1999-1102_ORANGE COUNTY FIRE AUTHORITY_H1a_Agenda Report0 0
AGENDA ITEM November 2, 1999
TO: Honorable Mayor and City Council members
FROM: George Scarborough, City Manager
SUBJECT: Proposed Amendments to the Agreement Creating the Orange County
Fire Authority
RECOMMENDATION:
By motion, approve the proposed amendments to the Joint Powers Agreement Creating
the Orange County Fire Authority.
SITUATION:
A. Summary and Recommendation -
When the Orange County Fire Authority was formed in March of 1995, the Authority
committed to review the issue of "equity". A few cities within the Authority, in particular
Irvine, believed they were contributing revenue far in excess of the actual cost of
services their community was receiving and that their excess revenue was in effect
subsidizing other Authority member cities that were receiving the same level of service
while contributing less revenue. Included in the Joint Powers Authority agreement which
formed the Fire Authority were provisions which required a 3 year waiting period before
any changes could be made in the cost of services based on "equity" and a limit of 2%
annually for any "equity" adjustments to individual member agencies.
The Equity Study was initiated in the summer of 1997 when the Authority retained The
Davis Company to prepare the study. The study was concluded at the beginning of this
year and contains a number of recommendations that attempt to address the issue of
equity. The study concludes as it was commissioned to do, that equity does not exist
between the various cities within the Authority. The Davis Company recommended a
methodology to determine relative status of each member and an implementation
strategy to improve equity between the members.
Both Mayor John Greiner, the City's Fire Authority Board Member, and the City
Manager have spent extensive hours over the last two years participating in the
development of the Equity Study. Both have reached the conclusion that equity does
exist in the Authority. Anywhere within the Service Area of the Structural Fire Fund a
property tax payer pays the same amount of taxes for fire services and receives the
same level of service as any other property tax payer with the same property value.
FOR CITY COUNCIL AGE / / ��
V
Agenda Item -2- November 2, 1999
Equity between taxpayers exists now throughout the Service Area of the Structural Fire
Fund.
However, we do support as a practical business necessity the right of the majority of the
Board of Directors to make budgetary and expenditure decisions for the Authority,
therefore we are recommending the adoption of the proposed amendments.
B. Background -
Cities in the Structural Fire Fund (SFF) are San Juan Capistrano, Cypress, Dana Point,
Irvine, Laguna Hills, Laguna Niguel, Lake Forest, La Palma, Los Alamitos, Mission
Viejo, Villa Park, and Yorba Linda plus the Unincorporated County area. Upon their
incorporation each of these cites continued to receive fire services from the County Fire
Department rather than establish a City Fire Department. The County through the SFF
retained a portion of the property tax. Property owners within SFF cities pay a property
tax levy for fire suppression services as they do for other local services such as
schools, libraries, flood control, vector control, etc. Proposition 13 significantly revised
the "equity" between tax payers and resulted in a system of older properties with low tax
roll values and new properties with high roll values. On a City by City basis, tax payers
in new cities like Irvine or Laguna Niguel contributed significantly more tax dollars
proportionally to the SFF than older cities like Cypress, La Palma or Los Alamitos.
However, in all circumstances, properties with the same property value pay the same
property taxes for the same level of service.
Cash contract cities in the County fire system at the time of Proposition 13 passed were
Tustin and Placentia. Seal Beach joined the system in 1982 and Stanton in 1987.
Buena Park, San Clemente, and Westminster joined in the early to mid 1990's. Each of
the Cash Contract Cities had at one time a City Fire Department which they each
disbanded after reaching agreement with the County to receive County Fire Services by
contract. A Cash Contract City makes an annual contract payment using funds from
whatever internal revenue source it chooses. Until the beginning of the JPA study
process in 1991, cash contract payments were determined by the Cost Allocation Plan
(CAP) process. The CAP considered four equally weighted factors of population,
assessed valuation, geographic size, and number of alarms responded to annually.
This composite factor was then applied to the operating budget for any given year in
determining the contract charge. In 1991, the Cities and the County agreed that the
charges would be frozen with the exception of directly identifiable costs related to
salary/benefit increases and servicestsupplies cost increases. This condition has
remained unchanged to date; however, this system applies only to the Cities of
Placentia, Seal Beach, Stanton, and Tustin, who were contracting with the County at
Agenda Item -3- November 2, 1999
the time of the JPA formation efforts. Later cash contracts with the cities of Buena
Park, San Clemente, and Westminster were written on the basis of "direct cost"
increases to the system. In conclusion, there are two distinct types of cash contact
cities, each having a different basis for contact cost calculations. Stated differently,
there is an equity issue even within the category of cash contract cities.
The Davis Company submitted its Final Report on Equity to the Board of Directors in
January 1999. The final report included several policy recommendations and
suggested options to address the equity issues. After reviewing the final report, the
Board of Directors created an Equity Working Group to review all issues raised during
the Equity. The Equity Working Group included five members of the Board of Directors.
OCFA member agencies were asked to review the Final Report on Equity over the
period February through April, to develop a written position, and to provide instruction to
their respective board member. The Equity Working Group studied the responses from
the member agencies, requested follow-up legal opinions from General Counsel,
identified the critical policy issues, and developed consensus on their points of
agreement. After considerable discussion and debate, at its final meeting in July, the
Equity Working Group formulated policy recommendations for consideration of the
Board of Directors.
In making its recommendations to the Board of Directors, the Equity Working Group
considered the need for long-term organizational stability of the OCFA as an overriding
goal. Other goals that the working group considered important in making its
recommendations were to:
♦ Assure equal treatment of members, to the extent possible.
♦ Address concerns of the donor members, to the extent possible.
♦ Develop a uniform model for service contracts.
♦ Address the inequities of the cost methodologies currently in use for the cash
contract cities and recover costs for vehicle and equipment replacement and
facilities maintenance currently borne by the SFF members.
