Ten Noteworthy 4 October 2011 City Council Agenda Items

ABSTRACT: Ten Noteworthy 4 October 2011 City Council Agenda Items, namely Announcements from Closed Session regarding Conference with legal
counsel regarding The Flanders Foundation, a California Nonprofit Public Benefit Corporation, Petitioner v. City of Carmel-by-the-Sea, Respondents – Monterey County Superior Court Case No. M99437/State of California Court of Appeals, Sixth District, Civil Case No. H035818 and labor negotiations with the Carmel-by-the-Sea Police Officers Association and the Carmel Professional Firefighters/International Association of Firefighters (IAFF), Report by outgoing Interim City Administrator Goss, a Resolution authorizing the City Administrator to enter into a Mills Act Contract with Stephanie Ager Kirz for an historic property located on Junipero Avenue 2 NW of Third Avenue, a Resolution extending the Forest Theater Guild’s lease of the Forest Theater for one year, a Resolution authorizing the transfer of $40,000 from the Rio Park Deposit Fund for the design development, construction documents and administration and bid negotiation elements of Phase II of the Scenic Drive Beach Restrooms Project, a Resolution modifying the City’s 2011-12 operating budget, effective January 1, 2012, to include CRFA expenditures and revenues, and revising the staff position table, a Resolution establishing Job Descriptions for the positions of Paramedic Fire Fighter, EMT Fire Fighter, Per Diem EMT Paramedic Fire Fighter and Operations Officer, a Resolution adopting the Carmel Regional Ambulance Authority (CRFA) Firefighters Memorandum of Understanding and Receive report on tentative contract with Monterey Fire, are presented. Excerpts from Agenda Item Summaries and Staff Reports are provided in an embedded document.

CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL AGENDA PACKET
Regular Meeting
Tuesday, October 4, 2011

Live & Archived Video Streaming

City Hall
East side of Monte Verde Street between Ocean and Seventh Avenues

II. Roll Call

V. Announcements from Closed Session, from City Council Members and the City Administrator.

A. Announcements from Closed Session.
1. Existing Litigation -- Government Code Section 54956.9(a) - Conference with legal counsel regarding The Flanders Foundation, a California Nonprofit Public Benefit Corporation, Petitioner v. City of Carmel-by-the-Sea, Respondents – Monterey County Superior Court Case No. M99437/State of California Court of Appeals, Sixth District, Civil Case No. H035818.

2. Labor Negotiations – Government Code Section 54957.6(a) Meet and confer with Carmel-by-the-Sea’s Meyers-Milias Brown Act representative, Interim City Administrator Goss, to give direction regarding labor negotiations with the Carmel-by-the-Sea Police Officers Association and the Carmel Professional Firefighters/International Association of Firefighters (IAFF).

C. Announcements from City Administrator.

3. Report by outgoing Interim City Administrator Goss.

X. Resolutions
A. Consideration of a Resolution authorizing the City Administrator to enter into a Mills Act Contract with Stephanie Ager Kirz for an historic property located on Junipero Avenue 2 NW of Third Avenue.

Description: A Mills Act Contract is one between the City and a private property owner of an historic structure. The contract is for a minimum of 10 years but also contains renewal provisions. The property owner must agree to specific maintenance and rehabilitation efforts in return for a reduction on property taxes.

Overall Cost:
City Funds: Loss of approximately $1,000 a year in property tax revenue.

Staff Recommendation: Approve the Mills Act Contract.

Important Considerations: The Mills Act was enacted by the State of California in 1972 as a way of encouraging partnerships between local governments and property owners of historic resources. Local governments are not required to participate in the Mills Act. For participating governments, a Mills Act contract can be offered to any property that contains an historic resource.

The City Council amended the City’s Mills Act requirements on June 8, 2010 and established a limit of no more than three contracts that could be approved during any given year.

Decision Record: On August 15, 2011 the Historic Resources Board recommended that the City Council adopt a Mills Act Contract for this property.

BACKGROUND AND PROJECT DESCRIPTION
This site is located on the west side of Junipero Avenue, three northwest of Third Avenue and is developed with a single-family residence (1,150 sq. ft.) and a detached garage (288 sq. ft.). The residence was designed and built by Hugh Comstock in 1929 and is known as “Curtain Calls.” The residence qualifies as historic under California Register Criterion #3 (architecture) as a good, intact example of the Storybook design of Hugh Comstock. The property also relates to the Architectural Development theme of the Historic Context Statement. A DPR 523 form (the historic designation form) was submitted to the City on January 31, 2011.

Both the Historic Resources Board (HRB) and the Planning Commission recently approved the demolition of the non-historic garage and the construction of a new detached guesthouse near the northeast corner of the property. The applicant is now requesting approval of a Mills Act Contract.

