CRITICAL PUBLIC SAFETY ISSUE: Regional Joint Powers Authority Agreement for Fire Services

ABSTRACT: For the City of Monterey’s 26 May 2010 City Council Meeting, City of Monterey Fire Chief Sam Mazza prepared a report on the subject “Authorizing and Directing Participation in the Development of a Regional Joint Powers Authority Agreement for Fire Services.” HIGHLIGHTS of the report, the complete verbatim report, HIGHLIGHTS of the City of Pacific Grove City Manager Thomas Frutchey’s Agenda Item report “Selection of Preferred Option for Future Fire Services” and HIGHLIGHTS of the City of Seaside Fire Chief Jerry Wombacher's Staff Report "PARTICIPATION IN THE REGIONAL FIRE SERVICES JOINT POWERS AUTHORITY" are presented. A Preliminary Draft JPA Agreement is reproduced in a preceding post. Background: Since December 2009, a JPA Working Group consisting of management staff of the six “core” cities, namely Monterey, Seaside, Pacific Grove, Carmel-by-the-Sea, Sand City, and Del Rey Oaks, “has identified a Joint Powers Authority agreement as a viable and the preferred alternative to achieve the desired fiscal and operational efficiencies. This group has also initiated development of the framework of a JPA governance agreement. In addition, a JPA Executive Committee consisting of the City Managers of the “core” cities has endorsed the Working Group’s recommendations relative to this preferred solution and key points of the draft governance agreement.” On May 12, 2010, the Pacific Grove City Council unanimously authorized participation in the development of the proposed JPA agreement, and the Seaside City Council postponed action on May 20 until their next meeting in June 2010. Additionally, the Monterey Fire Fighters Association, Monterey Fire Management Association, Seaside Public Safety Management Association, and Carmel Professional Firefighters Association all endorse the regional fire JPA proposal, according to Fire Chief Sam Mazza.

HIGHLIGHTS of “Authorizing and Directing Participation in the Development of a Regional Joint Powers Authority Agreement for Fire Services,” by City of Monterey Fire Chief Sam Mazza:

To: City Manager

From: Fire Chief

Date: May 26, 2010

Subject: Authorizing and Directing Participation in the Development of a Regional Joint Powers Authority Agreement for Fire Services

...the 2007 fire service consolidation study by the cities of Monterey, Pacific Grove, and Carmel-by-the-Sea both concluded that consolidation of fire services among the cities would provide enhanced fiscal and operational efficiencies and effectiveness. Both studies recommended a Joint Powers Authority (JPA) as the best-fit governance model, and further recommended merging the existing fire management staffs to provide the capacity to conduct the longer range detailed analysis and planning necessary to achieve full consolidation.

In October 2009, the Monterey County Mayors Association tasked the City Managers to explore opportunities to achieve enhanced fiscal and operational efficiencies by sharing fire services. This led to a November 2009 meeting of Monterey Peninsula City Managers and other fire agency policy-level and executive-level leaders to further discuss conceptual approaches to achieving the Mayors’ Association goal. These discussions highlighted the current window of opportunity to achieve fiscal and operational efficiencies by improving organizational efficiencies in the multiple small fire agencies within the greater Monterey Peninsula region. The discussions resulted in general consensus that the concept of a joint sub-regional fire agency had sufficient merit to warrant further discussion and analysis, and a “core” group of six cities including Monterey, Seaside, Pacific Grove, Carmel-by-the-Sea, Sand City, and Del Rey Oaks was formed to further develop a solution that could be implemented relatively quickly yet be scaled to accommodate future partner jurisdictions.

Since then, a JPA Working Group consisting of management staff of the six “core” cities has identified a Joint Powers Authority agreement as a viable and the preferred alternative to achieve the desired fiscal and operational efficiencies. This group has also initiated development of the framework of a JPA governance agreement. In addition, a JPA Executive Committee consisting of the City Managers of the “core” cities has endorsed the Working Group’s recommendations relative to this preferred solution and key points of the draft governance agreement.

Current Proposal

A Joint Powers Authority (JPA) is a public entity created by agreement of two or more public agencies pursuant to Division 7, Chapter 5, Article 1, Sections 6500 et seq. of the California Government Code. Essentially, a JPA has powers and responsibilities similar to other public agencies, limited by the terms of the governing agreement. Each member agency appoints representatives to the JPA Board of Directors, which makes policy-level decisions governing the Authority.