♦ Provide contract members with a predictable cost through a "cap" on cost increases.
On July 22, 1999, the OCFA Board of Directors discussed the Equity Working Group's
recommendations and voted to approve the recommended equity policies submitted by
the Equity Working Group. Staff was directed to distribute the draft amendments to the
Joint Powers Agreement Creating the Orange County Fire Authority to the member
agencies for review and comment.
Agenda Item -4- November 2, 1999
Modifications to the proposed Amendments were made in response to comments by
Mayor Greiner. The original proposed amendments stated that inequity existed and
that the Board would allocate additional services to "over -contributing" SFF members
on an annual basis. Mayor Greiner's modification requires that the Board would need
to make an annual determination that an inequity exits which warrants allocation of
additional services prior to any allocation of additional services. This modification will
force the Board to annually make a more thoughtful and reasoned assessment of the
equity issue than has occurred under the pressure to get the JPA amendments
accomplished.
The Board of Directors unanimously approved the amendments as modified at their
meeting on September 23, 1999.
The following provides an overview of the amendments:
Paoe 7: Article I.. 4.. (T) Powers - permits, but does not require, the Board to determine
compensation of directors (non -equity related).
Pages 17-22: Article IV., 3. Contributions for Budgeted Amounts - sets forth cost
methodology for cash contract charges.
• Changes due date for cash contract payments from within 60 days to within 30 days
of receipt of a billing.
• Continues existing cost calculation methodology.
• Provides that cost calculation methodology shall include the proportional share of
long-term debt obligations.
• Sets a cap of 3.5% on annual cost adjustments for the first five years; a cap of 4%
for the next five years.
• Includes charges for facilities maintenance, equipment rep lacement/depreciation,
and vehicle rep lacement/depreciation.
• Requires contract cities to be responsible for the incremental cost of new resources
committed to their city.
• Provides that repeated failure to make payments when due shall constitute grounds
for expulsion from the Authority and/or the imposition of an Authority determined late
fee.
Pages 22-24: Article IV., 4. Equity - sets forth the method for resolution of the "equity"
issue.
• Annually after the conclusion of each fiscal year and consideration of the audited
financial statement for that year, and after consideration of the Authority's financial
needs, the Board of Directors will determine if sufficient unencumbered funds are
available for additional services or resources to SFF members. In the event the
Board determines that (1) such funds are available, (2) an inequity exists which
warrants distribution, and (3) that it is appropriate to do so, it shall allocate those
funds based on the methodology developed from the Davis Group equity report.
Agenda Item -5- November 2, 1999
• Provides that if the Board determines that an inequity does exist than the Board will
use the general methodology employed in Model 2A of the Davis Group report as
the basis to determine the relative status of each member, unless otherwise directed
by a two-thirds vote of all Directors. That methodology shows the City of San Juan
Capistrano as a donor city by a small amount.
• Provides that no SFF member will be required to make additional payments for
services on account of equity.
Page 24: Article IV 5 Approval of Bonded Indebtedness
• Requires a two-thirds vote of all members for issuance of long-term debt.
• Specifies that any cash city that withdraws, after ceasing to be a member of the
Authority, it is not responsible for payment of its proportional share of long-term
debt.
Pages 25-26: Article VI., 1. Property Rights - describes member obligations with respect
to property.
• Provides that fire stations owned by cities shall be leased to OCFA for $1.00 per
year.
• Defines responsibility for capital improvements to cash contract city -owned and
Authority -owned fire stations; requires cash contract city participation in the fire
station maintenance and equipment and vehicle replacement/depreciation
programs.
Pages 30-34: Article VII. Withdrawal and Addition of Members - describes initial and
subsequent contract terms and notice requirements for withdrawal.
• Provides for an initial term of 10 years.
• Sets forth notice of withdrawal requirements for cash contract cities; allows the cities
of Buena Park, Stanton, and Westminister an extension of six months for notice and
effective date of withdrawal.
• Provides that membership terms automatically renew on the same terms and
conditions the prior term and with the same cap in effect in the last year of the prior
term unless a city provides notice of withdrawal or the Board by a two-thirds vote of
all Directors changes the terms.
• Requires that a city's representative be removed from the Board if notice of
withdrawal is given or is deemed to have been given by a city.
• Clarifies that withdrawal of a SFF member may be subject to property tax transfer
negotiations and such applicable notices as required by law.
• Provides flexibility for the Board to set terms and conditions for new members of the
Authority.
• Requires the County to be a member for an initial 10 -year term and provides for
automatic renewals subject to the same provisions and exceptions applicable to the
cities. If County withdraws, it remains liable for payment of the SFF's proportional
share of any bonded indebtedness incurred prior to withdrawal.
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Agenda Item -6- November 2, 1999
Page 35: Article IX.. 4. Amendment - provides for amendment or modification of the
agreement.
• Requires a two-thirds vote of all members for amendments or modifications to the
agreement.
• Provides that no amendment shall change the cap, the cost calculation methodology
or length of a term during the pendency of any term.
COMMISSION/BOARD REVIEW & RECOMMENDATIONS:
Not applicable.
FINANCIAL CONSIDERATIONS:
No direct financial impact to the City.
PUBLIC NOTIFICATION:
None.
ALTERNATE ACTIONS:
1. Adopt the staff recommendations.
2. Provide alternative direction to the City's Fire Authority Board Member.
RECOMMENDATION:
By motion, approve the proposed amendments to the Joint Powers Agreement Creating
the Orange County Fire Authority.
Respectfully submitted,
4eoecar rough—'g
Attachments: Amended Orange County Fire Authority Joint Powers Agreement
(Agreement in Council packets only. Copy of Agreement available for
review in City Clerk's Office.)
v.5�e
7800 Katella Avenue
Stanton, California 90680 • (714) 379-9222
September 28, 1999
The Honorable John Greiner
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Dear Mr. Greiner:
I would like to express my appreciation to you for supporting the language in the
proposed OCFA Joint Powers Authority Agreement amendments which will provide
Stanton, Buena Park and Westminster the opportunity to have until December 31, 2000
to give notice of withdrawal, to be effective December 31, 2001. 1 realize this was a
difficult decision to make.