The Mills Act was enacted by the State of California in 1972 as a way of encouraging partnerships between local governments and property owners of historic resources. Local governments are not required to participate in the Mills Act. For participating governments, a Mills Act contract can be offered to any property that contains an historic resource. The contract must be for at least 10 years and must include renewal provisions. The property owner typically agrees to specific rehabilitation/restoration efforts that would take place over the life of the contract. In turn, the property owner receives a reduced property tax assessment, typically by using the Income Approach to Value rather than the Market Approach to Value. The jurisdiction benefits by having historic resources rehabilitated and maintained, while the property owner benefits by having a reduced tax burden.

The City’s Historic Preservation Ordinance offers Mills Act contracts as a potential benefit to property owners of historic resources when certain findings can be made. These findings are addressed in the “Evaluation” section below. On June 8, 2010, the City Council adopted a resolution indicating that no more than three Mills Act Contracts for residential properties could be approved during any given year. This is the first Mills Act Contract application since that time.

On August 15, 2011 the HRB unanimously recommended that the Council approve the proposed Mills Act Contract.

EVALUATION
Mills Act Standards: As stated in CMC Section 17.32.100.B(1), the primary purpose for offering Mills Act contracts in the City of Carmel-by-the-Sea is to assist in the rehabilitation/restoration and long-term maintenance of historic resources. Applications should include both a rehabilitation/restoration component and a maintenance component.

CMC Section 17.32.100.B(6) establishes specific findings that must be met in order to qualify for a Mills Act contract in the City. These findings are summarized below followed by a brief staff response.

• The building is designated as an historic resource by the City and is listed on the Carmel Register.
Response: The property is listed on the City’s Historic Register and qualifies as an historic resource per the City’s Municipal Code and the California Environmental Quality Act.

• The proposed rehabilitation and maintenance plan is appropriate in scope and sufficient in detail to guide rehabilitation and long-term maintenance. Required maintenance and rehabilitation should be more significant than just routine maintenance that would be expected for any property.
Response: The applicant has done a good job of preparing a thorough rehabilitation and maintenance plan that includes both restoration and maintenance components. The plan includes proposals to repair and/or replace exterior materials including all of the existing windows and the stucco siding. The plan also includes seismic retrofitting, roof replacement and numerous annual maintenance items to ensure that the property is restored and maintained into the future. The plan goes beyond routine maintenance and appears to comply with the intent of the ordinance.

• Alterations to the historic resource have been in the past, and will continue to be in the future, limited to interior work and to exterior rehabilitation and alterations that:

(A) Comply with the Secretary’s Standards (future additions only), and
Response: All future changes/alterations shall require review by either staff or the HRB for a Determination of Consistency with the Secretary of the Interior’s Standards. A qualified professional historian and the HRB have reviewed the proposed rehabilitation and maintenance plan and determined that the items are consistent with the Secretary’s Standards.

(B) Do not significantly alter, damage or diminish any primary elevation or character-defining feature, and
Response: The applicant is not proposing any alterations at this time to the primary elevation or character defining features. Any such changes that are proposed in the future would require review by the HRB.

(C) Do not increase floor area on the property by more than 15 percent beyond the amount established in the documented original or historic design of the resource, and
Response: The original floor area of the historic residence was 1,105 square feet and the garage was 288 square feet for a total of 1,393 square feet. A 45-square-foot addition was constructed on the west elevation in 1947. The City’s recent approval of the demolition of the garage and the construction of a guesthouse increased the total floor area on the site by another 32 square feet. Therefore, the floor area has been expanded by approximately 5.5%.

(D) Do not result in any second-story addition to a single-story historic resource.
Response: Two dormers were added to the second-story, but no second-story additions have occurred. The dormers are consistent with the architectural style of the building.

Economic Impact: When the City Council reviewed the revisions to the Mills Act requirements in 2010, brief economic analysis was included in the discussion. It was determined that the average Mills Act Contract would result in a net decrease in property taxes to the City of approximately $1,020 per year. This is a fair assumption for this application.

RECOMMENDATION
Adopt the attached Resolution.

B. Consideration of a Resolution extending the Forest Theater Guild’s lease of the Forest Theater for one year.

Description: The Forest Theater Guild (FTG) has leased the Forest Theater for many years, presenting a number of live plays and movies each season. At the April 5, 2011 Council meeting, a one-year lease with the Guild for use of the Forest Theater was approved, with the direction to ask Guild to return after the conclusion of the 2011 season with a request for a full lease to 2015. The Council action also gave specific
direction on construction time schedules and the performance calendar.

