That the City Council approve and authorize the Mayor to execute a revised Amendment #4 to the Agreement for Services between the City of La Habra and the Los Angeles County Fire Department (LACoFD).

At the City Council meeting on August 21, 2023, staff discussed the history of the mutually beneficial cost-sharing agreement with LACoFD for fire services and the negotiations following LACoFD's announcement that they would no longer be able to support the prior funding model that had been in place for 20 years. Based on the negotiation position taken by LACoFD, if the City desired to have LACoFD continue providing service in La Habra, the City would have to assume the full fee for services, essentially doubling the cost from approximately $11 million to almost $22 million for four stations. Following months-long negotiations, the City and LACoFD were able to negotiate the following terms: 

Amendment #3 was entered into and effective on October 1, 2023. Since that time, staff has been working with LACoFD to finalize Amendment #4. The terms above have been included; however, there are some proposed amendments to the original agreement that Staff is recommending Council approve as part of Amendment #4. In discussions regarding Amendment #4 with LACoFD staff, they initially expressed to the City that they planned to remove the Annual Fee Limitation clause completely from the original agreement, meaning there would be no cap on how much LACoFD could raise the City's annual fire service costs each year. City staff indicated that this was not an acceptable demand, as it would create a significant amount of risk and uncertainty in the City's future years' costs and negatively impact the City's ability to effectively budget potential annual cost increases. After several months of additional negotiations, staff was able to retain an Annual Fee Limitation in place, slightly modifying the Annual Fee Limitation formula in years seven through ten by taking the average of the preceding four years' percentage increases plus one percent (1%) instead of the average preceding five years' increases plus 1% in Actual Annual Fee.

In discussions with LACoFD staff regarding Amendment #4, City and LACoFD staff also clarified additional areas of the original 2005 agreement and prior contract amendments. The new, revised proposed language in Amendment #4 would:

There is no immediate impact to the Fiscal Year 2023-24 budget. Schedule 2-E in the attached agreement shows the cost for fire service to the City's General Fund in FY 2024-25 will be $14,425,210 for three fire stations. This new annual cost is approximately $4.4 million higher per year for three fire stations than what the City had previously budgeted in FY 2022-23 for four fire stations, when negotiations first began with LACoFD for the new 10-year contract extension. This increased cost for fire services will be included in proposed FY 2024-25 budget for Council review and consideration.