The time afforded the three cities will assure that we will have adequate time to
complete the Fire Services Feasibility Study along with Garden Grove and make an
informed decision as to the City's future fire protection services for our citizens.
I assure you that we will act as expeditiously as is possible to complete the Study and
move forward with a decision.
Sincerely,
old T SIS wo ver
David John Shawver
Councilman
cc: Chip Prather, Fire Chief
SEP � ) 1999
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TABLE OF CONTENTS
Page(s)
RECITALS 1, 2
AGREEMENT 3
ARTICLE I. POWERS AND PURPOSES 3
1. Authority Created 3
2. Purpose of the Agreement; 3
Common Power to be Exercised
3. Effective Date of Formation 3, 4
4. Powers 4, 5, 6
ARTICLE II. ORGANIZATION
6
1.
Membership
6
2.
Designation of Directors
6, 7
3.
Principal Office
7
4.
Meetings
7, 8
5.
Quorum; Voting
8
6.
Executive Committee
8
7.
Officers
9
8.
Minutes
9
9.
Rules
9
10.
Fiscal Year
10
11.
Assent of Members
10
12.
Committees
10
13.
Additional Officers and Employees;
10, 11
Contract Services
ARTICLE III. TRANSFER OF FIRE OPERATIONS
11
1.
List of Assets and Liabilities
11, 12
2.
Transfer of County Assets and
12
Liabilities
a. Personnel
12
b. Assets
13
C. Reserves
13
d. Contracts
13, 14
e. Records
15
3.
Authority Assumption of Liability
15
ARTICLE IV. FUNDING OF FIRE OPERATIONS
16
1. General Budget 16
2. Expenditures for the Approved 16
Budget
3. Contributions for Budgeted Amounts 16
a. Structural Fire Fund 16, 17
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b. Cash Contract Cities 17
and John Wayne Airport
c. Termination 17, 18
4. Equity 18
5. Approval of Bonded Indebtedness 18
6. Authority Cooperation 19
ARTICLE V. ACCOUNTING AND AUDITS 19
1. Accounting Procedures 19
2. Audit 19
ARTICLE VI. PROPERTY RIGHTS 19
1. Project Facilities and Property 19, 20
2. Disposition of Assets Upon 19
Termination
3. Liabilities 20
4. Indemnification and Insurance 20, 21,
22, 23
ARTICLE VII. WITHDRAWAL AND ADDITION OF MEMBERS
23
1.
City Member Withdrawal
23
2.
Addition of New City Members
24
3.
Withdrawal of County
24
4.
Property of Withdrawing Members
24, 25
ARTICLE VIII. TRANSITION TO AUTHORITY
25
ARTICLE IX. NOTICE OF AGREEMENT
25
1.
Initial Notice
25
2.
Additional Notices
25
3.
Notice to Members
25
4.
Amendment
26
5.
Headings
26
6.
Severability
26
7.
No Continuing Waiver
26
8.
Successors
26
9.
No Third Party Beneficiary
26, 27
SIGNATURE PAGES
28
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JOINT POWERS AGREEMENT
CREATING THE
ORANGE COUNTY FIRE AUTHORITY
This Agreement is made this day of , 1994 by
and between the following public entities (collectively, the
"members"), BUENA PARR, CYPRESS, DANA POINT, IRVINE, LAGUNA HILLS,
LAGUNA NIGUEL, LAKE FOREST, LA PALMA, LOS ALAMITOS, MISSION VIEJO,
PLACENTIA, SAN CLEMENTE, SAN JUAN CAPISTRANO, SEAL BEACH, STANTON,
TUSTIN, VILLA PARK AND YORBA LINDA (collective4, the "Cities") and
the COUNTY OF ORANGE (the "County").
RECITALS
A. County operates the Orange County Fire Department (the
"Fire Department"), which presently provides fire protection,
prevention and suppression services and related and incidental
services to Cities, as well as to the unincorporated area of the
County and State areas of responsibility ("SRA").
B. Cities and County agree that the level and quality of
services are excellent and agree that the Fire Department's
operational control should be continued with the current Director
of Fire Services.
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C. _Cgunty agrees that Cities require additional policy input
into and direction over the costs of such services and use of
structural fire fund taxes levied therefor.
D. Cities and County have studied and discussed policy input
and cost control for over three years and have determined that
creation of a joint power entity to administer fire service
operations and delivery serves their needs for policy input and
cost control.
E. Each member is a public agency as defined by Government
Code Section 6500 et seq. and is authorized and empowered to
contract for the joint exercise of powers common to each member.
F. The members now wish to jointly exercise their powers to
provide for mutual fire protection, prevention and suppression
services and related and incidental services, including but not
limited to, creation, development, ownership and operation of
programs, facilities, and funds therefor through the establishment
of the "Orange County Fire Authority" (the" Authority").
NOW, THEREFORE, in consideration of the mutual promises set
out, the parties agree as follows:
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AGREEMENT
ARTICLE I.
POWERS AND PURPOSES
1. Authority Created. The Authority is formed by this
Agreement pursuant to the provisions of Article 1, Chapter 5,
Division 7, Title 1 (commencing with Section 6500) of the
Government Code of the State of California. The Authority shall be
a public entity separate from the parties hereto and its debts,
liabilities and obligations shall not be the debts, liabilities and
obligations of its members.
2. Purpose of the Agreement; Common Powers to be Exercised.
Each member individually has the statutory ability to provide fire
suppression, protection, prevention and related and incidental
services including but not limited to emergency medical and
transport services, as well as providing facilities and personnel
for such services. The purpose of this Agreement is to jointly
exercise the foregoing common powers in the manner set forth
herein.