The approach being considered for this Fire JPA would provide member agencies equal membership on the JPA Board of Directors. All agencies would continue to own their respective fire station facilities and equipment. Cost and operational advantages would accrue through economies of scale, particularly with consolidated headquarters staffing. Instead of operating as several independent fire departments, the envisioned JPA would operate as one unified department, with one Fire Chief and management staff scaled to manage the stations and personnel within the regional system.

The proposed JPA would be effective July 1, 2010 or as soon as possible thereafter, and would begin demonstrating operational and cost efficiencies immediately. However, due to significant administrative and labor relations matters that take considerable time to resolve (e.g., development of a CalPERS contract for a new agency can take one year or more before approval), the JPA is proposed to be implemented in three phases over approximately two years as follows:

Phase 1: Fire Chief Services (targeted effective July 1, 2010)

• JPA Board of Directors formed; initial members are agencies with fire resources: Seaside, Carmel-by-the-Sea, Monterey, and Pacific Grove

• Del Rey Oaks and Sand City will continue existing contractual relationships with Seaside and Monterey respectively during Phase 1

• JPA employs Fire Chief with the costs to be shared among all agencies using agreed cost sharing formula

• Member agencies appoint JPA Fire Chief as agency’s Fire Chief, with all authority to direct staff

• JPA Fire Chief would implement procedures to effect functional integration of member agencies’ fire services as soon as possible, including standardized training and operational procedures to achieve a single, fully integrated system.

• Member agencies continue to employ their existing command staff and fire station personnel

Phase 2: Fire Headquarters Services (targeted effective July 1, 2011)

• Fire command and administrative positions to be employed by the JPA with the costs to be shared among all agencies using the agreed cost sharing formula

Phase 3: Fire Station Services: (targeted effective July 1, 2012)

• All operational fire station personnel employed by the JPA

If the Council commits to the JPA, implementation will occur gradually over the next two years. In FY 2010-11, the City would pay its share for Fire Chief Services to the JPA, and would pay for all other services through the current budget process. Under the cost sharing formula and assuming all of the initial cities join the JPA, Monterey’s share of Fire Chief Services in phase 1 is 46.12%, or approximately $105,000. The costs for FY 2011-12 would reflect the cost of the shared headquarters services at approximately the same cost sharing percentage. The plan assumes the shared JPA costs for FY 2012-13 and beyond would utilize the same formula with Monterey’s share approximately 46%. After implementation of Phase 3, all staffing costs would be paid through the JPA.

COMPLETE VERBATIM REPORT "Authorizing and Directing Participation in the Development of a Regional Joint Powers Authority Agreement for Fire Services," by City of Monterey Fire Chief Sam Mazza:

CITY OF MONTEREY

To: City Manager

From: Fire Chief

Date: May 26, 2010

Subject: Authorizing and Directing Participation in the Development of a Regional Joint Powers Authority Agreement for Fire Services

Recommendation:

That the City Council authorize and direct staff to:

1. Continue development of a Joint Powers Authority (JPA) Agreement for fire services with the cities of Pacific Grove, Seaside, and Carmel-by-the-Sea; and

2. Present a final JPA agreement for approval by the City Council as soon as practical for implementation on or shortly after July 1, 2010.

Policy Implications:

The recommended action is consistent with the City Council’s strategic initiative to continue to seek and develop collaborative solutions with other local agencies and jurisdictions to enhance service levels, operational efficiency, and cost-effectiveness of fire and EMS services.

Fiscal Implications:

As proposed, the JPA would be implemented in three phases over approximately two years as described in the Discussion section of this report. The JPA would yield significant cost savings to the City for fire services, estimated to be $70,000 for Phase 1 and $340,000 annually for Phase 2 and thereafter. These savings would be reduced if any of the four “core” cities (Monterey, Seaside, Pacific Grove, and Carmel) should elect not to participate in the JPA.

Council should also be aware that Monterey has agreed to modify the fiscal model for existing contract fire services to Pacific Grove during the first phase to reflect incremental costs in lieu of the current proportional share methodology. That contract authorizes the City Managers of Monterey and Pacific Grove to revise the fiscal model by mutual written agreement, and this modification was offered to make the fiscal analysis more comparable between the proposed JPA alternative and a CalFIRE proposal that was also being considered by Pacific Grove. Under this revised fiscal methodology, Pacific Grove and Carmel will pay the incremental costs of the two former Pacific Grove chief officers for phase one. Pacific Grove will also continue to pay the direct personnel costs to staff the Pacific Grove station.

