HomeMy WebLinkAboutMINUTES - 11281989 - FC.1 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on November 28, 1989 by the following vote:
AYES:
NOES:
- See Vote Below -
ABSENT:
ABSTAIN:
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SUBJECT: Special District Augmentation Fund Allocation Formula
The Board received the attached report dated November
28, 1989 from the Finance Committee (Supervisors Nancy Fanden and
Robert Schroder) relative to a policy of allocating Special
District Augmentation Fund monies.
Supervisor Tom Powers expressed concern with the "return
to source" type formula, stating that he believed funding should be
based upon need as opposed to how much a community had contributed
to the Fund.
Supervisor Schroder agreed that funds should be
allocated on the basis of demonstrated need. He noted, however,
that the Committee felt that a district or community that was
helping itself should be given some consideration, both in
recognition of those efforts and to encourage other districts and
areas to participate in funding efforts.
Supervisor Powers advised that he agreed that
communities that support and participate in financing plans should
be given preference. He stated, however, that he believed that the
allocation of more funds to districts who historically have
formulas that contribute more money to the fund is not encouraging
the development of additional resources.
Supervisor Tom Torlakson expressed his concern with the
"return to source" formula, noting that while residents in some of
the less affluent parts of the County are paying an annual
assessment for fire district financing, there are still other areas
with a greater ability to pay that have not yet applied such
assessments.
Supervisor Sunne McPeak advised that she could support
the report as presented because it strikes a balance between need
and equity.
Supervisor Powers moved to amend the first paragraph to
state "adopt a policy of allocating funds on need and equity for
building and staffing new fire stations with priority
considerations for districts that support and participate in
financing plans. " He noted that such a change would give the Board
the ability to address special considerations on a case-by-case
basis.
Supervisor Torlakson seconded the motion, stating that
he believed the amended language emphasized the Board's policy to
allocate funds on a need basis and to consider equity in that
process.
The Chair called for a vote on the amended language and
the vote was as follows:
AYES: Supervisors Powers, Torlakson
NOES: Supervisors Fanden, Schroder, McPeak
The motion failed to carry.
1
The Chair then called for a vote on the Finance
Committee report as presented, with Recommendation #1 modified to
include unincorporated areas that support and participate in
financing plans. The vote was as follows:
AYES: Supervisors Fanden, Schroder, McPeak
NOES: Supervisors Powers, Torlakson
Therefore, IT IS BY THE BOARD ORDERED that the
recommendations in the attached Finance Committee report (with
revised language in Recommendation #1 to include the words
"unincorporated areas" ) are APPROVED.
cc: County Administrator
County Counsel
County and Independent Fire Districts
United Professional Firefighters Local 1230
Cities of Clayton, Concord, Lafayette,
Pleasant Hill, Walnut Creek and Martinez
County Taxpayers ' Association
Auditor-Controller
I hereby certify that this is a true and correct copy of
an action taken tend entered on the minutes of the
Board of Supervisors on the date shown.
ATTESTED: '2&uZ 'y X e t.,1 & I'P 9
PHIL BATCHELOR,Clerk of the Board
of and County Administrator
�r ��rt✓cvafot�� . y
2
TO: BOARD OF SUPERVISORS - Contra
. FROM: Finance Committee:
Supervisor Nancy Fanden COStaCou
Supervisor Robert Schroder my
DATE: November 28, 1989 F C. 1
SUBJECT: Fire District Special District Augmentation Fund Allocation
Formula (Return to Source)
Specific Request(s) or Recommendations(s) & Background & Justification
RECOMMENDATIONS
Approve the attached February 22, 1989 report of the County Administrator
recommending the following actions:
1. Adopt a policy of allocating supplemental funds for building and
staffing new fire stations with priority consideration for districts
that contribute more to the Fund than they receive through the normal
allocation process and/or whose cities support and participate in the
financing plans.
2. Request the County Auditor-Controller and the County Administrator, in
conjunction with the fire districts, to consider the development of a
new comprehensive financial report which would identify, as part of
annual budget review, all aspects of fire district financial
information as outlined in the attached report from the County Fire
Chiefs ' Association.
