CITY CLERK’S OFFICE
CITY OF CARMEL-BY-THE-SEA
May 5, 2009
TO: The Honorable Mayor McCloud & Council Members
FROM: Heidi Burch, City Clerk
SUBJECT: Agenda Item XI-A
The material for Agenda Item XI-A, “Receive report and provide policy direction regarding contracting fire protection services to the City of Monterey” will be provided under separate cover.
Thank you,
Heidi Burch
City Clerk
Showing posts with label Policy Direction. Show all posts
Showing posts with label Policy Direction. Show all posts
Sunday, May 3, 2009
Sunday, March 1, 2009
CITY COUNCIL: Policy Direction Regarding Transforming MST from a JPA to MST District
Meeting Date: 3 March 2009
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive report and provide policy direction on the proposal to transform MST from a JPA to the Monterey-Salinas Transit District.
Description: Monterey–Salinas Transit (MST) is a Joint Powers Agency (JPA) created by the State of California to provide public transit services to citizens of and visitors to communities which comprise its member jurisdictions. MST also operates transit services under contract to other communities in Monterey County and connecting services to other transit providers at Watsonville, Gilroy, Morgan Hill and San Jose. While MST is a JPA, many other transit agencies are organized by the California Public Utilities code as transit districts.
At the January 12, 2009 meeting of the MST Board of Directors, its 2009 Legislative Program was adopted. Staff was directed to explore the possibility of transforming MST from a JPA to a transit district. Since then, MST has been working with its legislative representative in Sacramento to craft a legal framework to accomplish this effort.
Overall Cost:
City Funds: None
Grant Funds: N/A
Staff Recommendation:
Important Considerations: Council may offer its support of the proposal by authorizing the Mayor to draft a letter of support to be forwarded to Assembly Member Anna Caballero.
Decision Record: None
Reviewed by:
__________________________ _____________________
Rich Guillen, City Administrator Date
February 24, 2009
Carmel City Council
Attn: Heidi Burch
Carmel City Hall
PO Box CC
Carmel CA 93921
Dear Ms. Burch:
The City of Carmel is one of the members of the Monterey-Salinas Transit Joint Powers Agency (JPA). As you may have heard, the state deficit reduction budget deal currently under consideration in Sacramento would result in the complete elimination of the State Transit Assistance program. MST uses State Transit Assistance to fund the majority of its RIDES paratransit services for specially qualified persons with severe disabilities. Without the State Transit Assistance program, MST will need to find alternative sources of revenue to fund the RIDES program to avoid devastating cuts to our fixed-route transit services and further increases to passenger fares, which were just raised in January.
As a JPA, MST does not have the ability to raise revenues itself. Assemblymember Anna Caballero has offered to introduce a bill in the legislature that would transform MST from a JPA to a transit district, thereby granting this agency the ability to ask the voters of Monterey County directly for a local sales tax and to raise revenues through the issuance of bonds. At the February 9th meeting of the MST Board of Directors, staff was given direction to pursue this action (see attached MST Board memo).
Please note that there would be no additional expense required from the City of Carmel to affect this change in MST’s governance. Before introducing the bill, Assemblymember Caballero has asked for a resolution from each of the existing JPA members supporting MST’s efforts to develop stable long-term sources of revenue, which is one of MST’s five strategic goals that were adopted by our Board of Directors in 2007. In that regard, please find the attached draft language that can be used as a model for a resolution that would be considered by the city council at its March 3nd meeting. Thank you for expediting this matter, as Assemblymember Caballero has asked for all resolutions of support by March 20th.
Sincerely,
Carl G. Sedoryk
General Manager/CEO
Attachment
Agenda # 9-1
February 9, 2009 Meeting
_____________________________________________________________________
To: Board of Directors
From: H. Harvath, Assistant General Manager – Finance & Administration
Subject: Proposal to Create the Monterey-Salinas Transit District
RECOMMENDATION:
Authorize staff to proceed in pursuing a legislative change to the Public Utilities Code to create the Monterey-Salinas Transit District.
FISCAL IMPACT:
None.
POLICY IMPLICATIONS:
Your Board approves changes to the governance structure of the MST Joint Powers Agency; this action would be consistent with and support “Strategic Goal #2 – Develop stable long-term revenue sources” from MST’s three-year strategic plan, adopted by your Board in 2007.
DISCUSSION:
Monterey-Salinas Transit is a Joint Powers Agency (JPA) created by the state of California to provide public transit services to citizens of and visitors to communities which comprise its member jurisdictions. In addition, MST operates transit services under contract to other communities in Monterey County as well as connecting services to other transit providers at Watsonville, Gilroy, Morgan Hill and San Jose. While MST is a JPA, many other transit agencies are organized by the California Public Utilities code as transit districts. One of the advantages of the transit district form of governance is the authority to levy taxes with the approval of the voters residing in that district. For instance, Santa Cruz Metropolitan Transit District receives revenues from a local sales tax that was approved by the county’s voters and that is dedicated solely to funding transit services.
Given the billions of dollars in cuts to State Transit Assistance in recent years, plus the governor’s proposed complete elimination of the State Transit Assistance program in future years, MST must seek alternative ways of funding its transit services locally. In November 2008, a ½-cent sales tax for transportation proposed by the Transportation Agency for Monterey County failed to garner the 2/3rds majority required to be implemented. Had the TAMC tax passed, MST would have received 20% of the revenues that would have been generated by that tax. While MST would continue to support TAMC’s future efforts to secure local funding for a broad range of transportation projects, it is possible that MST would need to find local sources of revenue before another TAMC sales tax would be able to garner the supermajority required to pass.
Transforming the Monterey-Salinas Transit JPA into a transit district would give MST the flexibility to ask the voters of Monterey County directly for a local sales tax to support public transit services. While there is no guarantee that a transit only sales tax would pass, MST as a transit district would, with direction by your Board, at least have the option of pursuing that funding mechanism. As a JPA, MST does not have that legal authority. In addition, an MST transit district would have bonding capabilities. As a JPA, MST has secured financing in the private markets to fund its bus replacement program. While MST has received competitive rates from the private markets, it is possible that interest rates would be even lower through bond financing, which would free up more of the agency’s money to fund transit services for its customers rather than interest
payments to banks.
At the January 12th meeting of your Board, MST’s 2009 Legislative Program was adopted. Item 2sc of the legislative program directed staff to explore the possibility of transforming MST from a JPA to transit district. In that regard, MST has been working with its legislative representative in Sacramento, JEA & Associates, to craft a legal framework accomplish this effort. The attached draft
legislation for the creation of the Monterey-Salinas Transit District has been compiled by borrowing, in part, from existing Public Utilities Code statutes for other transit districts around the state, including that for Yolo and Santa Cruz counties. In addition, the draft legislation, which has been reviewed by general counsel, has been developed with MST’s existing JPA member jurisdictions, bylaws, composition, policies and procedures in mind to facilitate a quick and easy transition to a transit district if it were enacted. Pending approval by your Board, staff would request the assistance of Assemblymember Anna Caballero with carrying this bill through the legislative process.
Subsequently, MST staff would then request letters from each member jurisdiction in support of its efforts to become a transit district to assist in moving the bill successfully through the legislature.
Attachment: Draft Public Utilities Code language creating the Monterey-Salinas Transit District
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive report and provide policy direction on the proposal to transform MST from a JPA to the Monterey-Salinas Transit District.
Description: Monterey–Salinas Transit (MST) is a Joint Powers Agency (JPA) created by the State of California to provide public transit services to citizens of and visitors to communities which comprise its member jurisdictions. MST also operates transit services under contract to other communities in Monterey County and connecting services to other transit providers at Watsonville, Gilroy, Morgan Hill and San Jose. While MST is a JPA, many other transit agencies are organized by the California Public Utilities code as transit districts.
At the January 12, 2009 meeting of the MST Board of Directors, its 2009 Legislative Program was adopted. Staff was directed to explore the possibility of transforming MST from a JPA to a transit district. Since then, MST has been working with its legislative representative in Sacramento to craft a legal framework to accomplish this effort.
Overall Cost:
City Funds: None
Grant Funds: N/A
Staff Recommendation:
Important Considerations: Council may offer its support of the proposal by authorizing the Mayor to draft a letter of support to be forwarded to Assembly Member Anna Caballero.
Decision Record: None
Reviewed by:
__________________________ _____________________
Rich Guillen, City Administrator Date
February 24, 2009
Carmel City Council
Attn: Heidi Burch
Carmel City Hall
PO Box CC
Carmel CA 93921
Dear Ms. Burch:
The City of Carmel is one of the members of the Monterey-Salinas Transit Joint Powers Agency (JPA). As you may have heard, the state deficit reduction budget deal currently under consideration in Sacramento would result in the complete elimination of the State Transit Assistance program. MST uses State Transit Assistance to fund the majority of its RIDES paratransit services for specially qualified persons with severe disabilities. Without the State Transit Assistance program, MST will need to find alternative sources of revenue to fund the RIDES program to avoid devastating cuts to our fixed-route transit services and further increases to passenger fares, which were just raised in January.
As a JPA, MST does not have the ability to raise revenues itself. Assemblymember Anna Caballero has offered to introduce a bill in the legislature that would transform MST from a JPA to a transit district, thereby granting this agency the ability to ask the voters of Monterey County directly for a local sales tax and to raise revenues through the issuance of bonds. At the February 9th meeting of the MST Board of Directors, staff was given direction to pursue this action (see attached MST Board memo).
Please note that there would be no additional expense required from the City of Carmel to affect this change in MST’s governance. Before introducing the bill, Assemblymember Caballero has asked for a resolution from each of the existing JPA members supporting MST’s efforts to develop stable long-term sources of revenue, which is one of MST’s five strategic goals that were adopted by our Board of Directors in 2007. In that regard, please find the attached draft language that can be used as a model for a resolution that would be considered by the city council at its March 3nd meeting. Thank you for expediting this matter, as Assemblymember Caballero has asked for all resolutions of support by March 20th.
Sincerely,
Carl G. Sedoryk
General Manager/CEO
Attachment
Agenda # 9-1
February 9, 2009 Meeting
_____________________________________________________________________
To: Board of Directors
From: H. Harvath, Assistant General Manager – Finance & Administration
Subject: Proposal to Create the Monterey-Salinas Transit District
RECOMMENDATION:
Authorize staff to proceed in pursuing a legislative change to the Public Utilities Code to create the Monterey-Salinas Transit District.
FISCAL IMPACT:
None.
POLICY IMPLICATIONS:
Your Board approves changes to the governance structure of the MST Joint Powers Agency; this action would be consistent with and support “Strategic Goal #2 – Develop stable long-term revenue sources” from MST’s three-year strategic plan, adopted by your Board in 2007.
DISCUSSION:
Monterey-Salinas Transit is a Joint Powers Agency (JPA) created by the state of California to provide public transit services to citizens of and visitors to communities which comprise its member jurisdictions. In addition, MST operates transit services under contract to other communities in Monterey County as well as connecting services to other transit providers at Watsonville, Gilroy, Morgan Hill and San Jose. While MST is a JPA, many other transit agencies are organized by the California Public Utilities code as transit districts. One of the advantages of the transit district form of governance is the authority to levy taxes with the approval of the voters residing in that district. For instance, Santa Cruz Metropolitan Transit District receives revenues from a local sales tax that was approved by the county’s voters and that is dedicated solely to funding transit services.
Given the billions of dollars in cuts to State Transit Assistance in recent years, plus the governor’s proposed complete elimination of the State Transit Assistance program in future years, MST must seek alternative ways of funding its transit services locally. In November 2008, a ½-cent sales tax for transportation proposed by the Transportation Agency for Monterey County failed to garner the 2/3rds majority required to be implemented. Had the TAMC tax passed, MST would have received 20% of the revenues that would have been generated by that tax. While MST would continue to support TAMC’s future efforts to secure local funding for a broad range of transportation projects, it is possible that MST would need to find local sources of revenue before another TAMC sales tax would be able to garner the supermajority required to pass.
Transforming the Monterey-Salinas Transit JPA into a transit district would give MST the flexibility to ask the voters of Monterey County directly for a local sales tax to support public transit services. While there is no guarantee that a transit only sales tax would pass, MST as a transit district would, with direction by your Board, at least have the option of pursuing that funding mechanism. As a JPA, MST does not have that legal authority. In addition, an MST transit district would have bonding capabilities. As a JPA, MST has secured financing in the private markets to fund its bus replacement program. While MST has received competitive rates from the private markets, it is possible that interest rates would be even lower through bond financing, which would free up more of the agency’s money to fund transit services for its customers rather than interest
payments to banks.
At the January 12th meeting of your Board, MST’s 2009 Legislative Program was adopted. Item 2sc of the legislative program directed staff to explore the possibility of transforming MST from a JPA to transit district. In that regard, MST has been working with its legislative representative in Sacramento, JEA & Associates, to craft a legal framework accomplish this effort. The attached draft
legislation for the creation of the Monterey-Salinas Transit District has been compiled by borrowing, in part, from existing Public Utilities Code statutes for other transit districts around the state, including that for Yolo and Santa Cruz counties. In addition, the draft legislation, which has been reviewed by general counsel, has been developed with MST’s existing JPA member jurisdictions, bylaws, composition, policies and procedures in mind to facilitate a quick and easy transition to a transit district if it were enacted. Pending approval by your Board, staff would request the assistance of Assemblymember Anna Caballero with carrying this bill through the legislative process.
Subsequently, MST staff would then request letters from each member jurisdiction in support of its efforts to become a transit district to assist in moving the bill successfully through the legislature.
Attachment: Draft Public Utilities Code language creating the Monterey-Salinas Transit District
Wednesday, December 3, 2008
CITY COUNCIL: Policy Direction Regarding Options for Future Carmel Fire Department Management
Meeting Date: December 2, 2008
Prepared by: George E. Rawson
Public Safety Director
City Council
Agenda Item Summary
Name: Receive report and provide policy direction regarding options for future Carmel Fire Department management.
Description: Staff is seeking City Council direction regarding which options to pursue regarding the future management of the Carmel Fire Department. Staff has prepared a report containing three options and preliminary findings/comments concerning each option. Staff recommends the option of “contracting” as the preferred option to pursue.
Overall Cost:
City Funds: $2.9-$3.1 million – detailed costs to be determined pending final Council policy direction.
Staff Recommendation: Staff is requesting that City Council review the options contained in the staff report and provide policy direction. Staff recommends contracting as the next best step to managing the Fire Department.
Important Considerations: Staff will diligently work towards the preparation of a report for final City Council action in early 2009.
Decision Record: At its meeting of October 2, 2007, City Council provided policy direction authorizing Carmel to participate in a joint study with Monterey and Pacific Grove concerning fire department consolidation.
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: GEORGE E. RAWSON, PUBLIC SAFETY DIRECTOR
DATE: NOVEMBER 24, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION REGARDING OPTIONS FOR FUTURE FIRE DEPARTMENT MANAGEMENT
RECOMMENDED MOTION:
Provide policy direction regarding options for future fire contract services.
BACKGROUND:
Beginning in 2005, staff began discussions with the cities of Monterey and Pacific Grove relative to the merits and interest of consolidating fire departments. In 2006, the three city councils jointly authorized and funded a fire services consolidation feasibility analysis study by Citygate Associates, LLC. The study was completed in June 2007 and presented at a joint City Council meeting. The study concluded consolidation was feasible and there were operational advantages to doing so.
In October 2007, a Fire Consolidation Executive Committee, consisting of the city managers and fire chiefs was established to further explore the feasibility of a “headquarters” consolidation. The ensuing discussions and research determined that the “headquarters” model posed significant risk management obstacles.
In January 2008, Carmel postponed their involvement as a consolidation partner due to firefighter labor negotiations, but continued attending consolidation meetings with the understanding Carmel might be a potential partner at a future date. Public Safety Director George Rawson attended the Executive Committee meetings to remain apprised of the progress and process of how a fire department consolidation would occur. Ultimately, the cities of Monterey and Pacific Grove abandoned the idea of a “headquarters consolidation” in favor of a contract model as a better solution to integrate the two fire departments in a single stop as soon as practical.
Also, in June of 2008, Carmel established an ad hoc committee comprised of the City Administrator, the Administrative Services Director, the Public Safety Director, and representatives of the Carmel Firefighters Association to study alternative fire department management options. The details of the committee’s preliminary findings are highlighted in Exhibit “A” attached, and are discussed in more detail under “Staff Review.”
On December 16, 2008, the Pacific Grove Fire Department will be consolidated with the Monterey Fire Department. Consequently, by the end of the day on December 15, 2008, Pacific Grove will cease providing fire administrative services to the Carmel Fire Department (CFD). As a result, the Director of Public Safety met with the Monterey Fire Chief to arrange continuation of administrative and Division Chief services to Carmel. Assuming City Council approves the proposed Monterey contract at its meeting of December 2, 2008, the Monterey Fire Department will begin to provide fire administrative services to Carmel commencing on December 16, 2008, through February 28, 2009. Because time is critical, the City of Carmel-by-the-Sea must finalize its study of options for future long-term fire management services and approve a new agreement in sufficient time to become effective on or before February 28, 2009.
STAFF REVIEW
Staff is seeking policy direction regarding the best alternative for the future management of the fire department. An ad hoc committee comprised of the contracted Fire Chief, staff and fire department labor performed some preliminary research on the following alternatives.
The initial findings of each option are included below:
1. Full Service – Stand-Alone Fire Department: This option is very expensive and is not recommended. Establishing a stand-alone fire department would be an arduous process that would necessitate an immediate recruitment effort to hire additional personnel to include a Fire Chief, Division Chiefs, and other personnel to oversee fire prevention and training. Undertaking this effort would impose an enormous burden on existing staff to perform a myriad of personnel-related duties, including recruitment, testing, background checks, and pre-employment medical testing. The recruitment costs alone associated with this process are estimated to be $20,000 to $25,000. The costs of salary and benefits for a new fire department administration, including a Fire Chief, three Division Chiefs, a Fire Marshal, and administrative secretary is estimated at $850,000 plus. These costs do not take into account
the risks of worker’s compensation and/or other costs relating to liability, nor any of staff’s time attempting to coordinate and process such a recruitment effort.
2. Contracting: This option is the most logical and will probably be the most economical.
Contracting, if done in the right way with the right agency, will act as a force multiplier that significantly increases firefighting capabilities in all contexts. Interoperability and operational readiness will be enhanced, thus making it much more probable that extensive firefighting resources can be quickly dispatched to an actual fire. Options to consider for providers of contracting include the Carmel Valley Fire Protection District, Cal Fire, and the City of Monterey fire department. Since 2000, the Monterey fire department has included binding arbitration as part of the collective bargaining agreement. However, the City of Monterey has never invoked binding arbitration to resolve fire department negotiations.
The exact costs for contracting are unknown at this time. Preliminary estimates indicate the total operations budget for contracting range from $2.9 to $3.1 million. Staff will need additional time to evaluate the scope of services and the methodology of the formula associated for these services.
3. Joint Powers Authority (Merger/Consolidation): Establishing a Joint Powers Authority (JPA) to govern a merger of fire services is a possibility, but such an undertaking is contingent on with which agency Carmel ultimately merges. The committee believes the JPA option may be more expensive than contracting due to staffing needs that are similar to Option #1 (Stand-Alone). The process of establishing a JPA also can be arduous and very time consuming. Based on the narrow window of time Carmel has to execute a new contract, it would be prudent to focus on contracting (Option #2). If a JPA is ultimately desired, the possibility of a contract transitioning to a JPA can be explored in the future.
Important decisions must be made within the next 60 days regarding future management of the Fire Department. The challenge before us cannot merely be resolved by hiring an interim fire chief. It is essential that an entire system of fire services be considered in the deliberations of the next best step. This includes acquiring a Division Chief response system, fire prevention and inspections, training, and administrative support.
Pending direction from City Council, staff must immediately move forward with acquiring information that can be brought before the City Council in early 2009 for final approval and implementation.
FISCAL IMPACT:
$2.9-$3.1 million – detailed costs to be determined pending final Council policy direction.
SUMMARY:
The requested action is consistent with the City Administrator’s goal to identify future options for managing the Fire Department. It is important that final decisions are based on both quality of services and cost analysis.
EXHIBIT “A”
PRELIMINARY ANALYSIS
CARMEL FIRE DEPARTMENT ALTERNATIVES
STAND-ALONE
Pros Cons
Local control
Promotional opportunities
Local knowledge (streets, hydrants, lack of addresses, etc.)
Productivity potential and increased oversight
Cons
Very costly!
Retention
Difficulty in recruiting
CONTRACT
Pros
Admin. team/shared costs Relinquish control of personnel costs
Improved staffing & infrastructure of
resources
Workers’ comp liability reduced
HR responsibilities reduced
Preserves local knowledge
Favorably disproportionate share of costs
Cons
Relinquish control of personnel costs
MERGER/JPA
Pros Cons
Better control of salary Marginal return on investment
Local knowledge Need to hire more staff (Duty Chiefs
Shared HR duties and responsibilities and other admin. staff)
Distribution of operational costs Partnering with agencies with
Shared workers’ comp uncertain financial status
Risk management liability exposure
Prepared by: George E. Rawson
Public Safety Director
City Council
Agenda Item Summary
Name: Receive report and provide policy direction regarding options for future Carmel Fire Department management.
Description: Staff is seeking City Council direction regarding which options to pursue regarding the future management of the Carmel Fire Department. Staff has prepared a report containing three options and preliminary findings/comments concerning each option. Staff recommends the option of “contracting” as the preferred option to pursue.
Overall Cost:
City Funds: $2.9-$3.1 million – detailed costs to be determined pending final Council policy direction.
Staff Recommendation: Staff is requesting that City Council review the options contained in the staff report and provide policy direction. Staff recommends contracting as the next best step to managing the Fire Department.
Important Considerations: Staff will diligently work towards the preparation of a report for final City Council action in early 2009.
Decision Record: At its meeting of October 2, 2007, City Council provided policy direction authorizing Carmel to participate in a joint study with Monterey and Pacific Grove concerning fire department consolidation.
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: GEORGE E. RAWSON, PUBLIC SAFETY DIRECTOR
DATE: NOVEMBER 24, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION REGARDING OPTIONS FOR FUTURE FIRE DEPARTMENT MANAGEMENT
RECOMMENDED MOTION:
Provide policy direction regarding options for future fire contract services.
