HomeMy WebLinkAboutSupplemental - email from Michael MarontaRobin Roberts
From: Michael Maronta <mmaranta@gmail.com>
Sent: Saturday, January 20, 2018 9:15 PM
To: Robin Roberts
Subject: Review of Joint Powers Agreement and Other Provided Documents on Flash Drive
Robin. Can you distribute this to the Committee before the next Meeting?
Mike Maronta
District 2 Committee Member
Hi Everybody. I have reviewed all Documents in detail provided to us at our First Meeting of the Citizen -
Council Fire Services Advisory Committee in the Three Ring Binder and Flash Drive on December 5, 2017.
Those Documents relating specifically to the JPA Include:
• Joint Powers Agreement Creating the OCFA -1995
• Amended OCFA Joint Powers Agreement -1999
• First Amendment to Amended Joint Powers Agreement - 2007
• Second Amendment to Amended Joint Powers Agreement - 2013
• Third Amendment to Amended Joint Powers Agreement - 2015
• First Amendment to Agreement for Provision of Fire/EMS Emergency Ambulance Transportation and
Related Services within Exclusive Operating Area Between the OCFA and CARE Ambulance Service,
Inc. (EOA No. 21 - -Seal Beach) - 2014
Also I reviewed, as part of the General Plan, the Safety Element, especially Topic 4 Relating to Fire Hazards
included on the Flash Drive as well as excerpts from the FY 2017-2018 Budget relating to Fire Services.
The JPA from 1995, in addition to creating the OCFA, designated Buena Park, Cypress, Dana Point, Irvine,
Laguna Hills, Laguna Nigel, Lake Forest, La Palma, Los Alamitos, Mission Viejo, Placentia, San Clemente,
San Juan Capistrano, Seal Beach, Stanton, Tustin, Villa Park and Yorba Linda m "Cities" to the Agreement and
the County of Orange, "the County" as Members.Further, it defined "Cash Contract Cities" as Buena Park,
Placentia, San Clemente, Seal Beach, Stanton and Tustin as well as John Wayne Airport while all other Cities
were part of the Structural Fire Fund, "SFF".
Basically the SFF Cities pay the JPA for services via property taxes collected by the Orange County Tax
Assessor for their particular City. 1% of all Property taxes collected by the Assessor in each City are to be paid
to that City on a Yearly Basis by the Assessor's Office minus any city speck assessments for things like
Community Colleges, OCTA, Vector Control, Parks, etc. and Fire Services. For example if a SFF City was due
$20,000,000 from the Assessor and the JPA told the Assessor that they needed $5,000,000 to provide Fire
Services to the City, then the City would get $15,000,000 from the Assessor and the Assessor would transfer
$5,000,000 to the JPA for that City. If that particular City was a "Cash Contract City" then the Assessor would
send the $20,000,000 to the City which would be deposited in the City General Fund and then the City would
send a "Cash" payment check to the JPA for Fire Services. To me it doesn't matter whether you're a "SFT" City
or a "Cash Contract City" the JPA is going to get what they want, one way or the other! There are some limits to
what can be charged, to be discussed later, but the reality of the situation is, the JPA gets what they ask for!
The Joint Powers Agreement Creating the OCFA of 1995 has been totally replaced and superseded by the
Amended OCFA Joint Powers Agreement of 1999. Significant changes
are as follows:
• added Westminster as a member City
• specifically states the OCFA has the authority to determine compensation and working conditions and
negotiate contracts with employees and employee organizations (read Unions)
• can determine compensation for Directors
• each Director shall hold office until replaced by appointing City
• Specificies what happens if the Chair and Vice Chair are absent from Board Meetings
• Major Changes to Article IV "Funding of Fire Operations" with respect to "Cash Contract Cities such as:
o Requires Payment in 30 Days vs 60 Days of invoices
o Can increase cost up to cap amount/year
o Can charge for Equipment Maintenance and replacement programs
o Cities responsible for OCFA required Capital Improvements to Stations above $15,000
Maintenance Fund (This is one reason why I wanted to see Station Lease Agreements)
o Specifies cap amount at 3.5% for fust 5 Years and then 4% for the next 5 Years
o Board by 2/3 vote can change cap after that.
o Cities must pay the cost of any new additional resources
• Specifies if a City does not pay, how it is terminated from the JPA
• Specifies how Equity is calculated for SFF Cities
• 2/3 vote of Directors to commit to Bond Indebtedness
• Specifies time frame for withdrawal of members from JPA before July 2010
• Specifies that a Cities Director shall be removed from the Board of Directors of the JPA once notice to
withdraw is given.