3 . 'Direct the County Administrator to work with fire districts to identify
and pursue additional revenue sources with the objective of reducing
SDAF receipts to an amount equal to the amounts contributed to the
Fund. Progress toward achieving this objective would be reported to
the Board on an annual basis.
4. With the exceptions recommended above, continue the current method of
allocating Special District Augmentation Funds (SDAF) on the basis of
demonstrated need.
Adopt a policy that redevelopment agencies contribute additional financial
resources to fire districts. This policy includes existing redevelopment
agencies providing the minimum 20 pass through and up to full pass through,
and additional financial assistance for building new stations in
redevelopment areas. The County Administrator and Community Development
Department are directed to review the current level of financial support
provided by the redevelopment agencies and report to the Board on ways and
means of implementing this policy.
CONTINUED ON ATTACFII4ENT: X YES Signature:
Recommendation of County Administrator
Recommendation of Board Committee
Approve Other
Signature(s) :
Acti of Board on: Approved as Recommended Other
Vote of Supervisors: I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
Unanimous (Absent ) ENTERED ON THE MINUTES OF THE
Ayes: Noes: B OF SUPERVISORS ON DATE SHOWN.
Absent: Abstain:
Attested:
cc: Gregg Manning, City of Clayton Ph Batchelor, Clerk of
Diane Longshore, City of Concord the Bo of Supervisors
Richard F. Holmes, City of Lafayette and Count inistrator
See Also P.4
By: DEPUTY
Fire District Special District Augmentation
Fund Allocation Formula (Return to Source)
Page 2
FINANCIAL IMPACT
Fire District funding levels will be maintained. New additional revenue
may be developed to supplement the Special District Augmentation Fund
(SDAF) .
REASONS FOR RECONIlENDATION/BACKGROUND:
For approximately the last two years, as a result of proposals by the
Contra Costa County Fire Chiefs Association and the Contra Costa County
Fire Protection District Five-Year Expansion Plan Task Force, the County
has had under consideration the issue of establishing a "return-to-source"
policy for the allocation of Special District Augmentation Funds to fire
districts. Under a return-to-source policy, allocations from the SDAF
would be made on the basis of contributions to the Fund rather than on the
needs of the fire districts.
The County Administrator' s Office analyzed the impact of a return-to-source
policy and found that several fire districts would be severely impacted as
a result of reduced SDAF allocations. In an attempt to find some alternate
allocation methods that would be agreeable to all interested parties and
not adversely impact some districts, the County Administrator' s Office
requested the County Fire Chiefs Association and the Capital Improvement
Committee of the Association to review the findings of the County
Administrator and assist in developing alternate allocation procedures.
The County Administrator' s Office met with the Association and the Capital
Improvement Committee on several occasions. The meetings with the County
Fire Chiefs ' Association resulted in the recommendations referenced in and
attached to, the February 22, 1989 report of the County Administrator.
In summary the Association recommended that the current allocation process
be continued and that the Board adopt a policy of allocating supplemental
funds for the construction and staffing of new fire stations. The report
also requested that the Auditor-Controller and County Administrator
consider developing a new financial report for fire districts, and that the
County Administrator be directed to work with fire districts to identify
new revenue sources to ease the burden on the SDAF.
The recommendations of the Fire Chiefs ' Association and the County
Administrator were presented to the Board of Supervisors on February 28,
1989 . Because of the serious financial implications of SDAF allocation
procedures the Board of Supervisors referred the County Administrator ' s
report to the Finance Committee for further review.
In March of 1989, Contra Costa County Fire District staff and the County
Administrator ' s Office met with the Contra Costa County Fire Protection
District Five-Year Expansion Plan Task Force to review the County
Administrator' s report. The Consolidated Expansion Plan Task Force, which
was established at the request of the Board of Supervisors, is comprised of
representatives of the six cities served by Consolidated Fire, the County
Taxpayers ' Association, the United Professional Firefighters Local 1230,
and the Consolidated Board of Fire Commissioners. The meeting was attended
by representatives of Clayton, Pleasant Hill, Walnut Creek, the County
Taxpayers ' Association and the United Professional Firefighters Local 1230.