BACKGROUND:
Beginning in 2005, staff began discussions with the cities of Monterey and Pacific Grove relative to the merits and interest of consolidating fire departments. In 2006, the three city councils jointly authorized and funded a fire services consolidation feasibility analysis study by Citygate Associates, LLC. The study was completed in June 2007 and presented at a joint City Council meeting. The study concluded consolidation was feasible and there were operational advantages to doing so.
In October 2007, a Fire Consolidation Executive Committee, consisting of the city managers and fire chiefs was established to further explore the feasibility of a “headquarters” consolidation. The ensuing discussions and research determined that the “headquarters” model posed significant risk management obstacles.
In January 2008, Carmel postponed their involvement as a consolidation partner due to firefighter labor negotiations, but continued attending consolidation meetings with the understanding Carmel might be a potential partner at a future date. Public Safety Director George Rawson attended the Executive Committee meetings to remain apprised of the progress and process of how a fire department consolidation would occur. Ultimately, the cities of Monterey and Pacific Grove abandoned the idea of a “headquarters consolidation” in favor of a contract model as a better solution to integrate the two fire departments in a single stop as soon as practical.
Also, in June of 2008, Carmel established an ad hoc committee comprised of the City Administrator, the Administrative Services Director, the Public Safety Director, and representatives of the Carmel Firefighters Association to study alternative fire department management options. The details of the committee’s preliminary findings are highlighted in Exhibit “A” attached, and are discussed in more detail under “Staff Review.”
On December 16, 2008, the Pacific Grove Fire Department will be consolidated with the Monterey Fire Department. Consequently, by the end of the day on December 15, 2008, Pacific Grove will cease providing fire administrative services to the Carmel Fire Department (CFD). As a result, the Director of Public Safety met with the Monterey Fire Chief to arrange continuation of administrative and Division Chief services to Carmel. Assuming City Council approves the proposed Monterey contract at its meeting of December 2, 2008, the Monterey Fire Department will begin to provide fire administrative services to Carmel commencing on December 16, 2008, through February 28, 2009. Because time is critical, the City of Carmel-by-the-Sea must finalize its study of options for future long-term fire management services and approve a new agreement in sufficient time to become effective on or before February 28, 2009.
STAFF REVIEW
Staff is seeking policy direction regarding the best alternative for the future management of the fire department. An ad hoc committee comprised of the contracted Fire Chief, staff and fire department labor performed some preliminary research on the following alternatives.
The initial findings of each option are included below:
1. Full Service – Stand-Alone Fire Department: This option is very expensive and is not recommended. Establishing a stand-alone fire department would be an arduous process that would necessitate an immediate recruitment effort to hire additional personnel to include a Fire Chief, Division Chiefs, and other personnel to oversee fire prevention and training. Undertaking this effort would impose an enormous burden on existing staff to perform a myriad of personnel-related duties, including recruitment, testing, background checks, and pre-employment medical testing. The recruitment costs alone associated with this process are estimated to be $20,000 to $25,000. The costs of salary and benefits for a new fire department administration, including a Fire Chief, three Division Chiefs, a Fire Marshal, and administrative secretary is estimated at $850,000 plus. These costs do not take into account
the risks of worker’s compensation and/or other costs relating to liability, nor any of staff’s time attempting to coordinate and process such a recruitment effort.
2. Contracting: This option is the most logical and will probably be the most economical.
Contracting, if done in the right way with the right agency, will act as a force multiplier that significantly increases firefighting capabilities in all contexts. Interoperability and operational readiness will be enhanced, thus making it much more probable that extensive firefighting resources can be quickly dispatched to an actual fire. Options to consider for providers of contracting include the Carmel Valley Fire Protection District, Cal Fire, and the City of Monterey fire department. Since 2000, the Monterey fire department has included binding arbitration as part of the collective bargaining agreement. However, the City of Monterey has never invoked binding arbitration to resolve fire department negotiations.
The exact costs for contracting are unknown at this time. Preliminary estimates indicate the total operations budget for contracting range from $2.9 to $3.1 million. Staff will need additional time to evaluate the scope of services and the methodology of the formula associated for these services.
3. Joint Powers Authority (Merger/Consolidation): Establishing a Joint Powers Authority (JPA) to govern a merger of fire services is a possibility, but such an undertaking is contingent on with which agency Carmel ultimately merges. The committee believes the JPA option may be more expensive than contracting due to staffing needs that are similar to Option #1 (Stand-Alone). The process of establishing a JPA also can be arduous and very time consuming. Based on the narrow window of time Carmel has to execute a new contract, it would be prudent to focus on contracting (Option #2). If a JPA is ultimately desired, the possibility of a contract transitioning to a JPA can be explored in the future.
Important decisions must be made within the next 60 days regarding future management of the Fire Department. The challenge before us cannot merely be resolved by hiring an interim fire chief. It is essential that an entire system of fire services be considered in the deliberations of the next best step. This includes acquiring a Division Chief response system, fire prevention and inspections, training, and administrative support.
Pending direction from City Council, staff must immediately move forward with acquiring information that can be brought before the City Council in early 2009 for final approval and implementation.
FISCAL IMPACT:
$2.9-$3.1 million – detailed costs to be determined pending final Council policy direction.
SUMMARY:
The requested action is consistent with the City Administrator’s goal to identify future options for managing the Fire Department. It is important that final decisions are based on both quality of services and cost analysis.
EXHIBIT “A”
PRELIMINARY ANALYSIS
CARMEL FIRE DEPARTMENT ALTERNATIVES
STAND-ALONE
Pros Cons
Local control
Promotional opportunities
Local knowledge (streets, hydrants, lack of addresses, etc.)
Productivity potential and increased oversight
Cons
Very costly!
Retention
Difficulty in recruiting
CONTRACT
Pros
Admin. team/shared costs Relinquish control of personnel costs
Improved staffing & infrastructure of
resources
Workers’ comp liability reduced
HR responsibilities reduced
Preserves local knowledge
Favorably disproportionate share of costs
Cons
Relinquish control of personnel costs
MERGER/JPA
Pros Cons
Better control of salary Marginal return on investment
Local knowledge Need to hire more staff (Duty Chiefs
Shared HR duties and responsibilities and other admin. staff)
Distribution of operational costs Partnering with agencies with
Shared workers’ comp uncertain financial status
Risk management liability exposure
Tuesday, December 2, 2008
CITY COUNCIL: Policy Direction Regarding Hybrid Vehicles for Police Patrol & General City Use
Meeting Date: November 15, 2008
Prepared by: Sgt. Paul Tomasi
City Council
Agenda Item Summary
Name: Receive report and provide policy direction regarding the implementation of hybrid vehicles for police patrol and general city use.
Description: The City Council has requested information about the feasibility of using hybrid vehicles for Police Department patrol. The information contained in this report may be used to initiate discussion and policy direction concerning the use of hybrid vehicles for police patrol and general city use.
Overall Cost:
City Funds: Unknown at this time, pending policy direction – refer to staff report for more details.
Staff Recommendation: Staff requests that City Council review the hybrid vehicle use report and provide comments and policy direction for future action.
Important Considerations: Using hybrid vehicles for police patrol purposes have been examined, and there are several concerns that must be addressed and understood using them for this purpose. The report addresses these concerns and lists both the pros and cons of using hybrids as patrol vehicles. This assessment will ensure a coordinated effort is under way to identify best practices related to future use of hybrids.
Decision Record: None
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: MIKE CALHOUN, POLICE SERGEANT
PAUL TOMASI, POLICE SERGEANT
DATE: OCTOBER 15, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION REGARDING THE USE OF HYBRID VEHICLES FOR POLICE PATROL AND GENERAL CITY USE
RECOMMENDED MOTION:
Provide policy direction concerning purchasing hybrid vehicles for police patrol purposes and for other city use.
BACKGROUND:
The use of hybrid vehicles was suggested by the public at several previous City Council meetings. Also, the City has made it a goal to become more “green” and environmentally friendly. The attached report focuses on the feasibility of using hybrid vehicles for city use and as police patrol vehicles. There are several hybrid vehicles the City could use for general use; however, with respect to use for the Police Department, there are some problems associated with many hybrid type vehicles. The following information summarizes the information we have received:
Are hybrids being used by other police agencies?
Yes, several agencies in California use hybrid vehicles; however most do not use them for patrol purposes. Instead, these hybrids are used as non-emergency type vehicles, such as for the chief, school resource officer or detectives.
A few agencies using hybrid vehicles as patrol vehicles, including the Lindsay Police Department, which purchased its hybrids through an air quality grant at no cost to the agency. The grant is no longer available. Beyond this, some subsequent research has uncovered some problems regarding hybrid police vehicles.
Major concerns about hybrid vehicles as patrol vehicles:
o Excessive cost for hybrid vehicles.
o The vehicle has a high wheel base, making the vehicle unstable and susceptible to roll over in high-speed driving.
o Most hybrid vehicles are front wheel drive, which changes the performance handling during high-speed driving.
o It is very difficult to mount spotlights on most hybrid vehicles. (A safety necessity for all police vehicles.)
o Few companies can do the wiring, welding cages in the back seat and outfitting.
o The extra battery is under the back seat. This requires padded vs. solid plastic. Due to safety concerns, current patrol vehicles have plastic back seats to prevent concealing contraband, and cleaning up body fluids.
o There is limited space in compact and sedan hybrid vehicles. Hybrids are limited to an SUV-type vehicle, preferably the Toyota Highlander
o The fuel usage of the Police Department would not offset higher cost of a hybrid vehicle.
California Highway Patrol (CHP) recommendations:
Steve Nielsen, Field Operations Manager, CHP Fleet Operations Section 074 in Sacramento provides the following information regarding using hybrid vehicles for patrol purposes:
Current hybrid technology is still at least two years away from being used in the capacity of patrol operations. The biggest factor associated with using hybrids is the cost. Hybrid vehicles cost nearly twice as much as conventional gas vehicles. There are limited companies that can do the retrofitting necessary to make them into patrol ready vehicles, (light bars, cages, electronic devices, etc.), which also increases the total cost. An additional problem with hybrid vehicles is they are much lighter than conventional vehicles. Patrol vehicles are designed to be heavy and low to the ground to assist with high-speed driving and maneuverability. Hybrids lack the stability of current vehicles due to less overall weight, which is necessary for their fuel efficiency. Adding police equipment adds weight and greatly reduces the high mileage expected from hybrid vehicles.
All current Ford Crown Victoria police vehicles are E-85 equipped and can run using
Ethanol or regular unleaded fuel. However, at this time, there are no E-85 fueling stations in our area.
STAFF REVIEW
Staff continues to find ways to incorporate hybrid vehicles into the City’s vehicle fleet. The following list provides some possible vehicles to consider. At his time, staff seeks City Council’s policy direction regarding the future use of hybrid vehicles and invites other suggestions regarding strategies to enhance the City’s goal toward green energy use.
Building Services
CURRENT VEHICLE HYBRID POSSIBILITY
2001 GMC SAFARI VAN FORD ESCAPE/TOYOTA HIGHLANDER
2000 JEEP CHEROKEE FORD ESCAPE/TOYOTA HIGHLANDER
2006 FORD RANGER FORD ESCAPE/TOYOTA HIGHLANDER
Police Department
CURRENT VEHICLE HYBRID POSSIBILITY
2001 FORD TAURUS TOYOTA CAMRY/HONDA ACCORD
FORD CROWN VICTORIA TOYOTA CAMRY/HONDA ACCORD
1998 FORD EXPEDITION* CHEVY TAHOE/ GMC YUKON
2006 FORD RANGER FORD ESCAPE/TOYOTA HIGHLANDER
Fire Department
CURRENT VEHICLE HYBRID POSSIBILITY
1998 FORD EXPEDITION* CHEVY TAHOE/ GMC YUKON
FISCAL IMPACT:
The fiscal impact will vary, depending on the direction taken by the City. Hybrid vehicles are more costly than non-hybrid vehicles. The approximate costs are listed below:
Patrol vehicle cost – Standard Crown Victoria
$40,000- $45,000 dollars equipped.
Patrol vehicle cost- Hybrid Patrol Vehicle
$34,000-$55,000 dollars standard model
$10,000-$15,000 dollars for standard police equipment
Non Patrol vehicle- Standard vehicle
$20,000-$54,000 dollars
Non Patrol vehicle cost- Hybrid vehicle
$25,000-$54,000 dollars
SUMMARY:
The information contained in this report is intended to assist City Council to provide policy direction concerning the City’s possible future adoption of hybrid vehicles into the vehicle fleet for police patrol as well as general city use.
Prepared by: Sgt. Paul Tomasi
City Council
Agenda Item Summary
Name: Receive report and provide policy direction regarding the implementation of hybrid vehicles for police patrol and general city use.
Description: The City Council has requested information about the feasibility of using hybrid vehicles for Police Department patrol. The information contained in this report may be used to initiate discussion and policy direction concerning the use of hybrid vehicles for police patrol and general city use.
Overall Cost:
City Funds: Unknown at this time, pending policy direction – refer to staff report for more details.
Staff Recommendation: Staff requests that City Council review the hybrid vehicle use report and provide comments and policy direction for future action.
Important Considerations: Using hybrid vehicles for police patrol purposes have been examined, and there are several concerns that must be addressed and understood using them for this purpose. The report addresses these concerns and lists both the pros and cons of using hybrids as patrol vehicles. This assessment will ensure a coordinated effort is under way to identify best practices related to future use of hybrids.
Decision Record: None
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: MIKE CALHOUN, POLICE SERGEANT
PAUL TOMASI, POLICE SERGEANT
DATE: OCTOBER 15, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION REGARDING THE USE OF HYBRID VEHICLES FOR POLICE PATROL AND GENERAL CITY USE
RECOMMENDED MOTION:
Provide policy direction concerning purchasing hybrid vehicles for police patrol purposes and for other city use.
BACKGROUND:
The use of hybrid vehicles was suggested by the public at several previous City Council meetings. Also, the City has made it a goal to become more “green” and environmentally friendly. The attached report focuses on the feasibility of using hybrid vehicles for city use and as police patrol vehicles. There are several hybrid vehicles the City could use for general use; however, with respect to use for the Police Department, there are some problems associated with many hybrid type vehicles. The following information summarizes the information we have received:
Are hybrids being used by other police agencies?
Yes, several agencies in California use hybrid vehicles; however most do not use them for patrol purposes. Instead, these hybrids are used as non-emergency type vehicles, such as for the chief, school resource officer or detectives.
A few agencies using hybrid vehicles as patrol vehicles, including the Lindsay Police Department, which purchased its hybrids through an air quality grant at no cost to the agency. The grant is no longer available. Beyond this, some subsequent research has uncovered some problems regarding hybrid police vehicles.
Major concerns about hybrid vehicles as patrol vehicles:
o Excessive cost for hybrid vehicles.
o The vehicle has a high wheel base, making the vehicle unstable and susceptible to roll over in high-speed driving.
o Most hybrid vehicles are front wheel drive, which changes the performance handling during high-speed driving.
o It is very difficult to mount spotlights on most hybrid vehicles. (A safety necessity for all police vehicles.)
o Few companies can do the wiring, welding cages in the back seat and outfitting.
o The extra battery is under the back seat. This requires padded vs. solid plastic. Due to safety concerns, current patrol vehicles have plastic back seats to prevent concealing contraband, and cleaning up body fluids.
o There is limited space in compact and sedan hybrid vehicles. Hybrids are limited to an SUV-type vehicle, preferably the Toyota Highlander
o The fuel usage of the Police Department would not offset higher cost of a hybrid vehicle.
California Highway Patrol (CHP) recommendations:
Steve Nielsen, Field Operations Manager, CHP Fleet Operations Section 074 in Sacramento provides the following information regarding using hybrid vehicles for patrol purposes:
Current hybrid technology is still at least two years away from being used in the capacity of patrol operations. The biggest factor associated with using hybrids is the cost. Hybrid vehicles cost nearly twice as much as conventional gas vehicles. There are limited companies that can do the retrofitting necessary to make them into patrol ready vehicles, (light bars, cages, electronic devices, etc.), which also increases the total cost. An additional problem with hybrid vehicles is they are much lighter than conventional vehicles. Patrol vehicles are designed to be heavy and low to the ground to assist with high-speed driving and maneuverability. Hybrids lack the stability of current vehicles due to less overall weight, which is necessary for their fuel efficiency. Adding police equipment adds weight and greatly reduces the high mileage expected from hybrid vehicles.
All current Ford Crown Victoria police vehicles are E-85 equipped and can run using
Ethanol or regular unleaded fuel. However, at this time, there are no E-85 fueling stations in our area.
STAFF REVIEW
Staff continues to find ways to incorporate hybrid vehicles into the City’s vehicle fleet. The following list provides some possible vehicles to consider. At his time, staff seeks City Council’s policy direction regarding the future use of hybrid vehicles and invites other suggestions regarding strategies to enhance the City’s goal toward green energy use.
Building Services
CURRENT VEHICLE HYBRID POSSIBILITY
2001 GMC SAFARI VAN FORD ESCAPE/TOYOTA HIGHLANDER
2000 JEEP CHEROKEE FORD ESCAPE/TOYOTA HIGHLANDER
2006 FORD RANGER FORD ESCAPE/TOYOTA HIGHLANDER
Police Department
CURRENT VEHICLE HYBRID POSSIBILITY
2001 FORD TAURUS TOYOTA CAMRY/HONDA ACCORD
FORD CROWN VICTORIA TOYOTA CAMRY/HONDA ACCORD
1998 FORD EXPEDITION* CHEVY TAHOE/ GMC YUKON
2006 FORD RANGER FORD ESCAPE/TOYOTA HIGHLANDER
Fire Department
CURRENT VEHICLE HYBRID POSSIBILITY
1998 FORD EXPEDITION* CHEVY TAHOE/ GMC YUKON
FISCAL IMPACT:
The fiscal impact will vary, depending on the direction taken by the City. Hybrid vehicles are more costly than non-hybrid vehicles. The approximate costs are listed below:
Patrol vehicle cost – Standard Crown Victoria
$40,000- $45,000 dollars equipped.
Patrol vehicle cost- Hybrid Patrol Vehicle
$34,000-$55,000 dollars standard model
$10,000-$15,000 dollars for standard police equipment
Non Patrol vehicle- Standard vehicle
$20,000-$54,000 dollars
Non Patrol vehicle cost- Hybrid vehicle
$25,000-$54,000 dollars
SUMMARY:
The information contained in this report is intended to assist City Council to provide policy direction concerning the City’s possible future adoption of hybrid vehicles into the vehicle fleet for police patrol as well as general city use.
CITY COUNCIL: Policy Direction Regarding Enhancement to Citywide Emergency Preparedness Plan
Meeting Date: October 7, 2008
Prepared by: George E. Rawson
City Council
Agenda Item Summary
Name: Receive report and provide policy direction regarding enhancement to the citywide emergency preparedness plan.
Description: The City Council has requested an update on the status of the City’s emergency preparedness plan. The information contained in this report will be used to initiate discussion and policy direction regarding the ongoing enhancement of the City’s emergency plan.
Overall Cost:
City Funds: Unknown at this time, pending policy direction – refer to staff report for more details.
Staff Recommendation: Staff recommends the City Council discuss the strategies proposed by staff to enhance the city’s emergency preparedness plan. Staff requests comments and policy direction from Council for future action.
Important Considerations: Disaster plans, both general and specific, require regular updating to remain effective. This assessment of the City’s plan will ensure a coordinated effort is under way to identify best practices related to emergency preparedness.
Decision Record: None
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: GEORGE E. RAWSON, PUBLIC SAFETY DIRECTOR
DATE: SEPTEMBER 23, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION
REGARDING ENHANCEMENT OF THE CITYWIDE
EMERGENCY PREPAREDNESS PLAN
RECOMMENDED MOTION:
Provide policy direction concerning the scope of work to enhance the City’s emergency response capabilities.
BACKGROUND:
One of the City Council goals for 2008 requires the City Administrator to review the City’s disaster response capabilities and enhance its emergency response plan. The City Administrator gave the Director of Public Safety the task to research, identify, and propose initiatives to fulfill this goal. Before discussing future enhancements to the City’s emergency plan, it is important to know what plans and/or actions already have been accomplished. The following information summarizes City actions concerning preparation for a major emergency, including compliance with Federal emergency management mandates.
Federal Mandate NIMS: Following the 2001 terrorist attacks, the Federal government issued a response mandate related to disaster management. This mandate, known as the National Incident Management System (NIMS), provides a consistent nationwide template to enable Federal, State, and local governments and private-sector and nongovernmental organizations to work together effectively and efficiently to prepare for, prevent, respond to, and recover from domestic incidents, regardless of cause, size, or complexity, including acts of catastrophic terrorism. State, County and local governments must adopt NIMS as a condition for Federal preparedness assistance. In addition, all local emergency personnel with a direct role in emergency preparedness, incident management or response must complete NIMS training. In August 2006, the City Council adopted a Resolution approving NIMS as the official regulatory guidance for emergency response. Consequently, appropriate City staff completed the required NIMS training course. Many employees have completed NIMS training and more employees are scheduled for additional NIMS training in 2008-09.
Federal Mandate DMA 2000: This federal mandate, entitled the Disaster Mitigation Act 2000 (DMA 2000), required local governments to develop a Local Hazard Mitigation Plan (LHMP). Failure to do would result in the loss of Federal funding eligibility, including grants, in the event of a disaster. In October of 2007 the City Council adopted a Resolution approving Carmel’s LHMP as part of the County of Monterey Multi Jurisdictional Hazard Mitigation Plan. On January 23, 2008, the Federal Emergency Management Agency (FEMA) officially certified the City of Carmel-by-the-Seal in compliance with DMA 2000.
CERT (Community Emergency Response Team) training classes – In 2004 the Fire Department began the CERT program to educate the public about disaster preparedness for hazards that may affect the area and train them in basic disaster response skills. Ten classes were held with more than 200 graduates. These graduates now have the knowledge and understanding to remain self-sustaining for the first few days following a significant event.