In phase two, all the participating cities will pay their proportionate share of all headquarters costs, and Pacific Grove will continue to pay the direct personnel costs associated with the Pacific Grove station. In phase three, all partner agencies will pay their proportionate share of headquarters costs and all direct costs associated with the staffing and operation of their respective fire stations.

Alternatives Considered:

No alternatives are suggested. Council could elect not to approve the proposed Resolution; however such action would result in higher costs for stand-alone fire services and would not be consistent with previous Council policy direction.

Discussion:

Background

The City of Monterey has participated with other local jurisdictions in shared services partnerships for many years, including the Fort Ord Reuse Authority (FORA), Transportation Agency of Monterey County (TAMC), Monterey Regional Water Pollution Control Agency (MRWPCA), Monterey-Salinas Transit Authority (MST), and the Presidio Municipal Services Agency (PMSA).

Specific to fire services, Monterey currently provides full or partial contract services to the Department of Defense, La Mesa Village, Sand City, Pacific Grove, and Carmel-by-the-Sea. Other local studies and examples of shared fire services include:

1981 LAFCO study of Monterey Peninsula fire services recommends consolidation of Monterey and Monterey Airport fire services

1993 Monterey invites other Peninsula cities to develop fire services Joint Powers Authority (JPA)

2000 Consolidation of Carmel Valley and Mid Carmel Valley Fire Districts

2004 Cities of Seaside and Marina conduct fire consolidation study; proposed consolidation fails to gain approval of Marina City Council

2007 Fire consolidation study conducted by the cities of Monterey, Pacific Grove, and Carmel-by-the-Sea recommends full consolidation using JPA governance model

2008 Symposium of Monterey County fire agency policy and executive-level leaders held to discuss opportunities for fire service partnerships in light of current state and local economic crisis as a window of opportunity to identify common interests and explore common sense alternatives to reduce costs and maintain vital public safety services to our respective communities

2008 Monterey and Pacific Grove consolidate fire personnel; Pacific Grove contracts with Monterey for full fire services

2009 Seaside fire department management and staffing study recommends continuing to expand its efforts with the City of Monterey including discussions regarding the feasibility of forming a sub-regional partnership to provide fire protection and EMS services

The 2004 Seaside-Marina fire service consolidation study and the 2007 fire service consolidation study by the cities of Monterey, Pacific Grove, and Carmel-by-the-Sea both concluded that consolidation of fire services among the cities would provide enhanced fiscal and operational efficiencies and effectiveness. Both studies recommended a Joint Powers Authority (JPA) as the best-fit governance model, and further recommended merging the existing fire management staffs to provide the capacity to conduct the longer range detailed analysis and planning necessary to achieve full consolidation.

In October 2009, the Monterey County Mayors Association tasked the City Managers to explore opportunities to achieve enhanced fiscal and operational efficiencies by sharing fire services. This led to a November 2009 meeting of Monterey Peninsula City Managers and other fire agency policy-level and executive-level leaders to further discuss conceptual approaches to achieving the Mayors’ Association goal. These discussions highlighted the current window of opportunity to achieve fiscal and operational efficiencies by improving organizational efficiencies in the multiple small fire agencies within the greater Monterey Peninsula region. The discussions resulted in general consensus that the concept of a joint sub-regional fire agency had sufficient merit to warrant further discussion and analysis, and a “core” group of six cities including Monterey, Seaside, Pacific Grove, Carmel, Sand City, and Del Rey Oaks was formed to further develop a solution that could be implemented relatively quickly yet be scaled to accommodate future partner jurisdictions. The objectives of this working group were to work cooperatively to:

• Identify and frame the key issues
• Define the scope and scale of a joint fire services agency
• Identify and explore shared governance options and associated costs
• Develop guiding principles

Council authorized participation in this initial study and analysis of joint sub-regional fire service options in December 2009. Participation did not commit the City to any proposed outcome, but rather provided the authority to participate in the working group’s analysis necessary to determine whether any of the potential joint services options could benefit Monterey and provide a higher level of service to the entire region by better utilizing existing resources.

