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HomeMy WebLinkAboutMINUTES - 09131988 - F.C.2 TO: BOARD OF SUPERVISORS C61 ra FROM: Finance Committee, Supervisor T. Powers I.JIJOlC1 and Supervisor R. Schroder ^ DATE: December 9,1987 ( / SUBJECT: Fire District Capital Outlay Review Procedure Specific Request(s) or Recommendations(s) & Background & Justification RECOMMENDATION: APPROVE the report of the Finance Committee recommending the attached proposed guidelines for Fire District Capital Allocations as the basis for recommending capital allocations from the Special District Augmentation Fund and appoint Bob Nyman, fire district financing "consultant, ; as an advisory member of the County Fire Chiefs' Association Capital Improvement Committee. BACKGROUND/REASONS FOR RECOMIUMATIONS: At the conclusion of the 1986/1987 capital allocation process, the Board of supervisors ordered that in future years, the capital allocation recommendations of the County Fire Chief's Capital Improvement Committee be referred to the Finance Committee for review prior td submission jto the Board of Supervisors. Additionally, the Board referred to the Finance Committee .for review the issue of the capital allocation'. review process. In preparation of the review of the allocation process by the Finance Committee, the County Administrator's Office requested the Capital Improvement Committee to conduct a review of previous allocation practices and changes suggested by Fire Districts and the County Administrator's Office with the objective of developing revised written guidelines for the allocation process. The County Administrator's Office took part in the revAw and revision process. Additionally, Bob Nyman,' the County's fire district financing consultant was asked to assist the Capital Improvement .Committee in the review and development of allocation procedures. The Capital Improvement Committee, Bob Nyman and the County Administrator's Office representative met on several occasions to develop the proposals contained in the attached guidelines. The proposed guidelines were subsequently presented to the County Fire Chiefs' Association and were approved by the Association on November 12, 1987. CONTINUED ON ATTACHMENT: YES Signature: Recommendation of County Administrator Recommendation of Board Comnittee Approve Other l Su ervisor T. Powers Supervisor R. chroder Signature(s): //^^ Action of Board on:,Cy j�� /yp7Approved as Recommended 7L Other,. Vote of Supervisors: I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OFAN ACTION TAKEN Unanimous (Absent ) AND ENTERED ON THE MINUTES OF THE Ayes: Noes: BOARD OF SUPERVISORS ON DATE SHOWN. Absent: Abstain: Attested: cc: County Administrator Phil Batchelor, Clerk f Auditor-Controller the Board of Supervisors County Counsel and County Administrator County & Independent Fire Districts By: �.(J. �,� , DEPUTY United Professional Firefighter's Union, Local 1230 Bob Nyman Fire District Capital Outlay Review Procedure December 9, 1987 Page Two on December 7, 1987 our Committee met with members of the Capital Improvement Committee, Bob Nyman and the County Administrator's Office to consider the proposed capital allocation guidelines and agreed to recommend approval of the proposed review procedures. In addition to the recommendations contained in the attached proposed guidelines, it is our recommendation that Bob Nyman be 'added to theCapital Improvement Committee as an advisory member to assist the Committee in the review process. The Capital Improvement Committee felt that. Bob Nyman's knowledge of fire district operations would be of value to the Committee and would increase the level of objectivity of the review process. It is our belief that the written proposed guidelines will correct or eliminate many of the problems experienced with the allocation process in prior years. The mere fact that the guidelines are in writing will eliminate misunderstandings regarding the review process and criteria for recommending capital allocations. The proposal to dedicate funds to Category 'C' items for the purchase of new equipment will benefit many districts that have been unable to purchase new items because available funding has been absorbed by the 'A' land 'B' category items. The revised apparatus replacement guidelines recognize that. age alone. is not the only determinant in evaluating the utility{ of vehicles. The addition of the mileage criteria should result in' a more realistic replacement policy. Although the County Administrator's Office has been involved in the review process over the past years, there has been a certain .,amount of criticism about the objectiveness of the Committee. The addition of a knowledgeable disinterested . person such as Bob Nyman to the Committee should substantially eliminate that criticism. 'The United Professional Fire Fighters' Union was provided a copy; of the proposed Finance Committee agenda and guidelines but declined to attend the meeting or offer comments about the review process. 