3.
Offective Date
of Formation.
The
Authority shall
be
formed as
of February 3,
1995, or such
later
date as agreed to
in
writing by all the members (the "Effective Date"), provided that
the Authority has met the insurance requirements set forth in
3.
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Article VI _.Section 4(d) below and has become enrolled as a member
in the Orange County Employees Retirement System (OCERS).
4. Powers. Pursuant to and to the extent required by
Government Code Section 6509, the Authority shall be restricted in
the exercises of its powers in the same manner as is a general law
city. The Authority shall have the power to do any of the
following in its own name:
(a) To exercise the common powers of its members in
providing fire suppression, protection, prevention
and related and incidental services.
(b) To make and enter into contracts, including
contracts with its members; notwithstanding, the
Authority may not enter into real property
development agreements.
(c) To assume Fire Department contracts relating to
fire suppression, protection, prevention and
related and incidental services.
(d) To negotiate contracts with represented and
unrepresented employees.
(e) To employ such agents, employees and other persons
as it deems necessary to accomplish its purpose.
(f) To lease, acquire, hold and dispose of property.
(g) To invest surplus funds.
4.
�bj To -incur debts, liabilities, or obligations.
provided that all bonded indebtedness, certificates
of participation or other long-term debt financing
require the prior consent of the members as set out
in Article IV hereof.
(i) To sue and be sued in its own name.
(j) To apply for grants, loans, or other assistance
from persons, firms , corporations, or governmental
entities.
(k) To use any and all financing mechanisms available
to the Authority, subject to the provisions of
Article IV hereof.
(1) To prepare and support legislation related to the
purposes of the Agreement.
(m) To lease, acquire, construct, operate, maintain,
repair and manage new or existing facilities as
well as to close or discontinue the use of such
facilities.
(n) To levy and collect payments and fees for services,
provided that paramedic or ambulance user fees
shall be approved by the member(s) affected.
(o) To impose new special taxes or assessments as
authorized by law to the extent allowed by law, and
in coordination with the underlying jurisdiction.
(p) To provide related services as authorized by law.
5.
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(q) To contract for the services of attorneys,
consultants and other services as needed.
(r) To purchase insurance or to self -insure and to
contract for risk management services.
(s) To adopt rules, regulations, policies, bylaws and
procedures governing
Authority.
ARTICLE II.
ORGANIZATION
the operation of the
1. Membership. The members of the Authority shall be the
original parties hereto which have not withdrawn from the
Authority, and such other cities as may join the Authority after
execution of this Agreement. New members may join on the terms and
conditions set out in Article VII hereof.
2. Designation of Directors. Before the Effective Date,
each member by resolution of its governing body shall designate and
appoint one representative to act as its director on the Authority
Board of Directors (the "Board"), except the County whose Board of
Supervisors shall appoint two representatives to act as its
directors. Each representative shall be a current elected member
of the governing body. Each director shall hold office from the
first meeting of the Board after appointment by the member's
governing body for a term of four (4) years or for a lesser term as
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determined ,under 4(a) of Article II, or until the selection of a
successor by the appointing body. Each member shall also appoint
an alternate to act in each director's absence. Each alternate
shall be a current elected representative of the governing board of
the member. Each director and alternate shall serve at the
pleasure of his or her appointing body and may be removed at any
time, with or without cause, at the sole discretion of that
appointing body. Any vacancy shall be filled in the same manner as
the original appointment of a director and/or alternate. No
director or alternate will receive compensation from the Authority
for his or her services. With approval of the Board, a director or
alternate may be reimbursed for reasonable expenses incurred in the
conduct of the business of the Authority.
3. Principal Office. The principal office of the Authority
shall be the Fire Department's Water Street headquarters or as may
be otherwise designated by the Authority from time to time.
4. Meetings.
(a) The first and organizational meeting of the
Authority shall be held at its principal office on the Effective
Date. At that meeting, the Board may determine whether to adopt a
rotation system of two (2) and four (4) year terms to provide for
increased continuity on the Board and shall classify themselves
into any groups selected.
7.
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tb)- She Board shall meet at the principal office of the
Authority or at such other place as may be designated by the Board.
The time and place of the regular meetings of the Board shall be
determined by resolution adopted by the Board, and a copy of such
resolution shall be furnished to each party hereto. All Board
meetings, including regular, adjourned and special meetings, shall
be called, noticed and held in accordance with the Ralph M. Brown
Act, Section 54950, et seq. of the Government Code (the "Brown
Act") as it may be amended from time to time.
5. Quorum, Votina. A majority of the directors shall
constitute a quorum for the purpose of the transaction of business
relating to the Authority. Each director, or alternate in the
absence of any voting director, shall be entitled to one vote.
Unless otherwise provided herein, a vote of the majority of those
present and qualified to vote shall be sufficient for the adoption
of any motion, resolution or order and to take any other action
deemed appropriate to carry forward the objectives of the
Authority.
6. Executive Committee. At its first meeting, the Board
shall elect from among its members an Executive Committee of five
(5) or seven (7) members, one of which shall be a County
Supervisor, and shall designate the functions to be performed by
the Executive Committee, as allowed by law.
[a
7. Offer icers. At its first meeting, the Board shall elect
from among its members a chair and vice -chair and thereafter at the
first meeting in each succeeding fiscal year the Board shall elect
or re-elect a chair and vice -chair. In the event that the chair or
vice -chair ceases to be a director, the resulting vacancy shall be
filled in the same manner at the next regular meeting of the Board
held after such vacancy occurs. In the absence or inability of the
chair to act, the vice -chair shall act as chair. The chair, or in
his or her absence the vice -chair, shall preside at and conduct all
meetings of the Board. The Board shall appoint a secretary to the
Authority who may be a member of the Board or an employee of a
member. The chair, vice -chair and secretary each shall hold office
for a period of one (1) year.