Since then, a JPA Working Group consisting of management staff of the six “core” cities has identified a Joint Powers Authority agreement as a viable and the preferred alternative to achieve the desired fiscal and operational efficiencies. This group has also initiated development of the framework of a JPA governance agreement. In addition, a JPA Executive Committee consisting of the City Managers of the “core” cities has endorsed the Working Group’s recommendations relative to this preferred solution and key points of the draft governance agreement.

Current Proposal

A Joint Powers Authority (JPA) is a public entity created by agreement of two or more public agencies pursuant to Division 7, Chapter 5, Article 1, Sections 6500 et seq. of the California Government Code. Essentially, a JPA has powers and responsibilities similar to other public agencies, limited by the terms of the governing agreement. Each member agency appoints representatives to the JPA Board of Directors, which makes policy-level decisions governing the Authority.

The approach being considered for this Fire JPA would provide member agencies equal membership on the JPA Board of Directors. All agencies would continue to own their respective fire station facilities and equipment. Cost and operational advantages would accrue through economies of scale, particularly with consolidated headquarters staffing. Instead of operating as several independent fire departments, the envisioned JPA would operate as one unified department, with one Fire Chief and management staff scaled to manage the stations and personnel within the regional system.

Another key consideration regarding the JPA is its potential for fostering future cost-efficiency improvements through other forms of shared services. When successful, the JPA agreement could serve as a model for other regional services, such as police and public works.

The proposed JPA would be effective July 1, 2010 or as soon as possible thereafter, and would begin demonstrating operational and cost efficiencies immediately. However, due to significant administrative and labor relations matters that take considerable time to resolve (e.g., development of a CalPERS contract for a new agency can take one year or more before approval), the JPA is proposed to be implemented in three phases over approximately two years as follows:

Phase 1: Fire Chief Services (targeted effective July 1, 2010)

• JPA Board of Directors formed; initial members are agencies with fire resources: Seaside, Carmel-by-the-Sea, Monterey, and Pacific Grove

• Del Rey Oaks and Sand City will continue existing contractual relationships with Seaside and Monterey respectively during Phase 1

• JPA employs Fire Chief with the costs to be shared among all agencies using agreed cost sharing formula

• Member agencies appoint JPA Fire Chief as agency’s Fire Chief, with all authority to direct staff

• JPA Fire Chief would implement procedures to effect functional integration of member agencies’ fire services as soon as possible, including standardized training and operational procedures to achieve a single, fully integrated system.

• Member agencies continue to employ their existing command staff and fire station personnel

Phase 2: Fire Headquarters Services (targeted effective July 1, 2011)

• Fire command and administrative positions to be employed by the JPA with the costs to be shared among all agencies using the agreed cost sharing formula

Phase 3: Fire Station Services: (targeted effective July 1, 2012)

• All operational fire station personnel employed by the JPA

If the Council commits to the JPA, implementation will occur gradually over the next two years. In FY 2010-11, the City would pay its share for Fire Chief Services to the JPA, and would pay for all other services through the current budget process. Under the cost sharing formula and assuming all of the initial cities join the JPA, Monterey’s share of Fire Chief Services in phase 1 is 46.12%, or approximately $105,000. The costs for FY 2011-12 would reflect the cost of the shared headquarters services at approximately the same cost sharing percentage. The plan assumes the shared JPA costs for FY 2012-13 and beyond would utilize the same formula with Monterey’s share approximately 46%. After implementation of Phase 3, all staffing costs would be paid through the JPA.

At their May 12, 2010 meeting, the Pacific Grove City Council unanimously authorized participation in the development of the proposed JPA agreement, and the Seaside City Council will consider similar action on May 20. In addition, the Monterey Fire Fighters Association, Monterey Fire Management Association, Seaside Public Safety Management Association, and Carmel Professional Firefighters Association all endorse the regional fire JPA proposal.

HIGHLIGHTS of the City of Pacific Grove City Manager Thomas Frutchey’s Agenda Report “Selection of Preferred Option for Future Fire Services:”

CITY OF PACIFIC GROVE
300 Forest Avenue, Pacific Grove, California 93950
AGENDA REPORT
May 5, 2010
SUBJECT: Selection of Preferred Option for Future Fire Services

RECOMMENDATION

Direct staff to:

1. Continue working with Carmel-by-the-Sea, Monterey, Seaside and other jurisdictions on the peninsula to fully develop a Joint Powers Authority for fire services; and

2. Present a finalized agreement for approval at either the June 2 or June 16 City Council meeting to implement the first phase of the JPA, effective July 1, 2010.

