Receive an update on the Yolo County Local Agency Formation Commission’s (LAFCo) Municipal Services Review (MSR) and Sphere of Influence (SOI) Update for the fifteen (15) Fire Protection Districts (FPDs) that serve the unincorporated area of Yolo County, including County staff’s regional governance recommendations, and consider taking action on potential implementation options related to regional governance of the unincorporated Fire Protection Districts consistent with the County’s “Long Term Fire Protection Sustainability” efforts underway since 2018. (No general fund impact) (Pinedo/Rinde/Sabatini)  
 

The Long-Term Fire Sustainability effort began in 2018 and has since continued exploring options to improve the long-term sustainability of the County’s 15 rural fire protection districts (FPDs). Of these 15 districts, 11 provide direct fire services while the other 4 are considered as contract districts and contract with a neighboring city or agency for fire protection services. Ten (10) of the districts are dependent to the Board of Supervisors, while five (5) are independent special districts (see table below).  
 

It is important to note that the challenges facing Yolo County fire protection districts are not unique to Yolo County and mirror challenges in the delivery of fire protection services at both the state and national level.  It is also important to note that challenges affecting the County's rural fire protection districts affect all Supervisorial districts throughout the County and is a County-wide concern, see map provided in Attachment A, and table below. 
 

Dist. 1	Dist. 2	Dist. 3	Dist. 4	Dist. 5
Clarksburg FPD	Madison FPD	East Davis FPD	East Davis FPD	Capay Valley FPD
CSA-9	Springlake FPD	Elkhorn FPD	No Mans Land FPD	Dunnigan FPD
East Davis FPD	Winters FPD	Madison FPD	Springlake FPD	Elkhorn FPD
No Mans Land FPD	West Plainfield FPD	Springlake FPD		Esparto FPD
		West Plainfield FPD		Madison FPD
		Willow Oak FPD		Knights Landing FPD
				Springlake FPD
				Willow Oak FPD
				Yolo FPD
				Zamora FPD

After the release of this report, the County formed the Yolo County Fire Protection Sustainability Board Ad Hoc Committee, consisting of District 3 Supervisor Sandy and District 5 Supervisor Barajas. Representatives of the Yolo County Fire Chiefs Association (YCFCA) are invited participants in certain committee meetings.  The goal of the ad hoc committee is to work collaboratively with the YCFCA to develop a suite of options and implementation strategies to ensure the long-term sustainability of the fire protection services in Yolo County.  The Fire Sustainability Ad Hoc Committee also created a Fire Sustainability Work Group, which meets bi-weekly and consists of County staff and five (5) representatives of the rural fire districts. The desired outcomes of this effort are as follows: 

Though initially hampered in its efforts by the COVID-19 pandemic, the Subcommittee began working more regularly during 2021 to find solutions and develop periodic updates. County staff brought its last update to the Board of Supervisors on May 24, 2022 included as Attachment B. That update discussed conclusion of an initial effort to meet the immediate wildfire season needs of the rural fire districts until longer term efforts could be completed.
 
Since that time, the Yolo Local Agency Formation Commission (LAFCo) has completed and unanimously approved the Municipal Services Review/Sphere of Influence study for all of the fire protection districts and County Service Area 9. In addition, the County has kicked off an effort to perform Proposition 218 studies for all rural fire districts to allow them an opportunity to consider self-help steps to increase their revenues to better address increased costs and service needs.
 
Updates on those significant efforts are described below:
 
LAFCo MSR/SOI Report
The County Administrator, along with the Board of Supervisors, requested that the Yolo Local Agency Formation Commission (Yolo LAFCo) accelerate its Municipal Service Review (MSR) and Sphere of Influence (SOI) study in Spring of 2021. MSR/SOI studies are typically conducted once every five (5) years. That request was based off the notion that many districts had not implemented efficiencies that were identified in the 2016 LAFCo report and an updated report could help to guide efforts to improve fire services in the County. There was still the recognition that the County would need to help to partner with districts and LAFCo and bring tools available (and possibly funding) in order to facilitate improvements.
 
LAFCo provided an initial FPD governance overview for the LAFCo Commission's direction on March 31, 2022, and the Commission approved the final MSR/SOI report (Attachment C) on July 28, 2022. The LAFCo Commission approved the report unanimously with direction to LAFCo staff to transmit the report, along with public comments received specific to the East Davis and Elkhorn Fire Districts, to the Board of Supervisors for further consideration (see Attachment D).
 