8. Minutes. The secretary of the Authority shall provide
notice of, prepare and post agendas for and keep minutes of
regular, adjourned regular, and special meetings of the Board, and
shall cause a copy of the minutes to be forwarded to each director.
The secretary will otherwise perform the duties necessary to ensure
compliance with the Brown Act and other applicable rules or
regulations.
9.- Rules. The Board may adopt from time to time such
bylaws, rules and regulations for the conduct of its affairs that
are not in conflict with this Agreement, as it may deem necessary.
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E
10. Fiscal Year. The Authority's fiscal year shall be July
1 of each year, or in the year of its formation, the Effective
Date, to and including the following June 30.
11. Assent of Members. The assent or approval of a member in
any matter requiring the approval of the governing body of the
member shall be evidenced by a copy of the resolution of the
governing body filed with the Authority.
12. Committees. The Board may establish standing or ad hoc
committees or subcommittees composed of Board members, staff and/or
the public to make recommendations on specific matters.
13. Additional
Officers
and Emolovees;
Contract
Services.
(a)
Pursuant
to
Government
Code
Sections
6505.5 and
6505.6, the Board shall appoint an officer or employee of the
Board, an officer or employee of a member public agency or a
certified public accountant to hold the offices of treasurer and
auditor for the Authority. Such person or persons shall possess the
powers of and shall perform the treasurer and auditor functions for
the Authority required by Government Code Sections 6505, 6505.5,
and 6505.6, including any subsequent amendments thereto. Pursuant
to Government Code Section 6505.1, the secretary and the auditor
and treasurer shall have charge of certain property of the
Authority. The treasurer and auditor shall assure that there shall
be strict accountability of all funds and reporting of all receipts
10.
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and disbursements of the Authority. The treasurer, auditor and
secretary shall be required to file an official bond with the Board
in an amount which shall be established by the Board. Should the
existing bond or bonds of any such officer be extended to cover the
obligations provided herein, said bond shall be the official bond
required herein. The premiums on any such bonds attributable to
the coverage required herein shall be appropriate expenses of the
Authority.
(b) The Board shall appoint general counsel and special
counsel to the Authority to serve as necessary.
(c) The Board may contract with a member to provide
necessary administrative services to the Authority as appropriate.
Any administrative duties also may rotate from year to year.
ARTICLE III.
TRANSFER OF FIRE OPERATIONS
1. List of Assets and Liabilities. An up-to-date list of
all Fire Department personnel, employment agreements, pension
agreements, assets (including but not limited to real property,
equipment, Fire Department reserves, contracts and deposits) and
all known liabilities (including but not limited to tort and
workers compensation cases and claims) shall be prepared by the
11.
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transition Seam during the transition referred to in Article VIII
below.
2. Transfer of County Assets and Liabilities. Effective as
of the date of Authority formation, County shall transfer to the
Authority all assets and liabilities of the Fire Department,
exclusive of the Weed Abatement and Hazardous Materials Program
Office and their personnel (the Asset Transfer), as further set out
in this Article.
(a) Personnel. The parties agree that the Authority is
the successor employer to the County by operation of law, including
for retirement and pension purposes. On the Effective Date, each
and every employee of the Fire Department shall become an employee
of the Authority on exactly the same terms and conditions as set
forth in the County's existing Memoranda of Understanding
("MOU's"), employment agreements and all other applicable
employment rules, regulations, ordinances and resolutions. The
Board shall forthwith adopt and ratify such MOD's, employment
agreements, and employment rules, regulations, ordinances and
resolutions for each of the Authority employees and shall take such
other and further actions as authorized and necessary to implement
this subparagraph (a). The Board also shall take all necessary
steps to confirm continuation of membership in the County's 1937
Act Retirement system on the same terms and conditions.
12.
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(b) Assets. All Fire Department assets, including and
not limited7 to real property, including the Fire Headquarters
complex located at 180 South water Street in Orange (but excepting
the four deactivated fire stations located at 1502 South Greenville
Street, Santa Ana; 12962 Dale Street, Garden Grove; 521 North
Figueroa Street, Santa Ana; and 31411 La Matanza Street, San Juan
Capistrano) and personal property and equipment and apparatus,
whether or not located at fire stations, the Fire Headquarters
complex, on equipment or otherwise shall transfer to the Authority
in their "as is" condition as of the Effective Date. As part of
the consideration for the County's Asset Transfer and contribution
to the Authority of its SFF from the unincorporated area, the
Authority shall assume the Fire Department's obligation for payment
of $14.5 million to the County for purchase of Fire Department
assets. The parties acknowledge that $8.2 million remains owing,
and that the Authority shall make a $4.1 million payment by June
30, 1995 and a $4.1 million payment by June 30, 1996.
(c) Reserves. All Fire Department reserves, including
the Fire Department's Fund 130 contingency, as shown in the
County's 1994-95 Final Budget, shall transfer, unencumbered, to the
Authority as of the Effective Date.
(d) Contracts. Except for the SRA agreement with the
California Department of Forestry and Fire Protection ("CDF"), all
existing County agreements and contracts involving the Fire
13.
0 9
Department.:or its personnel, including but not limited to contracts
with Structural Fire Fund and cash contract Cities, mutual aid
agreements, automatic aid agreements, County island agreements, and
entry, access and roadwork agreements, shall be assigned to the
Authority as of the Effective Date, with any service or obligation
to be provided or performed thereafter by the Authority. A list of
all such contracts shall be developed during the transition period.