In varying degrees, the Task Force representatives at the meeting expressed
support for the recommendations in the report. However, the majority of
the representatives present also expressed the view that the allocation
policy must contain a definite time schedule for districts to reduce or
eliminate their reliance on the SDAF. We believe that recommendation No. 3
addresses this concern of the Task Force. The representatives also stated
a strong interest in attending the Finance Committee meeting to be involved
in discussions regarding the allocation procedures.
on June 12, 1989, the Finance Committee held a scheduled meeting to
consider the return-to-source issue. Supervisor Tom Torlakson filled in
for Supervisor Nancy Fanden who was absent because of a scheduling
conflict. The meeting was attended by representatives of the cities of
Brentwood, Clayton and Walnut Creek, a representative of the Contra Costa
County Fire Protection District, a representative of the Firefighters Union
and various fire district personnel.
Fire District Special District Augmentation
Fund Allocation Formula (Return to Source)
Page 3
The County Administrator' s Office presented a brief overview of the
return-to-source issue. A discussion ensued regarding the pros and cons of
the return-to-source concept and the needs of the fire districts. It was
generally agreed that there was not enough property tax revenues to meet
all the needs of the fire districts.
Some of the city representatives expressed the view that redevelopment
agencies should contribute to the fire districts.
Supervisor Schroder stated the importance of not letting fire district
services deteriorate.
Supervisor Torlakson discussed the need for another revenue source such as
a County-wide baseline assessment that could be used to augment property
taxes and SDAF. He also suggested the possibility of establishing special
tax areas for new construction. It was further proposed that the baseline
assessment and/or the revenue from the special tax areas be used to reduce
SDAF allocations to districts.
Although the districts should be encouraged to consider these potential
financial resources, a County-wide benefit assessment may not be acceptable
to the residents of those districts that have implemented benefit
assessments and/or development fee programs. Additionally, since the Board
declined to implement the benefit assessment in the central County area
because of the concerns of the cities regarding return-to-source, it would
seem unlikely that there would be support for a broader based benefit
assessment program.
In view of the above discussion, it is our recommendation that the Board
not implement a County-wide assessment, but that the special tax area
concept be considered by the County Administrator' s Office and the various
fire districts in pursuing additional resources as discussed in
Recommendation 3 above.
The County has received letters from the cities of Hercules, Antioch and
Pittsburg opposing the return-to-source concept from the standpoint that
the cities have contributed to the fire districts serving their areas by
direct financial support and/or support and implementation of benefit
assessments and development fees. The cities also point out that these
financing mechanisms were implemented with the understanding that the SDAF
support would continue to maintain the existing service levels. The
Rodeo-Hercules Fire Protection District also sent a letter of opposition to
the return-to-source idea.
On November 13, 1989 the Finance Committee met to consider the status of
return-to-source issue and to develop recommendations to the Board of
Supervisors.
The County Administrator' s Office provided an update on the status of the
return-to-source issues. The Administrator' s Office and the fire-chiefs
discussed the efforts most of the fire district have made to obtain
additional funding.
Further discussion took place regarding the substantial revenue losses to
redevelopment agencies experienced by fire districts. Accordingly, the
Finance Committee developed the recommendation to adopt a redevelopment
policy designed to obtain additional financial support for fire districts
from redevelopment agencies.
The Board referral of the return-to-source issue included a request for
County Counsel to report to the Finance Committee on the legal aspects of
the return-to-source proposal. Attached is a memorandum from County
Counsel in response to that request.
SUMMARY
The recommendations of the County Fire Chiefs ' Association and the County
Administrator' s Office are designed to maintain funding levels for the fire
districts that rely on the Augmentation Fund. The recommendations also
recognize the needs of the Consolidated Fire District and the concerns of
the cities served by the District.
Fire District Special District Augmentation
Fund Allocation Formula (Return to Source)
Page 4
It was recognized that a return-to-source policy that would satisfy the
,,wishes of the Consolidated Task Force, would severely impact several county
and independent fire districts. However, in recognition of the need to
demonstrate support by the County for the expansion needs of Consolidated,
it was recommended that the practice of allocating supplemental funds for
station construction and staffing be continued in the hopes that the Task
Force cities would agree to help support the Five-Year Expansion. Plan by
providing financial resources and/or supporting the Board in establishing a
benefit assessment for fire station staffing.
