Review Agreement with El Dorado County Fire District and Provide
12.2 “Placerville, a Unique Historical Past Forging into a Golden Future” City Manager’s Report May 10, 2016 City Council Meeting Prepared By: M. Cleve Morris Item#: 12.2 Subject: Review Agreement with El Dorado County Fire District and Provide Direction if any to Staff. Background: The City began contracting for fire services with El Dorado County Fire District in approximately March of 1991. The contract was initiated as part of consolidation of three districts and the City of Placerville into the El Dorado County Fire District. The three districts included Placerville, Shingle Springs and Pollock Pines/Camino. The four jurisdictions formed the El Dorado County Fire Protection District. The new district was funded from property taxes for the three districts that were transferred as part of the LAFCO proceedings, and an agreement for payment from the City of Placerville. The agreement with Placerville started with a payment of $629,377 with annual adjustments based on the increase in the City’s “General Purpose Revenue” which was defined as property tax, sales and use tax, and transient occupancy tax revenues. Due to a shift in property tax revenues from cities and special districts to the State in the early 1990s, the City and the EDCFPD determined it would be more equitable for the City to pay for fire services exclusively through the allocation and distribution of property tax revenue to the EDCFPD effective Fiscal Year 1993/1994. A calculation was made which transferred all of the base property tax for the 1992/1993 fiscal year and the growth or increment from the 1993/1994 fiscal year to establish the beginning base amount to be transferred. The total estimated to be transferred in the first year was $696,631. For future years, the agreement provided for the base plus 80% of the property tax increment to go to the district and 20% of the increment to go to the City. This formula has continued and is adjusted annually by the El Dorado County Auditor Controller prior to being transferred to the District. The 1.00% Proposition 13 property tax that is levied on parcels within the City limits is allocated between the City, EDCFPD, CSA #7, El Dorado County, El Dorado County Office of Education, El Dorado County Water Agency, El Dorado High School District, El Dorado Irrigation District, Los Rios Community College District, and the Placerville Union School District. During Fiscal Year 2014/2015, the City received $222,896 in Proposition 13 property tax revenue, and the EDCFPD received approximately $1,439,097 during the same period. The question has been raised how do we know if we are getting what we are paying for? Is it a fair price for the service? In addition, the Fire District has been considering a parcel tax to supplement their funding. At their Board Meeting on April 22, 2015, the District decided not to proceed with a parcel tax at this time.
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12.2 When the City transferred property tax in 1993, two sections in the original agreement were modified. Section III of the original agreement, which provided for payment for the services, was deleted. In addition, the agreement states that: “In fiscal year 1994-1995 and all future years, the City’s obligation for fire protection service shall be satisfied by District’s receipt of the property tax revenue as herein provided, even if such amount is reduced by future shifts to the State of California.” The previous agreement had a provision relating to additional parcel taxes as follows: “Any parcel fees or voter approved taxes shall only apply to property within the CITY if such fees or taxes are applied throughout DISTRICT on a uniform basis.” However, this provision was removed as part of Section III when the property tax shift took place in 1994. This raises the question that should be discussed with the District as to whether or not the District can adopt a parcel tax in the City limits. In 2001, the City contracted with Citygate and Associates to review fire service through the District and what we pay for that service. A copy of that study is attached for your information. Four specific objectives were identified as follows: 1. Determine if the City of Placerville is getting the fire protection it is paying for and simultaneously, determine if the City of Placerville is paying for more fire protection that it is getting. Answer: The City of Placerville is receiving the fire protection it is paying for and has not subsidized District operations outside the City. 2. Determine if there is any advantage to changing the financial relationship with the El Dorado County Fire Protection District. Answer: The report lists the options for the City to regain control of its property tax (See page VI-2 – VI-7. The report concluded at that time that even if the City regained its property tax, and receive Proposition 172 funds, the total available would not be sufficient to fund fire service. 3. Compare fire protection services and costs with those of other cities. Answer: At $96.62, Placerville’s per capita cost was the highest of the cities surveyed, but it appears that the city also receives a significantly higher level of service in terms of number of firefighters present, the ALS capabilities they possess, and the overall EDCFPD response capabilities. 4. Explore the cost of contracting for fire protection services with another entity.