Conclusion. As outlined above, both CAL FIRE and a Monterey Peninsula JPA could provide high-quality fire services for the City of Pacific Grove. On balance, however, the JPA option (Scenario #4, above) is clearly preferable, for 5 primary reasons:

• Shared governance and local control;

• The $0.6M lower cost for next fiscal year and the comparable average annual cost over the first five years;

• The potential for evolving services and reducing costs (including a two-tiered retirement system) over time;

• The potential for expanding the JPA into additional service areas; and

• If the JPA doesn’t work, we then would have several options, including transitioning into a contract with CAL FIRE. However, if we were to go with CAL FIRE and were not satisfied, there is no easy way to transition to another approach.

Staff believes that this JPA represents an opportunity that may not arise again for many years to create a new model for collaborative service delivery that could be adapted for other City services and serve as a powerful tool for achieving long-term financial sustainability for Pacific Grove.

Thomas Frutchey
City Manager

CITY OF SEASIDE REGULAR MEETING
CITY COUNCIL AGENDA 440 Harcourt Avenue, Seaside
Thursday, May 20, 2010
7:00 p.m.
A G E N D A

BUSINESS ITEMS

16. Participation in the Regional Fire Services Joint Powers Authority
PURPOSE: Receive an update on the formation of the Regional Fire Services Joint Powers Authority and to consider membership in the Authority.

RECOMMENDATION: It is recommended that the City Council:

1. Receive and accept a report on the Regional Fire Services Joint Powers Authority;

2. Approve membership in the Regional Fire Services Joint Powers Authority and authorize staff to continue working with Carmel-by-the-Sea, Monterey, Pacific Grove and other jurisdictions on the Peninsula to fully develop a Joint Powers Authority for fire services;

3. Authorize the Mayor to sign the final agreement for the Regional Fire Services Joint Powers Authority for implementation of the first phase of the JPA, effective July 1, 2010.

ITEM NO. 16
CITY OF SEASIDE
STAFF REPORT
TO: Honorable Mayor and City Council
FROM: Ray Corpuz, City Manager
BY: Jerry Wombacher, Fire Chief
Daphne Hodgson, Deputy City Manager – Administrative Services
DATE: May 20, 2010
SUBJECT: PARTICIPATION IN THE REGIONAL FIRE SERVICES JOINT POWERS AUTHORITY

PURPOSE

The purpose of this item is to give the City Council an opportunity to receive an update on the formation of the Regional Fire Services Joint Powers Authority and to consider membership in the Authority.

RECOMMENDATION

It is recommended that the City Council:
1. Receive and accept a report on the Regional Fire Services Joint Powers Authority;

2. Approve membership in the Regional Fire Services Joint Powers Authority and authorize staff to continue working with Carmel-by-the-Sea, Monterey, Pacific Grove and other jurisdictions on the Peninsula to fully develop a Joint Powers Authority for fire services;

3. Authorize the Mayor to sign the final agreement for the Regional Fire Services Joint Powers Authority for implementation of the first phase of the JPA, effective July 1, 2010.

BENEFITS OF A JPA

The JPA option would optimize local control for fire services, and establish the City’s governance authority, albeit in a shared fashion, with other member agencies. The approach being considered would provide member agencies equal membership on the JPA Board. All agencies would continue to own their respective fire station facilities and equipment. Cost and operational advantages would accrue through economies of scale, especially in consolidated headquarters staffing. Instead of operating as several independent fire departments, the envisioned JPA would operate as one unified department, with one Fire Chief and a management staff scaled to only the minimum number of management staff required to manage the stations in the system.

The advantages of local control are especially compelling now, as cities and the State struggle with the anticipated spiking of employee retirement costs in the coming years. The Monterey County Mayors also tasked the city managers with tackling the retirement cost problem in a collaborative way and to affect needed changes without creating recruitment competitiveness disparities. So far, the city managers have all committed to pursuing second-tier benefit plans for future JPA employees, which would save significant money in the future. In addition, the city managers of the prospective JPA member cities have reiterated the vital importance of this change and acknowledge the opportunity for controlling these costs at the local level.