cc: County Taxpayers ' Association
United Professional Firefighters Local 1230
County and Independent Fire Protection Districts
County Counsel
Kerry Harms-Taylor
Contra Costa County Fire Protection District Commission
Terri Williamson, City of Pleasant Hill
Ed Skoog, City of Walnut Creek
Gary Hernandez, City of Martinez
W2• 4y
TO: BOARD OF SUPERVISORS
FROM: Phil Batchelor, County Administrator
DATE: February 22, 1989
SUBJECT: Fire District Special District Augmentation Fund Allocation
Formula (Return to Source)
Specific Request(s) or Recommendations(s) & Background S Justification
RECOMMENDATIONS:
1. Adopt a policy of allocating supplemental funds for building and staffing new
fire stations with priority consideration for districts that contribute
more to the Fund than they receive through the normal allocation process and/or
whose cities support and participate in the financing plans.
2. Request the County Auditor-Controller and the County Administrator, in conjunction
with the fire districts, to consider the development of a new comprehensive
financial report which would identify, as part of annual budget review, all
aspects of fire district financial information as outlined in the attached report
from-the County Fire Chiefs' Association.
3. Direct the County Administrator to work with fire districts to identify and pursue
additional revenues sources with the objective of reducing SDAF receipts to an
amount equal to the amounts contributed to the Fund. Progress toward achieving
this objective would be reported to the Board on an annual basis.
4. With the exceptions recommended above, continue the current method of allocating
Special District Augmentation Funds (SDAF) on the basis of demonstrated need.
FINANCIAL IMPACT:
To the extent that new revenue sources are identified and obtained by the districts,
the recommendations of this report would result in additional supplemental allocations
to districts in need of expansion.
CONTINUED ON ATTACHMENT: X YES Signature: Z ��c—
Recommendation of County Administrator
Recommendation of Board Committee
Approve Other
Sinnature(s):
Action of Board'on: Approved as Recommended Other X
REFERRED proposed Fire District Special District Augmentation Fund
Allocation "Return to Source" formula to the Finance Committee for
further review, and REQUESTED County Counsel to report to the Finance
Committee on the legal aspects .
Vote of Supervisors: I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
X Unanimous (Absent III ) AMID ENTERED ON THE MINUTES OF THE
Ayes: Noes: BOARD OF SUPERVISORS ON DATE SHOWN.
Absent: Abstain:
Z_ Attested: February 28 , 1989
cc: CAO Phil Batchelor, Clerk of
Auditor-Controller the Board of Supervisors
County Counsel and County Administrator
County and Independent Fire Districts
Contra Costa County Fire Protection By: 9_L DEPUTY
District Commission
Contra Costa County Taxpayers Assn.
NAR
REASONS FOR RECOIII'MATION/BACKGROUND:
In July 1987, the Contra Costa County Fire Chiefs' Association and, approximately one
year later, the Contra Costa County Fire Protection District Five-Year Expansion Plan
Task Force adopted positions recommending that the Board of Supervisors initiate a new
Special District Augmentation Fund (SDAF) allocation process that would result in the
fire districts' share of the Fund being allocated proportionately to the districts
without regard to need. The "Return to Source" proposals of the two groups are
virtually the same, with the exception that the Chiefs' Association proposal would
provide an allocation to the San Ramon Valley Fire Protection District. The
Consolidated Task Force proposal restricts allocations to those districts that are
currently eligible for and are receiving SDAF allocations.
As a result of these proposals, your Board requested the County Administrator to
analyze the two proposals and determine the impact on the districts of implementing
either proposal.
The projected impact of a return to source policy will vary depending on the
assumptions made about variable factors such as: the fiscal year in which the
proposal would apply, whether the proposal applies to both operations and capital
expenditures, the amount of funds available for distribution, and whether the San
Ramon Valley Fire Protection District is included in the allocation process.
The presentation in this report regarding the impact of a return to source policy is
based on the Consolidated Task Force proposal which excludes San Ramon Valley from the
allocation process. San Ramon Valley is not included in the return to source
illustration because it has become financially independent over the last several years
and has not required augmentation funds for maintenance of basic service levels. In
fact, the District has been able to expand to meet the needs of the community without
allocations from the Special District Augmentation Fund.
