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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />JUNE 3, 2014 <br />TITLE: <br />REQUEST FOR RELEASE OF <br />ESCROW ACCOUNT FUNDS FROM <br />THE ORANGE COUNTY FIRE <br />AUTHORITY <br />CITY M16MAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 1" Reading <br />❑ Ordinance on 2n° Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager to request the release of $2.9M in Risk Management funds held in <br />an escrow account at Grandpoint Bank pursuant to the agreement with the Orange County Fire <br />Authority for fire services and emergency medical services. <br />DISCUSSION <br />On February 21, 2012, the Mayor and City Council voted to partner with the Orange County Fire <br />Authority (OCFA) for the delivery of fire and emergency medical services. The approval of the <br />agreement was preceded by approximately 6 months of negotiations with the OCFA and Santa <br />Ana Fire Services bargaining units during the City's most difficult financial times in recent history. <br />Given the City's fiscal position at that time, the OCFA required a bond or escrow equal to one <br />month's payment as assurance in the case of default. The current value of the escrow account <br />is $2.9 million earning 0.20% interest and held by Grandpoint Bank, a financial institution agreed <br />upon by both agencies. <br />The agreement with OCFA includes a provision which allows the City to reduce, eliminate or <br />modify the bond or escrow account if the City demonstrates an improved financial position. The <br />first opportunity for a review is July 1, 2014. As part of the review, staff will present its current <br />financial forecast that demonstrates continued revenue growth, budget surplus over a 5 -year <br />period, and reserve levels approaching a goal of 20 %. Staff has had preliminary discussions with <br />OCFA's Business Services Department to ensure all information required is presented. In <br />addition, staff has coordinated with OCFA to develop a schedule of events to ensure that OCFA <br />Board of Directors approves the release of the escrow funds on or before July 1. The City is <br />tentatively scheduled to present its much improved financial position to the OCFA Budget and <br />Finance Committee on June 11th followed by a presentation to the OCFA Board of Directors on <br />June 26tH <br />65A -1 <br />