SAN BERNARDINO–The San Bernardino City Council this week hesitated in taking the final step toward the dissolution of the city’s municipal fire department.
Though the financially-challenged city has been on a steady march toward closing out the 137-year old department and arranging for the annexation of the entire area within its city limits to be a county-administered fire protection district, complete with what is to be a newly imposed taxing structure, the whole council fell one vote short of pulling the trigger on the makeover of the municipal fire department into one that would be a division of the county fire department.
In the run-up to Monday night’s meeting, the vote to effectuate the takeover appeared to be a mere formality, one that had sure opposition only from councilman John Valdivia, with the potential that councilman Henry Nickel might join with Valdivia in failing to embrace the plan, which calls for winnowing the city payroll by 140 employees, while imposing on all city landowners a $148 per year parcel tax intended to underwrite the county’s provision of the service.
The San Bernardino City Professional Firefighters Association had steadfastly opposed the proposal from the time it was first floated two years ago. The San Bernardino Fire Management Association, which represents seven of the fire department’s senior staff and had been far less vocal with regard to the proposal, registered belated alarm over the prospect of shuttering the city-run fire department.
The city’s firefighting professionals were concerned, at least in part, because, despite assurances that the county would hire those city firefighters at the level of captain or below displaced with the closing of the department, the level of pay and benefits they would receive with the county was considered below their remuneration and benefit packages with the city. Those working at the management level were formerly not guaranteed positions within the county system.
Their opposition, however, was insufficient to dissuade the council – or at least a majority of it – from voting 4-3 in August 2015 to initiate handing off the city’s fire protection service to the county and add a $148 per year parcel tax beginning in Fiscal Year 2016-17 and increasing by 3 percent per year thereafter as part of the transition. That included an application with the San Bernardino County Local Agency Formation Commission to process and approve the annexation of the city into the County’s Fire Protection District.
The Local Agency Formation Commission indeed signed off on the arrangement in January. Moreover the city smoked a peace pipe with the San Bernardino City Professional Firefighters Association and the San Bernardino Fire Management Association, reaching what was termed a “global settlement” with the San Bernardino City Professional Firefighters, bringing to a close the litigation initiated by that union in April 2015. Those suits by the bargaining unit asserted the city had run afoul of the municipal charter in imposing rampdowns on firefighter pay and benefits. That settlement involved resolving the firefighters’ claims stemming from the city imposing pension cost-sharing above 9 percent; by the municipality agreeing to pay the firefighters somewhere in the neighborhood of $1.1 million for settlement of other lawsuits filed since the 2012 bankruptcy filing; making a set of two payments of roughly $1.5 million each this year and next year in exchange for a release from any claims related to lower wages or benefits after the county fire division implements the annexation; the payment of $430,000 to the county so transitioning firefighters will receive sick leave and vacation time; and the city’s agreement to pay $140,000 of the outstanding $14 million claim the firefighters had against the city over other issues, the payment of which has been stymied by the bankruptcy filing the city made in 2012.
Per the agreement worked out with the county, all 140 of the fire department’s personnel, line firefighters and management, as well as clerical staff and dispatchers, were guaranteed jobs with the county after the takeover, according to Andrew Belknap of Management Partners, a city consultant who previewed the item relating to accepting the annexation.
Belknap characterized the city’s annexation into the county fire protection district as “a regionalization of fire services, which many communities have taken.” He intimated that the past tradition of municipalities being comprehensive providers of public services is being reconsidered in many differing jurisdictions in response to changes in the economic circumstances communities find themselves in. “It is important for the city to decide which services are going to be delivered and not necessarily deliver them directly” he stated, calling this approach a “paradigm of modern municipal government.”
Belknap offered his belief that the arrangement with the county fire division would provide “better service to city residents with a proven service provider. Less costs for the city frees up funds for the police master plan, results in fewer city employees,” adding it would “shrink the head count of city employees, which allows the city to rebuild. It allows the city to focus on rebuilding organizational capacity.” Moreover, he said, it would help restructure the city financially and “implement… a major component of the city’s recovery plan to exit bankruptcy,” calling it “a major foundation, a brick in the city recovery plan which the city council approved in May.”