• Cant modify the Amended Agreement without 2/3 consent of Board of Directors.
The Amended OCFA Joint Powers Agreement of 1999 appears to be ratified by all parties.
My take on this at this point is that it is a one sided Agreement favoring OCFA, makes no mention of a
required Level of Service ("Cover of Service" in today's lingo), makes no provision for Cities to change
the Level of Service, and provides no penalty for OCFA if they do not five up to the service level expected
by the Cities. Nobody in the private sector would ever agree to such a Contract!
The First Amendment to the Amended Joint powers Agreement of 1999 was executed in 2007. it took effect on
July 1, 2010. It makes major changes on how "Cash Contract Cities" pay for service. The highlights of this
Amendment are as follows:
• The annual amount that cities pay to OCFA is now called the "Service Charge"
• This "Service Charge" is only the cost of annual operational services as defined by the "cost calculation
methodology in place on the effective date of the Authority and shall include the annual percentage
change in the cost of fire system operations."
• The "Service Charge" includes the Annual Percentage change in operations cost, subject to a 4.5% cap
of the annual cost of of operational services provided to the City for the preceding year. Any year where
the actual cost increase for services exceeds 4.5% the excess amount shall be recorded and paid by the
City in a subsequent year in which the Service Charge is less that 4.5%. If only a portion of these
charges can be paid in one year to remain under the 4.5% yearly cap, they shall be carried over from
year to year until paid.
• in addition to the Service Charge each cash contract City shall pay the "2010 Shortfall" which is the
difference between the actual Authority cost of Operations to that City for Fiscal Year 2009/2010 and
the capped cost of those services. Beginning July 1, 2010 each Cash Contract City shall pay its
2009/2010 Shortfall by means of equal quarterly payments amortized over the period of July 1, 2010 to
June 30, 2020.
• In addition the Cash Contract Cities shall pay the cost of participation in the Authorities facilities
maintenance program and the Authorities vehicle replacement/depreciation program. These costs are
further defined below.
• Beginning in fiscal year 2014/2015 and every five years thereafter data will be compiled to review the
actual Authority cost for operational services for that fiscal year compared to the capped Service Charge
for each Cash Contract City for that year. The difference between these amounts is the "Five Year
Shortfall"
• If the "Five Year Shortfall" is less that 7.5% no additional amounts are to be owed. If the "Five Year
Shortfall' exceeds 7.5 % a Cash Contract City shall the pay that portion of the Shortfall to reduce the
Shortfall to 7.5%. If the Shortfall is between 7.5% and 15% the amount shall be paid in its entirety the
following fiscal year. If the Shortfall is greater than 15% the amount shall be paid through equal
amortized installments over the subsequent five year period.
• Each Cash Contract City shall make an additional $15000 initial Payment for each Fire station in its
jurisdiction for maintenance and repairs. The Authority will carry forward unspent amounts to the next
Fiscal Year. Minor repairs less than $1000/Year are included in the "Service Charge" while repairs
greater are deducted from the $15000 station maintenance account. Repairs greater than $15000 are
considered Capital Improvements and are additional Costs. This is why its important to review our
Lease Agreements for the Fire Stations with the Authority.
• The Term of the Agreement is set at 20 years. We must give notice of intent to withdraw before July
1, 2018 to withdraw by June 30, 2020.
• Upon providing Notice of Withdrawal, a Cash Contract City may negotiate with the Authority regarding
modifications to it payment options.
I assume that this First Amendment has been ratified by all parties and is in effect, although we only were
provided with signature pages for the County of Orange and Seal Beach
Santa Ana became a Cash Contract City on April 20th 2012.
The Second Amendment to the Amended Orange County Fire Authority Joint Powers Agreement was proposed
in 2013. If basically applies to SFF Cities, especially Irvine. From the Documents presented to us it appears not
to be in effect. Litigation is underway with the County of Orange. It really changes nothing significant for Seal
Beach.
The Third Amendment to the Amended Joint Powers Authority Agreement was created in 2015 and is to
eliminate an alternate Board Member appointment should the Primary Board Member be unavailable to attend
Board Meetings. Again I don't know if this is in effect from the Documents presented. It appears Ellery crossed
out the relative sentences and signed it. To me that's a non approval. We have no other City Signature pages.
The Agreement by the OCFA and CARE Ambulance Service appears to have expired on March 1, 2015 from
the Documents provided. I can make no comments here.
Bottom Line here is that no matter what the Cash Contract is capped at, OCFA can charge what they
want. This to me is a very bad Contract. We need to look elsewhere for Fire and EMS Services or re-
negotiate a better Contract.
Mike Maronta
District 2 Committee Member