The Authority agrees to assume all of County's obligations, duties
and liabilities under said agreements and contracts. With respect
to contracts between County and the Structural Fire Fund Cities and
cash contract Cities, each City member hereby agrees to the
assignment to the Authority and agrees to release County as of the
Effective Date from any further obligations to any City member
under said contracts upon assignment. As part of the consideration
for the County's Asset Transfer and contribution to the Authority
of its SFF from the unincorporated area, the Authority agrees to
subcontract with County for the provision of services to all areas
within the County which have been designated as SRAs or enter into
another arrangement on such terms as are acceptable to the CDF and
the County. As additional consideration for the County's Asset
Transfer and contribution of its SFF from the unincorporated area,
the Authority further agrees to contract with the County for the
Authority's provision of services to the County's unincorporated
areas and for the Authority's provision of aircraft rescue fire
fighting service to John Wayne Airport.
14.
(e) Records. Any and all business records and files,
whether computer records, hard copy, microfilm or fiche, historical
data, rosters, personnel records, organizational charts, job
descriptions, deeds, easements, equipment logs, warranties, manuals
and so forth, necessary or helpful to provide services shall be
transferred by the County to the Authority during the transition
period.
3. Authority Assumption of Liability. In further
consideration for the County's Asset Transfer and contribution of
its SFF from the unincorporated area, the Authority shall assume
responsibility for any and all loss, litigation, liability, injury,
damage, claim, demand, and tort or workers compensation incidents
that occur on or after the Effective Date. The County shall retain
responsibility and liability for any and all such incidents that
occur prior to the Effective Date and shall retain all risk
management reserves that have been set aside for such prior
incidents. The Authority may contract with the County to receive
risk management services on such terms as agreed to by the
Authority and the County. Notwithstanding, the Authority
acknowledges that it shall not be entitled to become a member of
the County's self-insurance pool without the County's written
consent.
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ARTICLE IV.
FUNDING OF FIRE OPERATIONS
1. General Budget. Within sixty (60) days after the first
meeting of the Board, a general budget for the first fiscal year
shall be adopted by the vote of a majority of all of the directors.
The initial budget and each succeeding budget shall include, but
not be limited to, the following: (a) the general administrative
expenses, operating expenses and necessary reserves of the
Authority to be incurred during the period covered by the budget;
and (b) the allocation of costs among the members of the Authority
in the amounts necessary to cover the budget items set out in 1(a)
above. Thereafter, at or prior to the last meeting of the Board
for each fiscal year, a general budget shall be adopted for the
ensuing fiscal year or years by a vote of at least a majority of
all of the directors of the Board. A written budget performance
report shall be presented to the Board.
2. Expenditures for the Approved Budget. All expenditures
within the designations and limitations of the approved general
budget shall be made on the authorization of the Board for general
budget expenditures without further action. No expenditures in
excess of those budgeted shall be made without the approval of a
majority of all of the directors of the Board.
3. Contributions for Budgeted Amounts.
(a) Structural Fire Fund. County receives Structural
16.
Fire Fund .("SFF") from the unincorporated area and all member
Cities except Stanton, Tustin, San Clemente, Buena Park, Placentia
and Seal Beach. On behalf of the Cities receiving SFF, and the
unincorporated area, County shall pay all SFF it receives to the
Authority to meet budget expenses and fund reserves in accordance
with the County's normal tax apportionment procedures pursuant to
the California Revenue and Taxation Code and the County's tax
apportionment schedules.
(b) Cash Contract Cities and John Wayne Airport. As
part of its annual budget process, the Authority shall determine
amounts owing from Buena Park, Placentia, San Clemente, Seal Beach,
Stanton, Tustin, other member cash contract Cities, and from the
County for service to the John Wayne Airport. Such amounts are due
and payable within sixty (60) days of receipt of a billing
therefor. For the first three (3) fiscal years of the Authority's
existence, the Authority shall limit any increase in annual costs
for its service to cash contract Cities to no more than the annual
percentage change in the cost of fire system operations consistent
with the cost calculation methodology in place on the Effective
Date, and for service to the County for the John Wayne Airport to
amounts consistent with the cost calculation methodology in place
immediately prior to the Effective Date.
(c) Termination. Failure by any member to make payments
when due constitutes grounds for expulsion from the Authority.
Prior to expulsion, the Authority shall provide written notice of
its intention to and expel such member if payment is not received
17.
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within sixty (60) days of the date of such notice. Any member
shall remain liable for payment of its proportional share of any
bonded indebtedness of the Authority incurred prior to the date of
its expulsion.
4. Equity. The County and each member City shall be member
agencies in equal standing in the Authority. It is understood that
the cost of service shall not be adjusted by reason of equity for
any member agency for a period of three (3) fiscal years from the
effective date of Authority formation. After the Authority's first
three fiscal years, any new annual adjustment to the cost for fire
services to each member for reasons of equity must be fair and
equitable to all members and may not exceed two (2) percent of the
member's immediately prior annual contribution. Upon approval of
two-thirds of all of the directors of the Board, another method may
be utilized in lieu of the foregoing formula as long as such method
is fair and equitable to all members.
5. Approval of Bonded Indebtedness. Prior to any Authority
resolution authorizing the issuance of any bonded indebtedness,
each member shall approve any bonded indebtedness to be incurred by
the Authority. Any withdrawing member shall remain responsible for
payment of its proportional share of any bonded indebtedness it has
approved. As used herein, "bonded indebtedness" does not include
short-term tax anticipation notes with a one-year (or shorter) term
which the Authority may authorize by a majority vote of all of the
directors of the Board.
0 9
6. Authority Cooperation. The Authority agrees to fully
cooperate with each of the members in pursuing federal and state
claims for emergency response reimbursements.
ARTICLE V.
ACCOUNTING AND AUDITS
1. Accounting Procedures. Full books and accounts shall be
maintained for the Authority in accordance with practices
established by, or consistent with, those utilized by the
Controller of the State of California for like public entities. In
particular, the Authority's auditor and treasurer shall comply
strictly with requirements governing joint powers agencies, Article
1, Chapter 5, Division 7, Title 1 of the Government Code of the
State of California (commencing with Section 6500).
