City of La Palma Agenda Item No. 3

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1 City of La Palma Agenda Item No. 3 MEETING DATE: October TO: FROM: SUBMITTED BY: CITY COUNCIL CITY MANAGER Eric R. Nuñez, Police Chief AGENDA TITLE: Resolution Making Findings Related to Approval of the Second Amendment to OCFA Joint Powers Authority Agreement - Equity RECOMMENDED ACTION: It is recommended that Council approve and adopt a Resolution making findings related to approval of the Second Amendment to the Amended Orange County Fire Authority Joint Powers Agreement. BACKGROUND: In March 2012, in response to concerns raised by the City of Irvine, the OCFA Board of Directors took action to form an Ad Hoc Committee for the purpose of studying equity. For OCFA, the equity issue refers to the extent to which the revenue received from a member agency bears a reasonable relationship to the cost of services that a member receives. Following 18 months of deliberations, an amendment to the Joint Powers Authority was prepared and approved by 20 of OCFA s 24 member agencies, including the City of La Palma, who approved the amendment on October 15, Three member cities rejected the Amendment, and one member agency (County of Orange) did not consider approval of the Amendment. To become effective, the Amendment was only required to be approved by 2/3 (16) of OCFA s individual member agencies, which was achieved on November 18, In approving the amendment, the OCFA Board of Directors also authorized General Counsel to commence a validation action in the Orange County Superior Court to obtain a judicial declaration of the validity of the Second Amendment to the Amended JPA once the amendment had been approved by 2/3 of OCFA s member agencies. Per that authorization, the OCFA and the City of Irvine jointly filed a Petition seeking validation of the Second Amendment on December 19, On January 28, 2014, the Orange County Board of Supervisors voted 4-to-1, with Supervisor Spitzer opposed, to file a formal response in opposition to the validation action. After hearing the matter, the trial court ruled on August 4, 2014, that the Second Amendment is invalid. Subsequent to this ruling, both the Irvine City Council and the OCFA Board of Directors approved filing an appeal in the validation action. Agenda Item 3 Page 1 of 3

2 OCFA s Special Litigation Counsel for this matter has drafted the attached Resolution for consideration and approval by OCFA s member agencies. The Resolution requests each city to make findings related to approval of the Second Amendment. If approved by OCFA s member agencies, Special Counsel will submit the approved Resolutions to the Court of Appeal. The proposed Resolution includes multiple recitals (WHEREAS clauses) explaining why cities voted to approve the Second Amendment last year. By adopting the resolution, the cities would resolve that the recitals are true and correct, and that they are adopted as findings representing the City Council s intent in approving the Second Amendment. When cities approved the Second Amendment last year, they were not required or requested to adopt any resolutions explaining why they were doing so. But now that the trial court has invalidated the Second Amendment, the adoption of a resolution explaining why the cities approved the Second Amendment could be helpful to OCFA s appeal. SUMMARY: This item is submitted to request approval of a Resolution by each of the Orange County Fire Authority s member agencies making findings related to approval of the Second Amendment to the Amended Joint Powers Authority (JPA) Agreement seeking to address the equity issue. As summarized in the October 15, 2013 staff report, benefits of the equity solution provided by the Second Amendment include: Keeps all OCFA members together Provides long-term organizational stability Addresses the equity concerns presented by the City of Irvine Achieves financial feasibility within OCFA s financial framework Protects SFF and Cash Contract members not eligible under the formula from financial impacts ALTERNATIVES: The Council could elect not to sign the Resolution for the Second Amendment to the amended JPA which could prevent a 2/3 Vote by member agencies thereby preventing the OCFA to continue to provide cost-effective fire protection services for the various member agencies, as several cash contract cities may withdraw from the continuance of this inequity of cost for fire services. As noted the Council previously voted to approve the Second Amendment to the Amended JPA Agreement FISCAL IMPACT: There is no significant fiscal impact for the City of La Palma. La Palma is an SFF city, and therefore would not be required to pay additional contributions to OCFA nor is it anticipated that the City will be eligible for the equity payments. Agenda Item 3 Page 2 of 3

3 APPROVED: Police Chief Administrative Services City Manager Director Attachments: 1. Proposed Resolution Agenda Item 3 Page 3 of 3

4 RESOLUTION NO A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA PALMA MAKING FINDINGS RELATED TO THE CITY S PRIOR APPROVAL OF THE ORANGE COUNTY FIRE AUTHORITY S SECOND AMENDMENT TO THE AMENDED JOINT POWERS AUTHORITY AGREEMENT WHEREAS, the Orange County Fire Authority (OCFA) was formed in 1995 to provide regional fire protection and related services to the County of Orange and 18 member cities; and WHEREAS, five additional cities have become members of the OCFA, since its original formation; and WHEREAS, the original Joint Powers Authority (JPA) Agreement was amended on September 23, 1999, and thereafter renewed in 2010 by the First Amendment to the Amended JPA Agreement; and WHEREAS, under the Amended JPA Agreement, OCFA member agencies pay for fire services under one of the following two pay structures: (1) the Structural Fire Fund, or (2) cash contracts; and WHEREAS, if a member agency is a Structural Fire Fund jurisdiction, the County of Orange collects property taxes in the member agency s jurisdiction, a portion of which is paid to OCFA for fire services; and WHEREAS, if a member agency is a Cash Contract City, the member agency makes service payments directly to OCFA from the member agency s general funds pursuant to the terms of a contract entered into by the OCFA and the member agency; and WHEREAS, the OCFA and certain member agencies were concerned that these payment structures created inequity among the member agencies; and WHEREAS, in light of this perceived inequity, some member agencies expressed concern that they may need to withdraw from membership in OCFA in 2020, as allowed by the Amended JPA Agreement; and WHEREAS, in order to ensure the long-term stability of the OCFA and allow the OCFA to continue to provide cost-effective fire protection services for the various member agencies, the OCFA proposed a new Enhanced Hybrid Model payment structure; and WHEREAS, the City of La Palma is committed to participating in regional efforts to provide cost-effective and adequate fire protection services; and WHEREAS, on October 15, 2013, the City Council approved the Second Amendment to the Amended JPA Agreement (Second Amendment) to allow for the use of the Enhanced Hybrid Model payment structure; and

5 WHEREAS, the City now wishes to affirm its intent in approving the Second Amendment. NOW THEREFORE, THE CITY COUNCIL HEREBY RESOLVES AND ORDERS AS FOLLOWS: SECTION 1. The City Council hereby affirms that the foregoing recitals are true and correct, and are adopted as findings representing the City Council s intent in approving the Second Amendment on October 15, SECTION 2. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED by the City Council of the City of La Palma at a regular meeting held on the 21 st of October ATTEST: Steve Shanahan Mayor Laurie A. Murray, CMC City Clerk

6 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS. CITY OF LA PALMA ) I, LAURIE A. MURRAY, City Clerk of the City of La Palma, California, DO HEREBY CERTIFY that the foregoing resolution was adopted by the City Council of said City at a regular meeting of said City Council held on the 21st of October 2014, and that it was so adopted by called vote as follows: AYES: NOES: ABSENT: Laurie A. Murray, CMC City Clerk

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