BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 239 (Hertzberg) - Local services: contracts: fire
protection services
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|Version: April 23, 2015 |Policy Vote: GOV. & F. 5 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 18, 2015 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 239 would require written approval from a local
agency formation commission (LAFCO) before a public agency can
contract for fire protection services outside its current
service area. The bill would prescribe a public process for
approving a fire protection reorganization contract, including a
requirement that, prior to submitting an application to the
LAFCO, a public agency must obtain written consent to the
proposal from each affected public agency and the recognized
employee organization representing firefighters of both the
existing and proposed service providers, and conduct a public
hearing.
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Fiscal
Impact:
Unknown increased General Fund costs to the Department of
Forestry and Fire Protection (CAL FIRE), likely in the low
hundreds of thousands annually, to comply with specified
administrative requirements prior to contracting with local
agencies for fire protection services. CAL FIRE currently has
115 contracts with local agencies for full fire protection
services, and the contracts typically have a duration of three
years. It is likely that all of those contracts would meet
the criteria in the bill requiring LAFCO approval. For
illustrative purposes, if CAL FIRE incurred additional costs
of $10,000 to extend 38 fire protection contracts in a year
through the LAFCO process, annual administrative costs would
be $380,000. It is likely that CAL FIRE would incur higher
costs to assess the impacts of contracts for larger service
areas.
Unknown, potentially significant impact on CAL FIRE fire
protection costs (General Fund). Currently, CAL FIRE provides
over $50 million in contracted reimbursements to counties for
fire protection services in "state responsibility areas," and
the state is provided with over $300 million in contracted
reimbursements from local agencies for CAL FIRE to provide a
variety of fire protection services to cities, counties, and
fire protection districts. These contracts must be mutually
beneficial and cost-effective. To the extent this bill
discourages or prevents contracting for fire services, both
CAL FIRE and local agencies could experience increased costs
to provide fire protection.
Background: Existing law, the Cortese-Knox-Hertzberg Local Government
Reorganization Act, delegates the Legislature's power to control
the boundaries of cities and special districts to local agency
formation commissions (LAFCOs). The Act authorizes a city or
county to provide new or extended services by contract or
agreement outside its jurisdictional boundaries if it receives
written approval from the LAFCO in the affected county. This
requirement does not apply to contracts or agreements solely
involving 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
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consistent with the level of service contemplated by the
existing service provider.
Existing law authorizes cities and fire protection districts to
enter into contracts with counties to provide fire protection
services within a local agency's jurisdiction. In addition,
cities, counties, and districts can enter into cooperative
agreements with CAL FIRE to provide fire protection services.
CAL FIRE currently has 149 contracts with a value of over $300
million to provide a variety of fire protection services to
local governments (Schedule A Agreements), ranging from dispatch
services to full service fire protection. CAL FIRE typically
enters into an average of two new contracts each year to provide
local fire protection services; the contracts typically have a
duration of three years and must be mutually beneficial. CAL
FIRE also has 6 contracts with counties with a value of over $50
million to provide wildland fire protection in State
Responsibility Areas on behalf of the state (Contract County
Agreements).
Proposed Law:
SB 239 requires a state or local public agency to obtain a
LAFCO's written approval to provide new or extended services
under a fire protection reorganization contract. Specifically,
this bill would:
Define a "fire protection reorganization contract" as a
contract or agreement that for the exercise of new or extended
fire protection services outside a public agency's current
service area that does either of the following:
o Transfers responsibility for providing services in
more than 25% of the service area of any public agency
affected by the contract or agreement.
o Changes the employment status of more than 25% of
the employees of any public agency affected by the
contract or agreement.
Require that a request submitted to LAFCO for approval of
services provided under a fire protection reorganization
contract be made as follows:
o For a non-state public entity, by the adoption of a
resolution of application by the legislative body
proposing to provide those services outside the agency's
current service area.
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o For a state public entity, the director of the
agency must initiate the application proposing to provide
these services outside its current service area, and have
the application approved by the Governor.
Prohibit the legislative body of a public agency or the
director of a state public agency from submitting an
application to LAFCO unless both of the following occur:
o The public agency obtains and submits a written
agreement validated and executed by each affected public
agency and recognized employee organization representing
firefighters of the existing and proposed service
providers consenting to the proposed change of
organization.
o The public agency conducts an open and public
hearing on the resolution.
Require that a resolution of application be submitted with a
fire services reorganization contract plan that includes all
of the following:
o A total cost estimate for providing new or extended
services.
o The estimated cost of the new or extended services
to customers.
o An identification of existing service providers and
the potential fiscal impact to the customers of those
existing providers.
o A plan for financing the exercise of the new or
extended services.
o Alternatives for the exercise of the new or extended
services.
Require that a public agency to contract for an independent
comprehensive fiscal analysis for submittal with the
application that reviews and documents the following:
o The costs to the applicant public agency during the
three years following the effective date of a fire
protection reorganization contract, including all direct
and indirect costs, and a review of specified cost
comparisons for similar service areas to reasonably
determine expected costs.
o The revenues of the applicant public agency during
the three years following the effective date of contract
with another public agency to provide a new or extended
service.
o The effects on the costs and revenues of any
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affected public agency, including the applicant public
agency, during the three fiscal years that the new or
extended service will be provided.
o Any other information and analysis needed to support
the findings that a LAFCO must make to approve services
under the contract.
Require the clerk of the public agency or the director of a
state agency to file a certified copy of the resolution of
application with the LAFCO executive officer.
Require the LAFCO executive officer to determine whether the
application for approval is complete and acceptable within 30
days of receipt, as specified.
Require the LAFCO to approve, disapprove, or approved with
conditions a fire protection reorganization contract following
a public hearing on the proposal.
Prohibit the LAFCO from approving the application unless it
determines the public agency will have sufficient revenues to
carry out the fire protection reorganization contract, but
allows for conditional approval on the concurrent approval of
sufficient revenue sources, as provided.
Prohibit the LAFCO from approving the application unless it
makes findings of all of the following:
o The proposed exercise of new or extended services
outside a public agency's current service area is
consistent with the Cortese-Knox-Hertzberg Act.
o The commission has reviewed the comprehensive fiscal
analysis.
o The commission has reviewed the testimony presented
at the public hearing.
o 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 between the public agencies to provide a new
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or extended service.
Specify the manner in which a LAFCO executive officer must
provide public notice for the hearing to review an application
for approval of a fire protection reorganization contract, and
require the LAFCO to hear and consider all written and oral
testimony by any affected local agency, county, or interested
person.
Staff
Comments: This bill is intended to ensure that contracts to
extend fire protection services outside of a public agency's
jurisdiction are thoroughly and independently examined in a
public process that provides increased transparency and
oversight. SB 239 requires a public agency to have an
independent fiscal analysis of a proposal for a fire protection
reorganization contract to assess the costs and revenues of the
public agency are sufficient to carry out the contract over a
three-year period. As such, this bill ensures the
cost-effectiveness of contracts that are approved through the
LAFCO process.
As part of the public process required by this bill, however,
public agencies must have the consent of recognized firefighter
organizations in both the existing and proposed service areas
prior to submitting an application to LAFCO for approval of a
fire protection reorganization contract. This provision reduces
a public agency's autonomy to make service delivery decisions,
and may present barriers that prevent contracting for fire
protection in some cases, or result in increased contracting
costs in others.
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