The analysis of the proposal revealed that almost half of the County and independent
fire districts would experience significant revenue reductions under the proposal.
In order to illustrate the magnitude of the adverse impact of a return to source
policy a scenario was developed by the County Administrator using the actual budget
and Augmentation Fund figures for fiscal year 1988-1989 with the assumption that the
formula would apply to the total amount of the fire districts' share of the
Augmentation Fund, less certain administrative costs and a reserve for contingencies.
The application of a return to source formula as outlined above would result in
certain districts receiving substantially more than they actually received under the
current allocation method as shown on the attached Schedule A on page 4. However, six
county and independent fire districts would have experienced the following reduced
funding for operations and capital:
Reduction as a
District Funding Reduction percent of budget
Bethel Island $133,753 38%
East Diablo 37,091 5%
Kensington 208,838 17%
Riverview 486,004 6%
Rodeo-Hercules 149,058 11%
West County 142,891 7%
In view of the severe adverse impact of the proposal on some districts, the County
Administrator's Office developed the following three alternative proposals designed to
maintain basic allocation levels but provide for a partial allocation on a return to
source basis.
1. Automatic Base and Growth Allocation - This proposal would only apply to the
operations portion of the fire districts' share of SDAF. The proposal would
guarantee each fire district a base year allocation equal to the prior year's
operations allocation plus a share of the SDAF growth based on a return to source
concept. An application of this alternative is shown on the attached Schedule B
on page 5.
The example used to illustrate this alternative is based on actual 1988-1989
allocations to date and. a redistribution of the growth revenue on a return to
source concept. If all available operating funds for 1988-1989 were allocated
pursuant to this proposal, the return to source amounts would be substantially
higher. However, under either scenario a formula allocation method would have
allocated more funds to some districts than they actually needed and in other
cases less would be allocated than needed to maintain services.
2
2. Automatic Base and Possible Growth Allocation - This proposal would be very
similar to No. 1 above except that the allocation of SDAF growth would not be
automatic but would be subject to the review and approval of the County
Administrator and the Board of Supervisors.
3. Need Plus Restricted Supplemental Allocations - This is basically the current
allocation method but would provide supplemental allocations to those districts
that contribute more to the Fund than they receive through the usual allocation
process.
The County Administrator's Office requested the Chiefs' Association to review the
findings of the return to source analysis . and to consider other alternatives to the
return to source proposals with the objective of identifying a proposal that would
minimize adverse effects on the districts but provide an allocation process that would
be acceptable to the districts and the County Administrator's Office for
recommendation to the Board of Supervisors.
The Chiefs' Association referred the issues to its Capital Outlay Committee for review
and recommendation. The Committee met in conjunction with the County Administrator's
Office on several occasions over the past few months. The Committee considered a
number of alternate proposals in addition to the ones proposed by the County
Administrator, but was unable to arrive at a consensus recommendation to the Chiefs'
Association. The Association subsequently discussed the issues at length at three
separate meetings which resulted in the adoption of the attached Findings and
Recommendations from the Association.
The Association's recommendation to maintain the present allocation method, subject to
certain conditions, supersedes the early recommendation that the Board establish a
return to source policy. The Association changed its position on the return to source
proposal because of the severe impact on approximately half of its member districts
and the lack of a consensus to make substantive changes in the allocation process.
Although the Association was unable to agree on a distribution formula, it did
recognize the problems of districts such as Consolidated Fire that are net
contributors to SDAF and are unable to finance their five-year plans.
t
The Consolidated Five-Year Expansion Plan Task Force comprised of representatives of
the six cities served by the District, the United Professional Firefighters Local
1230, the County Taxpayers Association, and the Consolidated Board of Fire
Commissioners took the position that Consolidated Fire should receive its
proportionate share of the fire district's portion of the Augmentation Fund as a
precondition to establishing a benefit assessment or other means of financing the
Five-Year Plan.
In view of the concerns of Consolidated Fire and the position of its Task Force, the
Chiefs' Association adopted a two-fold recommendation to deal with the issue. The
Association recommended that the Board formalize and continue the allocation of
supplemental funds for new stations and personnel to net contributor districts such as
Consolidated Fire. Additionally, the Association recommended that efforts be made to
provide more supplemental funding for districts such as Consolidated by requiring
districts to seek other financial resources, thus reducing the demands on the
Augmentation Fund.
