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19-0115_ORANGE COUNTY FIRE AUTHORITY_E14_Agenda Report1t15t2019 Ê.14 City of San Juan Capistrano Agenda Report Honorable Mayor and Members of the City CouncilTO FROM SUBMITTED BY Æn¡^ in Siegel, City Manager Jacob Green, Assistant City Mana n ¡f,f Lindsey Stigall, Management AnalYsff ' DATE:January 15,2019 SUBJECT Resolution Approving the Fourth Amendment to the Amended Orange County Fire Authority Joint Powers Agreement RECOMMENDATION Adopt a Resolution approving the Fourth Amendment to the Amended Orange County Fire Authority Joint Powers Agreement. DISCUSSION/ANALYSIS At the request of the Orange County Fire Authority (OCFA), staff is recommending the City Council adopt via Resolution, a Fourth Amendment to the Amended Joint Powers Authority (JPA) Agreement to formalize the OCFA's commitment to its "snowball" accelerated pension liability paydown plan (Attachment 1). JPA History and Proposed Fourth Amendment to the Amended JPA Agreement The Orange County Fire Authority (OCFA) was formed in 1995 to provide regional fire protection and related services to the County of Orange and 18 member cities. Subsequent to formation, six additional cities have become members of the OCFA. The original JPA Agreement was amended on September 23, 1999, and renewed in 2010 by the First Amendment, which provided for a term that runs through 2030. 1n2013, OCFA's members approved a Second Amendment to the Amended JPA, in an attempt to address equity concerns by the City of lrvine; however, the Second Amendmentwas subsequently invalidated by court judgment. ln 2015, a Third Amendment was approved by OCFA's members which eliminated alternate Directors to the OCFA Board. OCFA is now seeking approval of a Fourth Amendment to formalize the OCFA's commitment to its "snowball" accelerated pension liability paydown plan (Attachment 2). City Council Agenda Report January 15,2019 Paqe 2 of 3 ln order to become effective, the Fourth Amendment must be approved by at least two- thirds (e.9., 16 of 24) of the member agencies' governing bodies. Background - OGFA's "Snowball" Accelerated Pension Paydown Plan At, its meeting of September 26, 2013, the Orange County Fire Authority (OCFA) Board of Directors adopted an accelerated pension liability paydown plan, otherwise known as the "snowball" plan. The snowball plan calls for the OCFA to accelerate payment of its unfunded pension liability more quickly than the timeframe required for payment by the Orange County Employees Retirement System (OCERS), thereby saving future interest costs and improving the funding status of the OCFA's pension plan. Since the plan was adopted, the OCFA's unfunded pension liability has steadily declined from $473.8 million to $400.6 million, and the funding status has consistently improved from 65% to 79o/o. Per OCERS' actuary, OCFA is on track to achieve an 85% funding level by December 2020, and has achieved interest savings to date totaling $18.3 million. City of lrvine's June 13 Proposal and June 27 Notice of Withdrawal On June 13,2018, the City of lrvine provided a proposal to the OCFA requesting, among other proposal elements, that OCFA commit to a pension pay down strategy. On June 21 and June 25, the OCFA responded to the City's proposal reiterating its commitment to OCFA's "snowball" accelerated pension liability paydown plan, in addition to other commitments made by OCFA regarding proposed service enhancements. On June 27, 2018, the City of lrvine provided OCFA with a Notice of Withdrawal seeking the initiation of good faith negotiations. OCFA desires to retain lrvine as a member agency, and OCFA has indicated its staff will continue to negotiate in good faith. At the same time, OCFA desires to continue progress on the commitments made in its June 21 and June 25 responses to the City of lrvine. FISCAL IMPACT There is no fiscal impact to the City associated with the recommended action ENVIRONMENTAL In accordance with the California Environmental Quality Act (CEQA) the recommended action is exemptfrom CEQA per Section 15061(bX3), the general rule thatthe CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Adoption of a Fourth Amendment to the Amended Joint Powers Authority (JPA) Agreement to formalize the OCFA's commitment to its "snowball" City Council Agenda Report January 15,2019 Page 3 of 3 accelerated pension liability paydown plan would not be an activity with potentialto cause significant effect on the environment and is therefore exempt from CEQA. RIOR CITY COUNCIL On August 4, 2015, the City Council approved the Resolution and Third Amendment to the Amended Joint Powers Authority