MEETING DATE:
JANUARY 13, 2015
SUBJECT:
Title
RESOLUTION NO. 2015-8025 - ADOPT AN AMENDMENT TO THE NORTH COUNTY DISPATCH JOINT POWERS AUTHORITY AGREEMENT CHANGING THE TERM OF BOARD CHAIR AND FOR LIABILITY COST SHARING IN THE EVENT OF WITHDRAWAL OR TERMINATION
Body
Recommendation
Recommendation
ADOPT an amendment to the North County Dispatch Joint Powers Authority (JPA) Joint Exercise of Powers Agreement changing the term of Board Chair to one year and for liability cost sharing in the event of withdrawal or JPA termination.
Body
Board or Commission Action
Not applicable.
Relevant Council Strategic Theme
Planning for the Future
Good Governance
Relevant Department Goal
Not applicable
Introduction
On December 4, 2014, the Board of Directors of the North County Dispatch Joint Powers Authority (JPA) approved two changes to the Joint Exercise of Powers Agreement. The first modification changes the position of Board Chair from a two-year term to a one-year term to be consistent with the term of office for the Chair of the Board of Fire Chiefs. The second and more significant change requires each member agency to agree that upon termination or withdrawal it must pay a pro-rata share of any long-term debt of the JPA. These changes must now be approved by each member agency.
Discussion
The amendment to the Agreement came about after the San Miguel Fire District withdrew from the Heartland Communications Facility Authority. After the withdrawal, it became clear that the San Miguel Fire District was not responsible for any long-term financial obligations of its JPA, including unfunded retirement benefits. That JPA has since amended its agreement requiring withdrawing members to pay a pro-rata share of any outstanding long-term financial obligations upon withdrawal.
At this time, the North County Dispatch JPA's only long-term debt is its unfunded retirement benefits provided through CalPERS. The JPA Board proposed and adopted this amendment in order to make sure a withdrawal or termination would not leave the JPA or its remaining members with financial liabilities that should also be shared by the former agencies that have left the JPA.
The amendment requires member agencies to pay a pro-rata share of long-term liability based upon length of time with the agency and its call volume. How these factors are weighted would be the subject of negotiation with the withdrawing agency. The amendment also clarifies that the JPA's debts and liabilities are not the debts and liabilities of the member agencies.
The JPA Board of Directors approved the amendment 6-1. Those voting in favor were the fire districts of San Marcos, Carlsbad, Encinitas, North County, Rancho Santa Fe, and Vista. The representative from Solana Beach voted no because he wanted to discuss it with his City Council first. The representative from Oceanside was not present and did not vote.
Fiscal Impact
Under a hypothetical scenario where the JPA voted to disband at the end of the 2015 fiscal year, or if San Marcos withdrew from the JPA at that time, it is estimated the San Marcos Fire Protection District would be responsible for between $1.637 million and $1.758 million in retirement funding.
Failure of the JPA to adopt an amendment for liability cost sharing could result in the San Marcos Fire Protection District and other member agencies shouldering the burden for other agencies that have left the JPA. Total hypothetical CalPERS termination liability shared across all agencies at the end of the 2015 fiscal year is estimated at about $11.9 million.
Attachment(s)
1) Resolution adopting the amendment to the Joint Powers Authority Agreement
2) Attachment A - First Amendment to the Second Amended and Restated Joint Exercise of Powers Agreement
3) Attachment B - CalPERS actuarial valuation liability at the end of June 2012
4) Attachment C - Hypothetical CalPERS termination liability at the end of FY 2015
Prepared by: Michael Gordon, Management Analyst
Reviewed by: Lydia Romero, Deputy City Manager
Approved by: Jack Griffin, City Manager