El Dorado County Grand Jury 2007-2008 Consolidation of Fire Protection Districts

Either a fire protection district or LAFCO can initiate a consolidation study including a cost/benefit analysis. LAFCO has been reluctant to aggressively pursue consolidation of fire protection districts, waiting instead for one or more of them to initiate movement toward consolidation. Response to Finding 1: The respondent disagrees partially with the finding. The Board of Supervisors agrees that either a fire protection district or LAFCO can initiate a consolidation study including a cost/benefit analysis. Without additional information, the Board of Supervisors is unable to express agreement or disagreement with the statement regarding LAFCO’s reluctance to initiate a study. In addition, although the Board of Supervisors appoints some LAFCO representatives, LAFCO is an independent agency. Consequently, whether or not to initiate a consolidation study is a policy question more appropriately addressed by the LAFCO Board and its executive management.

There is often institutional resistance to changing the status quo of an organization. Consolidation and reorganization are likely to lead to elimination of redundant positions, which typically will not be well received by current employees. Should consolidation occur, these difficulties can be ameliorated by a) selecting at least one director from the district to be a director of the new district, and b) continuing former district volunteer firefighter associations, such as was done with the mergers to form the El Dorado County FPD. Response to Finding 2: The respondent disagrees partially with the finding. While it is reasonable to assume that any organization change will face some level of resistance, the Board of Supervisors does not have sufficient information to evaluate the amelioration strategies suggested by the Grand Jury. 4 3. The County Board of Supervisors supplements revenues for six FPDs on the County west slope and two small districts providing fire protection in the Tahoe Basin, Fallen Leaf Lake CSD and the Meeks Bay FPD. This is a subsidy by the County at large to these particular fire districts. These subsidies raise a fairness issue for taxpayers outside these districts who are supporting their own fire protection district through various taxes while also contributing, through the County’s General fund, an extra amount of money to these subsidized districts. These subsidies are based on an agreement between the County Board of Supervisors and the eight districts, “Supplemental Funding Agreement for Rural Fire Districts for Enhanced Fire Protection and Emergency Medical Services.” This agreement was amended by an Auditor-Controller memo of October 4, 2001, to provide for a correction in tax rates for fire protection in some of these districts. Under this agreement, the eight districts receiving less than 13 percent of the ad valorem property tax revenue collected within their boundaries will receive a supplemental contribution from the County general fund. This supplement is intended to be sufficient to provide the district with revenue for fire protection services equal to approximately 13 percent of their tax revenue base. The amount of this subsidy is calculated by the Auditor- Controller each year using the final assessed property valuation from the prior year to establish the 13 percent threshold. The difference between the 13 percent threshold and the prior year estimated actual tax revenue plus the prior year subsidy is the basis for the current year subsidy. For the eight subsidized districts, their percentage of total Tax Rate Area (TRA) taxes is always less than 13 percent; whereas for the five non-subsidized fire districts the percentage exceeds 13 percent. Exhibit A, column D, shows the amount of the County supplemental contribution to bring all fire protection districts up to the equivalent of 13 percent of the total TRA taxes for FY 2006/07. The supplemental amounts contributed by the County to all eight subsidized districts in FY 2006/07 totaled $1,188,142. The share of this amount received by the six West slope FPDs was $856,908, which is 72.2 percent of the total subsidy for FY 2006/07. The County supplemental in FY 2006/07 for all eight subsidized districts was $1,188,242. The subsidy for the six FPDs in the present year, FY 2007/08, is $926,948, an 8.2 percent increase over the previous year. The subsidy for all eight districts in FY 2007/08 is $1,300,347, which is a 9.3 percent increase over FY 2006/07. Response to Finding 3: The respondent disagrees partially with the finding. The county does supplement revenue for fire districts as described in the finding. The county funding is generally referred to as “Aid to Fire” and is included in the budget each year. For the current and next fiscal year the Board of Supervisors has specifically discussed Aid to Fire through the annual budget process or mid-year budget discussions. Most recently, on May 20, 2008 the Board of Supervisors requested that the Auditor-Controller engage fire district representatives to evaluate the formula for distribution of Aid to Fire. While fairness (in terms of taxpayer equity) is definitely one issue that the Board considers, other issues such as the overall condition of the county’s General Fund, and the cost-effectiveness and probability of preventing a catastrophic fire event and subsequent county costs must also be evaluated.