Although there is not unanimous agreement about an approach, the recommendations
before the Board address the most pressing issues of funding based on need and giving
special consideration to additional needs of net contributor districts.
The recommendations of this report were discussed with representatives of the United
Professional Firefighters Local 1230 and the County Taxpayers Association because of
the County-wide application of the report. The President of Local 1230, Mike Price,
was not able to comment on the report without discussing its contents with the union
membership. Donald Christen, Executive Vice President of the Taxpayers Association
stated that the recommendations of the report seemed reasonable in view of the severe
consequences of implementing a return to source policy.
3
SCHEDULE A
Consolidated Task Force
"Return to Source" Proposal
Fiscal Year 1988-1989
Return To Increase
Contribution Receipts from SDAF Source (RTS) (Reduction)
District To SDAF Operations Capital Total Allocation(A) Based on RTS
Bethel Island $ 88,014 $ 213,725 $ 6,448 $ 220,173 $ 86,420 $( 133,753)
Byron 150,058 -0- 2,110 2,110 147,184 145,074
Contra Costa
County 13,065,868 7,457,967 1,641,240 9,099.207 12,824,595 3,725,388
Crockett-
Carquinez 89,774 76,193 6,668 82,861 88,220 5,359
East Diablo 400,851 306,232 124,250 430,482 393,391 ( 37,091)
Kensington 354,389 556,769 -0- 556,769 347,931 ( 208,838)
Moraga 1,271,244 976,529 52,250 1,028,779 1,247,689 218,910
Oakley 249,637 52,199 52,170 104,369 245,082 140,713
Orinda 1,662,125 1,064,983 58,150 1,123,133 1,631,403 508,270
Pinole 104,897 56,135 -0- 56,135 103,073 46,938
Riverview 4,003,328 3,690,515 724,899 4,415,414 3,929,410 ( 486,004)
Rodeo-Hercules 382,657 524,670 -0- 524,670 375,612 ( 149,058)
Tassajara 89,274 42,074 6,645 48,719 87,545 38,826
West County 1,016,326 1,108,697 31,850 1,140,547 997,656 ( 142,891)
Total $22,928,442 $16,126,688 $2,706,680 $18,833,368 $22,505,211 $3,671,843
(A) Based on allocating 80% of the total 1988-1989 SDAF less amount allocated for
administrative support and a 1% reserve. The net amount of $22,505,211 is allocated
proportionally on the basis of contributions to SDAF.
4
SCHEDULE B
AUTOMATIC BASE YEAR ALLOCATIONS AND
RETURN TO SOURCE OF SDAF GROWTH REVENUE
(Reduction)
Base SDAF RTS 1988-1989 Allocation Increase
Operations Allocation 87-88 Base & Based
District 1987-88(A) 1988-1989 88-89 RTS Actual(B) on RTS
Bethel Island $ 255,133 $ 5,326 $ 260,459 $ 241,808 $ 18,651
Byron 0 9,071 9,071 0 9,071
Contra Costa
County 8,020,196 790,347 8,810,543 9,058,725 (248,182)
Crockett-Carquinez 52,051 5,437 57,488 90,235 ( 32,747)
East Diablo 256,201 24,244 280,445 362,399 ( 81,954)
Kensington 662,941 21,442 684,383 556,769 127,614
Moraga 990,178 76,892 1,067,070 1,145,029 ( 77,959)
Oakley 69,161 15,104 84,265 69,049 15,216
Orinda 1,206,652 100,539 1,307,191 1,281,226 25,965
Pinole 83,808 6,351 90,159 56,135 34,024
Riverview 3,936,292 242,159 4,178,451 4,238,142 ( 59,691)
Rodeo-Hercules 632,843 23,148 655,991 524,670 131,321
Tassajara 25,915 5,395 31,310 42,074 ( 10,764)
West County 1,356,724 61,483 1,418,207 1,268,772 149,435
Total $17,548,095 $1,386,938 $18,935,033 $18,935,033 0
(A) Includes 1986-1987 year end funds allocated in July, 1987, in the amount of
$1.6 m.
(B) Includes 1987-1988 year end funds allocated in July, 1988, in the amount of
$2.8 m.