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12.2 Answer: The study shows comparisons of other agencies for fire service. However, there are not solid numbers in this area provided. Staff has not been able to determine to what extent these recommendations were implemented. Two key components that are not currently being implemented are a monthly report to Staff and an annual report to the Council. In addition, it is not clear whether or not clear performance standards were established and consequences for not achieving those standards. Discussion: The purpose of this item on the agenda is to discuss the performance of the District and determine if any changes should be recommended for the contract. EDCFPD Fire Chief Michael Hardy will be in attendance to make a presentation. Following the presentation, Staff will request direction from Council on how to proceed. Options: 1. Direct Staff or the Fire District to bring back additional information to evaluate the current contract. 2. Direct Staff to negotiate changes to the contract as recommended by Council. 3. Keep contract as it currently is written and direct Staff to implement provisions that are not being currently implemented. Cost: No cost is anticipated at this time. The main cost will be staff time. Budget Impact: None Recommendation: Review Agreement with El Dorado County Fire District and Provide Direction if any to Staff.
M. Cleve Morris, City Manager
Attachments: 1. 1990 Original Agreement 2. 1993 Amendment to Agreement – Property Tax Shift 3. 2001 Citygate Associates Report
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12.2 When the City transferred property tax in 1993, two sections in the original agreement were modified. Section III of the original agreement, which provided for payment for the services, was deleted. In addition, the agreement states that: “In fiscal year 1994-1995 and all future years, the City’s obligation for fire protection service shall be satisfied by District’s receipt of the property tax revenue as herein provided, even if such amount is reduced by future shifts to the State of California.” The previous agreement had a provision relating to additional parcel taxes as follows: “Any parcel fees or voter approved taxes shall only apply to property within the CITY if such fees or taxes are applied throughout DISTRICT on a uniform basis.” However, this provision was removed as part of Section III when the property tax shift took place in 1994. This raises the question that should be discussed with the District as to whether or not the District can adopt a parcel tax in the City limits. In 2001, the City contracted with Citygate and Associates to review fire service through the District and what we pay for that service. A copy of that study is attached for your information. Four specific objectives were identified as follows: 1. Determine if the City of Placerville is getting the fire protection it is paying for and simultaneously, determine if the City of Placerville is paying for more fire protection that it is getting. Answer: The City of Placerville is receiving the fire protection it is paying for and has not subsidized District operations outside the City. 2. Determine if there is any advantage to changing the financial relationship with the El Dorado County Fire Protection District. Answer: The report lists the options for the City to regain control of its property tax (See page VI-2 – VI-7. The report concluded at that time that even if the City regained its property tax, and receive Proposition 172 funds, the total available would not be sufficient to fund fire service. 3. Compare fire protection services and costs with those of other cities. Answer: At $96.62, Placerville’s per capita cost was the highest of the cities surveyed, but it appears that the city also receives a significantly higher level of service in terms of number of firefighters present, the ALS capabilities they possess, and the overall EDCFPD response capabilities. 4. Explore the cost of contracting for fire protection services with another entity.
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12.2 Answer: The study shows comparisons of other agencies for fire service. However, there are not solid numbers in this area provided. Staff has not been able to determine to what extent these recommendations were implemented. Two key components that are not currently being implemented are a monthly report to Staff and an annual report to the Council. In addition, it is not clear whether or not clear performance standards were established and consequences for not achieving those standards. Discussion: The purpose of this item on the agenda is to discuss the performance of the District and determine if any changes should be recommended for the contract. EDCFPD Fire Chief Michael Hardy will be in attendance to make a presentation. Following the presentation, Staff will request direction from Council on how to proceed. Options: 1. Direct Staff or the Fire District to bring back additional information to evaluate the current contract. 2. Direct Staff to negotiate changes to the contract as recommended by Council. 3. Keep contract as it currently is written and direct Staff to implement provisions that are not being currently implemented. Cost: No cost is anticipated at this time. The main cost will be staff time. Budget Impact: None Recommendation: Review Agreement with El Dorado County Fire District and Provide Direction if any to Staff.
M. Cleve Morris, City Manager
Attachments: 1. 1990 Original Agreement 2. 1993 Amendment to Agreement – Property Tax Shift 3. 2001 Citygate Associates Report
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