The boards of directors of the following nine fire protection districts should make a good faith effort to reach consolidation agreements: Rescue, Pioneer, Mosquito, Latrobe, Georgetown, Garden Valley, El Dorado County, Diamond Springs, and El Dorado Hills. Each of these nine fire protection districts should 8 report the results of their efforts to the Grand Jury within the Penal Code timeframe requirements. RESPONSE Responses to this report are required in accordance with the California Penal Code §933.05. 9 , §925(a) and §928. The focus of the inspection is health and safety conditions. BACKGROUND The security measures utilized in Building C were inspected this year as a follow up to a prior year’s Grand Jury investigation (2005-2006). That investigation recommended that the area behind the metal detector (in the corridor leading to the Superior Court downstairs) be secured at all times, not just when the screening station is staffed. The 10 situation in Building C has recently been changed. A locking door has been installed in the area on the lower level as recommended by the prior Grand Jury Report. FINDINGS In accordance with the California Penal Code §933 and §933.05, each finding will be responded to by the government entity to which it is addressed. The responses are to be submitted to the Presiding Judge of the Superior Court. The 2007-2008 El Dorado County Grand Jury has arrived at the following findings: There are other court facilities on the ground level of Building C and there is no security station on that level. Additionally, there is a door into the court off of the lobby with an inoperative lock. When court is in session, the bailiff uses a portable metal detector to screen people entering the court. The problem is there are two entrances and only one bailiff. The ideal situation would be to secure all of Building C, but this has been rejected due to budget constraints. According to the Sheriff, to secure the entire building, at least three deputies would be needed to be on duty during all open hours. This expense is exacerbated by the fact that the Planning Department uses the building and often has meetings that continue as late as 9:30 p.m. Response to Findings: The respondent agrees with the findings.

All of the subsidized FPDs receive “special taxes” and/or “special assessments” except Pioneer FPD. These funds are not considered when the subsidy calculation is made. These special funds have been previously authorized on a continuing basis by an election of property owners within the districts. Special taxes require a vote of 2/3 of the property parcel owners. Special assessments are “fire suppression assessments,” which are allowed under State law and require only a property parcel vote of 50 percent plus one. Response to Finding 4: The respondent agrees with the finding.

The tax revenues for FY 2006/07 for the West Slope FPDs are summarized in Exhibit B. The tax revenues for each district, including special taxes and special assessments, are combined in one column. Note that all but Pioneer FPD and Latrobe FPD receive tax revenues exceeding 13 percent of their tax base, and all but Pioneer FPD have total funding including the County Supplemental Contribution that exceeds 13 percent of their tax base. With the exception of Pioneer FPD and Latrobe FPD, the County supplemental is much smaller than the other tax revenue received by the subsidized districts. Response to Finding 5: The respondent agrees with the finding.

With advance notification, the Board of Supervisors can discontinue these subsidies. The County has a fiduciary responsibility to minimize them, preferably without degrading fire protection capabilities. Elimination of the subsidies would require these fire protection districts to either find other sources of revenue in a similar amount, or find equivalent budget savings that would not degrade fire protection capability. Response to Finding 6: The respondent agrees with the finding.

Consolidation of the six West Slope subsidized fire districts, and especially mergers into the three financially stronger fire districts on the West Slope, should allow elimination of the fire chiefs and other administrative positions in the subsidized districts. The potential personnel savings that could result are shown in Exhibit C, where the administrative personnel costs for each fire district are shown in column L, with a total amount of $944,084. The County supplemental contributions for these fire districts are shown in column M, and the total amount is similar to the total administrative personnel costs shown in column L. Response to Finding 7: The respondent partially disagrees with the finding. While it is reasonable to assume that consolidation of fire districts would lead to the elimination of some positions, the Grand Jury report alone does not provide the Board of Supervisors sufficient insufficient information with which to evaluate the position reductions suggested in the report.

If supplemental payments to the six West Slope fire protection districts are eliminated, the savings to the County general fund will be recurrent, rather than one-time. Over ten years and with an annual increase of 9 percent, the SAVINGS will amount to $14,018,235. If supplemental payments to all eight subsidized fire districts are eliminated, the SAVINGS over ten years will amount to $19,665,148. Response to Finding 8: The respondent disagrees partially with the finding. The Board of Supervisors is unable to validate the savings amounts calculated by the Grand Jury. The 7 growth from year to year has been based on the growth of the property tax base. However, it is clear that eliminating or reducing Aid to Fire potentially results in significant savings to the county’s General Fund.