5
CONTRA COSTA COUNTY FIRE CHIEFS ASSOCIATION
February 9 , 1989
Mr. Terry McGraw
Office of the County Administrator
Contra Costa County
651 Pine St.
Martinez , CA 94553
Re: Recommendations on Special District Augmentation Funding
Dear Terry;
As you know the Office of the County Administrator requested the
County Fire Chiefs Association to review and comment on several
proposals to modify the existing Special District Augmentation
Fund (SDAF) distribution system. These proposals were referred to
the our Capital Improvements/Finance Committee for study.
Several open meetings were held on the subject many of which were
very well attended by our membership. After a great deal of study
and discussion on these issues our committee developed a brief
report on S.D.A.F. which was presented to the membership at our
regular meeting on February 8 , 1989 . The committee findings and
recommendations were approved by our members at that time.
The attached summary report represents the Contra Costa County
Fire Chiefs Association' s current position on distribution of
S.D.A.F. Our prior resolution, #87-01 ; Return of Special
District Augmentation Funds to Source Districts is amended by
approval of this report.
I believe these recommendations are in the best interests of our
member fire districts and we are pleased to have had the oppor-
tunity to provide our input. We ask that be advised of any future
county meetings that are held on S.D.A.F. so that we may continue
to provide our views on these issues.
Thank you for the valuable assistance you provided to our group.
I know many hours of hard work went into the preparation of the
financial information you provided to our committee. Without your
help we would have had a more difficult time coming to consensus
on this complex and important subject.
Sincerely;
John Cooper + +� �� .J:,0
President
cc: Kerry Harms-Taylor
CONTRA COSTA COUNTY FIRE CHIEFS ASSOCIATION
CONTRA COSTA COUNTY FIRE SERVICE
SUMMARY REPORT
ON
SPECIAL DISTRICT AUGMENTATION FUND
FEBRUARY 9 , 1989
FINDINGS
1. There is no consensus amongst the Fire Chiefs to significantly
change the present SDAF allocation method.
2. Each of the SDAF allocation methods studied , including the
present method, has some negative impact on County Fire
Districts and their ability to provide fire protection
services.
RECOMMENDATIONS
1. Except as noted in items 2, 3 , and 4 below, maintain the
present method of allocating SDAF monies to fire districts in
the 1989/90 fiscal year.
2. Allocate additional SDAF to provide funding, based on need,
for staffing, land acquisition and construction of fire
stations to help fire districts meet five year plan goals and
objectives. Priority should be given to SDAF net contributor
districts (those who contribute more than they receive) and/or
fire districts whose cities participate financially in five
year plans. Maintain existing financing plans to insure that
cities within the fire districts contribute to these projects.
3 . Develop a standardized year end accounting report for each
fire district which will provide specific information on:
a. Actual contributions to SDAF
b. Actual SDAF received, exclusive of any year end allocation
made for fund balancing purposes.
c. Funds from all other sources.
d. Total expenditures including operations, capital
improvements and debt service.
e. Net excess amounts of SDAF received and/or contributed,
if any.
f. Revenue losses from redevelopment agencies, rebate of
taxes and/or other sources.
4. Request the Office of the County Administrator to conduct
a formal review of the finances of each fire district. The
purpose is to insure that additional supplemental revenue
sources are developed as needed. The goal would be that no
fire district would receive more from the SDAF than they
contribute to the S.D.A.F. and that all fire district' s
become self sustaining. An annual report should be issued
to the Board of Supervisors on each fire districts ' progress
toward this goal.
SDAF ISSUES DISCUSSED
. Present method of allocating SDAF will not meet all county '
fire service needs:
. at present limited funds are being allocated to build and
staff new fire stations in high growth areas.
. some capital outlay requests are unable to be funded
. Current SDAF distribution method returns only 80% of SDAF
to the fire service whereas fire districts contribute 90. 8%
of the total SDAF. Some chiefs felt that 90.8 % of the SDAF
should be returned to fire districts. The county disagrees as
reductions in essential services provided by other special
districts would result.
. Several fire districts contribute more to SDAF than they
receive. Conversely, some districts contribute less to SDAF
than they receive. As a result some fire districts feel funds
collected from their area are being used to provide fire
protection to other fire districts.