When Belknap began his presentation, the general perception, based upon past city council action, was that a majority of the council was favorably disposed toward making the transition from the municipal fire department to one run by the county. Belknap’s approach initially came across as casual and confident. But as councilman Jim Mulvihill, who had previously endorsed the annexation and whose continuing support for it was anticipated, began to question elements of the plan in earnest, Belknap’s demeanor became progressively more defensive to the point that he was practically playing the role of an out-and-out advocate of the plan.
“Looking over the documentation we just received this last Thursday,” Mulvihill began, “I would have liked to have more time to really go over this because it is an important document and particularly important because it is going to be in perpetuity. All this kind of bothers me. Number one, it seems to me we should in the short term be able to revisit this and to see how it’s working, how it’s not working and come up with a new document. I don’t want to be making a decision [binding] some councilman who in a hundred years that is working with the same document whether it has been changed or not. So, the word in perpetuity is not something I am willing to vote on.”
Belknap responded, “That’s the way annexation works. You can always file an application to de-annex, detach.”
Mulvihill said, “Yes we could, but then you could modify the word ‘in perpetuity,’ saying something like ‘unless there is some de-annexation” because the word ‘in perpetuity’ is fairly permanent.”
Mulvihill then latched onto another issue, that of how thoroughly the city’s alternatives to annexing into the county fire district had been considered.
“It said in here we went through all the various agencies we could possibly have opted for, but we really didn’t,” Mulvihill said. “The county was the only option we had in reality. Calfire [The California Division of Forestry] didn’t come along, among other things.”
Mulvihill moved on to the taxing component of the arrangement and whether the numbers would hold steady and if the county would be entitled to all of the taxes generated as a consequence of the annexation when tax revenues into the district increased.
“I’m not quite sure that this contract, the numbers you’ve got here, the ad valorem tax [i.e., property tax] of $11.1 million is adding up,” Mulvihill said. He then referenced another $10.4 million in taxes and fees from other sources endowing the district. “That’s the way it is today, but property taxes are going to be going up, so presumably if we’re promising [to give the county] all of our ad valorem taxes outside of the redevelopment agency, then they are going to be going up so we are going to be paying more than the $21.5 million. What happens if the property values change? What I am looking for here is we are going to be getting services … we have in mind what kind of services we are looking for… I want to know what we are going to be paying definitely and if there is a kicker in there. Do we go up three percent a year if the property tax goes up three percent a year? I would like to understand a little bit more. I wish we had a little bit more discussion time. This was given to us last Thursday.”
Belknap said the numbers were the same ones previewed publicly when the Local Agency Formation Commission approved the plan in January.
But Mulvihill still expressed skepticism, saying the council was being rushed and stampeded and was thus unable to carry out its due diligence. He said the city had been more deliberative with regard to other issues.
“We have a long term property management plan,” he said. “We went over that step by step before we approved it. With this, which is a really important document, we get nothing. A lot of this – the contract itself, there’s no specifics in it. There’s really no dollars and cents in here. I would like, before I vote for something that’s going to be in perpetuity, which I wouldn’t vote for anyway, I’d sure like to know exactly what we are going to be spending, how much we are going be spending in five years and when we’re going to have the opportunity of renegotiating a contract. If the state wants to have a little bit more flexibility, I’m sure that can be written in here but the point is having something in perpetuity, from my point of view, I don’t think we would be doing a service to the people in terms of just signing a document [in which] we really don’t understand necessarily what the impact of it is going to be.”
Belknap pointed out to Mulvihill that the document was not a contract but rather an annexation agreement. That did not dissuade Mulvihill, however.