The purpose of a Municipal Services Review (MSR) in general is to provide a comprehensive inventory and analysis of the services provided by local municipalities, service areas, and special districts. An MSR evaluates the structure and operation of the local municipalities, service areas, and special districts and discusses possible areas for improvement and coordination. It is the intent that these reports be considered by the agencies studied. Below is a summary of the overall observations from the approved LAFCo report followed by area specific recommendations:
 
Overall Observations
The LAFCo analysis determined that Fire Districts are fragmented and could be improved primarily by adopting shared governance through Joint Operations Agreements (“JOA”) or through reorganization if districts are unwilling to undertake a JOA or if other factors, such as efficient service delivery and health or safety concerns, favor reorganization.
 
As part of the governance model, and to bring 15 fire districts into an efficient grouping for consideration of JOA/Consolidation, LAFCo determined it made sense to identify different geographic service areas where cooperation of existing resources would be most logical to address service needs. This was informed by LAFCo looking critically into those districts that were not meeting minimum requirements for rescue/EMS and fire responses, as well as analyzing the staffing, equipment and fiscal needs of each fire district.
 
Thus, the unincorporated areas of the County were divided into five key geographic zones where enhanced cooperation is needed. A map of draft/proposed service areas is provided as Attachment E to this staff report.

The adopted LAFCo MSR recommends that JOAs or consolidations/reorganizations should be performed for fire districts performing direct services (i.e. the non-contract only districts) in Area 1, 2, and 3. A JOA is a way to create a “functional consolidation” by having the districts work together for operational purposes and to achieve better efficiency and resiliency by working a cohesive unit. This differs from a legal consolidation as it is done by voluntary agreement between two or more districts. Area 5 was not recommended for a JOA due it is geographic isolation. The individual FPD’s in Areas 1, 2, and 3, except Madison FPD, have entered into JOAs in the past 16 months. Madison FPD remains in discussions with other Area 1 FPDs on joining the existing JOA.
 
The other "big picture" LAFCo recommendation was to dissolve the two FPDs of Elkhorn and No Man’s Land, and to reorganize the six (6) districts in Area 4 into four (4) districts whose boundaries would align with the contract service area of the city/entity that is providing fire services to its residents.

In addition to these recommendations there were several additional key recommendations, as follows:

 The last recommendation, that Yolo County monitor implementation of the LAFCo MSR, will be key to furthering fire sustainability. The County is in a unique position to aid the fire districts in implementation of LAFCo recommendations and ensure momentum continues into the future, improving the long-term sustainability of the FPDs. This is primarily because ten (10) of the fire protection districts are under the control of the Board of Supervisors as "dependent" fire districts, even though (as discussed further below) some are governed by commissions created by the Board of Supervisors to facilitate local control over district operations.

Independent vs. Dependent Special Districts

Special districts are separate and apart from any counties, cities, or other government agencies that may serve the area. However, an important governance distinction exists between what are known as independent special districts versus dependent special districts.  Independent special districts obtain their authority directly from the community they serve through a governing body that serves independently of other government agencies, providing the board members with a high degree of autonomy to fulfill the mission of the district. They are directly accountable to the community they serve. The vast majority of independent special districts are governed by a constituent-elected board of directors. In some cases, the district board may be appointed by one or more other local elected officials, so long as the board members serve fixed-terms and none of the board members serve in an ex-officio capacity.

On the other hand, dependent special districts are closely tied to another unit of local government. Typically, a county’s elected board members, or their appointees, serve as the board of directors for a dependent special district and control their budget, management, and operation. Unlike independent special districts, appointees to the governing board of a dependent special district may serve at the pleasure of the appointing body and, in the case of dependent fire districts in Yolo County, the Board of Supervisors can revoke powers delegated to the governing boards (fire commissions) of each district or dissolve the commissions altogether. In this respect, dependent special district governance is subject to the interests, influence, and authority of other governmental bodies.

Altogether, while the Board has historically delegated all or nearly all matters of governance to each appointed fire commission, through its authority to rescind delegated powers or dissolve commissions the Board can compel implementation of recommendations, including consolidations/reorganizations. Also, while the five (5) independent districts have independent boards of directors, under state law the County has the authority to initiate proceedings for consolidation of independent districts when and if deemed necessary.
 