Agreement. On July 21,2015, the City Council approved supporting the Third Amendment to the Amended Joint Powers Authority Agreement On November 5, 2013, the City Council approved the Second Amendment to the Amended Orange County Fire Authority Joint Powers Agreement. On February 8, 2008, the City Council approved the First Amendment to the Orange County Fire Authority Joint Powers Agreement. On November 2, 1999, the City Council approved the proposed Amendments to the Joint Powers Agreement creating the Orange County Fire Authority. On January 21, 1997, the City Council approved the First Amendment to the Joint Powers Agreement creating the Orange County Fire Authority. On Augusl2, 1994, the City Council approved, by Resolution, participation in the Orange County Fire Authority. COM M I SS I O N/CO M M ITTEE/B OARD REVIEW AND RECOMMENDATIONS: a o o o a a Not applicable. NOTIFICATION Brian Fennessy, Fire Chief, Orange County Fire Authority Lori Zeller, Deputy Chief, Orange County Fire Authority Rob Capobianco, Division Chief, Orange County Fire Authority Sherry Wentz, Clerk of the Authority, Orange County Fire Authority ATTACHMENT Attachment 1 - Resolution Attachment 2 - Fourth Amendment to the Amended Orange County Fire Authority Joint Powers Agreement RESOLUTION NO. 1 9-01 -1 5-xx A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORN¡A APPROVING THE FOURTH AMENDMENT TO THE AMENDED JOINT POWERS AUTHORITY AGREEMENT WITH THE ORANGE COUNTY FIRE AUTHORITY WHEREAS, the Orange County Fire Authority (Authority) presently provides fire protection, prevention and suppression services and related and incidentalservices to the City of San Juan Capistrano; and, WHEREAS, the City of San Juan Capistrano and the Authority wish to adopt a Fourth Amendment to formalize the Authority's commitment to its "snowball" accelerated pension liability paydown plan (Exhibit.4"). NOW, THEREFORE, BE lT FURTHER RESOLVED, by the City Council of the City of San Juan Capistrano, that the Fourth Amendment to the Amended Joint Powers Authority Agreement with the Orange County Fire Authority is approved; and, PASSED, APPROVED, AND ADOPTED this 15 day of January 2019 BRIAN L. MARYOTT, MAYOR ATTEST MARIA MORR¡S, CITY CLERK Form Date: 12/14/2005 ATTACHMENT 1 FOURTH AMENDMENT TO AMENDED JOINT POWERS AUTHORITY AGREEMENT ORANGE COUNTY FIRE AUTHORITY This Fourth Amendment ("Fourth Amendment") to the Amended Joint Powers Authority Agreement is made and entered into by and between the following public entities (collectively referred to as "members"): Aliso Viejo, Buena Park, Cypress, Dana Point, lrvine, La Palma, Laguna Hills, Laguna Niguel, Laguna Woods, Lake Forest, Los Alamitos, Mission Viejo, Placentia, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Stanton, Tustin, Villa Park, Westminster, and Yorba Linda (collectively referred to as "Cities" and individually as "City") and the County of Orange (referred to as the "County"), each of whom is a member of the Joint Powers Authority, Orange County Fire Authority ("the Authority"). This Fourth Amendment requires the approval of two thirds of the members to go into effect, and it shall be effective when approved by a sixteenth member. RECITALS WHEREAS, the Authority presently provides fire protection, prevention and suppression services and related and incidental services (collectively, "Fire Services") to Cities as well as to the unincorporated area of the County and State Responsibility Areas ("SRA"); and WHEREAS, the County and several of the Cities entered into a Joint Powers Authority Agreement to form the Authority as of February 3, 1995, pursuant to the provisions of Article 1, Chapter 5, Division 7, Title I (commencing with Section 6500) of the Government Code of the State of California ("Joint Powers Statutes"); and WHEREAS, pursuant to the Joint Powers Statutes the members are authorized to jointly provide for the methods of the provision of Fire Services, including the method of financing the provision of Fire Services; and WHEREAS, on September 23, 1999, the members entered into an amended Joint Powers Authority Agreement ("1999 Amended Agreement") which superseded all prior agreements between the members and is incorporated herein by reference; and I1328404.2 ATTACHMENT 2 WHEREAS, pursuant to the 1999 Amended Agreement the members provided for the provision of Fire Services and the joint financing of Fire Services; and WHEREAS, on July 1,2010, the members entered into the First Amendment to the Amended Joint Powers Agreement ("First Amendment") which amended several provisions of the 1999 Amended Agreement; and WHEREAS, on April 20, 2012, the City of Santa Ana joined the