2. Audit. The records and accounts of the Authority shall
be audited annually by an independent certified public accountant
and copies of the audited financial reports, with the opinion of
the independent certified public accountant, shall be filed with
the county Auditor, the State Controller and each member within six
(6) months of the end of the fiscal year under examination.
ARTICLE VI.
PROPERTY RIGHTS
1. Project Facilities and Property. On and after the
Effective Date of the Authority, all real and personal property,
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including but not limited to, facilities constructed, installed,
acquired or leased by the Authority, apparatus and equipment,
personnel and other records and any and all reserve funds shall be
held in the name of the Authority for the benefit of the members of
the Authority in accordance with the terms of this Agreement.
2. Disposition of Assets Upon Termination. The Authority
may vote to terminate this Agreement, or termination will occur if
only one member is left in the Authority. If termination occurs,
all surplus money and property of the Authority shall be conveyed
or distributed to each member in proportion to all funds provided
to the Authority by that member or by the County on behalf of that
member during its membership, whether SFF or cash contract amounts.
Each member shall execute any instruments of conveyance necessary
to effectuate such distribution or transfer. In any such
distribution, the amount of SFF derived from each incorporated or
unincorporated city areas shall be considered as received from that
member in the same manner as cash contract payments have
contributed to surplus assets.
3. Liabilities. Except as otherwise provided herein, the
debts, liabilities and obligations of the Authority shall be the
debts, liabilities or obligations of the Authority alone and not of
the parties of this Agreement.
4. Indemnification and Insurance.
(a) Except as provided in Article VI, Section 4(e)
below, from and after the Effective Date, the Authority shall
20.
defend, inc}emnify and hold harmless the County and each of the
Cities and their officers, employees, agents and representatives
with respect to any loss, damage, injury, claim, demand, litigation
or liability and all expenses and costs relating thereto (including
attorneys' fees) arising out of or in any way related to the
performance of services pursuant to this Agreement.
(b) Except as provided in Article VI, Section 4(e)
below, from and after the Effective Date, the Authority shall
defend, indemnify and hold harmless the County and each of the
County's officers, employees, agents and representatives with
respect to any loss, damage, injury, claim, demand, litigation or
liability and all expenses and costs relating thereto (including
attorneys' fees) arising out of or in any way related to any Fire
Department contract or agreement assumed by or otherwise
transferred to the Authority.
(c) Except as provided in Article VI, Section 4(e)
below, from and after the Effective Date, the Authority shall
defend, indemnify and hold harmless the County and each of the
County's officers, employees, agents and representatives with
respect to any loss, damage, injury, claim, demand, litigation or
liability and all expenses and costs relating thereto (including
attorneys' fees) arising out of or in any way related to any Fire
Department asset to be transferred to the Authority, including but
not limited to real property, personal property, equipment and
apparatus.
21.
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(d_) From and after the Effective Date, the Authority
shall maintain during the term of this Agreement, workers
compensation insurance as required by law and, in addition, general
comprehensive liability insurance in the minimum limit of
$5,000,000 combined single limit per occurrence and annual
aggregate. Each of the Authority members shall be named as an
additional insured on the general comprehensive liability policy.
Alternatively, the Authority may self -insure. Prior to the
Effective Date, the Authority shall provide the County with
certificates of insurance or proof of self insurance evidencing the
coverage referred to in this Section 4(d). Such insurance is a
condition precedent to performance under this Agreement, and until
the Authority obtains insurance as provided for in this Section
4(d), performance under this Agreement is excused and no member
shall have any right against any other member in equity or law.
(e) From and after the Effective Date, the County shall
defend, indemnify and hold harmless the Authority and each City
member and their officers, employees, agents and representatives
with respect to any loss, damage, injury, claim, demand, litigation
or liability and all expenses and costs relating thereto (including
attorneys' fees) arising out of the Fire Department's actions or
omissions prior to the Effective Date hereof which are related to
the provision of fire services or to the administration of Fire
Department contracts, facilities, sites or assets, and which may
include past, present or ongoing, or any future release of any
hazardous material, hazardous substance or hazardous waste as
defined under state and federal law or regulation. The Authority
22.
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and the Cities agree that the County's obligations under this
Section 4(e) shall only apply to costs, losses, damage, injuries,
claims, demands, litigation or liabilities for which a written
claim has been received by the County prior to February 3, 2000.
(f) Nothwithstanding Article VI, Section 4, the members agree
that no immunity available to the County or the Cities under state
or federal law or regulation shall be waived with respect to any
third party claim.
ARTICLE VII.
WITHDRAWAL AND ADDITION OF MEMBERS
1. City Member Withdrawal. No City member may withdraw its
participation in the Authority for three (3) years from the
Effective Date, or three (3) years from the date on which it
initially becomes a member. After that three (3) year period, any
withdrawing City member may give written notice to the Assessor and
State Board of Equalization by November 30 of any year pursuant to
Government Code Section 54902 and by Resolution to the County by
the succeeding March 1 pursuant to Government Code Section 25643
and such other notices as are required by laws then in effect, of
its intent to withdraw as of the end of that fiscal year. That
withdrawal may be subject to property tax transfer negotiation as
required by applicable law. Any withdrawing City member shall
remain liable for payment of its proportional share of any bonded
indebtedness of the Authority incurred prior to the date of its
withdrawal.
23.
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2. Addition of New City Members. Any non-member City may
join the Authority upon consent of a majority of all of the
directors of the Board and agreement to terms and conditions
determined by the Board. A new City member may be required to
transfer to the Authority its fire facilities and assets or to
reimburse the Authority for a proportionate share of facilities
which the new City will utilize. As a condition of membership, a
city may also be required to accept responsibility for a proportion
of the debts, obligations, and liabilities of the Authority from
its transferred facilities, to the extent agreed upon by the
Authority and the new member at the time of membership. The
Authority Board may determine to waive all or part of such
contribution requirements in return for an offsetting transfer of
the new member's fire facilities and assets to the Authority.