Seismic Retrofit – In 2006 the Fire Department’s seismic retrofit project was completed. The fire station is now safer for both personnel and equipment should an earthquake occur.
Self Contained Breather Apparatus (SCBA) – In 2007 the City acquired a grant to purchase a new in-house air compressor. The former portable compressor was mobile and had to be shared with other fire departments pursuant to a Joint Powers Authority. The compressor was not capable of fully pressurizing the Carmel Fire
Department SCBA cylinders. The new compressor has mitigated all of these issues. It is housed in the Fire Department and can fully pressurize the SCBAs and is exclusively available to Carmel fire fighters on a 24/7 basis. The City now is able to be self-sustaining with this critical emergency equipment.
Fire Department Generator – FY 08-09 City funds were appropriated to replace the existing antiquated generator with a new state-of-the-art generator that will fully power the Fire Department in the event of an outage. Preparations are now under way to have this generator installed in 2008.
Evacuation Route Map – A map depicting which streets will serve as evacuation routes was prepared and presented to the City Council during the September 12, 2006 regular meeting. This map will be incorporated as part of the city’s new Emergency Operations Plan.
Fire department radio equipment – The City acquired a grant to buy new mobile and portable radios for the Fire Department. These new radios are compliant with new FCC narrow banding and preserve Fire Department interoperable communications with allied public safety agencies.
Tsunami county plan and inundation map – Staff participated in the Monterey County Tsunami working group which worked to finalize the Monterey County Operational Area Tsunami Incident Response Plan, dated June 2008. Carmel-by-the-Sea is referenced in the plan (Annex H), and the plan is referenced in the new draft Emergency Operations Plan, which will be used in future City EOC activations.
Red Cross liaison: The city’s Emergency Operations Plan includes a position for Red Cross representation to be physically present in the EOC. It is essential for Red Cross to work side by side with EOC management to coordinate sheltering, assistance, and press releases. The Red Cross has various sites already identified and agreements in place to use these sites for sheltering.
STAFF REVIEW
Staff is working on several projects to further enhance the City’s emergency preparedness. A list of these projects, their objectives, and an estimate of completion date are listed below. Staff is seeking policy direction concerning the scope of work related to any one or more of these projects. In addition to these projects, staff invites suggestions regarding other strategies that would enhance the City’s emergency preparedness.
EOP (Emergency Operations Plan) updated: The existing EOP is being updated to ensure compliance with Federal and State guidelines. This plan will be presented to City Council for adoption before the end of this calendar year and will include detail on how regional assistance is acquired to assist the City manage emergencies. Evacuation - The update will include a beach evacuation plan and an evacuation route map for partial of Citywide evacuation. The plan also specifies how mutual aid
for regional resources is activated.
Non-ambulatory residents – A partial list of known non-ambulatory residents is being compiled, in cooperation with the Carmel Foundation. This list, and other sources of information, will be used to assist residents with special needs.
NIMS (National Incident Management System) & SEMS (Standardized Emergency Management System) training: A Citywide training schedule has been finalized to ensure all essential City personnel complete the necessary NIMS and SEMS training.
The training is ongoing throughout 2008-09.
EOC (Emergency Operations Center) Training: Staff assigned to the EOC will participate in a training exercise planned for early 2009. Tabletop Exercises (TTX), training, and one EOC activation occurred in 2008. The 2009 exercise will continue to incorporate NIMS and SEMS protocols as part of the overall training experience.
TAC (Temporary Assistance Center)/EOC Generator Project: Plans are under way to replace the existing EOC generator with a new generator. The new generator will have more capacity so that it can fully energize the EOC, Police Department, Public Works Department, and the Carmel Youth Center (CYC) as a new addition. The CYC was identified as an ideal location to operate a Temporary Assistance Center (TAC). The TAC would function as a resource center to provide information, care, and support to residents needing assistance. Local Red Cross representatives are interested in this project, and view the TAC as an excellent location to receive, stage, and manage displaced residents who may need shelter. The TAC also has a fully operational kitchen that could be used by volunteers and/or a service organization for meal preparation.
Telephone Emergency Notification System (TENS) – Earlier this year, the City Council approved the City to partner with the County of Monterey in applying for a state grant to purchase a telephone emergency notification system. The grant was approved and the County recently purchased this system, which will be available to the City of
Carmel-by-the Sea. The TENS system proved itself to be an invaluable resource for facilitating mass evacuations during the recent statewide wildland fires. In the final months of 2008, this system will be programmed and should be capable of being
operated by City staff.
NGEN (Next Generation) Radio Project: New Federal regulations require changes be made to public safety radios. Monterey County took the lead to implement these changes, and all cities in the County must participate in this project in order to preserve and enhance interoperable communications. As a participant, Carmel-by-the-Sea has allocated capital funds in the FY 08-09 and FY 09-10 budget to pay for costs associated with this project.
Carmel Foundation Generator Project - The Carmel Foundation is in the final stages of installing a new generator to keep the Foundation functional during power outages. The Foundation serves many local senior citizens in and around the area, and the new generator will operate the lights, heating, and kitchen.
Citizen Volunteer Assistance Program (CVAP) – An opportunity exists to develop a citizen volunteer assistance program to serve as an additional resource to disaster management. These volunteers could be trained and used for a variety of tasks including, but not limited to, notifications, evacuations, telephone support, and other critical support tasks related to emergency management. Meetings occurred earlier this year with members of the former St. Bernards, some of whom expressed interest in becoming volunteers.
Library Disaster Plan – The Library is drafting a disaster preparedness plan to identify critical tasks and what roles must accomplished during an emergency, and by whom. This plan will guide and facilitate specific actions the Library will perform to mitigate and operationally recover from events such as a fire or earthquake. Once the plan is finalized and approved, the staff will begin training.
Disaster Preparedness Education - Although CERT training is still available by nearby allied fire departments, more effort must be devoted to community outreach. This effort may include an annual disaster preparedness class presented by staff, and/or outreach efforts such as providing written information to all City residents.
FISCAL IMPACT:
The fiscal impact will vary depending on policy direction. Many of the projects referenced in this report are funded in the FY 2008/09 – 2010/11 budget.
The EOC Generator is estimated to cost $ 201,000. The capital improvement budget allocates $40,000 to be spent in FY 2010/2011 for design. The remaining $161,000 must be included in future budget discussions. A grant application was submitted to the U.S. Department of Homeland Security to pay for the new EOC generator. Unfortunately, the City just learned that it was not awarded this grant since other, much larger, competing jurisdictions received preference for funding.
SUMMARY:
The information contained in this report is intended to assist City Council provide policy direction related to our City’s emergency response capabilities. Staff will focus time and effort to complete the necessary tasks to enhance our level of disaster readiness.
Prepared by: George E. Rawson
City Council
Agenda Item Summary
Name: Receive report and provide policy direction regarding enhancement to the citywide emergency preparedness plan.
Description: The City Council has requested an update on the status of the City’s emergency preparedness plan. The information contained in this report will be used to initiate discussion and policy direction regarding the ongoing enhancement of the City’s emergency plan.
Overall Cost:
City Funds: Unknown at this time, pending policy direction – refer to staff report for more details.
Staff Recommendation: Staff recommends the City Council discuss the strategies proposed by staff to enhance the city’s emergency preparedness plan. Staff requests comments and policy direction from Council for future action.
Important Considerations: Disaster plans, both general and specific, require regular updating to remain effective. This assessment of the City’s plan will ensure a coordinated effort is under way to identify best practices related to emergency preparedness.
Decision Record: None
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: GEORGE E. RAWSON, PUBLIC SAFETY DIRECTOR
DATE: SEPTEMBER 23, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION
REGARDING ENHANCEMENT OF THE CITYWIDE
EMERGENCY PREPAREDNESS PLAN
RECOMMENDED MOTION:
Provide policy direction concerning the scope of work to enhance the City’s emergency response capabilities.
BACKGROUND:
One of the City Council goals for 2008 requires the City Administrator to review the City’s disaster response capabilities and enhance its emergency response plan. The City Administrator gave the Director of Public Safety the task to research, identify, and propose initiatives to fulfill this goal. Before discussing future enhancements to the City’s emergency plan, it is important to know what plans and/or actions already have been accomplished. The following information summarizes City actions concerning preparation for a major emergency, including compliance with Federal emergency management mandates.
Federal Mandate NIMS: Following the 2001 terrorist attacks, the Federal government issued a response mandate related to disaster management. This mandate, known as the National Incident Management System (NIMS), provides a consistent nationwide template to enable Federal, State, and local governments and private-sector and nongovernmental organizations to work together effectively and efficiently to prepare for, prevent, respond to, and recover from domestic incidents, regardless of cause, size, or complexity, including acts of catastrophic terrorism. State, County and local governments must adopt NIMS as a condition for Federal preparedness assistance. In addition, all local emergency personnel with a direct role in emergency preparedness, incident management or response must complete NIMS training. In August 2006, the City Council adopted a Resolution approving NIMS as the official regulatory guidance for emergency response. Consequently, appropriate City staff completed the required NIMS training course. Many employees have completed NIMS training and more employees are scheduled for additional NIMS training in 2008-09.
Federal Mandate DMA 2000: This federal mandate, entitled the Disaster Mitigation Act 2000 (DMA 2000), required local governments to develop a Local Hazard Mitigation Plan (LHMP). Failure to do would result in the loss of Federal funding eligibility, including grants, in the event of a disaster. In October of 2007 the City Council adopted a Resolution approving Carmel’s LHMP as part of the County of Monterey Multi Jurisdictional Hazard Mitigation Plan. On January 23, 2008, the Federal Emergency Management Agency (FEMA) officially certified the City of Carmel-by-the-Seal in compliance with DMA 2000.
CERT (Community Emergency Response Team) training classes – In 2004 the Fire Department began the CERT program to educate the public about disaster preparedness for hazards that may affect the area and train them in basic disaster response skills. Ten classes were held with more than 200 graduates. These graduates now have the knowledge and understanding to remain self-sustaining for the first few days following a significant event.
Seismic Retrofit – In 2006 the Fire Department’s seismic retrofit project was completed. The fire station is now safer for both personnel and equipment should an earthquake occur.
Self Contained Breather Apparatus (SCBA) – In 2007 the City acquired a grant to purchase a new in-house air compressor. The former portable compressor was mobile and had to be shared with other fire departments pursuant to a Joint Powers Authority. The compressor was not capable of fully pressurizing the Carmel Fire
Department SCBA cylinders. The new compressor has mitigated all of these issues. It is housed in the Fire Department and can fully pressurize the SCBAs and is exclusively available to Carmel fire fighters on a 24/7 basis. The City now is able to be self-sustaining with this critical emergency equipment.
Fire Department Generator – FY 08-09 City funds were appropriated to replace the existing antiquated generator with a new state-of-the-art generator that will fully power the Fire Department in the event of an outage. Preparations are now under way to have this generator installed in 2008.
Evacuation Route Map – A map depicting which streets will serve as evacuation routes was prepared and presented to the City Council during the September 12, 2006 regular meeting. This map will be incorporated as part of the city’s new Emergency Operations Plan.
Fire department radio equipment – The City acquired a grant to buy new mobile and portable radios for the Fire Department. These new radios are compliant with new FCC narrow banding and preserve Fire Department interoperable communications with allied public safety agencies.
Tsunami county plan and inundation map – Staff participated in the Monterey County Tsunami working group which worked to finalize the Monterey County Operational Area Tsunami Incident Response Plan, dated June 2008. Carmel-by-the-Sea is referenced in the plan (Annex H), and the plan is referenced in the new draft Emergency Operations Plan, which will be used in future City EOC activations.
Red Cross liaison: The city’s Emergency Operations Plan includes a position for Red Cross representation to be physically present in the EOC. It is essential for Red Cross to work side by side with EOC management to coordinate sheltering, assistance, and press releases. The Red Cross has various sites already identified and agreements in place to use these sites for sheltering.
STAFF REVIEW
Staff is working on several projects to further enhance the City’s emergency preparedness. A list of these projects, their objectives, and an estimate of completion date are listed below. Staff is seeking policy direction concerning the scope of work related to any one or more of these projects. In addition to these projects, staff invites suggestions regarding other strategies that would enhance the City’s emergency preparedness.
EOP (Emergency Operations Plan) updated: The existing EOP is being updated to ensure compliance with Federal and State guidelines. This plan will be presented to City Council for adoption before the end of this calendar year and will include detail on how regional assistance is acquired to assist the City manage emergencies. Evacuation - The update will include a beach evacuation plan and an evacuation route map for partial of Citywide evacuation. The plan also specifies how mutual aid
for regional resources is activated.
Non-ambulatory residents – A partial list of known non-ambulatory residents is being compiled, in cooperation with the Carmel Foundation. This list, and other sources of information, will be used to assist residents with special needs.
NIMS (National Incident Management System) & SEMS (Standardized Emergency Management System) training: A Citywide training schedule has been finalized to ensure all essential City personnel complete the necessary NIMS and SEMS training.
The training is ongoing throughout 2008-09.
EOC (Emergency Operations Center) Training: Staff assigned to the EOC will participate in a training exercise planned for early 2009. Tabletop Exercises (TTX), training, and one EOC activation occurred in 2008. The 2009 exercise will continue to incorporate NIMS and SEMS protocols as part of the overall training experience.
TAC (Temporary Assistance Center)/EOC Generator Project: Plans are under way to replace the existing EOC generator with a new generator. The new generator will have more capacity so that it can fully energize the EOC, Police Department, Public Works Department, and the Carmel Youth Center (CYC) as a new addition. The CYC was identified as an ideal location to operate a Temporary Assistance Center (TAC). The TAC would function as a resource center to provide information, care, and support to residents needing assistance. Local Red Cross representatives are interested in this project, and view the TAC as an excellent location to receive, stage, and manage displaced residents who may need shelter. The TAC also has a fully operational kitchen that could be used by volunteers and/or a service organization for meal preparation.
Telephone Emergency Notification System (TENS) – Earlier this year, the City Council approved the City to partner with the County of Monterey in applying for a state grant to purchase a telephone emergency notification system. The grant was approved and the County recently purchased this system, which will be available to the City of
Carmel-by-the Sea. The TENS system proved itself to be an invaluable resource for facilitating mass evacuations during the recent statewide wildland fires. In the final months of 2008, this system will be programmed and should be capable of being
operated by City staff.
NGEN (Next Generation) Radio Project: New Federal regulations require changes be made to public safety radios. Monterey County took the lead to implement these changes, and all cities in the County must participate in this project in order to preserve and enhance interoperable communications. As a participant, Carmel-by-the-Sea has allocated capital funds in the FY 08-09 and FY 09-10 budget to pay for costs associated with this project.
Carmel Foundation Generator Project - The Carmel Foundation is in the final stages of installing a new generator to keep the Foundation functional during power outages. The Foundation serves many local senior citizens in and around the area, and the new generator will operate the lights, heating, and kitchen.
Citizen Volunteer Assistance Program (CVAP) – An opportunity exists to develop a citizen volunteer assistance program to serve as an additional resource to disaster management. These volunteers could be trained and used for a variety of tasks including, but not limited to, notifications, evacuations, telephone support, and other critical support tasks related to emergency management. Meetings occurred earlier this year with members of the former St. Bernards, some of whom expressed interest in becoming volunteers.
Library Disaster Plan – The Library is drafting a disaster preparedness plan to identify critical tasks and what roles must accomplished during an emergency, and by whom. This plan will guide and facilitate specific actions the Library will perform to mitigate and operationally recover from events such as a fire or earthquake. Once the plan is finalized and approved, the staff will begin training.
Disaster Preparedness Education - Although CERT training is still available by nearby allied fire departments, more effort must be devoted to community outreach. This effort may include an annual disaster preparedness class presented by staff, and/or outreach efforts such as providing written information to all City residents.
FISCAL IMPACT:
The fiscal impact will vary depending on policy direction. Many of the projects referenced in this report are funded in the FY 2008/09 – 2010/11 budget.
The EOC Generator is estimated to cost $ 201,000. The capital improvement budget allocates $40,000 to be spent in FY 2010/2011 for design. The remaining $161,000 must be included in future budget discussions. A grant application was submitted to the U.S. Department of Homeland Security to pay for the new EOC generator. Unfortunately, the City just learned that it was not awarded this grant since other, much larger, competing jurisdictions received preference for funding.
SUMMARY:
The information contained in this report is intended to assist City Council provide policy direction related to our City’s emergency response capabilities. Staff will focus time and effort to complete the necessary tasks to enhance our level of disaster readiness.
CITY COUNCIL: Policy Direction Regarding Operation of an MST Trolley within the City Limits
Meeting Date: September 9, 2008
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive a report on the operation of an MST Trolley within the City limits and
provide policy direction.
Description: Monterey-Salinas Transit (MST) is offering to operate a trolley service with a route that would remain solely within the City limits. By confining the service within the City, it will improve both tourist and business employee parking and enhance tourism for all City-only businesses through greater exposure.
Overall Cost:
City Funds: $80,079 (not included in the Annual Budget)
Grant Funds: $0
Staff Recommendation: Receive the staff report and provide policy direction.
Important Considerations: The Carmel Chamber of Commerce offered the following as
the main reasons for operating a trolley: 1) enhance the visitor experience, 2)
alleviate parking issues, and 3) provide alternative, environmentally-friendly
transportation.
Decision Record: The City Council rejected the proposal twice before: 1) on May 2,
2006, a motion by former Council Member Erik Bethel to enter into an agreement
with MST to operate a trolley in and about Carmel-by-the-Sea died for lack of a
second, and 2) on June 5, 2007, Council voted 3-2 to reject the operation of an
MST trolley in and about Carmel-by-the-Sea, which would have been funded by
the Carmel Chamber of Commerce and the Crossroads Shopping Village.
Reviewed:
Rich Guillen, City Administrator Date
175
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
FROM: RICH GUILLEN, CITY ADMINISTRATOR
DATE: SEPTEMBER 9, 2008
SUBJECT: RECEIVE A REPORT ON THE OPERATION OF A MST
TROLLEY WITHIN THE CITY LIMITS AND PROVIDE POLICY
DIRECTION
RECOMMENDED MOTION
Provide policy direction.
BACKGROUND
The City Council over the past few years has discussed the operation of a Monterey-
Salinas Transit (MST) trolley in and about the City limits. The scenarios previously
discussed have been as follows:
1. The initial concept was to have a trolley route that would serve the Crossroads
Shopping Village and the City’s business area. Alternative route considerations
included having the trolley 1) serve the Monterey Conference Center and the City
business area, and 2) serve the Inn at Spanish Bay, Pebble Beach Lodge, and the
City business area. The preferred alternative recommended by staff in April 2006
was for the trolley to serve Pebble Beach and the City business area. The Pebble
Beach Company agreed to support the trolley, but did not want to financially
contribute to its operation. The reason was that they were already financially
supporting a shuttle service to Carmel for their visitors. The proposed trolley
service at that time was to operate eight to 10 hours a day, seven days a week. The
cost for this “trial period” service level was estimated at $22,800.
Outcome: The Carmel Chamber supported the concept, but was more
interested in having the service operate between the Crossroads Shopping
Village and the Carmel business area. MST staff felt that the service
between the Monterey Conference Center and Carmel would require two
trolleys, thus increasing costs and create operational deficiencies. The City
Council chose not to fund the trolley service to Pebble Beach.
2. The Carmel Chamber of Commerce requested that the City agree to operate the
trolley between the Crossroads Shopping Village and the City’s business area on a
trial basis. To make the trial period affordable, MST proposed a fee of $2,500 per
month, which was the cost to offset the monthly projected fares. MST would
absorb the operation of the trolley. The trial period was planned for July and
176
August 2007 and was to be free to the general public. The Chamber and the
Crossroads Shopping Village were to equally divide the cost of the fare. In
addition, the Carmel Innkeepers Association was to contribute $500 to offset costs
associated with printing maps/schedules.
Outcome: The Carmel Chamber was a strong supporter of implementing
the trolley service “trial period.” Even though the trial period required no
City financial support or operational approval, MST staff requested that the
Chamber ask for the City Council’s support of the trolley service. The
Chamber’s reasons for operating the trolley service were 1) enhance the
visitors’ experience, 2) alleviate parking issues in the Carmel business area,
3) improve the environment by using public transportation, and 4) the
operational cost proposed by MST was at an affordable rate. The City
Council after thorough deliberation voted to not support the trial trolley
service (3-2 vote in opposition).
What’s being proposed at this time is a trolley service that operates completely inside the
City limits at no cost to the general public. Council Member Karen Sharp along with
City staff met with MST staff to review the feasibility of developing a “City only” trolley
service. MST is willing to implement a City trolley service and, has developed a
proposed route and annual operating costs.
STAFF REVIEW
The general concept of the “City only” trolley service is to provide an alternative to
parking for the public and employee as well as provide a pleasant experience for the
visitor. MST staff’s proposed route embraces this concept by mostly using existing MST
bus stops. The proposed route is planned to take no more than ½ hour to complete. The
attached route map shows the existing MST bus route and the proposed trolley route.
Another consideration of planning the route was to determine the optimal hours of
operation. One proposal is to operate the trolley for 9 hours per day and 7 days per week.
The hours of operation being proposed are from 10:00 a.m. to 7:00 p.m. These hours of
operation are likely to best suit both the business community residents as well as the
visitor.
Consideration was given to operating for a “trial period”, but given that we are nearing
the end of the summer and that a trial period during the upcoming holiday season could
be inconclusive, staff is recommending that the proposed trolley service be planned for
next summer 2009 and at the height of the tourist season. The period of operation would
commence on Memorial Day weekend and end on Labor Day weekend.
FISCAL IMPACT
MST staff submitted an estimated cost for the “City only” trolley service as follows:
May 23 through June 30, 2009
39 days x 9 hours/day x $73.53/hour = $25,809
July 1 through September 7, 2009 (rate increase due to contract negotiations)
67 days x 9 hours/day x $90.00/hour = $54,270 (estimated)
177
Total cost = $80,079
The hourly rate increase commencing on July 1, 2009 is the result of a new contract with
the trolley operator. If the negotiated hourly rate is less than the estimated $90/hour, this
will lower the cost of trolley operation. The hourly rate covers the cost for a driver, fuel
and the maintenance of the trolley.