At the conclusion of the 2011 season, on July 29, 2011, the City received a letter from FTG requesting approval of four years of what the Guild considers a normal five-year lease. Action by the Council was requested in order to facilitate the Guild’s planning for the 2012 season. After evaluating FTG’s request for a lease extension to 2015, staff met with members of the Guild’s Board of Directors to discuss some problems noted during the 2011 season. The Board members present indicated that these issues would be addressed, such as obtaining blanket permits from the Health Department, ABC and the City. Staff was impressed by the efforts of the new Board to better organize FTG and to move the Guild forward.

Staff Recommendation: Staff recommends that a Resolution be adopted to extend the Forest Theater Guild’s lease for the Forest Theater for one year.

Important Considerations: It appears that the focus of the Board is pointed in the right direction; however, to determine if this intent is followed through by appropriate action, it is recommended that the lease be extended by one year rather than four at this time.

The Forest Theater Guild (FTG) has leased the Forest Theater for a number of years, presenting a number of live plays and movies each season. On July 29, 2011, the City received a letter from FTG requesting approval of four years of what the Guild considers a normal five-year lease. Action by the Council was requested in order to facilitate the Guild’s planning for the 2012 season.

You may recall that a lease extension with the FTG was considered at your April meeting. Council’s action at that time was to enter into a one-year lease with the Guild for use of the Forest Theater, and to ask the Guild to return after the season with a request for a full lease to 2015. The action also gave specific direction on construction time schedules and the performance calendar.

Now that the 2011 season has concluded, and an extension of the lease to 2015 has been proposed, staff has evaluated FTG’s request. After meeting with representatives of the Guild’s Board of Directors, staff was impressed by the efforts of its new Board to better organize FTG and move the Guild forward. Revised By-laws are scheduled to be considered by the Board on October 3, 2011. A Board retreat was held to set the tone and direction for FTG. Fund Builders Alliance was engaged to develop a sustainable financial plan for the Guild.

The Board members at the meeting also expressed a desire to address problems in 2012 that were brought to their attention. These problems include:

• Not consistently obtaining written permission from the City Administrator’s Office for the sale of food or beverages as required by Exhibit “C” of the Forest Theater use agreement. These permits require information regarding the type of food and beverage to be furnished and the name of the responsible person who will provide the food and be responsible for the cleanup.
• Although the FTC has use of the facility for nine weeks, permits were only requested for four nights during the season, and those were for special events. Also, these permit requests did not contain the detail required by the use agreement.
• It appears that ABC licenses were obtained for certain events, but not for other evenings where they were required.
• There is a general impression among staff that FTG is a high maintenance organization regarding requests for staff assistance. Maintenance staff has very limited hours to devote to these requests.

The Board members at the meeting indicated that these issues would be addressed, such as obtaining blanket permits from the Health Department, ABC and the City. It was explained by staff that the permits from the Health Department and ABC can be used as attachments to support the permit required from the City.

It appears that the focus of the Board is pointed in the right direction. To determine if this intent is followed through by appropriate action, however, it is recommended that the lease be extended by one year rather than four. While a lengthy lease may be needed for a capital campaign, most nonprofit organizations normally find a one-year lease is sufficient for operational fund raising.

RECOMMENDATION
It is recommended that a Resolution be adopted extending the Forest Theater Guild’s lease for the Forest Theater for one year.

C. Consideration of a Resolution authorizing the transfer of $40,000 from the Rio Park Deposit Fund for the design development, construction documents and administration and bid negotiation elements of Phase II of the Scenic Drive Beach Restrooms Project.

Description: The City presently has a temporary Coastal Commission permit that allows temporary restrooms located seaward of Scenic at the south end of Carmel Beach “until they can be replaced by a permanent” facility. There has been a long-standing demand to replace these porta-potties with a permanent ADA-accessible restroom. In 2009 architect Robert Carver prepared a schematic design and rendering (see attached) and provided additional services for a proposed restroom at this location. While funding for the entire project has not yet been determined, the City has an opportunity to take a next step in completing this project.

The initial design work by Mr. Carver cost $18,664. The next step would involve design development, and the preparation of construction documents which can be completed with a $40,000 budget. Funds will still be available to cover most of the cost for the bid process, construction administration and other services.

In 2010 a cost estimate for constructing this restroom was prepared, with the architect’s estimate at $314,000. Another firm evaluated the project and developed an estimate of $357,000. This is only an estimate, and some of the expense possibly could be reduced, such as the elimination of the showers. Further, if the sewer can be taken from the restroom by gravity rather than being pumped, an element of cost will be reduced. On the other hand, the ability to use gravity flow will depend on where the restroom is sited on the bluff. The City may wish to determine if the size of the structure is appropriate to this location and could be reduced in order to control costs.