3. Withdrawal of County. County may not withdraw from the
Authority for three (3) years from the Effective Date, and
thereafter may withdraw from the Authority only upon notice to
Authority by November 30 of any year to permit negotiation of the
property tax transfer pursuant to Revenue and Taxation Code
Sections 95 and 99 before December 31, and thereby to enable Cities
to give notice of withdrawal under Government Code Section 25643.
In the'event of withdrawal, the County shall remain liable for
payment of its proportional share of any bonded indebtedness of the
Authority incurred prior to the date of its withdrawal.
4. Property of Withdrawing Members. Any withdrawing member
may negotiate with the Authority for return or repurchase of any
24.
0 0
and all stations and equipment serving that member's jurisdiction.
ARTICLE VIII.
TRANSITION TO AUTHORITY
The cities and County shall designate a transition team to
implement the transfer of assets and liabilities hereunder, to
prepare for the Authority's organizational meeting, and to direct
the transition of administrative services from the County to the
Authority.
ARTICLE I%.
NOTICE OF AGREEMENT
1. Initial Notice. Upon the Effective Date of this
Agreement, the Authority shall timely file with the Orange County
Clerk and the Office of the Secretary of State the information
required by Government Code Sections 6503.5 and 53051.
2. Additional Notices. Upon any amendments to this
Agreement, the Authority shall prepare and timely file with the
Orange County Clerk and the Office of the Secretary of State the
information required by Government Code Sections 6503.5 and 53051.
3. Notice to Members. Notice to members shall be deemed
given when mailed to them, first class, postage prepaid, or faxed
to the address/or fax no. set out by their signatures.
25.
4. amendment. This Agreement may not be amended or modified
except by a written agreement signed by all of the members. This
Agreement represents the sole and entire agreement between the
parties and supersedes all prior agreements, negotiations and
discussions between the parties hereto and/or their respective
counsel with respect to the subject matter of this Agreement.
5. Headings. The headings in this Agreement are for
convenience only and are not to be construed as modifying or
explaining the language in the section referred to.
6. Severability. Should any part, term, or provision of
this Agreement be determined by a court to be illegal or
unenforceable, the remaining portions or provisions of this
Agreement shall nevertheless be carried into effect.
7. No Continuing Waiver. No waiver of any term of condition
of this Agreement shall be considered a continuing waiver thereof.
8. Successors. This Agreement shall inure to the benefit of
and be binding upon any successors or assigns of the members. No
member may assign any right or obligation hereunder without the
written consent of a majority of all of the directors of the Board.
9. No Third Party Beneficiary. The members agree that
except as provided in Article IX, Section 8 above, the provisions
of this Agreement are not intended to directly benefit, and shall
26.
• •
not be enforceable by, any person or entity not a party to this
Agreement.
IN WITNESS THEREOF, the parties hereto have caused this
Agreement to be executed and attested by their duty authorized
officers as of the date first above written.
27.
Dated: /EC 81994
SIGNED AND CERTIFIED THAT A
COPY OF THIS DOCUMENT HAS BEEN
DELIVERED TO THE CHAIREAN OF
THE BOARD
J.-4., I. c�,- -J, �d.�d t *, ,J
*MLS Cler of the Board of Supervisors
County of Orange, California
NOTICE TO COUNTY OF ORANGE TO BE
GIVEN TO:
ERNIE SCHNEID$R
COUNTY ADMINISTRATIVE OFFICER
P.O. BOX 22014
SANTA ANA, CA 92702-2014
FAR: (714) 834-3018
APPROVED AS TO FORMS
TERRY C. ANDRUS, COUNTY COUNSEL
By 'x £
Ann E. Fletcher, Deputy
Dated: //X/g
28.
0
COUNTY OF ORANGE, a political
subdivision of the State
of California
By
rhe+T+*a*+_nf .its B
Supervisors
0
Dated: February 1, 1995
NOTICE TO CITY TO BE GIVEN TO:
City Manager
City of San'Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Phone: (714) 443-6315
Fax: (714) 493-1053
AS TO FORM:
Atto,tney
PSP4MG0170-01402123514. 12/06194
40
CITY OF SAN JUAN CAPISTRANO
By: Carol Nash, Mayor
�J
01101 AI10
mannem 1961
1776
February 2, 1995
Ms. Betsy Hanna Dixon
Rutan & Tucker
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
Re: FormForm tinge County Fire Authority
Dear Ms. Dixon:
MEMBERS OF THE CITY COUNCIL
COLLENE CAMPBELL
MATT HART
OIL JONES
CAROLYN NASH
DAVID SWEROLIN
CITY MANAGER
GEORGESCARBOROUGH
At their Special Meeting of February 1, 1995, the City Council of the City of San Juan Capistrano
unanimously adopted Resolution No. 95-2-1-1, which approved the Joint Powers Agreement
Creating the Orange County Fire Authority. However, the City Council wished to make known their
dissatisfaction with the revised agreement allowing for an increase in County Board of Supervisor
representation and an even number of representatives on the Board of Directors. The City Council
also appointed Council Member Wyatt Hart to represent the City on the Board of Directors, with
Council Member David Swerdlin as alternate.
As instructed by your office, enclosed are two certified copies of Resolution No. 95-2-1-1. Itis my
understanding that your office will forward one of the certified copies to the Orange County Board
of Supervisors. Also enclosed is one signature page from the Agreement with the City signatures.
It is my understanding that when all the participants have signed the Agreement, a copy with all those
signatures will be returned to this office.
If you need any further information, please let me know.
Very truly yours,
C:1 --
Cheryl Johnson
City Clerk
Enclosures
c: Chief Larry Holmes
Chief Witesman
Apartment Association of Orange County
32400 PASEO ACIELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171