 
County staff propose to review the MSR in greater detail, and work collaboratively with the FPDs to bring back recommended actions to the Board by analyzing each operational area focusing on the operational area with the most pressing needs first. County staff plan to focus on Area 4 initially. According to LAFCo, adequate response for Elkhorn FPD has been a chronic issue and the 2016 LAFCo MSR recommended it become a contract district. The district is instead continuing to rely on significant auto-aid at no cost to the district from the Cities of Woodland and West Sacramento.  Both city departments have indicated that the auto-aid agreement is taxing on their regular duties. Should West Sacramento or Woodland amend this practice, it would have a significant negative impact to public service in the district.

Proposition 218 Studies
The County set aside $300,000 in the adopted budget for the conduct of Proposition 218 studies for each of the rural fire districts, which will provide them an opportunity to consider self-help steps to improve their revenues (subject to approval in a Prop 218 election) to meet increased costs and service needs. A benefit assessment is crucial to financial planning and provides a regular and reliable revenue source.

Four of the 15 FPDs do not have any benefit assessment established to contribute to their permanent long-term revenues. Those FPDs without any benefit assessment are: Capay Valley FPD, Dunnigan FPD, West Plainfield FPD, and Winters FPD.  In 1988 only two FPDs had a benefit assessment on file: East Davis FPD and Willow Oak FPD.  By 1997, eight FPDs had benefit assessments on file which averaged 36% of total revenue generated for those eight FPDs. The majority of FPDs with benefit assessments have not updated their assessments in the past two decades.

The selected consultant is SCI Consulting and has begun the kick-off meetings for this process. This culminated with an Open House hosted by the County where a comprehensive overview was provided on July 7, 2022 that was offered to all 15 fire districts to brief their chiefs and commissioners on the 218 process. This session was designed to be educational as many individuals may not be familiar with the 218 process and the session covered an overview of the law, engineers report, balloting and approval process, and timing for a 218. Materials presented are included as Attachment F and a recording is available here. 

Due to the significant effort involved in conducting a total of 15 studies, SCI, in coordination with the County, expects to conduct the studies in two distinct groups. The 10 direct service fire protection districts will proceed with prop 218 engineers' reports first, followed by the contract-only districts in late 2023. It should be noted that not all fire districts have expressed a desire to participate. Further, it should be noted that holding a 218 election does not guarantee a successful approval of an assessment by property owners in the district.

The initial draft schedule for the overall 218 process is included as Attachment G. It is anticipated that the first (the direct services fire districts) of the two rounds of engineers' reports will be completed by December 2022, followed by Prop 218 elections (if desired), with the entire process being completed by June 2024. This schedule is considered draft and may be amended from time to time based on interaction between County staff, SCI, and fire districts.

Fire Sustainability Contingency Funding - FY 2022-23
 
The County, as part of the adopted budget in September 2021, set aside $550,000 in contingency funds in the 2021-22 budget to fund efforts or initiatives towards long-term fire sustainability. These funds have been carried forward to the 2022-23 fiscal year. County staff would like to use the funds to further the fire sustainability effort. Staff would like board support to begin developing a plan as to how contingency funds could be leveraged in order to accelerate progress toward fire sustainability.
 
Some tools the County might be able to use the funds for could be as follows:

Staff would return to the Board with a specific approach to allocation of funds, acceptance of proposals, and request the board to formally approve the approach and appropriate funds at a later date.
 
Recommendation:

Staff recommend continuing with the Proposition 218 efforts and request the board authority as discussed above to develop proposals and return to the board on how to best leverage the $550,000 in one-time funding that is set aside. 

Other than these efforts which staff would continue in any scenario, staff analyzed various alternatives (in no preferential order) of how to proceed with addressing the LAFCo recommendations primarily focused on the approach to Area 4. Under all of these alternatives for Area 4 it should be noted that County staff recommend Elkhorn Fire Protection District be reorganized: 

The Fire Sustainability Ad Hoc Subcommittee, in close collaboration with the stakeholder working group, considered the three above listed alternatives, and by consensus recommends the following alternative be proposed for consideration by the Board of Supervisors: 
 

a. Conduct outreach and develop options for the reorganization of the Elkhorn Fire Protection District; 
b. Conduct outreach and undertake analysis for the Area 4 contract-only fire protection districts, analyzing a suite of options including shared services, JOAs, and reorganization; and 
c. Conduct status check on status of MSR/SOI recommendation implementation within 12-24 months.
 

Staff has collaborated with the Yolo County Fire Protection Sustainability Board Ad Hoc Subcommittee, the Yolo County Fire Chief's Association, staff from Department of Financial Services and the Yolo County Office of Emergency Services, Yolo LAFCo staff, various fire protect district staff/commissioners, and several peer jurisdictions.