Authority and became a party to the 1999 Amended Agreement and the First Amendment; and WHEREAS, on November 18,2013, the required number of member agencies approved the Second Amendment to the Amended Joint Powers Agreement ("Second Amendment") which amended several provisions of the 1999 Amended Agreement. However, a final court judgment subsequently invalidated the Second Amendment, so the Second Amendment became, and remains, inoperative; and WHEREAS, on July 14, 2015, the required number of member agencies approved the Third Amendment to the Amended Joint Powers Agreement ("Third Amendment") to eliminate alternative Board Directors; WHEREAS, the Amended Joint Powers Agreement, as amended by the First Amendment and Third Amendment, is referred to herein as the "Amended Joint Powers Agreement And lts Operative Amendments"; WHEREAS, the members wish to adopt this Fourth Amendment to the Amended Joint Powers Agreement And lts Operative Amendments to formalize the OCFA's commitment to its "snowball" accelerated pension liability paydown plan on the terms and conditions set forth herein. NOW THEREFORE, the members agree to amend the Amended Joint Powers Agreement And lts Operative Amendments as follows: 21328404.2 AGREEMENT 1. Article IV of the Amended Joint Powers Authority Agreement And lts Operative Amendmenfs ls amended to add Section 7, to read as follows: 7. Pavments to Reduce Unfunded Pension Liabilitv A. Except as provided in subsection C, the OCFA Board shall appropriate funds in its budget annually consistent with, or greater than, the budgetary payments called for in the "snowball" accelerated pension liability paydown plan approved by the OCFA Board of Directors on September 26,2013, and amended on November 19, 2015, November 17,2016, and March 23,2017 . B. Payments will be greater than those appropriated in the OCFA's budget annually when triggered by a Net General Fund Surplus (per the Financial Stability Budget Policy). Payments from the "Net General Fund Surplus" are hereby deemed as derived from revenues received by overfunded structural fire fund cities as determined by the equity calculation required under Article lV,Section4-Equity. C. Appropriations and payments required by subsection A and B may be reduced to the extent the Board determines, by vote approved by two-thirds of the Board, is necessary to address a fiscal hardship. 1) For purposes of this section, "fiscal hardship" shall refer to a substantial reduction in OCFA anticipated revenue and/or a significant increase in anticipated expenses that are beyond the reasonable control of the OCFA Board. 2. This Fourth Amendment amends the 1999 Amended Agreement And lts Operative Amendments, and except as specrTrcally amended herein, the 1999 Amended Agreement And its Operative Amendments shall remain in fullforce and effect. ISTGNATURES ON FOLLOWING PAGESI 1328404.2 3 Dated SIGNED AND CERT¡FIED THAT A COPY OF THIS DOCUMENT HAS BEEN DELIVERED TO THE CHAIRMAN OF THE BOARD Clerk of the Board of Supervisors County of Orange, California NOTICE TO COUNTY OF ORANGE TO BE GIVEN TO: County Executive Officer 10 Civic Center Plaza Santa Ana, CA 92701 APPROVED AS TO FORM County Counsel Dated [Signatures Continued on Page 5] COUNTY OF ORANGE, a political subdivision of the State of California By Chairman of its Board of Supervisors By 4 Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Aliso Viejo 12 Journey, Suite 100 Aliso Viejo, CA 92656-5335 Phone: (949) 425-2500Fax: (949) 425-3899 APPROVED AS TO FORM: City Attorney Dated CITY OF ALISO VIEJO By Mayor [Signatures Continued on Page 6] By: 5 Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Buena Park 6650 Beach Blvd. Buena Park, CA 90620 CITY OF BUENA PARK By Mayor [Signatures Continued on Page 7] Phone Fax: (714) 562-3500 (714) 562-35ee APPROVED AS TO FORM By City Attorney Dated 6 Dated ATTEST: City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Cypress 5275 Orange Avenue Cypress, CA 90630 Phone: (714) 229-6688 Fax: (714) 229-0154 APPROVED AS TO FORM City Attorney Dated CITY OF CYPRESS By: Mayor [Signatures Continued on Page 8] By 7 Dated: ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO: City Manager City of Dana Point 33282 Golden Lantern Dana Point, CA92629 CITY OF DANA POINT By: Mayor [Signatures Continued on Page 9] Phone Fax: (949) 248-9890 (e4e) 248-ee2o APPROVED AS TO FORM By: City Attorney Dated 8 CITY OF IRVINE Dated ATTEST: City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of lrvine One Civic Center Plaza lrvine, CA 92606-5208 By: Mayor Phone Fax: (e4e) 724-624e (949) 724-6045 APPROVED AS TO FORM By: City Attorney Dated [Signatures Continued on Page 