• All of the alternative SDAF distribution methods studied have
some negative impact on fire districts.
• The cities in Consolidated Fire District want that districts'
proportional 80% SDAF contribution returned to the source fire
district before imposing additional taxes or benefit assess-
ment fees.
. Redevelopment areas significantly reduce revenue to the
the Riverview and Consolidated Fire Districts.
. The County policy of using year end balances as starting funds
for the following fiscal years budget provides no incentive
for management to control operating costs.
• The County practice of appropriating unspent funds into
fire district budgets at end of fiscal year creates confusion
as to each fire districts true financial needs and condition.
. The County exercises very limited control on wages, benefits,
and staffing of the independent fire districts which receive
more from the SDAF than they contribute.
• Most fire districts have not developed adequate supplemental
sources of revenue to meet district needs should SDAF funding
be reduced.
COUNTY COUNSEL'S OFFICE
CONTRA COSTA COUNTY
MARTINEZ CAUFORNIA
Date: June 8, 1989
To: Finance Committee
I,7
V
From: Victor J. Westman, County Counsel
Re: Fire District's Special District Augmentation Fund Allocation
Formula ( "return to source" ) proposal
Earlier this year the Board .of Supervisors referred to the
Finance Committee a proposal for the implementation of a "return to
source" formula for the future distribution of Special District
Augmentation Funds in subsequent fiscal years to fire districts. At
that time, the Board also asked the County Counsel's Office to report
its comments on the legal aspects of this proposal to the Finance
Committee. Our comments follow:
1. Subsequent Fiscal Years . Pursuant to Revenue and Taxation
Code 5 98.6, the Board of Supervisors is required on or before June 1
of each fiscal year to notice a hearing on the proposed distribution
of funds available in the Special District Augmentation Fund for
allocation to eligible districts. (Govt C. S 16271. ) This public
hearing is held "for the purpose of determining the distribution of
the funds" . (subs . (c) , S 98. 6. ) Because of the required annual
hearing (and related) requirements, the Board of Supervisors cannot
now make any legally binding commitment as to the manner it will
distribute Augmentation Fund proceeds in subsequent fiscal years
except for the next immediately commencing fiscal year. In other
words,. a prior Board of Supervisor's decision cannot prescribe the
manner in which a subsequent Board exercises its annual fiscal year
allocation of the subject fund. Of course, the Board may adopt
tentative guidelines or procedures which it may or may not chose to
follow in subsequent fiscal years.
2. Purpose. In the relevant state statute (R.&T.C. S 98 .6) it
.is provided that the Special District Augmentation Fund is created in
each county "to augment the revenues of special districts" . This
statute makes no other expression of its intent but the California
Attorney General' s Office has opined that in its view "it is evident
that the legislature intended for the fund to provide flexibility and
a measure of local control in the property tax allocation process" .
(70 Ops. Cal. Atty. Gen. 87 . )
Finance Committee -2- June 8, 1989
3. Discretion. On or before June 1 of each fiscal year the
Board of Supervisors has broad discretion (pursuant to the provisions
of Revenue and Taxation Codes § 98 .6 ) to determine the manner in
which available funds in the Special District Augmentation Fund will
be allocated. The only apparent limitations on such allocation are:
(a) The funds must be used "to augment the revenues of
[eligible] special districts" . (subs. (b) , S 98.6 . )
(b) When determining the amount of the fund to be
distributed to each special district, the Board of Supervisors cannot
consider any revenue received by a district pursuant to an authorized
special tax election. (subs. (e) , S 98.6. )
(c) Available augmentation funds cannot be allocated to a
district where it is intended they will be transferred to the County
except as reimbursement for County services rendered to the district.
(subs• (g) , R.&T.C. S 98.6 . )
(d) The Board of Supervisors may not annually apportion in
excess of 1% of the amount available in the fund to reimburse it for
its expenditures of administering the special district augmentation
fund and in no event may such annual reimbursement exceed its actual
demonstrated cost for such administration. (subs. (j) , R.&T.C. S
98.6. )
If we may be of any further assistance, please advise.
VJW:df
cc: Phil Batchelor, County Administrator
Attn: Kerry Harms-Taylor, Assistant
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