The project also was reviewed by the Forest and Beach Commission on March 4, 2010. Its recommendations regarding the design of the restroom are contained in the attached minutes. The Planning Commission has not yet received the design.

Staff Recommendation: It is recommended that the City Council adopt a Resolution transferring $40,000 from the Rio Park construction project to the Scenic Drive Beach Restrooms Project.

Important Considerations: Assuming Council approves the proposed design concept, or a revision to this concept, this report suggests a funding source for taking the next step in the completion of this project. Rio Park has allocated $142,000 in funds for its improvement. If City Council considers the Scenic Drive Beach Restroom project a higher priority than the Rio Park improvements, it is recommended that a portion of the $142,000 (interest earned) be transferred to the restroom project account so that design of and construction drawings for this project can be prepared. The City then could seek grants or to identify other funding construct to these restrooms.

Currently, the City has a temporary Coastal Commission permit that allows temporary restrooms located seaward of Scenic at the south end of Carmel Beach “until they can be replaced by a permanent” facility. There has been a long-standing demand to replace these porta-potties with a permanent ADA-accessible restroom. Since water, sewer and electricity is available at this site, in 2009 architect Robert Carver prepared a schematic design and rendering plus provided additional services for a proposed restroom at this location. While funding for the entire project has not yet been determined, the City has an opportunity to take a next step in completing this project.

The initial design work by Mr. Carver cost $18,664. The next step would involve design development, and the preparation of construction documents. If a bid for this project were awarded, the cost for the bid process, construction administration and other services is estimated at a total of approximately $40,000.

In 2010 a cost estimate for constructing this restroom was prepared, with the architect’s estimate at $314,000. Another firm evaluated the project and developed an estimate of $357,000. This is only an estimate, and some of the expense possibly could be reduced, such as the elimination of showers. Further, if the sewer can be taken from the restroom by gravity rather than being pumped, an element of cost will be reduced. On the other hand, the ability to use gravity flow will depend on where the restroom is sited on the bluff. Finally, the City may wish to determine if the size of the structure is appropriate to this location and could be reduced in order to control costs.

In any event, assuming Council approval of the proposed design concept, or a revision to this concept, this report suggests a funding source for taking the next step in the completion of this project. Rio Park has allocated $142,000 in funds for its improvement. Assuming the City Council considers the Scenic Drive Beach Restroom project a higher priority than the Rio Park improvements, it is recommended that a portion of the $142,000 be transferred to the restroom project account so that design of and construction drawings for this project can be prepared. This would place the City in the position to seek grants or to identify other funding construct to these restrooms.

Recommendation
It is recommended that the City Council adopt a Resolution transferring $40,000 from the Rio Park construction project to the Scenic Drive Beach Restrooms Project.

D. Consideration of a Resolution modifying the City’s 2011-12 operating budget, effective January 1, 2012, to include CRFA expenditures and revenues, and revising the staff position table.

E. Consideration of a Resolution establishing Job Descriptions for the positions of Paramedic Fire Fighter, EMT Fire Fighter, Per Diem EMT Paramedic Fire Fighter and Operations Officer.

F. Consideration of a Resolution adopting the Carmel Regional Ambulance Authority (CRFA) Firefighters Memorandum of Understanding.

Name: Consideration of three Resolutions integrating the Carmel Regional Fire Ambulance Authority into the City of Carmel-by-the-Sea.

Description: The Carmel Regional Fire Ambulance Authority (CRFA) is a joint powers authority (JPA) initially consisting of the City of Carmel-by-the-Sea and the Carmel Valley Fire District. The District was absorbed by the Monterey County Regional Fire District and the JPA is scheduled to dissolve in December.

In anticipation of the JPA’s dissolution, the City has taken preliminary action to move the CRFA ambulance operation under the jurisdiction of the City, with the six CRFA’s paramedics/firefighters becoming City employees. In May 2011, Council directed the City to gather information and policy options from CRFA addressing the Health and Safety Code Section 1797.201 (201 rights), and ALS staffing. In June 2011, Council, in reviewing a proposal for CRFA employees becoming City employees, took action to “approve the plan – in concept – and to have John Goss, Gerard Rose and Dave Jedinak work together to develop an action plan addressing the specific issues involved in having CRFA employees become City employees.”

At the September 13 Council meeting the City Council took action to have staff develop a draft contract with the City of Monterey to merge Carmel’s Fire Department with the Monterey Fire Department. As part of that discussion it was represented that, if the City took over the ambulance service as a direct provider, then the ambulance service would not merge with Monterey Fire, but become a separate division of the integrated Fire
Department.

Overall Cost: There will be savings by bringing the ambulance operation into the City’s organization. First, CRFA contributes to the employees’ Social Security, and the City does not. This will result in an annual savings of $35,000. Second, there will be savings related to worker’s compensation (estimate $18,000 savings) and liability insurance (estimated $10,000 savings). The City already coordinated this fiscal year with CRFA for the conduct of their audit, saving CRFA $6,000.