Mulvihill said he was not sure the city was not “being sold a bill of goods.” He questioned the assertion that the city would net some $7 million to $8 million in savings, noting that this figure seemed to be reflected in the $7.4 million that would be generated by the $148 per year per parcel tax being imposed as a consequence of the annexation.
Mulvihill had been a crucial supporter of the plan to liquidate the fire department and annex the city to the fire protection district in the past. His seeming defection reinvigorated what had previously appeared to be the dormant opposition to the move.
Following his grilling of Belknap, the floodgates of reluctance with regard to the annexation opened.
Councilman John Valdivia asked Belknap, “What is the total revenue in income of tax? There are other aspects and components of the tax separate and apart from utility tax and special revenue fees.”
Belknap assured him that the incoming revenue would be “going to the county fire protection district for fire protection within the city.”
Valdivia said he had previously proposed a “solution to the conundrum” to the “$8 million to an almost $15 million budget gap” facing the fire department by obtaining ambulance funding he wanted the city to apply for. He said he found it alarming that “ambulance fees that we could have used to fix our department are being earmarked and given off to the county.”
“This might be a way to circumvent the voter at the back door,” Valdivia said of the annexation.
City attorney Gary Saenz said the citizens of the city would benefit by the annexation because “they’ll be safer.”
He linked the need to approve the annexation to critical elements of the city’s bankruptcy exit plan. He said “many of the agreements we were able to reach which are dependent upon approval of the plan of adjustment… were in jeopardy” if the annexation did not go through.
He said there was a possibility of “the bankruptcy proceeding [being] dismissed” if the city did not execute the annexation agreement. “That possibility scares me,” he said, calling it “realistic to think that is a possible consequence.”
He further said the global settlement with the fire union over the lawsuits it had brought against the city were contingent upon the annexation.
Councilman Henry Nickel relentlessly bore in on the city consigning future property tax revenue increases to the county, suggesting that the trade-off for doing that should be a guarantee from the county ensuring a minimal level of fire protections service to the county in the face of possible property tax decreases.
“Does this transfer of all city property tax revenue continue if such property tax revenue increases as a result of higher property [values]?” Nickel asked. In an effort to foreclose any avoidance of the question, he rephrased it multiple times and from different perspectives. “If the assessed values go up, we’re still on the hook, that money still goes to the county, right?” he asked. “The city never gets that money back, correct? Any increase that occurs as a result of increased values in the city, that money will forever go to the county, it never comes back to the city, correct?”
Belknap responded, “It goes to the county fire protection district for fire services within the city. If things go well and the city’s property taxes improve, the county fire protection district will be able to make additional investments, maybe open some of the closed fire stations, improve fire services within the city.”
Nickel pressed forward. “Can we get any guarantee of that?” he asked.
Belknap said, “Yes, because that’s all they can do with the money. That is what they do. In the service plan it says quite clearly, if revenue improves, fire stations will be reopened.”
Belknap continued, “The advantage of the annexation rather than the contract approach is an incentive to increase economic development within the city because of the revenue stream it depends upon to deliver fire services. If there is a recession and the those revenues go down, they are still responsible for delivering fire services. This is an agency with a track record. The fact of the matter is that when property taxes increase, the county fire protection district will benefit and the citizens of San Bernardino will benefit because they will get improved fire and emergency medical services.”
But Nickel extracted from Belknap an admission that a drop in property tax revenue generated in San Bernardino would be matched by a drawdown in the service level the county fire district would provide to the city.
“We aren’t getting a guaranteed level of service,” Nickel intoned. “I’ve been pretty battered on this over the last couple of weeks ever since the last council decision. I agree with my colleague Mr. Mulvihill. I am not necessarily opposed to this, but I do have some concern about the need to really digest this. This is a very, very consequential decision for our city, as was stated in the agenda item ‘in perpetuity,’ and I do not take that type of decision lightly, particularly given one weekend to review that information. I do not think it is sufficient to make a decision of this caliber in perpetuity.”
