HomeMy WebLinkAbout65A - RELEASE ESCROW FUNDS FROM OCFAREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 3, 2014
TITLE:
REQUEST FOR RELEASE OF
ESCROW ACCOUNT FUNDS FROM
THE ORANGE COUNTY FIRE
AUTHORITY
CITY M16MAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 1" Reading
❑ Ordinance on 2n° Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the City Manager to request the release of $2.9M in Risk Management funds held in
an escrow account at Grandpoint Bank pursuant to the agreement with the Orange County Fire
Authority for fire services and emergency medical services.
DISCUSSION
On February 21, 2012, the Mayor and City Council voted to partner with the Orange County Fire
Authority (OCFA) for the delivery of fire and emergency medical services. The approval of the
agreement was preceded by approximately 6 months of negotiations with the OCFA and Santa
Ana Fire Services bargaining units during the City's most difficult financial times in recent history.
Given the City's fiscal position at that time, the OCFA required a bond or escrow equal to one
month's payment as assurance in the case of default. The current value of the escrow account
is $2.9 million earning 0.20% interest and held by Grandpoint Bank, a financial institution agreed
upon by both agencies.
The agreement with OCFA includes a provision which allows the City to reduce, eliminate or
modify the bond or escrow account if the City demonstrates an improved financial position. The
first opportunity for a review is July 1, 2014. As part of the review, staff will present its current
financial forecast that demonstrates continued revenue growth, budget surplus over a 5 -year
period, and reserve levels approaching a goal of 20 %. Staff has had preliminary discussions with
OCFA's Business Services Department to ensure all information required is presented. In
addition, staff has coordinated with OCFA to develop a schedule of events to ensure that OCFA
Board of Directors approves the release of the escrow funds on or before July 1. The City is
tentatively scheduled to present its much improved financial position to the OCFA Budget and
Finance Committee on June 11th followed by a presentation to the OCFA Board of Directors on
June 26tH
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Request for Release of Escrow Account Funds from the Orange County Fire Authority
June 3, 2014
Page 2
Approval of the recommended action will direct staff to continue discussions and present the
City's much improved financial position to ensure the release of escrow funds occurs on or
before July 1, 2014.
FISCAL IMPACT
There is no fiscal impact associated with this action.
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