If the City Council decides to implement the trolley service for the upcoming 2009
summer season, the Triennial Budget will need to be amended as follows:
Fiscal Year 2008/2009…………………$25,809 increase to expenditures
Fiscal Year 2009/2010…………………$54,270 increase to expenditures
To fund the trolley as proposed above would require either eliminating a current program
or drawing from one of the City’s reserve accounts. The City Council may want to direct
staff to ask the Carmel Chamber of Commerce and Carmel Innkeepers’ Association to
partially finance the trolley service. MST staff has the ability to add an audio guide as
part of the trolley service. One suggestion is to include a name of a business on the audio
guide which is created with a GPS locater and as the trolley passes the business, make an
announcement specific to that business. A business could pay a fee for this service. The
fee could be used to offset some of the cost to operate the trolley service.
SUMMARY
It’s not completely known whether the trolley will be an attractive service for the general
public or employees in our City. The trolley service in Monterey has worked
successfully and can very easily work well in Carmel-by-the-Sea. However until a “trial
run” occurs, the discussion to operate a trolley service will be anecdotal and ongoing.
What separates the above proposal from the others previously discussed is that this
concept is expected to increase the amount of time tourists stay in our City, which is an
important factor of economic revitalization, as well as improve the availability of visitor
parking in the business area by providing transportation from “free” city parking areas for
residents and business employees at reasonable hours.
178
179
180
Monterey-Salinas Transit owns six trolleys, but not all in use. Each is 29 feet long and
holds 28 seated passengers with room for another 19 standing passengers. They fully
meet ADA requirements. For some time, the Chamber has been interested in getting
trolleys and City staff has been involved in some meetings about this as well. The
Chamber membership has supported this through surveys and focus groups, but until
now, the cost has been prohibitive.
MST staff recently approached the Chamber and proposed that a trolley could be put on
the current bus route through Carmel for a trial period of July and August, 2009. There is
now a small bus on the route which goes from Brinton’s/ Crossroads into downtown
Carmel to the front of Grasing’s and then goes back. The bus runs every half hour,
seven days a week, from approximately 7:00 am to 8:00 pm. There are bus stops
approximately every two blocks, including stops close to the beach and at the Carmel
Mission.
The cost would be $2,500 a month. This cost would offset the fares that they would get,
so the trolleys could be free. Trolleys experts have suggested that the only way the
general public will take transit vehicles is if it is free.
The Board of Directors of the Carmel Chamber of Commerce has committed to pay half
($2,500) and the Crossroads Shopping Village has agreed to pay the other half. The
Carmel Innkeepers Association also will contribute $500 to help offset the additional cost
of printing maps/schedules.
Why trolleys?
1) The trolleys will enhance the visitor experience.
• The trolleys look better than buses and attract people to ride them.
• Visitors in Carmel-by-the-Sea consistently ask how to get to the
beach and the Mission and would like to ride public transportation.
2) The trolleys could help alleviate downtown parking issues as people could
park at the Crossroads and ride the trolley into town. This would be especially
helpful during busy weeks such as during the Concours in August.
3) We have an excellent public transportation system here and getting people
out of their cars into public transportation benefits the environment.
4) The price is finally down to an affordable rate and this is an opportunity to try
initiating trolleys.
It is important to note that this is only a two-month test. If significant ridership is not
demonstrated during the test period or the community decides that this is not a beneficial
program, there is no requirement to continue past the trial period.
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive a report on the operation of an MST Trolley within the City limits and
provide policy direction.
Description: Monterey-Salinas Transit (MST) is offering to operate a trolley service with a route that would remain solely within the City limits. By confining the service within the City, it will improve both tourist and business employee parking and enhance tourism for all City-only businesses through greater exposure.
Overall Cost:
City Funds: $80,079 (not included in the Annual Budget)
Grant Funds: $0
Staff Recommendation: Receive the staff report and provide policy direction.
Important Considerations: The Carmel Chamber of Commerce offered the following as
the main reasons for operating a trolley: 1) enhance the visitor experience, 2)
alleviate parking issues, and 3) provide alternative, environmentally-friendly
transportation.
Decision Record: The City Council rejected the proposal twice before: 1) on May 2,
2006, a motion by former Council Member Erik Bethel to enter into an agreement
with MST to operate a trolley in and about Carmel-by-the-Sea died for lack of a
second, and 2) on June 5, 2007, Council voted 3-2 to reject the operation of an
MST trolley in and about Carmel-by-the-Sea, which would have been funded by
the Carmel Chamber of Commerce and the Crossroads Shopping Village.
Reviewed:
Rich Guillen, City Administrator Date
175
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
FROM: RICH GUILLEN, CITY ADMINISTRATOR
DATE: SEPTEMBER 9, 2008
SUBJECT: RECEIVE A REPORT ON THE OPERATION OF A MST
TROLLEY WITHIN THE CITY LIMITS AND PROVIDE POLICY
DIRECTION
RECOMMENDED MOTION
Provide policy direction.
BACKGROUND
The City Council over the past few years has discussed the operation of a Monterey-
Salinas Transit (MST) trolley in and about the City limits. The scenarios previously
discussed have been as follows:
1. The initial concept was to have a trolley route that would serve the Crossroads
Shopping Village and the City’s business area. Alternative route considerations
included having the trolley 1) serve the Monterey Conference Center and the City
business area, and 2) serve the Inn at Spanish Bay, Pebble Beach Lodge, and the
City business area. The preferred alternative recommended by staff in April 2006
was for the trolley to serve Pebble Beach and the City business area. The Pebble
Beach Company agreed to support the trolley, but did not want to financially
contribute to its operation. The reason was that they were already financially
supporting a shuttle service to Carmel for their visitors. The proposed trolley
service at that time was to operate eight to 10 hours a day, seven days a week. The
cost for this “trial period” service level was estimated at $22,800.
Outcome: The Carmel Chamber supported the concept, but was more
interested in having the service operate between the Crossroads Shopping
Village and the Carmel business area. MST staff felt that the service
between the Monterey Conference Center and Carmel would require two
trolleys, thus increasing costs and create operational deficiencies. The City
Council chose not to fund the trolley service to Pebble Beach.
2. The Carmel Chamber of Commerce requested that the City agree to operate the
trolley between the Crossroads Shopping Village and the City’s business area on a
trial basis. To make the trial period affordable, MST proposed a fee of $2,500 per
month, which was the cost to offset the monthly projected fares. MST would
absorb the operation of the trolley. The trial period was planned for July and
176
August 2007 and was to be free to the general public. The Chamber and the
Crossroads Shopping Village were to equally divide the cost of the fare. In
addition, the Carmel Innkeepers Association was to contribute $500 to offset costs
associated with printing maps/schedules.
Outcome: The Carmel Chamber was a strong supporter of implementing
the trolley service “trial period.” Even though the trial period required no
City financial support or operational approval, MST staff requested that the
Chamber ask for the City Council’s support of the trolley service. The
Chamber’s reasons for operating the trolley service were 1) enhance the
visitors’ experience, 2) alleviate parking issues in the Carmel business area,
3) improve the environment by using public transportation, and 4) the
operational cost proposed by MST was at an affordable rate. The City
Council after thorough deliberation voted to not support the trial trolley
service (3-2 vote in opposition).
What’s being proposed at this time is a trolley service that operates completely inside the
City limits at no cost to the general public. Council Member Karen Sharp along with
City staff met with MST staff to review the feasibility of developing a “City only” trolley
service. MST is willing to implement a City trolley service and, has developed a
proposed route and annual operating costs.
STAFF REVIEW
The general concept of the “City only” trolley service is to provide an alternative to
parking for the public and employee as well as provide a pleasant experience for the
visitor. MST staff’s proposed route embraces this concept by mostly using existing MST
bus stops. The proposed route is planned to take no more than ½ hour to complete. The
attached route map shows the existing MST bus route and the proposed trolley route.
Another consideration of planning the route was to determine the optimal hours of
operation. One proposal is to operate the trolley for 9 hours per day and 7 days per week.
The hours of operation being proposed are from 10:00 a.m. to 7:00 p.m. These hours of
operation are likely to best suit both the business community residents as well as the
visitor.
Consideration was given to operating for a “trial period”, but given that we are nearing
the end of the summer and that a trial period during the upcoming holiday season could
be inconclusive, staff is recommending that the proposed trolley service be planned for
next summer 2009 and at the height of the tourist season. The period of operation would
commence on Memorial Day weekend and end on Labor Day weekend.
FISCAL IMPACT
MST staff submitted an estimated cost for the “City only” trolley service as follows:
May 23 through June 30, 2009
39 days x 9 hours/day x $73.53/hour = $25,809
July 1 through September 7, 2009 (rate increase due to contract negotiations)
67 days x 9 hours/day x $90.00/hour = $54,270 (estimated)
177
Total cost = $80,079
The hourly rate increase commencing on July 1, 2009 is the result of a new contract with
the trolley operator. If the negotiated hourly rate is less than the estimated $90/hour, this
will lower the cost of trolley operation. The hourly rate covers the cost for a driver, fuel
and the maintenance of the trolley.
If the City Council decides to implement the trolley service for the upcoming 2009
summer season, the Triennial Budget will need to be amended as follows:
Fiscal Year 2008/2009…………………$25,809 increase to expenditures
Fiscal Year 2009/2010…………………$54,270 increase to expenditures
To fund the trolley as proposed above would require either eliminating a current program
or drawing from one of the City’s reserve accounts. The City Council may want to direct
staff to ask the Carmel Chamber of Commerce and Carmel Innkeepers’ Association to
partially finance the trolley service. MST staff has the ability to add an audio guide as
part of the trolley service. One suggestion is to include a name of a business on the audio
guide which is created with a GPS locater and as the trolley passes the business, make an
announcement specific to that business. A business could pay a fee for this service. The
fee could be used to offset some of the cost to operate the trolley service.
SUMMARY
It’s not completely known whether the trolley will be an attractive service for the general
public or employees in our City. The trolley service in Monterey has worked
successfully and can very easily work well in Carmel-by-the-Sea. However until a “trial
run” occurs, the discussion to operate a trolley service will be anecdotal and ongoing.
What separates the above proposal from the others previously discussed is that this
concept is expected to increase the amount of time tourists stay in our City, which is an
important factor of economic revitalization, as well as improve the availability of visitor
parking in the business area by providing transportation from “free” city parking areas for
residents and business employees at reasonable hours.
178
179
180
Monterey-Salinas Transit owns six trolleys, but not all in use. Each is 29 feet long and
holds 28 seated passengers with room for another 19 standing passengers. They fully
meet ADA requirements. For some time, the Chamber has been interested in getting
trolleys and City staff has been involved in some meetings about this as well. The
Chamber membership has supported this through surveys and focus groups, but until
now, the cost has been prohibitive.
MST staff recently approached the Chamber and proposed that a trolley could be put on
the current bus route through Carmel for a trial period of July and August, 2009. There is
now a small bus on the route which goes from Brinton’s/ Crossroads into downtown
Carmel to the front of Grasing’s and then goes back. The bus runs every half hour,
seven days a week, from approximately 7:00 am to 8:00 pm. There are bus stops
approximately every two blocks, including stops close to the beach and at the Carmel
Mission.
The cost would be $2,500 a month. This cost would offset the fares that they would get,
so the trolleys could be free. Trolleys experts have suggested that the only way the
general public will take transit vehicles is if it is free.
The Board of Directors of the Carmel Chamber of Commerce has committed to pay half
($2,500) and the Crossroads Shopping Village has agreed to pay the other half. The
Carmel Innkeepers Association also will contribute $500 to help offset the additional cost
of printing maps/schedules.
Why trolleys?
1) The trolleys will enhance the visitor experience.
• The trolleys look better than buses and attract people to ride them.
• Visitors in Carmel-by-the-Sea consistently ask how to get to the
beach and the Mission and would like to ride public transportation.
2) The trolleys could help alleviate downtown parking issues as people could
park at the Crossroads and ride the trolley into town. This would be especially
helpful during busy weeks such as during the Concours in August.
3) We have an excellent public transportation system here and getting people
out of their cars into public transportation benefits the environment.
4) The price is finally down to an affordable rate and this is an opportunity to try
initiating trolleys.
It is important to note that this is only a two-month test. If significant ridership is not
demonstrated during the test period or the community decides that this is not a beneficial
program, there is no requirement to continue past the trial period.
CITY COUNCIL: Policy Direction Regarding the Responsibilities of the Planning Commission & Design Review Board
Meeting Date: 9 September 2008
Prepared by: Sean Conroy,
Planning & Building Services Manager
City Council
Agenda Item Summary
Name: Provide policy direction regarding the responsibilities of the Planning Commission and Design Review Board.
Description: This item is intended for Council to discuss the responsibilities of the Planning
Commission and Design Review Board and to reevaluate options for how these City
bodies might operate in the future.
Overall Cost:
City Funds: None
Grant Funds: N/A
Staff Recommendation: Provide policy direction on the issue.
Important Considerations: CMC section 17.52 establishes the responsibilities of both the
Planning Commission and Design Review Board. Changes to these responsibilities
would require an amendment to the Local Coastal Program.
Decision Record: N/A
Reviewed by:
__________________________ _____________________
Rich Guillen, City Administrator Date
184
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
FROM: SEAN CONROY, PLNG & BLDG SERVICES MANAGER
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
DATE: 9 SEPTEMBER 2008
SUBJECT: PROVIDE POLICY DIRECTION REGARDING THE
RESPONSIBILITIES OF THE PLANNING COMMISSION
AND DESIGN REVIEW BOARD
BACKGROUND
This report is in response to a request to analyze the workloads of the Design Review
Board (DRB) and the Planning Commission (PC) and to present possible alternatives for
their operation.
Municipal Code section 17.52 (attached) identifies the duties and responsibilities of the
PC and the Design Review Board. These responsibilities are summarized below.
DRB: The Design Review Board’s primary responsibility is to review Design Review
applications that do not require any type of land use permit. These include:
• Demolitions
• Construction of new homes
• Remodeling of homes and commercial buildings
• Signs
PC: The Planning Commission has a much broader range of responsibilities, including:
• Maintain and update the General Plan & Zoning Ordinance
• Develop specific plans and master plans
• Review Capital Improvements Plan
• Review environmental documents
• Review land use permits (variances, subdivisions, conditional use permits, etc.)
• Perform design review for projects that include land use permits
• Interpret land use regulations
• Review appeals of staff approved projects
185
EVALUATION
The majority of applications submitted to the City are Design Review applications which
do not include land use permits. Therefore, on average, the DRB agendas have more
items than the PC. However, PC agenda items, on average, tend to be more complicated
and require more time and analysis. For example, a recent PC agenda included a large
commercial mixed-use project, the potential redevelopment of a community theater,
review of a general plan amendment and review of a Municipal Code amendment. These
types of projects are more labor intensive than the standard Design Review applications
typically handled by the DRB.
Below is a brief comparison of PC and DRB agendas from January until July of this year
and all of 2007. While the PC reviewed seven fewer this year, the Commission has spent
nearly three hours longer in meetings than the DRB. A table
DRB PC
Month (’08) Items Demos Time Items Demos Time
Jan 5 2 1 hr. 16 min. 6 1 2 hr. 29 min.
Feb 10 3 2 hr. 23 min 5 0 57 min.
Mar 5 0 1 hr. 39 min. 3 0 1 hr. 40 min.
Apr 5 2 57 min. 4 0 52 min.
May 6 1 1 hr. 7 min. 6 1 1 hr. 3 min.
Jun 7 1 1 hr. 5 min. 7 0 1 hr. 57 min.
Jul 5 1 2 hr. 3 min. 5 1 4 hr. 4 min.
Total 43 10 10 hr. 30 min. 36 3 13 hrs.
DRB PC
Month (‘07) Items Demos Time Items Demos Time
Jan 5 0 1 hr. 45 min. 5 1 3 hr. 12 min.
Feb 8 1 2 hr. 9 min. 3 0 3 hr.
Mar 6 2 2 hr. 9 min. 2 0 1 hr.
Apr 5 1 2 hr. 4 1 3 hr. 25 min.
May 5 0 1 hr. 42 min. 5 0 1 hr. 39 min.
Jun 4 2 2 hr. 30 min. 4 0 2 hr. 25 min.
Jul 4 0 1 hr. 40 min. 3 0 28 min.
Aug 4 1 2 hr. 14 min. 3 0 2 hr. 4 min.
Sept 10 3 2 hr. 27 min. 3 0 1hr.
Oct 6 0 1 hr. 45 min. 3 0 42 min.
Nov 4 0 24 min. 5 0 1 hr. 19 min.
Dec 0 0 0 4 0 41 min.
Total 61 10 20 hrs. 45 44 2 21 hrs. 55 min
The following is a list of potential options if the Council is interested in redefining the
responsibilities of the two bodies:
1) Revise the code to give staff discretion to assign applications to PC or DRB.
While this would allow staff to balance the agendas between the two bodies, this
could lead to accusations of unfair or inconsistent treatment by applicants.
186
2) Revise the code to redefine the roles of the PC and DRB. The simplest way to
redistribute the workload would be to require a use permit for demolitions. This
would send all demolitions and rebuilds to the Planning Commission and leave the
smaller projects to the DRB. This would increase the length of PC agendas and
decrease the length of DRB agendas.
3) Dissolve the DRB and have the PC meet twice a month. This would require a
larger time commitment from planning commissioners, but would avoid
inconsistent decisions between the two bodies. If this option is taken, staff
recommends adding several alternates to the Commission to cover for absent
members.
4) Maintain the responsibilities as currently defined in the Municipal Code.
Since the DRB and PC duties are part of the zoning ordinance, any proposals to modify
these requirements would require an amendment to the Local Coastal Program. This
would require hearings with the Planning Commission, City Council and California
Coastal Commission.
RECOMMENDATION
Provide direction on this issue.
187
Duties of DRB & PC as defined in the Municipal Code
17.52.050 Duties and Powers of the Design Review Board.
The Design Review Board shall have the following duties and responsibilities:
A. To conduct public hearings, review evidence and act on permit applications
not reserved to the Planning Commission, Historic Resources Board or to the
Director.
B. To act on commercial district design review applications not involving any
land use permit pursuant to CMC 17.58.030, Commercial Design Review.
C. To act on residential design studies for projects not involving any land use
permit pursuant to CMC 17.58.040, Residential Design Review.
D. To act on projects subject to coastal permit requirements pursuant to
Chapter 17.58 CMC, Design Review, when such projects are within the
categories listed above. (Ord. 2004-02 § 1, 2004; Ord. 2004-01 § 1, 2004).
17.52.060 Duties and Powers of the Planning Commission.
The Planning Commission as the designated planning agency of the City shall
have the following power and responsibilities:
A. To develop and maintain a General Plan.
B. To develop specific plans, master plans and area plans as may be
necessary or desirable.
C. To periodically, at least once each fiscal year, review the capital
improvement program of the City.
D. To determine the consistency of capital improvements projects and
programs with the General Plan.
E. To prepare an annual report to the City Council on the status of the General
Plan and progress in its application.
F. To interpret the meaning and intent of the City’s land use code.
G. To hear and render decisions on appeals of discretionary decisions made
by administrative officials.
H. To review environmental impact reports and initial studies.
I. To conduct public hearings, review evidence and determine requests for use
permits, variances, lot line adjustments, subdivisions, rezones and land use code
amendments.
J. To act on design review and design study applications for those projects
involving issuance of a land use permit.
K. To act on projects subject to coastal permit requirements when such
projects are within the categories listed above.
L. To review the water management plan annually.
Prepared by: Sean Conroy,
Planning & Building Services Manager
City Council
Agenda Item Summary
Name: Provide policy direction regarding the responsibilities of the Planning Commission and Design Review Board.
Description: This item is intended for Council to discuss the responsibilities of the Planning
Commission and Design Review Board and to reevaluate options for how these City
bodies might operate in the future.
Overall Cost:
City Funds: None
Grant Funds: N/A
Staff Recommendation: Provide policy direction on the issue.
Important Considerations: CMC section 17.52 establishes the responsibilities of both the
Planning Commission and Design Review Board. Changes to these responsibilities
would require an amendment to the Local Coastal Program.
Decision Record: N/A
Reviewed by:
__________________________ _____________________
Rich Guillen, City Administrator Date
184
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
FROM: SEAN CONROY, PLNG & BLDG SERVICES MANAGER
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
DATE: 9 SEPTEMBER 2008
SUBJECT: PROVIDE POLICY DIRECTION REGARDING THE
RESPONSIBILITIES OF THE PLANNING COMMISSION
AND DESIGN REVIEW BOARD
BACKGROUND
This report is in response to a request to analyze the workloads of the Design Review
Board (DRB) and the Planning Commission (PC) and to present possible alternatives for
their operation.
Municipal Code section 17.52 (attached) identifies the duties and responsibilities of the
PC and the Design Review Board. These responsibilities are summarized below.
DRB: The Design Review Board’s primary responsibility is to review Design Review
applications that do not require any type of land use permit. These include:
• Demolitions
• Construction of new homes
• Remodeling of homes and commercial buildings
• Signs
PC: The Planning Commission has a much broader range of responsibilities, including:
• Maintain and update the General Plan & Zoning Ordinance
• Develop specific plans and master plans
• Review Capital Improvements Plan
• Review environmental documents
• Review land use permits (variances, subdivisions, conditional use permits, etc.)
• Perform design review for projects that include land use permits
• Interpret land use regulations
• Review appeals of staff approved projects
185
EVALUATION
The majority of applications submitted to the City are Design Review applications which
do not include land use permits. Therefore, on average, the DRB agendas have more
items than the PC. However, PC agenda items, on average, tend to be more complicated
and require more time and analysis. For example, a recent PC agenda included a large
commercial mixed-use project, the potential redevelopment of a community theater,
review of a general plan amendment and review of a Municipal Code amendment. These
types of projects are more labor intensive than the standard Design Review applications
typically handled by the DRB.
Below is a brief comparison of PC and DRB agendas from January until July of this year
and all of 2007. While the PC reviewed seven fewer this year, the Commission has spent
nearly three hours longer in meetings than the DRB. A table
DRB PC
Month (’08) Items Demos Time Items Demos Time
Jan 5 2 1 hr. 16 min. 6 1 2 hr. 29 min.
