FIRE PROTECTION CONTRACTS Workshop on Senate Bill 239 (Hertzberg) July 21, 2016 Nevada LAFCo – Presented by P. Scott Browne, Counsel

SENATE BILL 239 (HERTZBERG) Adds GC §56134 relating to the extension of fire protection services outside existing city or district boundaries. Also makes consistency amendments to Government Code Sections (applications) and (agency to agency contracts).

LEGISLATIVE HISTORY SB 239 (Hertzberg) was sponsored by the California Professional Firefighters (CPF). Response to several local situations involving contracted fire services. SB 239 signed by Governor in October The provisions became effective January 1, 2016.

THE WORLD PRIOR TO DECEMBER 31, 2016 Contracts between fire agencies were subject to Government Code Section 56133(e)1: (e) This section does not apply to any of the following: (1) Two or more public agencies where the public service to be provided is an alternative to, or substitute for, public services already being provided by an existing public service provider and where the level of service to be provided is consistent with the level of service contemplated by the existing service provider.

FIRE PROTECTION CONTRACT DEFINITION An agreement for the exercise of new or extended fire protection services outside a public agency’s jurisdictional boundaries which either:

FIRE PROTECTION CONTRACT  Transfers responsibility for providing services in more than 25 percent of the area within the jurisdictional boundaries of any public agency affected by the contract or agreement; Or …

FIRE PROTECTION CONTRACT  Changes the employment status of more than 25 percent of the employees of any public agency affected by the contract or agreement.

FIRE PROTECTION CONTRACT Also …  Any other contract or agreement for new or extended services that would, in concert with other contracts or agreements, produce the 25% change in area or change the employment status of 25% of the employees is deemed a Fire Protection Contract.(56134 (a)(2))  “Jurisdictional Boundaries” are defined to include lands already being served under prior agreements, not just agency boundaries (56134(a)(3))

EXEMPTIONS Several types of agreements are exempt from the SB 239 process: Mutual Aid Agreements Automatic Aid Agreements Renewals of Existing Contracts Termination of Existing Contracts Ambulance Service Contracts Cooperative Agreements with CDF per PRC 4143 &4144

PROCESS

INITIATION Local agency contracts: The board of directors of the local agency extending services submits a Resolution of Application to LAFCO along with a Plan for Services; or CalFire contracts: If the proposed contract involves a State agency, the application is initiated by the Director of the agency, subject to the approval of the State Director of Finance.

APPLICATION REQUIREMENTS Before adopting Resolution of Application, the Board of Directors or the State Director must conduct a Public Hearing on the application.

APPLICATION REQUIREMENTS Must include either: A written agreement executed by each of the affected public agencies involved, including the “consent” of the recognized firefighter association from each district affected by the proposed fire protection contract; Or …

SB239 (HERTZBERG) Written notice of a public hearing to each of the affected public agencies and recognized firefighter association affected by the proposed fire protection contract at least 30 days prior to the hearing. A copy of each written notice needs to be submitted with the resolution of application. The notice, at minimum, must include a full copy of the proposed contract.

PLAN FOR SERVICE Application must include a Plan for Services which must address 10 issues: 1.Total estimated costs of the new or extension of services; 2.The estimated costs to the customers in the affected territory of the new or extended services; 3.Identification of the agencies slated to provide the new or extended services and the estimate of costs to the customers of those agencies;

PLAN FOR SERVICE 4.A plan for financing the new or extended services on to the affected territory 5.Alternatives to providing new or extended services to the affected territory; 6.The enumeration and description of the new or extended services to be provided; 7.The level and range of the new or extended fire protection services;

PLAN FOR SERVICE 8.The timeline of when the new or extended fire protection services can feasibly be extended to the affected territory; 9.An indication of any improvements or upgrades to structures, roads, sewer or water facilities, or other conditions the public agency slated to provide new or extended services would impose or require within the affected territory if the fire protection contract is completed; 10.A determination, supported by documentation, that the proposed fire protection contract meets the criteria of a change in 25% of service area/employment status.

COMPREHENSIVE FISCAL ANALYSIS Must be independently prepared and submitted with the application. Must address 3 issues: 1.Review of the Plan for Service. 2.Comparison of costs of existing service provider with service costs for similar service areas. 3.Any other information and analysis needed to support the findings required of the Commission.

LAFCO PROCESS Timelines: LAFCo Staff must determine whether application is complete within 30 days. LAFCo Hearing must be no later than 90 days from date the application is deemed complete. Affected local agencies, the County and any interested parties must be notified at least 21 days prior to hearing. Also, notice must be published and posted on LAFCo website. Aggrieved Party can request reconsideration of Commission decision within 30 days

COMMISSION HEARING The commission may approve, disapprove, or approve with conditions, the contract for new or extended services following the hearing at the commission meeting.

COMMISSION DETERMINATION The Commission may approve or conditionally approve of the contract if it can determine that: The public agency will have sufficient revenues to carry out the exercise of the new or extended fire protection services outside its current area; If the public agency will not have sufficient revenues, the Commission may condition approval on concurrent approval of sufficient revenue sources. If the new revenues are not approved, then the approval of the contract is null and void.

COMMISSION DETERMINATION The Commission approval contingent upon all of the following four factors: 1.The proposed exercise of the new or extended fire protection services outside the applicant’s current service area is consistent with the intent of this division, including, but not limited to, the policies of Sections and The commission has reviewed the comprehensive fiscal analysis. 3.The commission has reviewed any testimony presented at the public hearing. 4.The proposed affected territory is expected to receive revenues sufficient to provide public services and facilities and a reasonable reserve during the three fiscal years following the effective date of the contract or agreement.

SPONSOR’S CLARIFICATIONS In December 2015, the California Association of LAFCOs (CALAFCO) met with California Professional Firefighters (legislation sponsor), CAL FIRE Local 2881 and the California Fire Chief’s Association to clarify certain aspects of the new law. Resulting bulletin was distributed to LAFCos and is provided today.

SPONSOR’S CLARIFICATIONS  The change of 25% of employees is intended to apply to any one of the agencies signing on to the contract; it is not intended to be cumulative across all fire agencies.  Changes in wages, benefits, hours worked or working conditions are not intended to be include in the definition of “changes in employment status.”  Renewal of existing contracts are not subject to the new provisions unless the renewed contracts included amendments that triggered the 25% change in service area or employment status.

EXAMPLES How would apply to the following : A new agreement for an area that is already served subject to 56134? A new agreement for an area that is not served? Higgins FPD terminates CALFIRE contract? Penn Valley FPD initiates CALFIRE contract? Washington Co. Water District contracts with NCCFD?

COMMISSION POLICIES FOR IMPLEMENTATION OF DEFINITIONS The Commission may utilize comments from the affected agencies in crafting policies to implement SB 239 Define the proof each an applicant must provide to determine whether the percentage of the service area affected by the contract is or is not 25%; Define what constitutes “changes in employment status” Lay-offs Compensation and\or Benefit changes Changes in employment rights or working conditions

COMMISSION POLICIES FOR IMPLEMENTATION OF Specify Exemptions for: Automatic Aid Mutual Aid agreements Renewals of existing contracts Ambulance Service Other Policy Suggestions?

QUESTIONS?