4 county of Contra Costa ` special District Augmentation Fund i PROPOSED GUIDELINES FOR Fire District CAPITAL' (FI XED ASSET) ! ITEMS ALLOCATIONS Background : the Board of Supervisors has instructed the County Administrator and the Capital Improvements Committee to present the proposed guidlines to be used in recommending capital allocations for the 1987-88 fiscal year to the board 's Finance Committee prior to the submission of the acutal recommended allocations For 1987-88. The chiefs serving on the Capital Improvements Committee and sthe County Administrator 's representative have Indicated that they want to review the proposed guidelines and related procedures with the County Fire Chiefs Association members prior ' to finalizing and presenting them to the Board's Finance Committee. Once the proposed guidlines have been approved, they will become the basis. for determining' the recommended allocations for `each : district . Proposed Guidelines: presented below are the proposed guidelines, ..along with the definitions and related procedures required to apply the guidelines to. the capital requests that have already been submitted for the 1987-88 fiscal year: PROCESSING PROCEDURE -------------------- ' r Using the approved guidelines, the Capital -Improvements Committee will 'review each requested Item with the chief of the -requesting district and arrive at its recommended allocation. (When necessary.." & field review of the need for a requested item will be conducted. ) The;; Committee ; will provide a statement for each item not recommended for allocation under one of the capital categories. Some -items may require further study. In these cases, a statement to that effect will be provided by the Committee. Items not recommended for approval during any year many be submitted again in a subsequent year. i Recommended allocations will be forwarded to the Board of Supervisors' Finance Committee. 4 f Hage 1 { i . D�lIMI�IONa Capital equipment: as provided in the State Controller 's accounting regulations, an item of capital equipment is a movable fixed asset. It has a unit cost, including sales tax, delivery and installation charges, of at least $500. it is the unit cost that determines whether or not.-an item is capital equipment, not the total amount of the proposed order . (Equipment iteiss not classified as capital equipment would be purchased from regular district operating funds. ) Land: all land acquisitions and land improvements are capital projects, without regard to cost. Structures and improvements: the following are capital projects; new permanent structures, with a .cost of at least $5,000; and additions to existing structures, structural betterments and ground improvements each with a coat of at least $5,000. (Lesser projects are 'not considered as capital projects and would' be financed from regular district operating funds. ) GUIDELINES to be used with Priority Categories ----------------------------------------------- Category A,. ------------ acquisition of additional or replacement capital equipment items required by ; CAL OSHA regulations, or otherwise, for the protection of the health and safety of district fire fighters. (Since all apparatus and equipment is normally .utfed for the protection of the public, this category relates only to the protection of fire fighters. ) Quantities requested must be realistic and reasonable, based on the problem to be corrected and such factors -as the size of the district's service responsibilities, workload volume and absence of viable alternatives. Category B: ------------- acquisition of vehicles and capital equipment for replacement of capital items which are obsolete, uneconomical to operate or no longer 'serviceable and; replacement of.. or major page 2 _W tparking lots, etc. ) where necessary to protect the original Investment or to maintain the usefulness of the item. v In the case of apparatus, the following factors willr bit considered in reviewing requests for replacement: age, mileage, engine hours, condition, Cos ti, of maintenance and operation, parts availability, frequency of use, feasibility of re-powering or re=modeling. u The Committee will develop a recommended procedure ; and guidelines to be used by the Committee in arriving at Its recommended allocations for replacement of apparatus, other vehicles and some equipment. (See ATTACHMENT. ) Category C: ------------ acquisition of net additional vehicles and capital equipment not eligible for consideration under above Categories A and B. �` i Note : an amount, of approximately 5% of the total avaihable funds for all capital items may be recommended for this category. (Any funds not -allocated for Categories A and B would also be available for this category.) Requested items must be logical additions,`; based on the requesting district's service ' responsibilities, workload volume and absence of viable alternatives. t Because of the limited funds normally available for 4this category, only the most me.ritorius of requests could be expected to be recommended- for .allocation oC funds. Category D: ---- land acq;uisltions and land Improvements,. regardless of coat; and new permanent structures, additions, structural betterments and ground improvements, with an individual project cost of at leaa`t $5,000 each. Note : as these projects would not normally �be realistic for consideration under the limited amount available each 'year from the Special District Augmentation Fund, ! such projects would undoubtedly have to be the subject of long- term financing proposals using additional resources such as new construction fees, general obligation bonds or special taxes. (The County Administrator 's Office should, be contacted about such special financing proposals. ) page 3 . •. l�AvvR� 6�L ht+w�wiri.ii+i .5..�+..r�.o...� .. +:'c.. o..=:��..