Feb 10 3 2 hr. 23 min 5 0 57 min.
Mar 5 0 1 hr. 39 min. 3 0 1 hr. 40 min.
Apr 5 2 57 min. 4 0 52 min.
May 6 1 1 hr. 7 min. 6 1 1 hr. 3 min.
Jun 7 1 1 hr. 5 min. 7 0 1 hr. 57 min.
Jul 5 1 2 hr. 3 min. 5 1 4 hr. 4 min.
Total 43 10 10 hr. 30 min. 36 3 13 hrs.
DRB PC
Month (‘07) Items Demos Time Items Demos Time
Jan 5 0 1 hr. 45 min. 5 1 3 hr. 12 min.
Feb 8 1 2 hr. 9 min. 3 0 3 hr.
Mar 6 2 2 hr. 9 min. 2 0 1 hr.
Apr 5 1 2 hr. 4 1 3 hr. 25 min.
May 5 0 1 hr. 42 min. 5 0 1 hr. 39 min.
Jun 4 2 2 hr. 30 min. 4 0 2 hr. 25 min.
Jul 4 0 1 hr. 40 min. 3 0 28 min.
Aug 4 1 2 hr. 14 min. 3 0 2 hr. 4 min.
Sept 10 3 2 hr. 27 min. 3 0 1hr.
Oct 6 0 1 hr. 45 min. 3 0 42 min.
Nov 4 0 24 min. 5 0 1 hr. 19 min.
Dec 0 0 0 4 0 41 min.
Total 61 10 20 hrs. 45 44 2 21 hrs. 55 min
The following is a list of potential options if the Council is interested in redefining the
responsibilities of the two bodies:
1) Revise the code to give staff discretion to assign applications to PC or DRB.
While this would allow staff to balance the agendas between the two bodies, this
could lead to accusations of unfair or inconsistent treatment by applicants.
186
2) Revise the code to redefine the roles of the PC and DRB. The simplest way to
redistribute the workload would be to require a use permit for demolitions. This
would send all demolitions and rebuilds to the Planning Commission and leave the
smaller projects to the DRB. This would increase the length of PC agendas and
decrease the length of DRB agendas.
3) Dissolve the DRB and have the PC meet twice a month. This would require a
larger time commitment from planning commissioners, but would avoid
inconsistent decisions between the two bodies. If this option is taken, staff
recommends adding several alternates to the Commission to cover for absent
members.
4) Maintain the responsibilities as currently defined in the Municipal Code.
Since the DRB and PC duties are part of the zoning ordinance, any proposals to modify
these requirements would require an amendment to the Local Coastal Program. This
would require hearings with the Planning Commission, City Council and California
Coastal Commission.
RECOMMENDATION
Provide direction on this issue.
187
Duties of DRB & PC as defined in the Municipal Code
17.52.050 Duties and Powers of the Design Review Board.
The Design Review Board shall have the following duties and responsibilities:
A. To conduct public hearings, review evidence and act on permit applications
not reserved to the Planning Commission, Historic Resources Board or to the
Director.
B. To act on commercial district design review applications not involving any
land use permit pursuant to CMC 17.58.030, Commercial Design Review.
C. To act on residential design studies for projects not involving any land use
permit pursuant to CMC 17.58.040, Residential Design Review.
D. To act on projects subject to coastal permit requirements pursuant to
Chapter 17.58 CMC, Design Review, when such projects are within the
categories listed above. (Ord. 2004-02 § 1, 2004; Ord. 2004-01 § 1, 2004).
17.52.060 Duties and Powers of the Planning Commission.
The Planning Commission as the designated planning agency of the City shall
have the following power and responsibilities:
A. To develop and maintain a General Plan.
B. To develop specific plans, master plans and area plans as may be
necessary or desirable.
C. To periodically, at least once each fiscal year, review the capital
improvement program of the City.
D. To determine the consistency of capital improvements projects and
programs with the General Plan.
E. To prepare an annual report to the City Council on the status of the General
Plan and progress in its application.
F. To interpret the meaning and intent of the City’s land use code.
G. To hear and render decisions on appeals of discretionary decisions made
by administrative officials.
H. To review environmental impact reports and initial studies.
I. To conduct public hearings, review evidence and determine requests for use
permits, variances, lot line adjustments, subdivisions, rezones and land use code
amendments.
J. To act on design review and design study applications for those projects
involving issuance of a land use permit.
K. To act on projects subject to coastal permit requirements when such
projects are within the categories listed above.
L. To review the water management plan annually.
CITY COUNCIL: Policy Direction Regarding the Hiring of Three New Firefighters
Meeting Date: September 9, 2008
Prepared by: George E. Rawson
City Council
Agenda Item Summary
Name: Receive report and provide policy direction to hire three new firefighters.
Description: The Fire Department seeks to add three new full-time firefighter positions to improve staffing coverage. The category of “firefighter” will be classified as a full-time position in accordance to the provisions of Municipal Code section 2.52.055. Adding three firefighters will ensure that a 24/7, stable level of
staffing is maintained in accordance with Occupational Safety & Health Administration (OSHA) requirements and National Fire Protection Agency (NFPA) guidelines.
Overall Cost:
City Funds: $324,000 annually
Staff Recommendation: Staff recommends that City Council approve hiring three additional firefighters.
Important Considerations: The ambulance assigned to the fire station is staffed with two medical responders, both of whom are cross-trained as firefighters. When the
ambulance is committed to medical calls, these firefighters are temporarily unavailable, consequently depleting front-line firefighter capability. Adding
three new firefighters will resolve this problem by ensuring a constant staffing level.
Decision Record: None
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: GEORGE E. RAWSON, DIRECTOR OF PUBLIC SAFETY
ANDREW MILLER, FIRE CHIEF
DATE: SEPTEMBER 9, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION TO HIRE THREE NEW FIREFIGHTERS
_______________________________________________________________________
I. RECOMMENDED MOTION:
Provide policy direction.
II. BACKGROUND:
The City faces significant fire protection challenges. The two of most concern are
conflagration fires due to the potential of a wildland/urban interface fire and the
commercial zone fires. The City of Carmel-by-the-Sea is heavily forested, bordered by a canyon to the north and an open space nature preserve park to the south. Between these borders are high-density residential and commercial occupancies built on a slope from the ocean to the forest. Based on the nature of the terrain, weather and available fuels, the State has placed the majority of the City into its highest threat category, the “Very High Fire Hazard Severity Zone.” Furthermore, the commercial zone has several large, multi-story, antiquated buildings that are closely built, which pose significant access problems. Many of these buildings lack fire sprinkler systems. These threat assessments must be carefully considered, especially in light of past out-of-control fires, most recently in Big Sur, as well as the devastating 1987 Pebble Beach fire.
There have been several new state and federal laws, regulations and standards that limit the flexibility of cities in determining their staffing levels, training, and methods of operation. These are given an abbreviated overview below:
1. 1999 OSHA Staffing Policies – Most commonly known as the 2-in-2-out rule; this federal/state regulation requires that a minimum of two firefighters work as a team inside structure fires, and a minimum of two firefighters be on standby outside the structure to provide assistance or perform rescue, should the firefighters working interior firefighting operations have trouble exiting the building or become trapped. The only exception to this regulation is when there is a known imminent rescue.
2. May 2001 National Staffing Guidelines – The National Fire Protection Association (NFPA) Standard on Career Fire Service Deployment. NFPA 1710 calls for four-person fire crew staffing, arriving on one or two apparatus as a “company.” The initial attack crew should arrive at the emergency within four minutes travel time, 90 percent of the time, and the total effective response force of 14 (15 with aerial apparatus) should arrive within eight minutes travel time, 90 percent of the time.
3. October 1999 California OSHA Changes – AB 1127 legislation made all of the OSHA regulations applicable to local government, including fines and a huge increase in criminal penalties under Cal/OSHA. Individual managers and supervisors (Fire Chiefs – Incident Commanders) may now be fined up to $250,000 and be imprisoned for up to four years for failure to take appropriate safety precautions. Criminal fines range up to a maximum of $3.5 million for corporations and limited liability companies (cities & special districts).
The Carmel-by-the-Sea Fire Department (CFD) is a one station, six-person department.
Daily staffing consists of two of the six fulltime personnel assigned to the fire station on a 24/7/365 basis. Of the six full-time career employees, three are captains and three are engineers. In order to conform to the two-in-two-out federal regulation, the Fire Department also contracts via a Joint Powers Agreement (JPA) with the Carmel Regional Fire Ambulance Authority (CRFA) for additional firefighting staff. The CRFA provides an ambulance staffed with one emergency medical technician and one paramedic, both of whom are cross trained as firefighters. During each shift at the Carmel fire station, the two CRFA firefighters supplement Carmel’s daily staffing by two for a total of four firefighters. The full-time staff is supported by a limited number of paid-call (volunteer) firefighters who assist as needed.
The ability to use volunteers to supplement paid personnel is no longer viable. OSHA
and other regulatory actions have made it more difficult for the CFD to maintain a cadre of volunteers. Due to the growth in society of complex systems and technology, the fire service was given more missions, such as emergency medical services, hazardous materials response, and technical rescue. This has dramatically increased the legally mandated training hours for volunteers, causing many to drop out. Rising firefighter injuries and deaths, especially in the volunteer ranks, have created more safety regulations and training minimums to be placed on all firefighters. For instance: in January 2004 California Volunteer Firefighters – New laws (Assembly Bills 2118 and SB 1207) require volunteer firefighters to receive the same level of training that the fulltime staff receives. In part it “provides that the California Occupational Safety and Health Act applies to volunteer firefighters. Equipment and training for volunteers to meet the same requirements as regular firefighters.”
Due to these regulatory changes, today’s volunteers must give significantly more time
and effort to undergo physical agility testing, background checks, and commit to
significant training requirements. So, the availability of volunteers in communities with high cost of living and home values like ours is rapidly diminishing and is no longer a viable long-term solution to the need for readily available, trained firefighters.
With respect to the CRFA ambulance service, which remains a mission of the Fire
Department, the expectation is that such service always be prompt, efficient, and
professional. The Carmel ambulance service, however, has been compelled to spend
increased time out of the city due to the time it takes to transport a victim to the hospital, the automatic and mutual aid agreements with Monterey County’s private ambulance provider, and inadequate coverage by the countywide ambulance provider. For example, the CFD response data from July 1st, 2007 through June 30th 2008 identified the following:
• A total of 1,131 calls for service.
• 907 of the total were ambulance calls.
• 271 of these calls were “auto/mutual aid” meaning the ambulance was out of the
city of Carmel-by-the-Sea (23% of total).
• 220 calls for service in Carmel were while the CRFA ambulance was committed
out of the city, thus leaving the CFD engine down-staffed to only two (20% of the
total).
Based on this data, the two CRFA firefighters were committed and unavailable to assist CFD firefighters for approximately 440 hours (estimated at an average of two hours per out-of-city response) over this one-year period. It should be noted that any time the CRFA ambulance transports a patient to the hospital from the Carmel area, turnaround time averages between 60 and 90 minutes. If the transport is out of the area, it could take two or more hours, depending on the distance from Carmel.
These statistics do not take into account that the CRFA ambulance will move to the Carmel Valley Fire District, Mid-Valley station for emergency medical training, ambulance coverage, meetings and other logistical needs. There have also been numerous times when the Carmel ambulance is placed out-of-service for short periods of time due to the unavailability of staffing.
Despite Carmel’s best efforts to schedule staffing complying with the OSHA two-in-twoout regulation and the NFPA Standard 1710, it is quite apparent that noncompliance
occurs in those instances when the CRFA ambulance is committed to an emergency
medical response and/or transport. In such cases, the ambulance is deemed out-of-service for in-city medical responses for approximately an hour or more (depending if the EMS response/transport is in, or out of the City).
Consequently, when the CRFA ambulance is unavailable, the CFD is reduced to only two
fire personnel and must rely on automatic-aid response from the Cypress and Carmel
Valley Fire Protection District’s and/or CFD off-duty and paid-call personnel (when
available) to comply with the OSHA two-in-two-out regulations. This is not a desirable scenario due to firefighter safety issues, delayed fire attack, increased response times, and the unknown availability status of neighboring fire agencies resources, CFD off-duty and paid-call personnel.
The cities of Pacific Grove, Monterey, and Carmel retained Citygate Associates, LLC, to conduct an assessment of the feasibility to fully or partially consolidate fire agencies. The study concluded such an undertaking was operationally and economically feasible, but points out that no matter what Carmel does for long-term fire protection planning, the City’s Fire Department staffing must include three additional firefighters in order to achieve constant engine staffing requirements, in accordance with current response standards.
It should also be mentioned that in the near future, the cities of Pacific Grove and
Monterey intend to merge the two fire departments. The justification for this action is based on a need to curtail future increased expenses and to establish a staffing solution that ensures long-term sustainability, adequate staffing standards and right sized administrative function. The City of Carmel-by-the-Sea is not a participant in the fire merger, but city officials are attending the meetings occurring between Monterey and Pacific Grove, and have not ruled out the option of Carmel participating in the merger.
This issue will be formally brought to Council for consideration at a future date.
III. STAFF REVIEW:
The answer to managing these identified threats to the City is the speed and weight of the initial fire response. It is essential that the first fire company on scene must be capable of containing a fire before it spreads. In the "flashover" stage of structural fire growth a small incipient fire can grow to involve the entire room in a four- to five-minute timeframe. This is the critical point in time with which fire departments want to arrive with adequate staffing and deploy their resources. Flashover is a critical stage of fire growth for two reasons: no living thing in the room of origin will survive, so the chances for firefighters to save lives drops dramatically; and flashover creates a quantum jump in the rate of combustion and a significantly greater amount of water is needed to reduce the burning material below its ignition temperature. A post-flashover fire burns hotter and
moves faster, compounding the search and rescue and fire spread and endangers
firefighters. From the standpoint of a vegetation fire, it is critical for the fire to be controlled and/or extinguished in the initial stage before the fire spreads beyond the capability of the first-in engine company. It is well known throughout the fire service that all fires start small and are controllable in the beginning with early notification, quick response time and adequate staffing by the initial responding fire company.
Both of the potential fire spread scenarios identified above are contingent upon the initial response time, and staffing capability of the first arriving company. Fortunately, our city Fire Department has excellent response times to any location within the City, averaging four minutes or less, well above the national average of five minutes or less 90% of the time. The problem is the uncertainty of the initial response staffing, based on the location of the ambulance. When the ambulance is out of position due to a patient transport or automatic/mutual aid response, the on-duty staffing reduces by 50%, down to only two fire personnel to cover the City. This downsize in staffing could essentially mean the difference between performing a rescue, holding a structural fire to pre-flashover stage, or a vegetation fire to the area of origin.
The only way to ensure adequate (albeit not optimal) initial attack staffing is to increase the current minimum staffing in the CFD from two to three fulltime fire personnel on a 24/7/365 basis. This increase in minimum staffing would also benefit the CFD capability when responding to other emergency incidents such as medical emergencies, vehicle accidents, rescues, hazardous materials/environmental incidents and other fire-related responses. In all of the above categories of response, the Duty Chief also responds and can be considered part of the 2-in-2-out response.
Other advantages of the increased CFD staffing are as follows:
• Supports the city’s priority to enhance emergency preparedness.
• Increases off-duty call back capability capacity.
• Allows for more FD staff hours committed to fire prevention and loss reduction
activities, life and fire safety inspections, public education, infrastructure
maintenance and inspection and other related duties.
• Enhances customer service through program management such as CPR classes,
CERT training, public education and other related opportunities to interact with
our community.
Another point of interest for consideration is the staffing standards in neighboring fire agencies. Furthermore, the Monterey County Fire Mutual Aid Plan requires all mutualaid immediate need responses be staffed with a minimum of three fire personnel. Listed below are examples of “minimum staffing standards” in neighboring fire agencies:
• Cypress Fire Protection District: four personnel on engines.
• Pebble Beach Community Services District: four personnel on truck; three personnel on engine.
• Carmel Highlands Fire Protection District: three personnel on engine.
• Monterey Fire Department: three personnel on all apparatus.
• Seaside Fire Department: three personnel on all apparatus.
• Pacific Grove Fire Department: two personnel on all apparatus (it should be noted that the Pacific Grove companies run tandem providing for four personnel on fire and rescue responses).
• Carmel Valley Fire Protection District: two personnel all apparatus. (it should be noted that its engine company will not respond to a fire call until off duty or paid-call respond back to up-staff apparatus to four personnel and it has a 2nd engine in its system.)
IV. FISCAL IMPACT:
On an annual basis, the cost of hiring three new fulltime firefighters is approximately $324,000 (or $27,000 per month). For the current fiscal year, the budget impact will depend on when the firefighters are hired. Funding for these three new positions will come from postponing filling other open positions in the FY 2008-09 budget.
V. SUMMARY:
Staff is seeking policy direction to increase the Carmel-by-the-Sea firefighter staffing level. Per NFPA 1710, OSHA’s standard of 2-in-2-out, the Citygate study, and the City’s own internal study (Public Safety Team Report February 2003), it is essential to increase our daily fire engine minimum staffing. Staff recommends the Council authorize three firefighter positions to bring the fire engine minimum staffing up from two to three. This enhancement will bring use closer to a state of operational readiness to enable CFD to significantly increase the ability to effectively deploy a properly staffed engine company within the nationally recognized response time and staffing standards, thus enhancing our capability of protecting lives, property and the environment.
Prepared by: George E. Rawson
City Council
Agenda Item Summary
Name: Receive report and provide policy direction to hire three new firefighters.
Description: The Fire Department seeks to add three new full-time firefighter positions to improve staffing coverage. The category of “firefighter” will be classified as a full-time position in accordance to the provisions of Municipal Code section 2.52.055. Adding three firefighters will ensure that a 24/7, stable level of
staffing is maintained in accordance with Occupational Safety & Health Administration (OSHA) requirements and National Fire Protection Agency (NFPA) guidelines.
Overall Cost:
City Funds: $324,000 annually
Staff Recommendation: Staff recommends that City Council approve hiring three additional firefighters.
Important Considerations: The ambulance assigned to the fire station is staffed with two medical responders, both of whom are cross-trained as firefighters. When the
ambulance is committed to medical calls, these firefighters are temporarily unavailable, consequently depleting front-line firefighter capability. Adding
three new firefighters will resolve this problem by ensuring a constant staffing level.
Decision Record: None
Reviewed by:
______________________________ _________________
Rich Guillen, City Administrator Date
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: GEORGE E. RAWSON, DIRECTOR OF PUBLIC SAFETY
ANDREW MILLER, FIRE CHIEF
DATE: SEPTEMBER 9, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION TO HIRE THREE NEW FIREFIGHTERS
_______________________________________________________________________
I. RECOMMENDED MOTION:
Provide policy direction.
II. BACKGROUND:
The City faces significant fire protection challenges. The two of most concern are
conflagration fires due to the potential of a wildland/urban interface fire and the
commercial zone fires. The City of Carmel-by-the-Sea is heavily forested, bordered by a canyon to the north and an open space nature preserve park to the south. Between these borders are high-density residential and commercial occupancies built on a slope from the ocean to the forest. Based on the nature of the terrain, weather and available fuels, the State has placed the majority of the City into its highest threat category, the “Very High Fire Hazard Severity Zone.” Furthermore, the commercial zone has several large, multi-story, antiquated buildings that are closely built, which pose significant access problems. Many of these buildings lack fire sprinkler systems. These threat assessments must be carefully considered, especially in light of past out-of-control fires, most recently in Big Sur, as well as the devastating 1987 Pebble Beach fire.
There have been several new state and federal laws, regulations and standards that limit the flexibility of cities in determining their staffing levels, training, and methods of operation. These are given an abbreviated overview below:
1. 1999 OSHA Staffing Policies – Most commonly known as the 2-in-2-out rule; this federal/state regulation requires that a minimum of two firefighters work as a team inside structure fires, and a minimum of two firefighters be on standby outside the structure to provide assistance or perform rescue, should the firefighters working interior firefighting operations have trouble exiting the building or become trapped. The only exception to this regulation is when there is a known imminent rescue.
2. May 2001 National Staffing Guidelines – The National Fire Protection Association (NFPA) Standard on Career Fire Service Deployment. NFPA 1710 calls for four-person fire crew staffing, arriving on one or two apparatus as a “company.” The initial attack crew should arrive at the emergency within four minutes travel time, 90 percent of the time, and the total effective response force of 14 (15 with aerial apparatus) should arrive within eight minutes travel time, 90 percent of the time.
3. October 1999 California OSHA Changes – AB 1127 legislation made all of the OSHA regulations applicable to local government, including fines and a huge increase in criminal penalties under Cal/OSHA. Individual managers and supervisors (Fire Chiefs – Incident Commanders) may now be fined up to $250,000 and be imprisoned for up to four years for failure to take appropriate safety precautions. Criminal fines range up to a maximum of $3.5 million for corporations and limited liability companies (cities & special districts).
The Carmel-by-the-Sea Fire Department (CFD) is a one station, six-person department.
Daily staffing consists of two of the six fulltime personnel assigned to the fire station on a 24/7/365 basis. Of the six full-time career employees, three are captains and three are engineers. In order to conform to the two-in-two-out federal regulation, the Fire Department also contracts via a Joint Powers Agreement (JPA) with the Carmel Regional Fire Ambulance Authority (CRFA) for additional firefighting staff. The CRFA provides an ambulance staffed with one emergency medical technician and one paramedic, both of whom are cross trained as firefighters. During each shift at the Carmel fire station, the two CRFA firefighters supplement Carmel’s daily staffing by two for a total of four firefighters. The full-time staff is supported by a limited number of paid-call (volunteer) firefighters who assist as needed.
The ability to use volunteers to supplement paid personnel is no longer viable. OSHA
and other regulatory actions have made it more difficult for the CFD to maintain a cadre of volunteers. Due to the growth in society of complex systems and technology, the fire service was given more missions, such as emergency medical services, hazardous materials response, and technical rescue. This has dramatically increased the legally mandated training hours for volunteers, causing many to drop out. Rising firefighter injuries and deaths, especially in the volunteer ranks, have created more safety regulations and training minimums to be placed on all firefighters. For instance: in January 2004 California Volunteer Firefighters – New laws (Assembly Bills 2118 and SB 1207) require volunteer firefighters to receive the same level of training that the fulltime staff receives. In part it “provides that the California Occupational Safety and Health Act applies to volunteer firefighters. Equipment and training for volunteers to meet the same requirements as regular firefighters.”