Staff Recommendation: Approve the three Resolutions.

Important Considerations: There are advantages to the City assuming the ambulance service from the JPA. The City will retain its excellent ambulance service and preserve its “201” rights. By bringing the CRFA employees into the City and making the ambulance operation a separate division in the Fire Department, the ambulance service can be provided without direct merger with Monterey Fire while till having the day-to-day operational oversight by Monterey Fire as there is now and ambulance service will be provided by City of Carmel-by-the-Sea employees. Also, the fiscal support person for CRFA is already an employee of the City, and the duties of this position will not change. Finally, the unique position classifications now in CRFA need to maintained, both for maintaining qualifications as paramedic fire fighters, but also to provide medical oversight to the ambulance service consistent with County EMS requirements. The goal is to accomplish bringing the ambulance service and its employees into the City organization by January 1, 2012.

Background
As the City Council is aware, the Carmel Regional Fire Ambulance Authority (CRFA) is a joint powers authority (JPA) initially consisting of the City of Carmel-by-the-Sea and the Carmel Valley Fire District. The District has been absorbed by the Monterey County Regional Fire District. The JPA is scheduled to dissolve in December.

In anticipation of the JPA’s dissolution, the City has taken preliminary action which would move the CRFA ambulance operation under the jurisdiction of the City, with the six CRFA’s paramedics/firefighters becoming City employees. First, among the City Council’s more recent actions, direction was given at its May meeting that the City gather information and policy options from CRFA addressing the Health and Safety Code Section 1797.201 (201 rights), and ALS staffing. More specifically, at the June 7 Council meeting, in reviewing a proposal for CRFA employees becoming City employees, action was taken to: “approve the plan – in concept – and to have John Goss, Gerard Rose and Dave Jedinak work together to develop an action plan addressing the specific issues involved in having CRFA employees become City employees.”

At the September 13 Council meeting the City Council took action to have staff develop a draft contract with the City of Monterey to merge Carmel’s Fire Department with the Monterey Fire Department. As part of that discussion it was represented that, if the City took over the ambulance service as a direct provider, then the ambulance service would not merge with Monterey Fire, but become a separate division of the integrated Fire Department.

Analysis
Fiscal Concerns. One of the reasons the plan to fold the ambulance service into City operations was approved only “in concept” at the June meeting was a question related to financing the ambulance service. The concern was that out of CRFA’s $1,795,854 projected Gross Revenue for 2011-12, a substantial portion of this revenue came from the unincorporated service area in which the County’s ambulance (AMR) can respond. In fact, according to CRFA’s Profit and Loss Budget for 2011-12 (see attached) presented at the June Council meeting, only $560,417 comes from calls in Carmel-by-the-Sea.

A question was raised whether or not there might be a way to guarantee CRFA revenue especially for calls from the “Mouth of the Valley.” One thought was that if the County were reissuing an RFP to extend its ambulance contract in the near future, the City could be incorporated into this RFP to cover this nearby area.

In discussing this issue with Monterey County’s EMS Director it was first pointed out that a new RFP will not be issued in the near future. The current contract for ambulance service with AMR is valid through 2016. If AMR meets its performance standards and financial commitments, the contract could be extended through 2019.

Regarding unincorporated Pebble Beach and Carmel Valley, CRFA is considered a peripheral provider by County EMS. CRFA is, in effect, considered part of the County ambulance system by this designation. In practice, CRFA responds to these unincorporated areas and handles a good number of the AMR calls through an informal understanding with this firm. This is advantageous to AMR if one of its ambulances is not in the Cypress District or is otherwise engaged. Further, AMR has a performance standard in its County contract that requires an eight-minute response 90% of the time. As is often the case, when AMR cannot meet this standard for a call in this area, it will ask CRFA to respond. So, in effect, CRFA benefits AMR in the unincorporated area surrounding Carmel-by-the-Sea by meeting the response time standard for AMR.

In terms of the current balance of operations between CRFA and AMR, it does not appear that there should be any major difference in the area served by CRFA and the number of calls received from these areas, both inside and outside of the City. It is not expected that this balancing of calls will change drastically in the near or intermediate future.

It should be noted that if demand for ambulance transport should change in the unincorporated area now primarily served by CFRA, or if there would be change in how AMR responds to this area in the future, the financial impact would be felt by the City whether the ambulance function was performed by CRFA or directly by the City. In either case, the City would need to determine what options it has in addressing a changed revenue base. Therefore, the potential future uncertainty of the current CRFA revenue base should not deter the City from taking on the provision of the ambulance service. Currently, this revenue base seems stable.

