Santa Paula Takes First Step To Join Ventura County Fire

By Sheryl Hamlin

The most sweeping financial decision in the city’s history was considered on January 17, 2017 at the regular City Council Meeting.

After Public Comments from Chris Mahon (VCFD) Jerry Byrum (SPFD), Dustin Lazenby (SPFD), Nick Bacigalupo (SPFD), Gary Nasalroad (citizen, Santa Paula Police and Fire Fighters Association), Lynn McReynolds (citizen and co-chair Moonlight at the Ranch), Marleen Canniff (grant writer for SAFER Grant) and Sheryl Hamlin (citizen), the council took a five minute break.

Mark Lorenzen, Ventura County Fire Department (VCFD) Chief, described the arsenal of resources the VCFD brings to the City of Santa Paula: exceptional service, $146 million operating budget, $40 million capital budget, $90 million in reserves, 32 station department with 600 employees.

Chief Lorenzen explained that the Board of Supervisors (BOS) is the governing body of the VCFD, but the VCFD will never ask the county for funds, he said. The VCFD asks the BOS for permission to spend its own monies.

Personnel Transfers: Salaries and Pensions

Questions were asked about personnel transfers. The answer was “no negative impacts”. There is reciprocity with CalPERS (retirement pension system). The defined benefit of ‘3 at 50’ or ‘2.75 at 55’, presumably indicates a two tier system, but that was not discussed. There has been the presumption throughout this discussion that the county salaries are higher than that which Santa Paula can pay.

Note on definitions: 3% at 50 means a person can retire at age 50 with 3% of highest salary times the number of years worked as a pension. 2.75% at 55 means a person can retire at age 55 with 2.75% of highest salary times the number of years worked. Click here to learn more about this benefit.

What does this cost?

With repeated questions about the ultimate cost of the switch, Chief Araiza deferred to the Finance Director Sandra Easley, Finance Director, and her report which was in the appendix of the council agenda. Click here to download.

  • There were no charts or timelines in the Finance Director report showing the actual costs for the new service versus what was left to be paid from the General Fund including legacy costs such as pension for retirees and those firefighters on medical leave.
  • There were no charts to explain how the insurance coverage would change. The staff report provided a simple forecast of the city’s General Fund through FY 20/21, but it was not broken down by department in order to use it to analyze the future grown of the SPFD.
  • The staff report produced costs for the SPFD from the years FY 11-12 through FY 15-16, but did not provide insight on how this might look in the future, in particular what the capital expenditure deficit would be. The city will still be carrying some legacy costs from the Santa Paula Fire Department.
  • There was no breakdown on the change in costs to CalPERS (pension system) after the cutover.
  • There was no analysis of the changes in the city liability insurance after the cutover to VCFD. There was a pie chart of city revenues but no attempt to correlate this with the VCFD. There were assumptions about home sales in East Area I with no association to a timeline.

One staff chart (shown below) attempted to show possible scenarios, wherein one scenario lost money and two others were positive. Remember that FY 2016/2017 ends June 30,2017.


staff_report_VCFD

Vice Mayor Gherardi attempted to summarize the new relationship by saying that sales tax grows at a faster rate than the growth of property tax. But the staff report did not provide backup for this theory.

There is a chart (shown below) in the approved FY 2016/2017 budget which shows property taxes diminishing and sales taxes increasing for the next fiscal year. But there was no chart in the fire analysis showing expected property tax revenue by year in terms of the East Area I buildout schedule. The 2015/2016 fiscal year ended June 30, 2016, but there has not yet been a year-end report nor has there been a mid-year report of FY 2016/2017 based on 12/31/2016 financial data.

 

 

budget_forecast_2016_2017

The Council agreed to proceed with the next step which will eventually include filing with LAFCO for the incorporation. The entire process will take about 7 months. There is a protest period during which residents may write to oppose the new district. If a certain amount of protest letters are received, then a vote must be taken.

The council requested more detail about the future costs, legacy liabilities, pensions, insurance, equipment, loss of fee revenue from the SPFD which was forecast for the FY2016/2017 year and the hiatus when the SAFER grant ends.

Why not do this?

Council Member Hernandez posed the question “Why would we not want to do this?” The answer is simple: unknowns.

  • The staff report is based on “received” property tax of $16,245,341, but the county’s assessed value indicates $16,738,495. Could the $493,154 difference be delinquent or unpaid taxes? The cost to the city for VCFD is calculated on “assessed value” not “received” property taxes.
  • As the city loses General Fund monies from property tax to pay for VCFD, how does a diminished General Fund affect the city’s credit standing? How is this huge liability represented on the city’s books?
  • The state of brick and mortar retailing is demonstrably weak. Is it wise for the city to have so much riding on the East Area II sales tax, particularly when the county as a whole is experiencing feeble growth.
  • There has been no attempt to project the VCFD cost into the future. If the city starts at $3,135,000 as has been suggested, then a 5% annual increase (assuming properties are sold and reassessed or added to tax rolls), then the VCFD cost would be $5,106,584 in ten years and $8,138,088 in 20 years. Will there be population growth to sustain this rate? Is this a predictable model on which to base a budget?

There is certainly no question about the value of increased, quality resources, but will there be resources left for other necessities?

A previous report on this topic was published here.

For more information about the author, visit sheryhamlin.com


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One Response to Santa Paula Takes First Step To Join Ventura County Fire

  1. JBL January 19, 2017 at 7:24 pm

    The purpose is to save taxpayer money by consolidating fire protection services .  The City of Santa Paula cannot provide nor sustain fire protection services with less (existing) dollars, and the City Council is prudent to seek alternatives to safely provide such services to its residents. It’s either outsource to VCFD, California Department of Forestry and Fire Protection, or Cal Fire.  The future is now, and current City fire services are inadequate.

    If such action is not taken, the City Council would be doing a disservice to community.  Furthermore, the Council would have to continue to downsize its firefighting force to dangerous levels, and shut-down firehouses.

    Reply

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