Due to these regulatory changes, today’s volunteers must give significantly more time
and effort to undergo physical agility testing, background checks, and commit to
significant training requirements. So, the availability of volunteers in communities with high cost of living and home values like ours is rapidly diminishing and is no longer a viable long-term solution to the need for readily available, trained firefighters.
With respect to the CRFA ambulance service, which remains a mission of the Fire
Department, the expectation is that such service always be prompt, efficient, and
professional. The Carmel ambulance service, however, has been compelled to spend
increased time out of the city due to the time it takes to transport a victim to the hospital, the automatic and mutual aid agreements with Monterey County’s private ambulance provider, and inadequate coverage by the countywide ambulance provider. For example, the CFD response data from July 1st, 2007 through June 30th 2008 identified the following:
• A total of 1,131 calls for service.
• 907 of the total were ambulance calls.
• 271 of these calls were “auto/mutual aid” meaning the ambulance was out of the
city of Carmel-by-the-Sea (23% of total).
• 220 calls for service in Carmel were while the CRFA ambulance was committed
out of the city, thus leaving the CFD engine down-staffed to only two (20% of the
total).
Based on this data, the two CRFA firefighters were committed and unavailable to assist CFD firefighters for approximately 440 hours (estimated at an average of two hours per out-of-city response) over this one-year period. It should be noted that any time the CRFA ambulance transports a patient to the hospital from the Carmel area, turnaround time averages between 60 and 90 minutes. If the transport is out of the area, it could take two or more hours, depending on the distance from Carmel.
These statistics do not take into account that the CRFA ambulance will move to the Carmel Valley Fire District, Mid-Valley station for emergency medical training, ambulance coverage, meetings and other logistical needs. There have also been numerous times when the Carmel ambulance is placed out-of-service for short periods of time due to the unavailability of staffing.
Despite Carmel’s best efforts to schedule staffing complying with the OSHA two-in-twoout regulation and the NFPA Standard 1710, it is quite apparent that noncompliance
occurs in those instances when the CRFA ambulance is committed to an emergency
medical response and/or transport. In such cases, the ambulance is deemed out-of-service for in-city medical responses for approximately an hour or more (depending if the EMS response/transport is in, or out of the City).
Consequently, when the CRFA ambulance is unavailable, the CFD is reduced to only two
fire personnel and must rely on automatic-aid response from the Cypress and Carmel
Valley Fire Protection District’s and/or CFD off-duty and paid-call personnel (when
available) to comply with the OSHA two-in-two-out regulations. This is not a desirable scenario due to firefighter safety issues, delayed fire attack, increased response times, and the unknown availability status of neighboring fire agencies resources, CFD off-duty and paid-call personnel.
The cities of Pacific Grove, Monterey, and Carmel retained Citygate Associates, LLC, to conduct an assessment of the feasibility to fully or partially consolidate fire agencies. The study concluded such an undertaking was operationally and economically feasible, but points out that no matter what Carmel does for long-term fire protection planning, the City’s Fire Department staffing must include three additional firefighters in order to achieve constant engine staffing requirements, in accordance with current response standards.
It should also be mentioned that in the near future, the cities of Pacific Grove and
Monterey intend to merge the two fire departments. The justification for this action is based on a need to curtail future increased expenses and to establish a staffing solution that ensures long-term sustainability, adequate staffing standards and right sized administrative function. The City of Carmel-by-the-Sea is not a participant in the fire merger, but city officials are attending the meetings occurring between Monterey and Pacific Grove, and have not ruled out the option of Carmel participating in the merger.
This issue will be formally brought to Council for consideration at a future date.
III. STAFF REVIEW:
The answer to managing these identified threats to the City is the speed and weight of the initial fire response. It is essential that the first fire company on scene must be capable of containing a fire before it spreads. In the "flashover" stage of structural fire growth a small incipient fire can grow to involve the entire room in a four- to five-minute timeframe. This is the critical point in time with which fire departments want to arrive with adequate staffing and deploy their resources. Flashover is a critical stage of fire growth for two reasons: no living thing in the room of origin will survive, so the chances for firefighters to save lives drops dramatically; and flashover creates a quantum jump in the rate of combustion and a significantly greater amount of water is needed to reduce the burning material below its ignition temperature. A post-flashover fire burns hotter and
moves faster, compounding the search and rescue and fire spread and endangers
firefighters. From the standpoint of a vegetation fire, it is critical for the fire to be controlled and/or extinguished in the initial stage before the fire spreads beyond the capability of the first-in engine company. It is well known throughout the fire service that all fires start small and are controllable in the beginning with early notification, quick response time and adequate staffing by the initial responding fire company.
Both of the potential fire spread scenarios identified above are contingent upon the initial response time, and staffing capability of the first arriving company. Fortunately, our city Fire Department has excellent response times to any location within the City, averaging four minutes or less, well above the national average of five minutes or less 90% of the time. The problem is the uncertainty of the initial response staffing, based on the location of the ambulance. When the ambulance is out of position due to a patient transport or automatic/mutual aid response, the on-duty staffing reduces by 50%, down to only two fire personnel to cover the City. This downsize in staffing could essentially mean the difference between performing a rescue, holding a structural fire to pre-flashover stage, or a vegetation fire to the area of origin.
The only way to ensure adequate (albeit not optimal) initial attack staffing is to increase the current minimum staffing in the CFD from two to three fulltime fire personnel on a 24/7/365 basis. This increase in minimum staffing would also benefit the CFD capability when responding to other emergency incidents such as medical emergencies, vehicle accidents, rescues, hazardous materials/environmental incidents and other fire-related responses. In all of the above categories of response, the Duty Chief also responds and can be considered part of the 2-in-2-out response.
Other advantages of the increased CFD staffing are as follows:
• Supports the city’s priority to enhance emergency preparedness.
• Increases off-duty call back capability capacity.
• Allows for more FD staff hours committed to fire prevention and loss reduction
activities, life and fire safety inspections, public education, infrastructure
maintenance and inspection and other related duties.
• Enhances customer service through program management such as CPR classes,
CERT training, public education and other related opportunities to interact with
our community.
Another point of interest for consideration is the staffing standards in neighboring fire agencies. Furthermore, the Monterey County Fire Mutual Aid Plan requires all mutualaid immediate need responses be staffed with a minimum of three fire personnel. Listed below are examples of “minimum staffing standards” in neighboring fire agencies:
• Cypress Fire Protection District: four personnel on engines.
• Pebble Beach Community Services District: four personnel on truck; three personnel on engine.
• Carmel Highlands Fire Protection District: three personnel on engine.
• Monterey Fire Department: three personnel on all apparatus.
• Seaside Fire Department: three personnel on all apparatus.
• Pacific Grove Fire Department: two personnel on all apparatus (it should be noted that the Pacific Grove companies run tandem providing for four personnel on fire and rescue responses).
• Carmel Valley Fire Protection District: two personnel all apparatus. (it should be noted that its engine company will not respond to a fire call until off duty or paid-call respond back to up-staff apparatus to four personnel and it has a 2nd engine in its system.)
IV. FISCAL IMPACT:
On an annual basis, the cost of hiring three new fulltime firefighters is approximately $324,000 (or $27,000 per month). For the current fiscal year, the budget impact will depend on when the firefighters are hired. Funding for these three new positions will come from postponing filling other open positions in the FY 2008-09 budget.
V. SUMMARY:
Staff is seeking policy direction to increase the Carmel-by-the-Sea firefighter staffing level. Per NFPA 1710, OSHA’s standard of 2-in-2-out, the Citygate study, and the City’s own internal study (Public Safety Team Report February 2003), it is essential to increase our daily fire engine minimum staffing. Staff recommends the Council authorize three firefighter positions to bring the fire engine minimum staffing up from two to three. This enhancement will bring use closer to a state of operational readiness to enable CFD to significantly increase the ability to effectively deploy a properly staffed engine company within the nationally recognized response time and staffing standards, thus enhancing our capability of protecting lives, property and the environment.
Monday, December 1, 2008
CITY COUNCIL: $10 Surcharge on Noncommercial California Vehicle Registrations to Fund Maintenance of State Parks & Ranger Services
Meeting Date: August 5, 2007
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive draft letter and provide policy direction in support of a $10 surcharge on noncommercial California vehicle registrations to fund maintenance of state parks and ranger services.
Description: In late May, Assemblyman Laird proposed an annual $10 surcharge on noncommercial California vehicle registrations as a long-term solution to fund the deferred maintenance and operations of the California Parks System. In exchange, anyone in a vehicle with California plates, including rental cars, would gain free admittance to the parks. The State of Montana has a similar plan that has been very successful.
According to Assemblyman Laird, by freezing the current budget support for parks and adding the new support from vehicle registrations, California would have $40 million to cover the park entrance fees ($6-$10 per car) currently paid by California residents, $120 million more for operations, and $62 million more to address the backlog of deferred maintenance.
Overall Cost:
City Funds: N/A
Grant Funds: N/A
Staff Recommendation: Staff recommends that Council approve sending the letter to Assemblyman Laird in support of the $10 surcharge on noncommercial vehicle registrations.
Important Considerations: A private poll by the State Parks Foundation shows 74 percent of Californians support this proposal. According to a Laird staffer, the proposal was introduced too late to be included in the pending 2008-09 budget, but will still be considered as an ancillary item.
Decision Record:
Reviewed:
Rich Guillen, City Administrator Date
DRAFT
The Honorable John Laird
State Capitol Building, Room 2196
Sacramento, CA 95814
RE: Support of $10 surcharge on noncommercial vehicle registrations to fund park maintenance
Dear Assemblyman Laird:
The City of Carmel-by-the-Sea supports your proposal to add a $10 surcharge on noncommercial California vehicle registrations to help fund the maintenance of the California State Parks system and ongoing ranger services, in exchange for allowing free access to state residents.
This proposal seems to us to be a winning proposition for all concerned. The state will receive necessary funding to address the much needed, deferred maintenance and operation of its parks, and all state residents will be able to access and enjoy our wonderful parks at no cost, other than the $10 vehicle fee. Clearly, California faces serious budgetary issues; however, closing our State parks or making them unaffordable to many through higher fees would be a shame. Your plan does much to share the burden with the state’s vehicle owners, yet rewards them for doing so.
We, in Carmel-by-the-Sea, are fortunate to have Point Lobos right in our area. Your Parks Access Pass plan is especially attractive for urban families, who might otherwise be unable to partake in the beauty of California’s wild and scenic landscape.
Thank you for your creative leadership in this regard.
Sincerely,
Rich Guillen
City Administrator
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive draft letter and provide policy direction in support of a $10 surcharge on noncommercial California vehicle registrations to fund maintenance of state parks and ranger services.
Description: In late May, Assemblyman Laird proposed an annual $10 surcharge on noncommercial California vehicle registrations as a long-term solution to fund the deferred maintenance and operations of the California Parks System. In exchange, anyone in a vehicle with California plates, including rental cars, would gain free admittance to the parks. The State of Montana has a similar plan that has been very successful.
According to Assemblyman Laird, by freezing the current budget support for parks and adding the new support from vehicle registrations, California would have $40 million to cover the park entrance fees ($6-$10 per car) currently paid by California residents, $120 million more for operations, and $62 million more to address the backlog of deferred maintenance.
Overall Cost:
City Funds: N/A
Grant Funds: N/A
Staff Recommendation: Staff recommends that Council approve sending the letter to Assemblyman Laird in support of the $10 surcharge on noncommercial vehicle registrations.
Important Considerations: A private poll by the State Parks Foundation shows 74 percent of Californians support this proposal. According to a Laird staffer, the proposal was introduced too late to be included in the pending 2008-09 budget, but will still be considered as an ancillary item.
Decision Record:
Reviewed:
Rich Guillen, City Administrator Date
DRAFT
The Honorable John Laird
State Capitol Building, Room 2196
Sacramento, CA 95814
RE: Support of $10 surcharge on noncommercial vehicle registrations to fund park maintenance
Dear Assemblyman Laird:
The City of Carmel-by-the-Sea supports your proposal to add a $10 surcharge on noncommercial California vehicle registrations to help fund the maintenance of the California State Parks system and ongoing ranger services, in exchange for allowing free access to state residents.
This proposal seems to us to be a winning proposition for all concerned. The state will receive necessary funding to address the much needed, deferred maintenance and operation of its parks, and all state residents will be able to access and enjoy our wonderful parks at no cost, other than the $10 vehicle fee. Clearly, California faces serious budgetary issues; however, closing our State parks or making them unaffordable to many through higher fees would be a shame. Your plan does much to share the burden with the state’s vehicle owners, yet rewards them for doing so.
We, in Carmel-by-the-Sea, are fortunate to have Point Lobos right in our area. Your Parks Access Pass plan is especially attractive for urban families, who might otherwise be unable to partake in the beauty of California’s wild and scenic landscape.
Thank you for your creative leadership in this regard.
Sincerely,
Rich Guillen
City Administrator
Sunday, November 30, 2008
CITY COUNCIL: LAFCO of Monterey County Proposed Fee Schedule
Meeting Date: June 3, 2008
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive report on the LAFCO of Monterey County proposed fee schedule and
provide policy direction.
Description: As part of its annual Work Plan, LAFCO directed its executive director to update the current fee schedule. According to the LAFCO’s executive officer, “the purpose of the update is to ensure that LAFCO is reimbursed for the actual and reasonable cost of services provided by LAFCO, in a manner that is consistent with the law and the public purposes of this agency.”
The executive officer Fee Schedule Report is attached and goes into great detail
and justification for the fee schedule update. What’s important here is to determine whether the analysis provided is fair and equitable to all LAFCO member agencies and applicants. At the same time, it’s prudent on LAFCO’s part to reduce its operating expenses to a workable level without diminishing customer services or programs.
Overall Cost:
City Funds: $0 at this time-impact can occur in the future should the City want to annex lands within the Sphere of Influence
Grant Funds: $0
Staff Recommendation: Provide policy direction whether to formally submit comments
in support or opposition to the proposed LAFCO fee schedule update.
Important Considerations: The fee schedule focuses more on increase application
revenues and to reduce LAFCO’s dependency on member agency contributions.
LAFCO staff was also directed to reduce their operating expenses.
Decision Record: No prior action has been taken by the City Council on the LAFCO fee
schedule.
Reviewed:
Rich Guillen, City Administrator Date
Prepared by: Rich Guillen
City Council
Agenda Item Summary
Name: Receive report on the LAFCO of Monterey County proposed fee schedule and
provide policy direction.
Description: As part of its annual Work Plan, LAFCO directed its executive director to update the current fee schedule. According to the LAFCO’s executive officer, “the purpose of the update is to ensure that LAFCO is reimbursed for the actual and reasonable cost of services provided by LAFCO, in a manner that is consistent with the law and the public purposes of this agency.”
The executive officer Fee Schedule Report is attached and goes into great detail
and justification for the fee schedule update. What’s important here is to determine whether the analysis provided is fair and equitable to all LAFCO member agencies and applicants. At the same time, it’s prudent on LAFCO’s part to reduce its operating expenses to a workable level without diminishing customer services or programs.
Overall Cost:
City Funds: $0 at this time-impact can occur in the future should the City want to annex lands within the Sphere of Influence
Grant Funds: $0
Staff Recommendation: Provide policy direction whether to formally submit comments
in support or opposition to the proposed LAFCO fee schedule update.
Important Considerations: The fee schedule focuses more on increase application
revenues and to reduce LAFCO’s dependency on member agency contributions.
LAFCO staff was also directed to reduce their operating expenses.
Decision Record: No prior action has been taken by the City Council on the LAFCO fee
schedule.
Reviewed:
Rich Guillen, City Administrator Date
CITY COUNCIL: Municipal Endowment Fund
Meeting Date: June 6, 2008
Prepared by: Joyce Giuffre,
Admin. Services Director
City Council
Agenda Item Summary
Name: Request for policy direction regarding the establishment of a Municipal Endowment Fund (comprised of a number of individual endowment funds) and the related policies governing the acceptance of gifts, investment, spending, accounting, and reporting of all endowed funds.
Description: The City Treasurer and Administrative Services Director request that City Council provide policy direction regarding the establishment and marketing of a city-run endowment fund. The primary purpose of this Endowment Fund would be to generate income to support the development and enhancement of the City’s programs and activities, and to provide the City with long-term financial stability.
The City Treasurer and Administrative Services Director have determined that a review of a program of this nature is appropriate at this time. In light of the current national economy and the state budget outlook over both the near and long terms, the City’s revenue from all major sources could be trending downward.
Staff requests approval from the City Council to move forward with establishing the Carmel-by-the-Sea Municipal Endowment Fund.
Overall Cost: City Funds: to be determined
Grant Funds: N/A
Staff Time: estimated at between 10-40 hours per month
Staff Recommendation: Provide policy direction regarding establishing a Municipal
Endowment Fund for the City of Carmel-by-the-Sea.
Decision Record: None
Reviewed by:
Rich Guillen, City Administrator Date
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: JOYCE GIUFFRE, ADMINISTRATIVE SERVICES DIRECTOR
DATE: JUNE 6, 2008
SUBJECT: REQUEST FOR POLICY DIRECTION REGARDING ESTABLISHMENT OF A MUNICIPAL ENDOWMENT FUND IN THE CITY OF CARMEL-BY-THE-SEA
______________________________________________________________________________
RECOMMENDED MOTION:
Provide policy direction about whether or not to establish a Municipal Endowment Fund in the City of Carmel-by-the-Sea.
BACKGROUND:
In light of the current national economy and the state budget outlook over both the near and long terms, the City’s revenue from all major sources could be trending downward.
The primary purpose of an endowment fund is to generate income to support the development and enhancement of the City’s programs and activities, and to provide long-term financial stability to the City.
It is intended that the Endowment Fund will provide an income base not subject to major shortterm fluctuations resulting from changes in economic and other conditions which affect the City’s major sources of income. Thus, it should enable the City to better plan, enhance, and carry out its duties of service to the public.
Among the municipalities that have established endowments to allow their citizens to help fund public programs and commitments are:
• San Francisco, CA (pop. 770,000) – has a Cultural Equity Endowment Fund
• Des Moines, IA (pop. 540,000) – has an Affordable Housing Endowment Fund
• Kalamazoo, MI (pop. 80,000) – has a Recreation Endowment Fund
• Lacombe, Alberta, Canada (pop. 11,000) – has an endowment fund to help pay for its
ambulance services and also a fund to assist in paying for its Arts programs
• McFarland, WI (pop. 6,000) – has a Senior Outreach Services Endowment Fund
The establishment of a municipal endowment fund (which is comprised of any number of
individual, donor-specific funds) would allow the City to consistently address needs that have been determined to be municipal in nature, which might otherwise be postponed for economic reasons.
There are several costs related to establishing an endowment fund: those related to staff time (estimated at 10-40 hours per month); those related to the legal expense of evaluating individual endowments; and those related to directly marketing the program. These costs will be fully explored and estimated should City Council decide to move in this direction.
Accompanying this staff report is a draft Endowment Policy analysis that outlines the
numerous required policies regarding gift acceptance, investments, spending, accounting and reporting.
SUMMARY:
The City Treasurer and Administrative Services Director request policy direction from the City Council to move forward with establishing the Carmel-by-the-Sea Municipal Endowment Fund.
Table of Contents
1. Purpose of Endowment Funds
2. Key Concepts
3. Endowment Gift Acceptance Policy
4. Endowment Investment Policy
5. Endowment Spending Policy
6. Endowment Accounting Policy
7. Endowment Reporting Policy
8. Appendix A - Endowment Management Start-Up
9. Appendix B – Reporting Formats
1. Purpose of the Endowment Fund
The primary purpose of the Endowment Fund of Carmel-by-the-Sea is to generate income to support the development and enhancement of the City’s programs and activities, and to provide long-term financial stability to the City.
It is intended that the Endowment Fund will provide an income base not subject to major short-term fluctuations resulting from changes in economic and other conditions which affect the City’s major sources of income. It should thus enable the City to better plan, enhance and carry out its duties of service to the public.
The Endowment Fund is to be permanent and never closed.
2. Key Concepts
Endowments and gifts are donations of cash, securities or other endowment assets to provide income for the maintenance and operation of the City. Donations are set up and accounted for in special funds. The use of the endowment and gift funds may be permanently restricted, temporarily restricted (based on donor imposed restrictions) or unrestricted.
Endowment funds are generally established as a donor-restricted gift or bequest to provide a permanent endowment (a permanent source of funds) or a term endowment (funds for a specified period of time).
Endowment funds functioning as an endowment are Council designated and are not subject to permanent restriction.
Gifts that are available for current purposes are classified as “gifts for
current use”. Gifts that have been restricted by the donor or designated
by the Council for construction, endowment, or similar purposes are classified as “gifts of capital”.
Net Asset Balances
Net Assets are the excess or deficiency of assets over/under liabilities classified according to the existence or absence of donor-imposed restrictions.
Permanently Restricted Endowment
Permanently Restricted assets are determined when the donor specifies that the entire donated principal is to remain in perpetuity within the Endowment Fund (a true endowment). The spending of such principal is prohibited. Earnings associated with this principal can be retained or used to fulfill the donor’s wishes (temporarily restricted) or applied under the direction of the City (unrestricted).
Temporarily Restricted Endowment
Temporarily Restricted Assets are endowment earnings associated with true endowments to fill the donor’s wishes. Quasi Endowments established by the provisions of the City whose source of principal is from Current
Restricted Funds are Temporarily Restricted. Earnings associated with Temporarily Restricted Quasi Endowments are unrestricted because Current Restricted funds have no donor restrictions on income.
Unrestricted Endowment
Unrestricted Assets include donations by parties who did not specify that the assets be used for a certain purpose. Endowment earnings associated with true endowments that are to be applied under the direction of the City are unrestricted. Quasi Endowments established by the provisions of the City whose source of principal is from Current Unrestricted funds remain classified as Unrestricted Funds including the
associated income.