In fact, as was pointed out in the June CRFA report, there will be savings by bringing the ambulance operation into the City’s organization. First, CRFA contributes to the employees’ Social Security, and the City does not. This will result in an annual savings of $35,000. Second, there will be savings related to worker’s compensation (estimate $18,000 savings) and liability insurance (estimated $10,000 savings). The City already coordinated this fiscal year with CRFA for the conduct of their audit, saving CRFA $6,000.

“201” Rights. Past discussion has focused on the City maintaining its “201” rights in order to provide ambulance service directly rather than through the County contract. There appears to be uniform consensus that the City taking over the ambulance service will preserve its “201” rights. As the attorney, William Ross, pointed out in a letter to the City on November 9, 2009, “…the City retains the right to provide ambulance service without obtaining the County’s consent. This is regardless of whether the City is involved in a JPA, because the City itself is grandfathered under section 201.” So even if not part of the JPA the City will have direct control over ambulance service and therefore will maintain its “201” rights.

Next Steps. As indicated in previous reports and Council discussions, there are advantages to the City assuming the ambulance service from the JPA. The City will retain its excellent ambulance service and preserve its “201” rights. By bringing the CRFA employees into the City and making the ambulance operation a separate division in the Fire Department, the ambulance service can be provided without direct merger with Monterey Fire. There will still be day-to-day operational oversight by Monterey Fire as there is now. But ambulance service will be provided by City of Carmel-by-the-Sea employees. Also, the fiscal support person for CRFA is already an employee of the City, and the duties of this position will not change. Finally, the unique position classifications now in CRFA need to maintained, both for maintaining qualifications as paramedic fire fighters, but also to provide medical oversight to the ambulance service consistent with County EMS requirements.

The goal is to accomplish bringing the ambulance service and its employees into the City organization by January 1, 2012. Steps to begin the process and recommended to be adopted at this time include:

• Adopt a resolution modifying the City’s 2011-12 budget to include the CRFA expenditures and revenues. The staff position table in the budget will need to be revised to reflect six new employees and their unique classification titles.
• Adopt a resolution adopting the Job Classification statements for the CRFA employees.
• Adopt a resolution adopting the current CRFA MOU.

In connection with modification of the City’s 2011-12 budget, several actions by the City Council are required. The first is to establish a City Ambulance Fund as shown on Exhibit “A” of this budget modification resolution. This reflects expected revenues and expenditures, which offset one another, for the last six months of the fiscal year.

In addition to creating this fund, adjustments are made to several General Fund departments resulting in total decreases in the General Fund of $10,172. This is presented in Exhibit “B”.

The Position Listing in the 2011-12 budget also is amended to reflect the addition of an Operations Manager/Paramedic Firefighter (1), Paramedic Firefighter (4) and EMT Firefighter (1). This is presented in Exhibit “C”. A revised City organization chart reflecting these changes is presented in Exhibit “D” to this Resolution.

In connection with the MOU, there are differences between the economic provisions for the paramedic/fire fighters of CRFA and the Carmel fire fighters. Instead of attempting to resolve these issues at this point, which could delay the transition date for the City assuming this ambulance service, it is recommended that these issues be resolved during a transition period beginning January 1, 2012. Both the Fire Chief and the CRFA union representatives are in agreement with this approach. Parenthetically, the CRFA union supports the 2%@50, highest three consecutive year average for all new hires.

While beginning the process for bringing the CRFA ambulance function into the City organization by adopting the three resolutions recommended in this report, there will be additional steps which will need to be taken. These include:

• Resolving insurance issues with the current JPA. This involves the resolution of the split between the City and its JPA partner regarding their respective worker’s compensation claims.
• Resolution of Intent that the City will follow EMS policies and procedures in providing ambulance service.
• Provide notice to the CRFA Insurance Company requesting a waiver of the timeline for cancellation.
• Employee physicals.
• Laying off and hiring the CRFA employees.

Recommendation
It is recommended that the City Council:

• Adopt a Resolution modifying the City’s 2011-12 operating budget, effective January 1, 2012, to include CRFA expenditures and revenues, and to revise the staff position table.
• Adopt a Resolution adopting the Job Classification statements for the CRFA employees, effective January 1, 2012.
• Adopt a Resolution adopting the CRFA MOU with its Association, effective January 1, 2012.

XI. Orders of Council
A. Receive report on tentative contract with Monterey Fire.

Description: The purpose of this report is to present the requested draft agreement for review and consideration by the City Council. It is important to obtain the Council’s thoughts and concerns to ensure that the agreement with the City of Monterey properly reflects and protects the interests of Carmel-by-the-Sea. Some of the major elements of the draft agreement are outlined including: basic service, term/termination clause, the method and conditions of payment, the cost of the service, how the ambulance fits into the larger picture, labor and employment issues, and the coordination of fire service.