+�.:wTrlii i 'iii ti+�r i ia�rr ITS" ii Procedure: Because of the recurring gap between the amount of funds available for replacement of capital items and the amount of requests for these funds, the Capital improvements Committee, in the course of arriving at its recommended allocations for replacement of these items, will ' need to ensure that the limited funds are assigned where they will provide -the greatest potential benefit to all; of the citizens served by the'' participating diatticts. In. order to do this, the committee will need to consider factors other than the Justification provided for the requested replacement lien and the replacement guidelines, where they have been established . The other factors .will include: a . number (annual) of requesting district's alarms and relative response times; b. size and- type of district service responsibilities; C. amount of and condition of relevant apparatus, equipment or other property already immediately available; and d. mutual aid or other viable alternatives- to the requested replacement. REPLACEMENT GUIDELINES Heavy Duty Apparatus (including heavy wild land Units) : -------------------------------------------------------- Age (years) Road Niles - 30 regardless of mileage 25+ and 251000+ 20+ and 501000+ 15+ and 75,000+ 10+ and 1001000+ other considerations: _ page 1 units: _ --------------------------------------------- ---- 20 regardless of mileage 15+ and is 000-cr 10+ and 20,000+ Other considerations: I Light vehicles (sedans, pick-ups, etc. ) : ---------------------------------------- 20 regardless of smileage 15+ and 50,000+ 10+ and 75,000+ 5+ and 10080004 Other considerations: * such as engine hours, general condition, cost of maintenance and operation, parts availability and feasibility of re-powering and re-modeling may be applied byi the committee in evaluating the justification for ' the replacement or over-hauling of a capital ite, a. Equipment- (partial listing) : - ----------------------------- Item Replacement Guideline Radio equipment 15 years age Resuscitator ATTACHMENT j page 2 ii OFFICE OF COUNTY ADMINISTRATOR CONTRA COSTA COUNTY Administration Building Martinez, California i Finance Committee To: Supervisor Nancy Fanden Date: August 24, 1'988 Supervisor Tom Torlakson Frorrphil Batchelor, Subject RODEO-HERCULES FIRE PROTECTION County Administrator DISTRICT CAPITAL OUTLAY RESERVE RECOMMENDATION Request the Rodeo-Hercules Fire Protection District to transfer the funds in its Capital Outlay Reserve Fund in the approximate amount of $98,000 to its operating budget to be applied toward its operating budget requirements for fiscal year 1988-1989. Financial Impact: Approval of the recommendation will reduce the demands on the Special District Augmentation Fund and result in the availability of an additional $98,000 ,for .allocation for other purposes. BACKGROUND/REASONS .FOR RECOMMENDATION: Earlier this year it was discovered that the Rodeo-Hercules Fire Protection District had accumulated a capital outlay reserve fund over a two-year period by inaccurately reporting year-end .fund balances in the 1986-1987 and 1987-1988 budget cycles. In each of those two budget cycles, portions of year-end fund balances were transferred by the District into a capital outlay reserve fund. This action had the effect of understating the amount of carryover balance used to finance the coming year' s budget, which in turn necessitated allocating an additional amount from the Special District Augmentation Fund to balance the operations, budget of the District in those two fiscal years. The subject capital outlay fund established with prior year carryover funds, while not being illegal or inherently improper, does present problems from the standpoint of equity and credibility between; this office and the other fire districts of the County. Budget and Special District Augmentation Fund allocation policies established by the County Administrator' s Office, ratified by your Board and followed by the fire districts preclude the establishment and funding of reserve funds. The budget process requires that all carryover funds be applied towards funding the following year' s budget. ;, All of the fire districts applying for Augmentation Funds are aware of this procedure, and to the best of their ability, accurately report carryover funds t 4 Finance Committee -2- August 24, 1988 .with the knowledge that carryover funds will be applied towards the coming year' s budget. The District has proposed that it be allowed to use the $98,000 for communications equipment and station furnishings for the new .Hercules station. However, since the Special District Augmentation Fund provides resources for capital items, it is our view that the District should submit its request for capital to the County Fire Chiefs' Capital Improvement Committee. If the needed items do not meet the criteria of the Chiefs' Committee, the District should consider utilizing funds raised either through the development fee or the benefit assessment established approximately one year ago. The Board referral regarding this item suggested a review of the process and procedures involved in the allocation of special district augmentation funds. Approximately one and a half years ago the Capital Improvement Committee, in conjunction with the County's fire district' consultant and the County Administrator's Office, developed written procedures and criteria for reviewing, capital outlay requests. The' procedures were approved by the County Fire Chiefs' Association, the Finance Committee and the Board of Supervisors. .Attached is a copy of the Board Order and guidelines outlining the current process used by our office and the Chiefs' Committee--in - reviewing ommittee-in -reviewing requests for funding. We think this process is a significant improvement over the process used in the past and recommend that it be 'continued in 1988-89. PB:TJM:gm cc: County Administrator Auditor-Controller Rodeo-Hercules Fire Protection District Capital Improvement Committee t AGENDA FINANCE COMMITTEE Monday, August 29, 1988 at 9: 30 a.m. 4th Floor Conference Room 1. 9: 30 - 10: 00 Consider Rodeo Hercules Fire Protection Request to 'reserve $98 ,000 of fund balance for capital outlay.