Current Funds (Spending Accounts)
Current Unrestricted Funds and Current Restricted Funds retain the classification for the Net Asset Class as the fund name signifies; that is, Unrestricted Net Assets and Temporarily Restricted Net Assets respectively.
Gifts and Grants
When the City is to receive something of value there is the possibility of confusion as to whether it is a gift or a grant. The City will make that determination based on the definitions below, regardless of the characterization by the donor or sponsor.
A gift is something of value, such as money or other economic assets, given to the City by a donor in support of City programs. There is no economic benefit provided by the City in return.
There are several types of gifts. It is important to understand the distinctions because different policies may apply.
Restricted Gifts – A gift is considered restricted if it is available for operations but limited by the donor to specific purposes, programs, or departments. The City is responsible for ensuring the donor’s intentions are followed when expending restricted gift funds.
Unrestricted Gifts – A gift is considered unrestricted if the donor does not
specify how it is to be used.
In-kind Gifts – non-cash gifts of tangible or intangible property. Gifts –inkind can fall into two distinct categories: (1) objects such as equipment, software, printed materials, food, or other tangible items, and (2) services.
Regardless of the type, gifts-in-kind need to be reported to the City for
proper gift acknowledgment and stewardship.
Employee Gifts - gifts made by City employees. Gifts made to the city may not be earmarked for the donor nor be under the control of the donor.
Endowments – gifts structured by the donor such that only the income may be spent, while the principal is held indefinitely. An endowment may also be a term endowment, wherein the donor specifies the principal must be held for specific length of time.
Quasi-endowment – Any individual donation or gift in excess of $100,000 is generally classified as a quasi-endowment, and treated like an endowment. A related gift income fund is set up for the earnings on the quasiendowment principal. Quasi-endowments may be either restricted or unrestricted, depending on whether there are purpose restrictions on the use of the income from the quasi-endowment.
A grant, in contrast, returns something of value to the donor. There is generally a formal agreement, and there may be effective dates for results, requirements that financial or technical reports be provided to the donor, requirements that the donor retain the rights to intellectual property, or access to City resources or services be given to the donor.
Fiduciary Responsibility
A crucial frame of reference in making all business decisions, including whether to make a given expenditure. A fiduciary relationship exists when someone (the fiduciary) acts in the capacity of a “caretaker” of another’s rights, assets and/or well being. The fiduciary has an ethical and/or legal obligation to carry out this responsibility with discretion, intelligence, honest and impartiality. Those who make decisions or give approval for expenditures must ensure that the funds are expended responsibly, reasonably, and in compliance with the intentions, rules, law and concerns of the provider of the funds.
Authority
Relates to the responsibility for making decisions. At the City, a specific department may be the recipient of a gift, or it may be deemed available for general use. If not specified by the donor, authority to spend with gift will generally be given to the City Administrator.
3. Endowment Gift Acceptance Policy
General Policy
Federal and state law requires that the City satisfy various requirements regarding gifts made the City. The City will act in accordance with all such requirements and this gift acceptance policy will be amended to reflect any changes in applicable law.
To qualify as a charitable contribution, a transfer of cash or assets to the City must be made for the use of the City. The City must have legal authority over the distribution of the contributed funds, although the donor may request that the City apply the funds to a particular need if such application of funds is consistent with the exempt purpose of the City, the donor’s request to the City does not interfere with the donor’s charitable contribution deduction unless the request becomes a material restriction or condition with respect to the transferred assets. A material
restriction exists if any condition is imposed on the actions taken by the City which prevents it from exercising ultimate control over the assets received from the donor for purposes that are consistent with its exempt purpose. There is no material restriction if the following guidelines are observed.
1. The City has the full ownership, benefit and control of the assets it receives.
2. The assets to be administered by the City are consistent with its exempt purposes.
3. The fund to which the assets were contributed is independent of any donor.
Federal law denies contribution deductions when recipients of contributions act as “conduits” – funneling gifts to particular individuals. However, the City can legally establish discretionary distribution funds that are consistent with its exempt purpose. Donations to such funds will be credited as charitable contributions as long as they meet the following criteria:
1. The donor has no family relationship or legal obligation to support the recipient.
2. No other relationship exists by which the donor directly or indirectly benefits from the donation.
3. The donation is not made in lieu of an existing financial responsibility that may reasonably be required or expected of the donor.
Execution of Endowment Agreements
A named endowment can be established either by a lifetime gift or by bequest. When it is created by a lifetime gift, the donor and officials of the City will sign an endowment agreement that sets forth the terms of the endowment. When the donor executes a will containing language directing that a named endowment be established, no other documentation is required, though the donor will be encouraged to execute an endowment agreement in addition to the will. Contributions for existing unrestricted or restricted endowment funds, but not for a new named endowment, require only a transmittal letter or bequest language stating the donor’s intention.
Departmental Endowments
Departments may establish endowments or add to exiting Department endowments from any source including existing fund balances once the Department has reached a minimum fund balance as determined by the Department and approved in accordance with the budget review process and approved financial plan. The establishment of Department endowments will follow the guidelines outlined in the City policy. The use
of the interest from these Department endowments will be subject to City Administrator approval and applicable City policy.
City Council Approval
Prior to the acceptance of restricted gifts or donations to the Endowment Fund, all conditions, restrictions, and stipulations of any kind associated with the gift must be examined and approved by the City Council as being consistent with the City’s purposes and policies, and being helpful to it in its work.
All funds in the Carmel-by-the-Sea Endowment Fund, regardless of their
source, are considered to be the funds of Carmel-by-the-Sea.
4. Endowment Investment Policy
Investment Philosophy
In recognition of its fiduciary responsibility, the City of Carmel-by-the-Sea has adopted the following investment management guidelines for its long-term holdings and endowment funds.
The Endowment Investment Policy of the City is to enhance the value of funds held in the portfolio and at the same time provide a dependable, increasing source of income, which will be used to support various programs of the City. The portfolio shall be composed of diversified assets, including both equities and fixed-income investments. The equities are designed to provide current income, growth of income and appreciation of principal. The fixed-income investments are intended to provide a
predictable and reliable source of interest income while reducing the volatility of the portfolio. Investments will be diversified in order to enhance return and reduce risk.
It is the intent of these guidelines to conform to the prudent investor standard. This standard requires the exercise of reasonable care, skill and caution, and is to be applied to investments, not in isolation, but in the context of the trust portfolio and as part of an overall investments strategy, which should incorporate risk and return objectives reasonably suitable to the City of Carmel-by-the-Sea.
Investment Objectives
The investment objectives for the management of endowment and longer tern assets are to manage contributions in a manner that will best realize the benefit intended by the donor; to produce current income to support the programs of the City and donor objectives; and to achieve growth of both principal value and income over time sufficient to preserve or increase the purchasing power of the assets, thus protecting the assets against inflation.
Total return shall be the method for measuring the performance of market invested funds. This refers to the combination of income (interest and dividends) and appreciation/depreciation in the fund’s value for a certain period of time. The specific financial objective is for total return, less expenses and distributions, to equal or exceed the Consumer Price Index (CPI) for that period. Real growth is a measure of the extent to which total return, less expenses and distributions, exceeds the CPI. It is 100 recognized that this objective will not be attained every year because of market fluctuations, but it is expected to be attained over time.
City Council Approval
Investment of monies of the Endowment Fund will be made by the City Treasurer only in investment vehicles approved by the City Council.
Asset Structure
To facilitate investment and accounting, the endowments and other invested funds shall function as a pooled fund. Each individually-named endowment shall hold its pro rata share as part of the investment pool. On occasion, income may be capitalized and transferred to the principal of a fund.
When contributions for either temporarily restricted funds or the endowments are received, they shall be temporarily retained by the City in a holding account and added to the endowment on the first day of the following quarter.
The funds within the endowment shall consist of all individually-named funds, plus such other funds as the City may from time to time establish.
Investment Management
The investment portfolio shall be overseen by the Finance and Investment Committee of the City, whose responsibilities in the area of investment administration are as follows:
• To recommend policies to the City for the management of the investments,
• To make recommendations to the City on the selection of portfolio managers,
• To determine how assets are to be allocated,
• To monitor the management of the portfolio in order to enhance return and control risk and to keep the City fully informed of any material changes in the portfolio value or composition.
Asset Allocation
The general policy shall be to diversify investments with both equity and fixed-income securities so as to provide a balance that will enhance total return while avoiding undue risk concentration in any single asset class or investment category.
The monitoring and adjustment of the mix of assets among the investment classes is a major factor in achieving investment return. The Finance and Investment Committee shall carefully review the mix of assets in the investment pool and periodically make, or instruct the portfolio managers to make, transfers within prescribed asset class limitations.
As a long-term policy guideline, equity investments will constitute no more
than 80 percent of endowment assets.
1. Equity Investments
Common Stocks – Equities – Mutual Funds
The principal category of equity investments will be common stocks that are generally considered high quality, financially sound, and readily marketable in the open market. Investments made in professionally manage, pooled real estate funds (commonly referred to as REIT’s) will also be considered a component of this
type of investment.
Stock investments should be diversified in terms of market segment, industry, capitalization, and nation of origin.
Real Estate
Equity investments may also include real estate investments in professionally managed, income-producing commercial property, unless otherwise approved by Council action. Gifts of income-producing real estate may be included in the equity portfolio, provided they are consistent with these management guidelines. To the extent that such gifts of real estate would require a greater percentage of endowment assets to be committed to this asset class, or would constitute a negative cash flow, or would be deemed by professional management counsel to constitute undue market risk, such gifts would be disposed of at sale and the proceeds directed to the general endowment pool for the benefit of programs consistent with the donor’s original intent.
Private Equity and Venture Capital
Equity investments may also include private equity or venture capital investments. Such investments, however, shall not exceed 5 percent of the total endowment assets and must be made through pooled funds offered by professional investments managers with proven records of superior performance over time.
2. Fixed-Income Investments
Cash Equivalents
Fixed-income investments may include short-term money market securities, which historically have produced the lowest return of available investment options. Such investments, however, shall be kept at the minimum level that the Finance and Investment Committee considers necessary to meet foreseeable short-term liquidity requirements. Such investment shall be made in U. S.
Treasury securities commercial paper rated A-1 or P-1, and money market securities issued by institutions with proved high-quality credit ratings or by pooled funds with demonstrably high-quality standards and proven records of superior performance over time.
Bonds
The managed portfolios will be well-diversified and consist of readily marketable securities in the open market.
Investments in fixed-income securities will consist of investment
grade securities
1
5. Endowment Spending Policy
It shall be the intention to retain the principal included in the Carmel-bythe-
Sea Endowment Fund by using only a portion of the net earnings of the fund (defined as cash dividend and interest income) to support activities of Carmel-by-the-Sea to be determined from time to time by the City Council.
Spending Policy
The allocation/spending policy shall be determined on a year-to-year basis by the City upon recommendation of the Finance and Investment Committee. In recommending a spending policy for the forthcoming year, the Finance and Investment Committee shall take into consideration total return and CPI for the immediately preceding year and projections for the following year. While the allocation/spending policy may fluctuate within a narrow range, it is expected to average approximately 3-5
percent of market value.
It shall be the responsibility of the Finance and Investment Committee to annually review the spending policy against actual returns in order to make adjustments necessary for the preservation of the purchasing power of the endowment funds, and for the maximization of earnings on all other funds deemed not to be used in the short term/current allocation period.
All monies deposited in the Endowment Fund (including sub-accounts) will remain in it as its principal sum, and will not be spent except as specially permitted.
All interest and other income generated by the Endowment Fund will be
applied and spent as follows:
1. At least ten (10) percent of non-restricted income generated will be retained in the Endowment Fund to enable it to grow and maintain its real value during inflationary periods
2. The remaining ninety (90) percent of the non-restricted income generated may be spent in whatever manner the City Council decides will at any particular time best carry out the work of the City.
The Budget and Finance Committee with advice from the City Administrator will recommend to the City Council disposition of net interest earnings if earnings are sufficient in nature to warrant action. The City Council will determine the use of these net earnings with the provision that the earnings be used for Carmel-by-the-Sea program enhancements and special initiatives. In the absence of specific action, net earnings revert to endowment principal.
Emergency Withdrawal of Principal
In the event of unavoidable serious financial emergency situations for the City, the principal amount of the Endowment Fund may be used under the following conditions:
A vote of 2/3 of the total number of City Council at two successive regular
meetings is required;
1. Not more than twenty (20) percent of the principal sum may be used in any one calendar year;
2. Money in sub-accounts subject to restrictions will not be used;
3. Amounts utilized by the City from the Endowment Fund principal sum will be replaced as a priority budget item as soon as financial conditions permit
The City Council recommends withdrawals from the Endowment Fund principal only when the need is so great that the purposes and programs of Carmel-by-the-Sea would otherwise be seriously impaired and in accordance with the Carmel-by-the-Sea Long Term Investment Policy.
6. Endowment Accounting Policy
The policy on accounting for endowments and gifts defines the accounting procedures for assets donated to the City to support its operations.
Steps involved in process:
Receipt of donation
1. A donor transfers gift to City. The donor is responsible for stipulating the nature of the gift.
2. Treasurer analyzes the terms of the gift and sets up new endowment on accounting system, specifying the net asset class of the corpus, and of the income.
If cash, the gift is deposited into an investment account. It is recorded as an asset and as gift revenue.
If a marketable security, the security is placed with an investment advisor. It is recorded as an asset (at FMV) and as gift revenue.
If real estate, Treasurer should contact professional management counsel to determine if real estate should be held or liquidated. If held, real estate is to be recorded as asset at FMV (GASB Statement 52, Nov. 2007) and as gift revenue. If liquidated, record as cash, above.
Allocation of investment income
3. Once a month (quarter), the endowment accountant credits each endowment with its share of the investment income. A “Payout Roll-Forward Schedule” is prepared for each endowment. See Section 7 – “Endowment Reporting Policies”.
Payout requests
4. When payout is requested, requestor submits “payout request” to endowment administrator. Treasurer verifies that request is permissible under gift restrictions and that there is sufficient unspent payout to cover the request. Treasurer prepares request to pay out funds to Accounts Payable.
Reporting of endowment investments
5. The performance of endowment investments will be reported with the investments reports submitted each quarter to the Finance and Investment Committee. The report shall contain a summary of the following:
a. Book value, by asset class
b. Market value, by asset class
c. Performance measures
d. Benchmarks against which to measure performance, and
e. Beginning and ending market values for the quarter, with changes in market values
For details on these reports see Section 7 – “Endowment Reporting Policies”.
Critical Gift Reporting Times
1. Fiscal Year End – It is important to ensure that all gifts received on or
before June 30th of each year are reflected in the City’s financial statements
2. Calendar Year End – For income tax purposes, many donors make charitable donations on or before December 31st. It is important to be on the alert to potentially process and receipt year-end gifts for donors’ tax requirements.
Pro Forma New Accounts Required
Contra-Account
Net Asset Class Definition Type
General Operating Account
Unrestricted – undesignated
Represents receipts, gifts and funds with no donorimposed restrictions Revenue
Unrestricted - designated
Represents receipts, gifts and funds with no donorimposed restrictions but designated by the governing board (City Council) for a specific purpose Revenue
Unexpended Endowment Income
Represents restricted endowment income that has not yet
been used for the specific purposes intended Revenue
Unexpended Current Use
Gifts
Represents gifts received to support the City's general operations not used as of the current period Revenue
Construction Gifts
Represents gifts received with a donor-imposed stipulation that they be used for construction Revenue
Funds Invested in Facilities
Represents the net book value of plant assets in service and costs of plant constructions in progress Fixed Asset
Funds Invested in Equipment
Represents the net book value of plant assets in service and costs of plant constructions in progress Fixed Asset
Endowments
Endowment Funds Principal
Represents the principal balance of endowments received, classified based on donor-imposed restrictions Asset
Endowment Appreciation
Represents allocated appreciation and unrealized appreciation on investments of endowment principal Asset
Endowment Interest in
Perpetual Trust held by
Others
Represents the estimated fair value of expected future cash flows from certain perpetual trusts held and administered by others where the City is the beneficiary Asset
Life Income Funds
Life Income Funds Principal
Represents the principal balance of life income funds classified based on donor-imposed restrictions Asset
Life Income Funds
Appreciation
Represents allocated appreciation and unrealized appreciation on investment of life income fund principal Asset
Life Income Funds - liability under life agreement
Represents the liability for the net present value of future
payments due to beneficiaries of life income funds Liability
Life Income Funds - liability under CRTs
Represents the liability for obligations under Charitable
Remainder Trusts due to other institutions Liability
Life Income Funds - general
investment income distributed
Represents income earned by gift annuities during the past year from their investment in the General Investment Account Revenue
7. Endowment Reporting Policy
The reporting of endowment activity information required in Section 6
can be contained in 3 basic reports per endowment.
The Payout Roll-forward Schedule
This report tracks, by endowment, the beginning balance plus all additions and draws against all unspent payouts (a complete accounting of funds that have be authorized to be spent, but have yet to be spent) for a given fiscal year (or, to date within a fiscal year).
This report is most useful for departments that have been authorized to spend endowment payout, but have yet to completely spend it. The
City Administrator and Finance and Investment Committee will also use it to compare future funding necessary for endowment program
completion.
The Payout Drawdown Report
This report details the individual drawdown transfers and direct payout drawdowns for each individual endowment.
This report is useful for departments and the City Administrator in order to review exactly how the drawdowns are spent.
The Description, Units, Book Value, Market Value and Unspent Payout Report
This summary report tracks the general “meta” data related to each endowment. It relates the number of units for which the endowment accounts (the percentage of total invested funds), the book value of the endowment, the market value of the endowment, and the unspent payout remaining at a given point in time.
8. Appendix A - Endowment Management Start-Up
The following is an outline of tasks necessary to put into effect the Endowment Policy as presented.
Start-up Tasks
1. A Finance and Investment Committee should be formed, recommended to and approved by the City Council
2. The City Administrator shall recommend an investment advisor and investment manager for selection by the City Council Annual Tasks
3. The City Administrator shall coordinate the activities of the investment advisor and the investment manager throughout the year
4. The City Administrator and the Committee shall meet to determine the current year spending policy, asset allocation, and methods of keeping costs to a minimum (including, but not limited to (1) diligent investigation of alternative investment
candidates, (2) tough negotiation of fees, and (3) efficient management of the firms managing the City’s investments.
5. At a fall meeting (i.e., early in the fiscal year), the investment advisor shall meet with the Finance and Investment Committee to accomplish the following:
a. Present a brief summary of the policies of the City that have been in effect for the reported period
b. Present the relative market valuations of the various asset classes
c. Review the reports of the investment manager for the year ended June 30th, addressing specifically the balances maintained between the stock and bond funds. It is expected that the City’s actual results will be compared with leading performance indicators for similar funds and with the performances achieved by peer institutions
d. Make recommendations to the Committee related to long-term policies, changes in the balancing of the portfolios, and considerations related to the investment
manager
6. At a successive meeting, the investment manager shall meet with the Finance and Investment Committee to accomplish the following:
a. Make presentations to the Committee on endowment fund investment performance for the year ended June 30th
b. Present analyses of current and future market conditions
Prepared by: Joyce Giuffre,
Admin. Services Director
City Council
Agenda Item Summary
Name: Request for policy direction regarding the establishment of a Municipal Endowment Fund (comprised of a number of individual endowment funds) and the related policies governing the acceptance of gifts, investment, spending, accounting, and reporting of all endowed funds.
Description: The City Treasurer and Administrative Services Director request that City Council provide policy direction regarding the establishment and marketing of a city-run endowment fund. The primary purpose of this Endowment Fund would be to generate income to support the development and enhancement of the City’s programs and activities, and to provide the City with long-term financial stability.
The City Treasurer and Administrative Services Director have determined that a review of a program of this nature is appropriate at this time. In light of the current national economy and the state budget outlook over both the near and long terms, the City’s revenue from all major sources could be trending downward.
Staff requests approval from the City Council to move forward with establishing the Carmel-by-the-Sea Municipal Endowment Fund.
Overall Cost: City Funds: to be determined
Grant Funds: N/A
Staff Time: estimated at between 10-40 hours per month
Staff Recommendation: Provide policy direction regarding establishing a Municipal
Endowment Fund for the City of Carmel-by-the-Sea.
Decision Record: None
Reviewed by:
Rich Guillen, City Administrator Date
CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: JOYCE GIUFFRE, ADMINISTRATIVE SERVICES DIRECTOR
DATE: JUNE 6, 2008
SUBJECT: REQUEST FOR POLICY DIRECTION REGARDING ESTABLISHMENT OF A MUNICIPAL ENDOWMENT FUND IN THE CITY OF CARMEL-BY-THE-SEA
______________________________________________________________________________
RECOMMENDED MOTION:
Provide policy direction about whether or not to establish a Municipal Endowment Fund in the City of Carmel-by-the-Sea.
BACKGROUND:
In light of the current national economy and the state budget outlook over both the near and long terms, the City’s revenue from all major sources could be trending downward.
The primary purpose of an endowment fund is to generate income to support the development and enhancement of the City’s programs and activities, and to provide long-term financial stability to the City.
It is intended that the Endowment Fund will provide an income base not subject to major shortterm fluctuations resulting from changes in economic and other conditions which affect the City’s major sources of income. Thus, it should enable the City to better plan, enhance, and carry out its duties of service to the public.
Among the municipalities that have established endowments to allow their citizens to help fund public programs and commitments are:
• San Francisco, CA (pop. 770,000) – has a Cultural Equity Endowment Fund
• Des Moines, IA (pop. 540,000) – has an Affordable Housing Endowment Fund
• Kalamazoo, MI (pop. 80,000) – has a Recreation Endowment Fund
• Lacombe, Alberta, Canada (pop. 11,000) – has an endowment fund to help pay for its
ambulance services and also a fund to assist in paying for its Arts programs
• McFarland, WI (pop. 6,000) – has a Senior Outreach Services Endowment Fund
The establishment of a municipal endowment fund (which is comprised of any number of
individual, donor-specific funds) would allow the City to consistently address needs that have been determined to be municipal in nature, which might otherwise be postponed for economic reasons.
There are several costs related to establishing an endowment fund: those related to staff time (estimated at 10-40 hours per month); those related to the legal expense of evaluating individual endowments; and those related to directly marketing the program. These costs will be fully explored and estimated should City Council decide to move in this direction.
