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Doug Fry
Fire Chief
600 Elm Street
San Carlos, CA 94070
Phone: (650) 802-4255
Fax: (650) 592-4714 | |
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Amending JPA for Belmont-San Carlos Fire Department and Notice of Termination Options (December 11, 2006)
City of San Carlos Council Staff Report
City Council Meeting Date: December 11, 2006 Item Title: Consideration of a Resolution Amending the Amended and Restated Exercise of Joint Powers Agreement for the Belmont-San Carlos Fire Department; and Consideration of Notice of Termination Options
Recommendation: 1. Adopt a Resolution to amend the Amended and Restated Exercise of the Joint Powers Agreement for the Belmont-San Carlos Fire Department (JPA) extending the deadline for giving notice of the six month expedited dissolution from December 31, 2006 to June 30, 2007; and 2. Authorize the City Manager, or his designee, to send notice of the City’s withdrawal from and dissolution of the JPA as of June 30, 2007, in response to any equivalent letter submitted to San Carlos by the Belmont Fire Protection District prior to December 31, 2006.
Fiscal Implications: There are no fiscal implications for this action. A withdrawal notice from the Belmont Fire Protection District would initiate a series of immediate steps with attenuate cost implications to ensure continued provision of fire protection services within the City of San Carlos. Belmont representatives have taken the position that the District wishes to implement a 53/47 formula in exchange for its agreement to remain with the Belmont-San Carlos Fire Department. An extra three per cent on an anticipated $12 million budget would equate to an additional expense of $360,000 to the City of San Carlos (and $360,000 less to the District). Additionally, Belmont reports current income of $5.7 million in its Fire District with an anticipated increase of $285,000 next year (i.e., to $5.985 million). Belmont representatives suggest that the City of San Carlos should match Belmont’s revenue availability to the Department, plus pick up the additional 3 percent formula adjustment. In total, these adjustments, if accepted, would require an additional San Carlos contribution of $1,045,000 toward fire services in FY 2008 (i.e., $400,000 to match the current Belmont revenue availability; $285,000 to match anticipated growth in that revenue; plus the $360,000 formula adjustment). This would equate to a 19.7% increase in the City’s current fire services budget and would likely require significant reductions in police, and parks and recreation funding levels to accommodate it. Additionally, any formula adjustment may impact the City’s share of the Department’s unfunded liabilities, currently estimated at more than $16 million, if applied retroactively (e.g., 3% of $16 million = $480,000).
Background: The City Council adopted a motion to work with the Belmont Fire Protection District as equal partners to further the Belmont-San Carlos Fire Department (BSCFD) at its regular meeting of November 27, 2006. The BSCFD met Wednesday, November 29, 2006 and discussed options for the Department in the wake of the recent assessment district tally. Belmont representatives, during this meeting, indicated an unwillingness to continue working as equal partners under terms of the current Joint Powers Agreement (JPA) beyond June 30, 2006. Belmont representatives further suggested that Belmont intended to submit a letter prior to the end of this calendar year to dissolve the JPA as of June 30, 2007, unless San Carlos agreed to implement a 53/47 formula (i.e., whereby San Carlos would contribute 53% of the Departments’ cost, or approximately $300,000 to $360,000 more than current costs per year). As previously reported, the current JPA provides for an equal 50/50 cost formula. The JPA grants either party the option to dissolve the JPA on June 30, 2007 (a six month time frame) if notice is given by December 31, 2006. After that date, eighteen months notice will be required prior to dissolution of the JPA. Staff believes that responsible dissolution of the Department will likely require more than six months (i.e., to analyze the appropriate distribution of assets and liabilities while arranging for alternative fire service and payment of unfunded liabilities). Belmont’s notice of termination before December 31st would trigger the dissolution on June 30, 2007, irrespective of San Carlos’ wishes, however. In recognition of this fact, and in consideration of potential initiatives to consider alternative solutions to the current financing issues facing the Department, the BSCFD considered a suggestion that the City of San Carlos and the Belmont Fire Protection District extend the deadline for notice triggering the six months dissolution under the current JPA from December 31, 2006 to June 30, 2007. The Belmont Fire Protection District (District) has scheduled a special meeting for Thursday, December 7, 2006 to consider a Resolution amending the Amended and Restated Development Agreement. Staff has been advised that the District will take up the matter and consider options including, but perhaps not limited to, retaining the JPA as is; submitting a letter withdrawing from the JPA with the June 30, 2007 dissolution date; extending the time in which to trigger the six-month dissolution; or extending the time to trigger a dissolution with an effective date for dissolution of December 31, 2007. No action is required to ensure continuation of fire services through June 2007. Extending the time frame for withdrawal may allow extra time for discussion with Belmont representatives providing the District concurs. Staff supports the extension concept with an effective date for dissolution of December 31, 2007. We believe that the extension, while contributing to continued uncertainty within the Department and in the provision of fire services for the City of San Carlos, is preferable to the District’s threatened action terminating the JPA by June 2007. Accordingly, staff supports a definitive date of December 31, 2007 for dissolution if notice is delivered with the hope that Belmont acts accordingly. Alternatives: Options available to the City Council include:
1. Adopt a Resolution to amend the Amended and Restated Exercise of Joint Powers Agreement for the Belmont-San Carlos Fire Department extending the deadline for six month dissolution from December 31, 2006 to June 30, 2007; or 2. Adopt a Resolution to amend the Amended and Restated Exercise of Joint Powers Agreement for the Belmont-San Carlos Fire Department establishing December 31, 2007 as the date certain for dissolution if notice of withdrawal is given from January 1, 2007 through June 30, 2007; and 3. Authorize the City Manager, or his designee, to submit a notice letter of the City’s withdrawal from and the dissolution of the JPA as of June 30, 2007, in response to any equivalent letter submitted to San Carlos by the Belmont Fire Protection District prior to December 31, 2006; or 4. Provide staff with alternative direction.
Respectfully submitted,
Mark Weiss, City Manager
Attachments: Resolution of the City of San Carlos - Authorizing an Amendment to the Joint Powers Agreement to Extend the Deadline to June 30, 2007 for Notice of Expedited Dissolution of the Belmont - San Carlos Fire Department (PDF  , 58 kb) Resolution of the City of San Carlos - Authorizing An Amendment To The Joint Powers Agreement To Extend The Deadline For Notice Of Expedited Dissolution Of The Belmont-San Carlos Fire Department With A Definitive Dissolution Date Of December 31, 2007 (PDF , 59 kb)
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