers Agreement (JPA) was unanimously approved by the City Councils in both San Carlos and Belmont.  Key changes in the newly amended and restated JPA were:

  • Renames the South County Fire Authority to the Belmont-San Carlos Fire Department (BSCFD)
  • Changes the funding formula of the Fire Department from 50% San Carlos, 50% Belmont to a four part formula that includes the number of fire stations, number of fire calls, assessed valuation and population if a revenue measure is passed in both cities
  • The funding formula will remain at 50% for each City if a revenue measure does not pass in both cities
  • Eliminates the Management Committee and changes management of the department from the City Managers of the two cities to the 4 Member Elected Fire Board effective on July 1, 2006.

 

Proposed Fire Assessment Districts in San Carlos & the BFPD

Shortly after the Second Amended and Restated JPA was adopted by the City of San Carlos and the BFPD, the BSCFD Fire Board Members began to move ahead with the proposed Fire Assessment revenue measure mentioned in the revised JPA document.  The proposed Fire Assessment was authorized by the San Carlos City Council on July 24, 2006.

The proposed Fire Assessment was actually two separate revenue elections – one held in San Carlos and a second held in the BFPD service area.  Each agency contributed funds towards an education and outreach campaign conducted by the Lew Edwards Group to familiarize the public with the need for the revenue measure.  Information on the proposed Fire Assessment was mailed to voters and posted on the Fire Department and City Web Sites.

Ballots on the proposed Fire Assessment were sent to property owners in both cities on September 28, 2006, with the mail in ballots due on November 13, 2006 (San Carlos) and November 14, 2006 (Belmont).  The proposed Fire Assessment measure did not pass in San Carlos (47% Support; 53% Oppose) and did not pass in Belmont (41% Support; 59% Oppose) and therefore did not go into effect. 

Second Amended & Restated JPA for Belmont-San Carlos Fire Department

After the Fire Assessment measure did not pass, San Carlos received a request from the Belmont representatives on the Fire JPA Board to reopen the discussion of the 50/50 fire funding formula and the potential of increasing the Fire department budget by an amount up to what would have been raised through the proposed Fire Assessment measure.  The potential formulas involved a range of options that would have raised the San Carlos cost of Fire department services from 50% to 56.6% in the first year of operation.

In April 2007, a Second Amended and Restated JPA for the Belmont- San Carlos Fire Department was adopted and approved by the City Council.  A key change was the cost of Fire Service and the cost of paying off existing debts and past retirement costs to each agency. 

Rather than continue with the prior 50/50 cost sharing model, a 4-part formula was agreed to that was based on Number of Fire Stations, Call Volume, Population and Assessed Valuation.  Each of these “factors” was weighted equally in determining the annual cost of Fire Service to the two partner agencies.

As noted in a report to the City Council from City Manager Mark Weiss on November 10, 2009, the new fire services funding formula resulted in a significant increase in fire service costs to San Carlos since it went into effect.  During the last three fiscal years, San Carlos has paid 52.04%, 52.86% and 53.25% of the costs of fire service in the two communities during the 2007-08, 2008-09 and 2009-10 fiscal years.  The current budget shows a General Fund fire cost to San Carlos of $6,292,394 – an increase of 19.5% since the 2006-07 cost of $5,267,467.  In comparison, the Belmont share of fire service costs has only increased 4.9% since 2007.

Reviewing the Fire JPA Funding Formula

Last year, Council Member Bob Grassilli – one of the two San Carlos representatives on the Fire JPA Board at that time – expressed concern about the continued upward trend of the fire funding formula.  Council Member Grassilli asked the Fire JPA Board members to explore a modification in the cost sharing formula. 

The Fire JPA Board held a number of meetings on this proposal and explored a number of cost models.  They ultimately recommended a revised formula to both agencies on a 3-1 vote (Fire Board Member Grassilli dissenting).  The revised formula would increase the fire-related components of the formula (Call Volume and Number of Fire Stations) from 25% to 35% and reduce the non-fire related components of the formula (Population and Assessed Valuation) from 25% to 15%.  It is estimated that while such an adjustment would continue to have San Carlos pay the majority of the Fire JPA costs, it could reduce San Carlos’ share of fire service costs by over $100,000 per year.

At the November 10, 2009 San Carlos City Council Meeting, the Council approved an amendment to the concurrence of the Belmont City Council, acting as the Belmont Fire Protection District.  The BFPD voted on the proposed formula change and voted against it on a 4-0 vote (Council Member Lieberman absent).

Fire JPA Chairman and San Carlos Council Member Andy Klein noted that the revised Fire JPA funding formula remains an open issue at the last San Carlos City Council meeting on February 8, 2010.  Chairman Klein announced at the meeting that he has asked the BSCFD Fire Chief to place the topic of reopening the Fire JPA Funding Formula discussion on the March agenda for the BSCFD Fire JPA Board.

Submitted by:

Brian Moura                                          
Assistant City Manager

Approved by:

 

Mark Weiss
City Manager