Accompanying this staff report is a draft Endowment Policy analysis that outlines the
numerous required policies regarding gift acceptance, investments, spending, accounting and reporting.
SUMMARY:
The City Treasurer and Administrative Services Director request policy direction from the City Council to move forward with establishing the Carmel-by-the-Sea Municipal Endowment Fund.
Table of Contents
1. Purpose of Endowment Funds
2. Key Concepts
3. Endowment Gift Acceptance Policy
4. Endowment Investment Policy
5. Endowment Spending Policy
6. Endowment Accounting Policy
7. Endowment Reporting Policy
8. Appendix A - Endowment Management Start-Up
9. Appendix B – Reporting Formats
1. Purpose of the Endowment Fund
The primary purpose of the Endowment Fund of Carmel-by-the-Sea is to generate income to support the development and enhancement of the City’s programs and activities, and to provide long-term financial stability to the City.
It is intended that the Endowment Fund will provide an income base not subject to major short-term fluctuations resulting from changes in economic and other conditions which affect the City’s major sources of income. It should thus enable the City to better plan, enhance and carry out its duties of service to the public.
The Endowment Fund is to be permanent and never closed.
2. Key Concepts
Endowments and gifts are donations of cash, securities or other endowment assets to provide income for the maintenance and operation of the City. Donations are set up and accounted for in special funds. The use of the endowment and gift funds may be permanently restricted, temporarily restricted (based on donor imposed restrictions) or unrestricted.
Endowment funds are generally established as a donor-restricted gift or bequest to provide a permanent endowment (a permanent source of funds) or a term endowment (funds for a specified period of time).
Endowment funds functioning as an endowment are Council designated and are not subject to permanent restriction.
Gifts that are available for current purposes are classified as “gifts for
current use”. Gifts that have been restricted by the donor or designated
by the Council for construction, endowment, or similar purposes are classified as “gifts of capital”.
Net Asset Balances
Net Assets are the excess or deficiency of assets over/under liabilities classified according to the existence or absence of donor-imposed restrictions.
Permanently Restricted Endowment
Permanently Restricted assets are determined when the donor specifies that the entire donated principal is to remain in perpetuity within the Endowment Fund (a true endowment). The spending of such principal is prohibited. Earnings associated with this principal can be retained or used to fulfill the donor’s wishes (temporarily restricted) or applied under the direction of the City (unrestricted).
Temporarily Restricted Endowment
Temporarily Restricted Assets are endowment earnings associated with true endowments to fill the donor’s wishes. Quasi Endowments established by the provisions of the City whose source of principal is from Current
Restricted Funds are Temporarily Restricted. Earnings associated with Temporarily Restricted Quasi Endowments are unrestricted because Current Restricted funds have no donor restrictions on income.
Unrestricted Endowment
Unrestricted Assets include donations by parties who did not specify that the assets be used for a certain purpose. Endowment earnings associated with true endowments that are to be applied under the direction of the City are unrestricted. Quasi Endowments established by the provisions of the City whose source of principal is from Current Unrestricted funds remain classified as Unrestricted Funds including the
associated income.
Current Funds (Spending Accounts)
Current Unrestricted Funds and Current Restricted Funds retain the classification for the Net Asset Class as the fund name signifies; that is, Unrestricted Net Assets and Temporarily Restricted Net Assets respectively.
Gifts and Grants
When the City is to receive something of value there is the possibility of confusion as to whether it is a gift or a grant. The City will make that determination based on the definitions below, regardless of the characterization by the donor or sponsor.
A gift is something of value, such as money or other economic assets, given to the City by a donor in support of City programs. There is no economic benefit provided by the City in return.
There are several types of gifts. It is important to understand the distinctions because different policies may apply.
Restricted Gifts – A gift is considered restricted if it is available for operations but limited by the donor to specific purposes, programs, or departments. The City is responsible for ensuring the donor’s intentions are followed when expending restricted gift funds.
Unrestricted Gifts – A gift is considered unrestricted if the donor does not
specify how it is to be used.
In-kind Gifts – non-cash gifts of tangible or intangible property. Gifts –inkind can fall into two distinct categories: (1) objects such as equipment, software, printed materials, food, or other tangible items, and (2) services.
Regardless of the type, gifts-in-kind need to be reported to the City for
proper gift acknowledgment and stewardship.
Employee Gifts - gifts made by City employees. Gifts made to the city may not be earmarked for the donor nor be under the control of the donor.
Endowments – gifts structured by the donor such that only the income may be spent, while the principal is held indefinitely. An endowment may also be a term endowment, wherein the donor specifies the principal must be held for specific length of time.
Quasi-endowment – Any individual donation or gift in excess of $100,000 is generally classified as a quasi-endowment, and treated like an endowment. A related gift income fund is set up for the earnings on the quasiendowment principal. Quasi-endowments may be either restricted or unrestricted, depending on whether there are purpose restrictions on the use of the income from the quasi-endowment.
A grant, in contrast, returns something of value to the donor. There is generally a formal agreement, and there may be effective dates for results, requirements that financial or technical reports be provided to the donor, requirements that the donor retain the rights to intellectual property, or access to City resources or services be given to the donor.
Fiduciary Responsibility
A crucial frame of reference in making all business decisions, including whether to make a given expenditure. A fiduciary relationship exists when someone (the fiduciary) acts in the capacity of a “caretaker” of another’s rights, assets and/or well being. The fiduciary has an ethical and/or legal obligation to carry out this responsibility with discretion, intelligence, honest and impartiality. Those who make decisions or give approval for expenditures must ensure that the funds are expended responsibly, reasonably, and in compliance with the intentions, rules, law and concerns of the provider of the funds.
Authority
Relates to the responsibility for making decisions. At the City, a specific department may be the recipient of a gift, or it may be deemed available for general use. If not specified by the donor, authority to spend with gift will generally be given to the City Administrator.
3. Endowment Gift Acceptance Policy
General Policy
Federal and state law requires that the City satisfy various requirements regarding gifts made the City. The City will act in accordance with all such requirements and this gift acceptance policy will be amended to reflect any changes in applicable law.
To qualify as a charitable contribution, a transfer of cash or assets to the City must be made for the use of the City. The City must have legal authority over the distribution of the contributed funds, although the donor may request that the City apply the funds to a particular need if such application of funds is consistent with the exempt purpose of the City, the donor’s request to the City does not interfere with the donor’s charitable contribution deduction unless the request becomes a material restriction or condition with respect to the transferred assets. A material
restriction exists if any condition is imposed on the actions taken by the City which prevents it from exercising ultimate control over the assets received from the donor for purposes that are consistent with its exempt purpose. There is no material restriction if the following guidelines are observed.
1. The City has the full ownership, benefit and control of the assets it receives.
2. The assets to be administered by the City are consistent with its exempt purposes.
3. The fund to which the assets were contributed is independent of any donor.
Federal law denies contribution deductions when recipients of contributions act as “conduits” – funneling gifts to particular individuals. However, the City can legally establish discretionary distribution funds that are consistent with its exempt purpose. Donations to such funds will be credited as charitable contributions as long as they meet the following criteria:
1. The donor has no family relationship or legal obligation to support the recipient.
2. No other relationship exists by which the donor directly or indirectly benefits from the donation.
3. The donation is not made in lieu of an existing financial responsibility that may reasonably be required or expected of the donor.
Execution of Endowment Agreements
A named endowment can be established either by a lifetime gift or by bequest. When it is created by a lifetime gift, the donor and officials of the City will sign an endowment agreement that sets forth the terms of the endowment. When the donor executes a will containing language directing that a named endowment be established, no other documentation is required, though the donor will be encouraged to execute an endowment agreement in addition to the will. Contributions for existing unrestricted or restricted endowment funds, but not for a new named endowment, require only a transmittal letter or bequest language stating the donor’s intention.
Departmental Endowments
Departments may establish endowments or add to exiting Department endowments from any source including existing fund balances once the Department has reached a minimum fund balance as determined by the Department and approved in accordance with the budget review process and approved financial plan. The establishment of Department endowments will follow the guidelines outlined in the City policy. The use
of the interest from these Department endowments will be subject to City Administrator approval and applicable City policy.
City Council Approval
Prior to the acceptance of restricted gifts or donations to the Endowment Fund, all conditions, restrictions, and stipulations of any kind associated with the gift must be examined and approved by the City Council as being consistent with the City’s purposes and policies, and being helpful to it in its work.
All funds in the Carmel-by-the-Sea Endowment Fund, regardless of their
source, are considered to be the funds of Carmel-by-the-Sea.
4. Endowment Investment Policy
Investment Philosophy
In recognition of its fiduciary responsibility, the City of Carmel-by-the-Sea has adopted the following investment management guidelines for its long-term holdings and endowment funds.
The Endowment Investment Policy of the City is to enhance the value of funds held in the portfolio and at the same time provide a dependable, increasing source of income, which will be used to support various programs of the City. The portfolio shall be composed of diversified assets, including both equities and fixed-income investments. The equities are designed to provide current income, growth of income and appreciation of principal. The fixed-income investments are intended to provide a
predictable and reliable source of interest income while reducing the volatility of the portfolio. Investments will be diversified in order to enhance return and reduce risk.
It is the intent of these guidelines to conform to the prudent investor standard. This standard requires the exercise of reasonable care, skill and caution, and is to be applied to investments, not in isolation, but in the context of the trust portfolio and as part of an overall investments strategy, which should incorporate risk and return objectives reasonably suitable to the City of Carmel-by-the-Sea.
Investment Objectives
The investment objectives for the management of endowment and longer tern assets are to manage contributions in a manner that will best realize the benefit intended by the donor; to produce current income to support the programs of the City and donor objectives; and to achieve growth of both principal value and income over time sufficient to preserve or increase the purchasing power of the assets, thus protecting the assets against inflation.
Total return shall be the method for measuring the performance of market invested funds. This refers to the combination of income (interest and dividends) and appreciation/depreciation in the fund’s value for a certain period of time. The specific financial objective is for total return, less expenses and distributions, to equal or exceed the Consumer Price Index (CPI) for that period. Real growth is a measure of the extent to which total return, less expenses and distributions, exceeds the CPI. It is 100 recognized that this objective will not be attained every year because of market fluctuations, but it is expected to be attained over time.
City Council Approval
Investment of monies of the Endowment Fund will be made by the City Treasurer only in investment vehicles approved by the City Council.
Asset Structure
To facilitate investment and accounting, the endowments and other invested funds shall function as a pooled fund. Each individually-named endowment shall hold its pro rata share as part of the investment pool. On occasion, income may be capitalized and transferred to the principal of a fund.
When contributions for either temporarily restricted funds or the endowments are received, they shall be temporarily retained by the City in a holding account and added to the endowment on the first day of the following quarter.
The funds within the endowment shall consist of all individually-named funds, plus such other funds as the City may from time to time establish.
Investment Management
The investment portfolio shall be overseen by the Finance and Investment Committee of the City, whose responsibilities in the area of investment administration are as follows:
• To recommend policies to the City for the management of the investments,
• To make recommendations to the City on the selection of portfolio managers,
• To determine how assets are to be allocated,
• To monitor the management of the portfolio in order to enhance return and control risk and to keep the City fully informed of any material changes in the portfolio value or composition.
Asset Allocation
The general policy shall be to diversify investments with both equity and fixed-income securities so as to provide a balance that will enhance total return while avoiding undue risk concentration in any single asset class or investment category.
The monitoring and adjustment of the mix of assets among the investment classes is a major factor in achieving investment return. The Finance and Investment Committee shall carefully review the mix of assets in the investment pool and periodically make, or instruct the portfolio managers to make, transfers within prescribed asset class limitations.
As a long-term policy guideline, equity investments will constitute no more
than 80 percent of endowment assets.
1. Equity Investments
Common Stocks – Equities – Mutual Funds
The principal category of equity investments will be common stocks that are generally considered high quality, financially sound, and readily marketable in the open market. Investments made in professionally manage, pooled real estate funds (commonly referred to as REIT’s) will also be considered a component of this
type of investment.
Stock investments should be diversified in terms of market segment, industry, capitalization, and nation of origin.
Real Estate
Equity investments may also include real estate investments in professionally managed, income-producing commercial property, unless otherwise approved by Council action. Gifts of income-producing real estate may be included in the equity portfolio, provided they are consistent with these management guidelines. To the extent that such gifts of real estate would require a greater percentage of endowment assets to be committed to this asset class, or would constitute a negative cash flow, or would be deemed by professional management counsel to constitute undue market risk, such gifts would be disposed of at sale and the proceeds directed to the general endowment pool for the benefit of programs consistent with the donor’s original intent.
Private Equity and Venture Capital
Equity investments may also include private equity or venture capital investments. Such investments, however, shall not exceed 5 percent of the total endowment assets and must be made through pooled funds offered by professional investments managers with proven records of superior performance over time.
2. Fixed-Income Investments
Cash Equivalents
Fixed-income investments may include short-term money market securities, which historically have produced the lowest return of available investment options. Such investments, however, shall be kept at the minimum level that the Finance and Investment Committee considers necessary to meet foreseeable short-term liquidity requirements. Such investment shall be made in U. S.
Treasury securities commercial paper rated A-1 or P-1, and money market securities issued by institutions with proved high-quality credit ratings or by pooled funds with demonstrably high-quality standards and proven records of superior performance over time.
Bonds
The managed portfolios will be well-diversified and consist of readily marketable securities in the open market.
Investments in fixed-income securities will consist of investment
grade securities
1
5. Endowment Spending Policy
It shall be the intention to retain the principal included in the Carmel-bythe-
Sea Endowment Fund by using only a portion of the net earnings of the fund (defined as cash dividend and interest income) to support activities of Carmel-by-the-Sea to be determined from time to time by the City Council.
Spending Policy
The allocation/spending policy shall be determined on a year-to-year basis by the City upon recommendation of the Finance and Investment Committee. In recommending a spending policy for the forthcoming year, the Finance and Investment Committee shall take into consideration total return and CPI for the immediately preceding year and projections for the following year. While the allocation/spending policy may fluctuate within a narrow range, it is expected to average approximately 3-5
percent of market value.
It shall be the responsibility of the Finance and Investment Committee to annually review the spending policy against actual returns in order to make adjustments necessary for the preservation of the purchasing power of the endowment funds, and for the maximization of earnings on all other funds deemed not to be used in the short term/current allocation period.
All monies deposited in the Endowment Fund (including sub-accounts) will remain in it as its principal sum, and will not be spent except as specially permitted.
All interest and other income generated by the Endowment Fund will be
applied and spent as follows:
1. At least ten (10) percent of non-restricted income generated will be retained in the Endowment Fund to enable it to grow and maintain its real value during inflationary periods
2. The remaining ninety (90) percent of the non-restricted income generated may be spent in whatever manner the City Council decides will at any particular time best carry out the work of the City.
The Budget and Finance Committee with advice from the City Administrator will recommend to the City Council disposition of net interest earnings if earnings are sufficient in nature to warrant action. The City Council will determine the use of these net earnings with the provision that the earnings be used for Carmel-by-the-Sea program enhancements and special initiatives. In the absence of specific action, net earnings revert to endowment principal.
Emergency Withdrawal of Principal
In the event of unavoidable serious financial emergency situations for the City, the principal amount of the Endowment Fund may be used under the following conditions:
A vote of 2/3 of the total number of City Council at two successive regular
meetings is required;
1. Not more than twenty (20) percent of the principal sum may be used in any one calendar year;
2. Money in sub-accounts subject to restrictions will not be used;
3. Amounts utilized by the City from the Endowment Fund principal sum will be replaced as a priority budget item as soon as financial conditions permit
The City Council recommends withdrawals from the Endowment Fund principal only when the need is so great that the purposes and programs of Carmel-by-the-Sea would otherwise be seriously impaired and in accordance with the Carmel-by-the-Sea Long Term Investment Policy.
6. Endowment Accounting Policy
The policy on accounting for endowments and gifts defines the accounting procedures for assets donated to the City to support its operations.
Steps involved in process:
Receipt of donation
1. A donor transfers gift to City. The donor is responsible for stipulating the nature of the gift.
2. Treasurer analyzes the terms of the gift and sets up new endowment on accounting system, specifying the net asset class of the corpus, and of the income.
If cash, the gift is deposited into an investment account. It is recorded as an asset and as gift revenue.
If a marketable security, the security is placed with an investment advisor. It is recorded as an asset (at FMV) and as gift revenue.
If real estate, Treasurer should contact professional management counsel to determine if real estate should be held or liquidated. If held, real estate is to be recorded as asset at FMV (GASB Statement 52, Nov. 2007) and as gift revenue. If liquidated, record as cash, above.
Allocation of investment income
3. Once a month (quarter), the endowment accountant credits each endowment with its share of the investment income. A “Payout Roll-Forward Schedule” is prepared for each endowment. See Section 7 – “Endowment Reporting Policies”.
Payout requests
4. When payout is requested, requestor submits “payout request” to endowment administrator. Treasurer verifies that request is permissible under gift restrictions and that there is sufficient unspent payout to cover the request. Treasurer prepares request to pay out funds to Accounts Payable.
Reporting of endowment investments
5. The performance of endowment investments will be reported with the investments reports submitted each quarter to the Finance and Investment Committee. The report shall contain a summary of the following:
a. Book value, by asset class
b. Market value, by asset class
c. Performance measures
d. Benchmarks against which to measure performance, and
e. Beginning and ending market values for the quarter, with changes in market values
For details on these reports see Section 7 – “Endowment Reporting Policies”.
Critical Gift Reporting Times
1. Fiscal Year End – It is important to ensure that all gifts received on or
before June 30th of each year are reflected in the City’s financial statements
2. Calendar Year End – For income tax purposes, many donors make charitable donations on or before December 31st. It is important to be on the alert to potentially process and receipt year-end gifts for donors’ tax requirements.
Pro Forma New Accounts Required
Contra-Account
Net Asset Class Definition Type
General Operating Account
Unrestricted – undesignated
Represents receipts, gifts and funds with no donorimposed restrictions Revenue
Unrestricted - designated
Represents receipts, gifts and funds with no donorimposed restrictions but designated by the governing board (City Council) for a specific purpose Revenue
Unexpended Endowment Income
Represents restricted endowment income that has not yet
been used for the specific purposes intended Revenue
Unexpended Current Use
Gifts
Represents gifts received to support the City's general operations not used as of the current period Revenue
Construction Gifts
Represents gifts received with a donor-imposed stipulation that they be used for construction Revenue
Funds Invested in Facilities
Represents the net book value of plant assets in service and costs of plant constructions in progress Fixed Asset
Funds Invested in Equipment
Represents the net book value of plant assets in service and costs of plant constructions in progress Fixed Asset
Endowments
Endowment Funds Principal
Represents the principal balance of endowments received, classified based on donor-imposed restrictions Asset
Endowment Appreciation
Represents allocated appreciation and unrealized appreciation on investments of endowment principal Asset
Endowment Interest in
Perpetual Trust held by
Others
Represents the estimated fair value of expected future cash flows from certain perpetual trusts held and administered by others where the City is the beneficiary Asset
Life Income Funds
Life Income Funds Principal
Represents the principal balance of life income funds classified based on donor-imposed restrictions Asset
Life Income Funds
Appreciation
Represents allocated appreciation and unrealized appreciation on investment of life income fund principal Asset
Life Income Funds - liability under life agreement
Represents the liability for the net present value of future
payments due to beneficiaries of life income funds Liability
Life Income Funds - liability under CRTs
Represents the liability for obligations under Charitable
Remainder Trusts due to other institutions Liability
Life Income Funds - general
investment income distributed
Represents income earned by gift annuities during the past year from their investment in the General Investment Account Revenue
7. Endowment Reporting Policy
The reporting of endowment activity information required in Section 6
can be contained in 3 basic reports per endowment.
The Payout Roll-forward Schedule
This report tracks, by endowment, the beginning balance plus all additions and draws against all unspent payouts (a complete accounting of funds that have be authorized to be spent, but have yet to be spent) for a given fiscal year (or, to date within a fiscal year).
This report is most useful for departments that have been authorized to spend endowment payout, but have yet to completely spend it. The
City Administrator and Finance and Investment Committee will also use it to compare future funding necessary for endowment program
completion.
The Payout Drawdown Report
This report details the individual drawdown transfers and direct payout drawdowns for each individual endowment.
This report is useful for departments and the City Administrator in order to review exactly how the drawdowns are spent.
The Description, Units, Book Value, Market Value and Unspent Payout Report
This summary report tracks the general “meta” data related to each endowment. It relates the number of units for which the endowment accounts (the percentage of total invested funds), the book value of the endowment, the market value of the endowment, and the unspent payout remaining at a given point in time.
8. Appendix A - Endowment Management Start-Up
The following is an outline of tasks necessary to put into effect the Endowment Policy as presented.
Start-up Tasks
1. A Finance and Investment Committee should be formed, recommended to and approved by the City Council
2. The City Administrator shall recommend an investment advisor and investment manager for selection by the City Council Annual Tasks
3. The City Administrator shall coordinate the activities of the investment advisor and the investment manager throughout the year
4. The City Administrator and the Committee shall meet to determine the current year spending policy, asset allocation, and methods of keeping costs to a minimum (including, but not limited to (1) diligent investigation of alternative investment
candidates, (2) tough negotiation of fees, and (3) efficient management of the firms managing the City’s investments.
5. At a fall meeting (i.e., early in the fiscal year), the investment advisor shall meet with the Finance and Investment Committee to accomplish the following:
a. Present a brief summary of the policies of the City that have been in effect for the reported period
b. Present the relative market valuations of the various asset classes
c. Review the reports of the investment manager for the year ended June 30th, addressing specifically the balances maintained between the stock and bond funds. It is expected that the City’s actual results will be compared with leading performance indicators for similar funds and with the performances achieved by peer institutions
d. Make recommendations to the Committee related to long-term policies, changes in the balancing of the portfolios, and considerations related to the investment
manager
6. At a successive meeting, the investment manager shall meet with the Finance and Investment Committee to accomplish the following:
a. Make presentations to the Committee on endowment fund investment performance for the year ended June 30th
b. Present analyses of current and future market conditions
Subscribe to:
Posts (Atom)