10] I CITY OF LA PALMA Dated ATTEST: City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of La Palma 7822 Walker Street La Palma, CA 90623 By: Mayor Phone: Fax: (714) 690-3333 (714) 523-7351 APPROVED AS TO FORM By: City Attorney Dated [Signatures Continued on Page 11] 10 CITY OF LAGUNA HILLS Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO: City Manager City of Laguna Hills 25201 Paseo de Alicia #150 Laguna Hills, CA 92653 By Mayor Phone: Fax: (949) 707-2600 (949) 707-2614 APPROVED AS TO FORM By City Attorney Dated [Signatures Continued on Page 12] 11 CITY OF LAGUNA NIGUEL Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Laguna Niguel 30111 Crown Valley Parkway Laguna Niguel, CA92677 Phone: (949) 362-4380 Fax: (949) 362-4340 APPROVED AS TO FORM City Attorney Dated By: Mayor [Signatures Continued on Page 13] 12 CITY OF LAGUNA WOODS Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Laguna Woods 24264 El Toro Road Laguna Woods, CA 92637 Phone: (949) 639-0500Fax: (949) 639-0591 APPROVED AS TO FORM By: City Attorney Dated By: Mayor [Signatures Continued on Page 14] 13 CITY OF LAKE FOREST Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Lake Forest 23161Lake Center Drive, Suite 100 Lake Forest, CA 92630 By: Mayor Phone Fax: (e4e) 461-3400 (949) 461-3511 APPROVED AS TO FORM: By City Attorney Dated [Signatures Continued on Page 15] 14 CITY OF LOS ALAMITOS Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Los Alamitos 3191 Katella Avenue Los Alamitos, CA 90720 By Mayor Phone Fax: (562) 431-3538 (562) 493-1255 APPROVED AS TO FORM By: City Attorney Dated [Signatures Continued on Page 16] 15 CITY OF MISSION VIEJO Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Mission Viejo 25909 Pala, Suite 150 Mission Viejo, CA 92691 Phone: (949) 470-3000Fax: (949) 859-1386 APPROVED AS TO FORM: City Attorney Dated By: Mayor By [Signatures Continued on Page 17] 16 CITY OF PLACENTIA Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Placentia 401 E. Chapman' Placentia, CA 92870 By: Mayor Phone Fax: (714) ee3-8117 (714\ 961-0283 APPROVED AS TO FORM: By: City Attorney Dated [Signatures Continued on Page 18] 17 Dated ATTEST: City Clerk NOTICE TO CITY TO BE GIVEN TO: City Manager City of Rancho Santa Margarita 22112 El Paseo Rancho Santa Margarita, CA 92688 CITY OF RANCHO SANTA MARGARITA By Mayor Phone Fax: (e4e) 635-1 800 (e4e) 635-1 840 APPROVED AS TO FORM City Attorney Dated [Signatures Continued on Page 19] l8 CITY OF SAN CLEMENTE Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of San Clemente 100 Avenida Presidio San Clemente, CA92672 By Mayor Phone Fax: (949) 361-8322 (94e) 361-8283 APPROVED AS TO FORM: By City Attorney Dated [Signatures Continued on Page 20] 19 Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 CITY OF SAN JUAN CAPISTRANO By Mayor Phone: Fax: (949) 443-6315 (949) 493-1 053 APPROVED AS TO FORM By City Attorney Dated [Signatures Continued on Page 21] 20 CITY OF SANTA ANA Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 By Mayor Phone Fax: (714) 647-5200 (714) 647-6956 APPROVED AS TO FORM By: City Attorney Dated [Signatures Continued on Page 22] 21 CITY OF SEAL BEACH Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Seal Beach 211 9th Street Seal Beach, CA 90740 By Mayor Phone: Fax: (562) 431-2527 (562) 431-4067 APPROVED AS TO FORM: By: City Attorney Dated [Signatures Continued on Page 23] 22 CITY OF STANTON Dated ATTEST: City Clerk NOTICE TO CITY TO BE GIVEN TO: City Manager City of Stanton 7800 Katella Avenue Stanton, CA 90680 By: Mayor Phone Fax: (714) 37e-9222 (714) 890-1443 APPROVED AS TO FORM By City Attorney Dated [Signatures Continued on Page 24] 23 CITY OF TUSTIN Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Tustin 300 CentennialWay Tustin, CA 92780 By Mayor Phone: Fax: (714) 544-8890 (714) 832-0825 APPROVED AS TO FORM By: City Attorney Dated [Signatures Continued on Page 25] 24 CITY OF VILLA PARK Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO: City Manager City of Villa Park 17855 Santiago Blvd Villa Park, CA 92861 By Mayor Phone Fax: (714) 9e8-1500 (714) 998-1508 APPROVED AS TO FORM City Attorney Dated [Signatures Continued on Page 26] 25 CITY OF WESTMINSTER Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Westminster 8200 Westminster Boulevard Westminster, CA 92683 By: Mayor Phone: Fax: (714) 8e8-3311 (714) 373-4684 APPROVED AS TO FORM: By: City Attorney Dated [Signatures Continued on Page 27] 26 CITY OF YORBA LINDA Dated ATTEST City Clerk NOTICE TO CITY TO BE GIVEN TO City Manager City of Yorba Linda 4845 Casa Loma Avenue Yorba Linda, CA 92885-8714 By: Mayor Phone Fax: (714) e61-7100 (714) 993-7530 APPROVED AS TO FORM By: City Attorney Dated 27