In attendance at the meeting were Kathleen Rollings-McDonald, the executive director of the Local Agency Formation Commission, and Greg Devereaux, the chief executive officer of San Bernardino County. Belknap had requested their presence to ensure any misgivings the council had could be addressed. As the hearing on the issue dragged on interminably, however, and the possibility that the annexation would not be ratified became apparent, both Mayor Carey Davis and Saenz sought to usher the council back toward having the collective will and votes to achieve approval. At one point, McDonald was called upon to tell the council that the county was awaiting the city’s action to finalize the process the city had initiated.
Councilman Fred Shorett, long an advocate for closing out the city fire department, could sense from the drift of council discussion that chances for approval of the annexation that night were receding.
“I’m not going to support continuing this,” Shorett said. “I see no need. This is what’s called paying for services. We’re going to get better services. It costs money to run a fire department. This council had no problem turning over the trash [hauling franchise] to an outsider. That we contracted out without any problem. I have no problem with the county taking over being responsible for fire service. It’s been clear to me we are going to get better services and indeed it’s going to cost something. I, like any other taxpayer, [don’t] want to pay more for taxes or more for services but the alternative is to throw caution to the wind and who knows what is going to happen over in Riverside in [Federal Bankruptcy] Judge Jury’s court and who knows what the county is going to do when they don’t see us being serious about what needs to be done. I’ve been talking about contracting fire out for almost seven years now. It is something we should have done a long time ago. I couldn’t get any support on that. The public doesn’t want to do it, but they don’t want to pay for it either. There’s is just no other way to do this and for us to go backwards and to not go forward with this very difficult and complex decision, I think we look foolhardy at best and I’m not sure if the other players involved, the courts, the county, the fire district, are going to take us very seriously. I understand the need for reviewing this stuff [but] we’re putting the cost of the services that the people of San Bernardino not only want but deserve on them because there is no free lunch. It’s just that simple.”
The second swing vote to move into line against approving the annexation this week was that of councilman Benito Barrios. The statement of his rationale for holding off – a shrouded assertion that the city should legalize the distribution of medical marijuana as a ploy to raise capital in the same fashion that another county city – Adelanto – did late last year, was an unanticipated twist to the discussion that manifested late in the meeting. The entire council appeared to be caught off guard by the position Barrios – a retired Marine – took. Barrios’s statement did not provoke a response. In his remarks, Barrios carefully avoided actually using the word marijuana or cannabis.
“Tonight is a tough decision to make, to either accept the plan or not accept the plan,” Barrios said. “We have this plan presented to us. The big concern I see is there is no money to pay for these services, for our fire department, and we need the money. We need revenue to pay for these services. Where is it going to come from? It’s not going to fall out of the sky. But I think we haven’t exhausted all of our options. I don’t think we have looked at all the different ways that we could generate revenue because there is an industry out there that is very controversial. It challenges our morals, our standards, our way of living, our religious beliefs. For the city of Adelanto, they’ve made the decision to generate $10 million to $12 million with this industry that we refuse to even entertain a conversation about. I think now may be the time to really look at that if the city is serious. I just want to point that out: because being the Mecca of Southern California if not the Western United States – San Bernardino – a lot of people have their eyes on us. I had a consultant come to me a few months ago and say ‘We’re willing to drop $25 million right now into San Bernardino if you guys will work with us.’ But at this dais not too many people are open to having that conversation and learning. It’s taken me over a year to accept what I have learned and advocate for the industry. I just wanted to point that out because many people in my ward have come to me and who grew up against this industry and said ‘It happens already. Why don’t we just tax it so the city can generate revenue?’ I just think it’s time for us to take advantage of this industry, for the opportunities it offers.”
Ultimately, Valdivia, Nickel, Barrios and Mulvihill voted to delay a decision on the annexation plan – including the creation of the $148 per parcel assessment district and the revenue sharing plan with the county  – until March 21, with Shorett, and council members Rikki Van Johnson and Virginia Marquez opposed to the delay.