ORANGE COUNTY FIRE AUTHORITY - 2012 JPA - INCLUDES PROPOSAL

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Santa Ana Proposal for Emergency Services Service Charge Relative to Regional Costs 1'he proposed annual scr~-ice charge would fund fire suppression, hazardous materials, fire prevention, emergency medical sit-~-iccs, and sul~l~ort functions, such as di~Patching, ecluipn~ent maintenance, supply, and procurement, risk management and all othc-r services reeluired in the City of Santa _~na for [he effective operation of a modem fire department. The charge would he prorated on a monthly basis, and payment would be due monthly in advance. In addition, to secure future payments to OCNA for services rendered, C~CFA will negotiate with the. City to either provide a payment security hoed securing the value of one monthly payment, or a secured cash collateral account containing the same. value. fr erIT1S relating to periodic increases to the payment bond or collateral account will be negc>tiate•d with the City during contract negotiations, as well as terms that would trigger payment on the bond or drawdown from and replenishment to the collateral account. During the riventy year contract period, each March the. <.)CI-~A would provide. the Ciri~ of Santa :1na with notification of estimated changes in contract costs for the next fiscal year. I~.ach )une, the C~CI~'A would provide. the. final annual contract service charge amount to the City. "1'hc term of the JPA is twenty years (expiring in 2030) with an option to withdraw at each tern-year interval. ~~rticle I V, Section 3-1^'- of the iPA agreement provides the dctailecl me[hodology for this review. "1'he new service agreement will run concurrent with thr twenty-year J Pl1 agreement- Cost Control A common concern of cities interested in contracting with the OCI~A is the ability to control costs. Orange County lire :\uthoritv's cash contract cities enjoy the financial protection of a cap on annual increases not-to-exceed 45`%>. The cap includes recapture provisions, wherein increases above the cap are banked for future recapture in suhseduent years when cost increases are less Than the cap. '1'hr functionality of Lhe recaptum bank is illustrated below. IIypothctical Recapture Bank Contract Year Increase to OCFA Increase to Cash Contract Recapture Bank 13udget Charge PY 3t l l t 1/ 1 I ~" ~, ,~~ ~, n/a h'Y 201 1 / 12 4% 4% n/a 1'1" 3(113/ 13 ~S"'.. -1S" ~~ + 1'S5, F'Y 2013/14 3.5% 4.5% -1% h1' 2111-1/15 3.5";, 35°;~, n/a The cap and recapture pro~-i~ions arc intended try ensure that the Cirv is protected from the ~~-olatility of lark cost increase. durinc> any einz>le ve<u- whilr al 'o en-itrintr that C>~'l~ V'' c< r- for pmvidine the services arc covered over rime. _ldministrttivc reviews will be conducted every five years to review actual cost increases compared to the cap. .automatic. triggers are included to ensure that any future cash contract city payment shortfalls that may develop can be addressed through nc~ administrative reviews every five years. In discussing the. recapture Orange County l=ire Authority C of 50 December 2, 201 I