Overall Cost: N/A

Staff Recommendation: Receive the report.

Important Considerations: There may be other provisions in the proposed draft agreement in which Council may have an interest or have questions. It is suggested that you review this report and the attached draft agreement and provide input on any issues you would like addressed. This will enable the new City Administrator to continue moving this project forward. The goal will be bring a final contract and possibly other implementing documents at the November 1, 2011 Council meeting for consideration.

During the September 13, 2011, City Council meeting, Council considered various options for the provision of fire service in Carmel-by-the-Sea. After due deliberation, the Council adopted a motion which provided that:

• A fire unit (engine) should be maintained 24/7 at the Carmel-by-the-Sea FireStation;
• A minimum of three career fire fighters/EMTs should be available for emergency response 24/7;
• The City should retain ownership of its buildings, engines, vehicles and other
equipment;
• Carmel Fire should be fully merged with Monterey Fire, and that staff prepare a draft Agreement with the City of Monterey for Council consideration.

The purpose of this report is to present the requested draft agreement for review and consideration by the City Council. It is important to obtain the Council’s thoughts and concerns to ensure that the agreement with the City of Monterey properly reflects and protects the interests of Carmel-by-the-Sea. Some of the major elements of the draft agreement are outlined in the following paragraphs.

Basic Service. The draft agreement which is attached covers the basic service which will implement Council’s direction on September 13. This includes providing a Fire Captain, Engineer and Firefighter “each and every day” at the Carmel Fire Station. It also provides continuity of staffing, assuring that all current Carmel employees will be assigned to the Carmel fire station for a period of not less than one year. It further provides that Monterey will train all of its fire safety personnel to the unique response characteristics of Carmel. In fact, this has been occurring for some time under the current contract. In addition, the agreement continues to provide that Monterey will provide Chief Fire Officer duty-chief coverage for the management of emergency incidents.

Basically, the agreement will provide fire service in Carmel-by-the-Sea similar to that currently provided. Monterey will also oversee emergency medical services including ambulance response as is currently the case. The agreement will provide administrative services including program planning and management, budgeting, training, procurement, human resource support, and records management.

Term/Termination Clause. One of the questions raised at the September 13, 2011 meeting is whether the “escape clause” in the agreement was sufficient. First, the agreement provides that the agreement would be for four and one-half years, rather than five years. The initial term would be from January 1, 2012 through June 30, 2016, since the agreement will begin in mid-year. It also provides that upon the conclusion of the initial term, the agreement can be automatically extended for five years, unless either party gives written notice in the form of a Council Resolution of its intent to allow the agreement to lapse.

Permitting the agreement to lapse can occur if, no later than the preceding June 30 before the end of the term, written notice is given by either party of its intent to not renew the agreement. In addition, there is a another provision that the agreement can be terminated by either party at any time with 12 months notice in the form of a Council resolution. In either case, Carmel will retain its real property, buildings, equipment and apparatus. It should be noted, that in connection with this last provision (property retention) the City will be responsible for equipment repair, maintenance and replacement as it is now.

Method and Conditions of Payment. The agreement provides that by March 15 each year, a budget projection for the following fiscal year will be provided describing the total expected costs of providing Fire Service. Carmel will then pay 1/12 of that amount each month by the 15th of that month, subject to a penalty for late payment.

At the end of the fiscal year, a final calculation of the actual costs for providing fire service will be determined. If the actual costs are greater than the budget projection, Carmel will pay the difference between the actual and budgeted costs. If the actual costs are less than the budget projection, Monterey shall pay to Carmel the difference between the actual and budgeted costs. An interest rate factor will be applied to these payments starting from the beginning of the following fiscal year. In the case of Pacific Grove, thus far, money has been returned by Monterey at the end of each fiscal year.

Since the proposed agreement is scheduled to begin January 1, 2012, the initial phase of the agreement will be for six months from January 1, 2012 through June 30, 2012. At the end of the initial six month period, the budget will be provided and payments made annually as described above.

Cost of Service. The proposed cost of service on a fiscal year basis calculated by Monterey and submitted earlier this year, was $1,720,396. After further refinement and discussion, the 2011-12 estimate for Monterey Fire Service as reflected in Exhibit C is $1,713,828. The cost for the initial six month term, and the remainder of the 2011-12 fiscal year beginning January 1, 2012, is $873,179 also documented in Exhibit C.

Ambulance Service. Elsewhere on this Council agenda there are three resolutions which will start the process of moving the ambulance service provided by Carmel Regional Fire Ambulance (CRFA) to the City of Carmel effective January 1, 2012. The CRFA employees would become City employees at that time. With the merger with Monterey, the ambulance operation would become a division of the newly merged Fire Department. So even though the ambulance employees will be City employees, operational oversight will be provided by the Monterey Fire Department, as is now the case. In terms of service and operations, there would be no change in ambulance service and operations, even with the Monterey merger and transfer of CRFA employees to the City.

During the initial six-month period of the Fire contract beginning January 1, 2012, additional analysis will be conducted by Monterey, Carmel and CRFA staff regarding the provision of ambulance service to the City. Monterey has agreed to provide interim operational oversight to CRFA at no cost to Carmel upon commencement of the fire service contract. After this initial period, Monterey will administer the ambulance service based on directions given by Carmel-by-the-Sea through a negotiated contract amendment or through an additional contract for service. Carmel-by-the-Sea ambulance will continue the continuity of the pre-contract system and maintain the current staffing level of two paramedic/firefighters, or one paramedic/fighter and one firefighter/EMT, per shift.

It is important that Carmel-by-the-Sea maintain formal continuity of direction and control over the provision of ambulance service in order to preserve their “201” rights in providing this service.

Transfer of Employment. The agreement provides that existing Carmel firefighters will be hired as City of Monterey employees on the effective date of the agreement. This is contingent upon each Carmel fire fighter passing a Monterey pre-employment medical evaluation. (See Exhibit D)

There are only moderate differences in the compensation and benefit packages in the Carmel-by-the-Sea and Monterey compensation and benefits packages; however, the agreement ensures that no Carmel fire fighter will lose any compensation.

Also, there will be no layoffs or demotions of Carmel-by-the-Sea employees. This is because all of the Carmel position classifications are in-line with the Monterey position classifications and the nine Carmel positions of three fire captains, three fire engineers and three firefighters dovetail with the positions and staff assignments used by Monterey.

It should be noted that when Carmel-by-the-Sea fire safety employees become new employees of Monterey, that City (Monterey) will not assume any responsibility for PERS liabilities that these employees incurred during their employment by Carmel-by-the-Sea. This same provision was incorporated in the Pacific Grove and Monterey fire merger agreement.

Labor Agreements. When there is a change in compensation, benefits and working conditions, the California Government Code requires that employers meet and confer with recognized labor organizations. Officers of the affected labor organizations have worked cooperatively with each City to resolve issues concerning any impacts of the proposed agreements. Pertinent to Carmel-by-the-Sea firefighters there will be an agreement with Monterey regarding the initial position classification and related salary step, transfer of accumulated leave balances up to the maximum allowed by Monterey, maintenance of seniority for certain specified benefits, station assignments and vacation selection. It precludes layoff of any incumbent Carmel-by-the-Sea firefighters during the term of the agreement.

Regarding Carmel-by-the-Sea and the Carmel firefighters, an agreement has been reached to amend the current MOU. The term of the existing agreement would be extended from January 1, 2011 to January 1, 2012. The 8.75% salary adjustment scheduled for January 1, 2011 would not be implemented.

Fire Prevention. A service provided by Monterey Fire is to coordinate the planning and development of fire prevention and safety education programs for schools, businesses, community associations, child-care providers and other members of the community. This service will be extended to Carmel-by-the-Sea under this agreement.

Also as part of this service, fire safety inspections of all state-mandated occupancies and fire protection systems within Carmel can be provided as well as the review of all development and building plans to ensure compliance with all applicable fire and life safety codes. All fees collected through this process will be retained by Carmel-by-the-Sea. There has been some interest, however, in retaining the current consultant used to conduct fire inspections and to review building plans from the fire code perspective. Monterey Fire is receptive to continuing the provision of this service. In fact, Monterey uses the same consultant for some of this specialty work. The only stipulation is that the fire inspections and fire code reviews be coordinated with Monterey Fire and under their supervision.

Conclusion. This report touches on some of the highlights of the proposed agreement for fire services. It is based on the agreement developed between Pacific Grove and Monterey. However, certain refinements have been made, which include:

• The proposed draft agreement clarifies that Carmel-by-the-Sea will have all of its buildings and equipment returned at “lapse” of the agreement in addition to exercise of the “termination” clause.
• The proposed draft agreement provides for the payment of interest from the end of the fiscal year in reconciling actual versus budgeted expenditures.
• The proposed draft agreement provides for ongoing discussion of issues related to service, operations, and labor relations at least annually but more frequently as requested by either party.

There may be other provisions in the proposed draft agreement in which Council may have an interest or have questions. It is suggested that you review this report and the attached draft agreement and provide input on any issues you would like addressed. This will enable the new City Administrator to continue moving this project forward. The goal will be bring a final contract and possibly other implementing documents at the November Council meeting for consideration.