Agenda Item Wording:
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Fire Department Hazmat MOU Extension w/ Amendments - Authorize the City Manager to execute the amendment and extension of the Tulare & Kings County Interagency Hazardous Materials (Hazmat) Team Memorandum of Understanding (MOU).
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Deadline for Action: 11/18/2024
Submitting Department: Fire Department
Contact Name and Phone Number: Dan Griswold, Fire Chief, 559-713-4220 Crissy Balderama, Administrative Analyst, 559-713 -4513
Department Recommendation:
Staff recommends the City Council authorize the City Manager to execute the amendment and extension of Tulare and Kings County Interagency Hazmat Team MOU and grant authority for the City Manager to authorize minor changes to the agreement if necessary.
Background Discussion:
A regional approach to Hazmat response within Tulare and Kings counties has been in place for several years. The Fire Department has documentation on file of service agreements dating prior to 2010. In 2019, partnering agencies entered into the current MOU and cost share agreement. The initial term of the MOU was five years and was due for extension on June 30, 2024.
To prepare for the MOU extension, Fire Administration solicited feedback from partnering agencies, worked closely with the Finance Department, and City Legal to recommend the amendments included. Below is a summary of the recommended amendments and the full amendment document is included as an attachment to this staff report. Following the recommended amendments is an explanation of the operational cost share, and the added cost share for vehicle replacement.
Extension and Recommended Amendments:
Extended Term of the Agreement - The term of the MOU shall be extended for an additional five-year term. The MOU, as modified by this Amendment, shall be extended until June 30, 2029.
Cost Recovery Among Parties - This amendment allows for a means to collect from a responsible party when the incident occurs outside the City of Visalia and the City has not been able to collect the response costs. The amendment recommends a change to the current procedure where if the City of Visalia is unable to collect Hazmat response related costs and fees from a responsible party not within the City of Visalia’s jurisdiction within twelve months of the incident, the agency in whose jurisdiction the incident occurred will reimburse the remaining agencies of the agreement. Agencies have up to one year to reimburse the costs. The purpose of this amendment allows the agency with jurisdiction where the incident occurred to use their local authority and means to collect the costs of response.
Termination - This amendment adds language stating that if an agency decides to withdraw from the MOU prior to October 1, then their required contributions under the agreement may be prorated based on the applicable termination date. This amendment also states all previously contributed fees, materials, assets, etc. will remain with the remaining agencies of the agreement.
Tule River Indian Tribe included as an Agency to the MOU - This amendment includes language specific to the inclusion of the Tule River Indian Tribe to this agreement.
Exhibit A Cost Responsibility - This amendment changes the annual escalator from the current 2% to the unadjusted figures of the U.S. Department of Labor Consumer Price Index (CPI) for all Urban Customers. This amendment also states that in no instance shall the annual increase exceed 5%.
Wording Changes - There were some wording changes made within the amendment and the Exhibit A. Most notably, the words “Party” or “Parties” to denote partnering agencies of the MOU were changed to the words “Agency” or “Agencies.” This change adds distinction between a partnering agency of the MOU and a responsible party for an incident.
Operational Cost Share Assessment
To prepare for the extension, Fire Administration analyzed program operational costs over the first five-year term of the MOU to determine if an adjustment to the cost share amount was appropriate. The operational costs assessed included personnel costs, medical costs, training costs, operational expenses including equipment and capital improvement projects, and fuel/maintenance costs for the hazmat response vehicle, Hazmat 55. After evaluation, Fire Administration determined $85,531 to be the average annual cost to include as the cost share within the MOU. The initial base cost of the MOU’s first five-year term was $72,562.22.
Vehicle Replacement Cost Analysis
The current hazmat vehicle, Hazmat 55, is a 2007 Pierce Quantum purchased by the Hanford Fire Department in 2006 with the FY06 State Homeland Security Grant Program. The purchase price was $501,200. Ownership was transferred to the City of Visalia in 2020 under the terms included in the Hazmat MOU.
Vehicle replacement costs had been a piece of agreements prior to the current MOU. However, vehicle replacement is not explicitly captured in the current MOU and needs to be added to keep the program sustainable. The challenge is forecasting how much replacement funding will be needed and when. The vehicle cost approximately $500,000, 18 years ago. The unknowns are, what is a reasonable life expectancy for the vehicle and how much will a replacement cost at that time?
The Hazmat vehicle currently has less than 9,000 miles on it. When the City of Visalia obtained ownership, it was put into the asset system for 15 years as any fire asset would be. The City of Visalia will have owned the vehicle for 15 years in 2035 and the vehicle will be 28 years old. This would be an old fire apparatus were Hazmat 55 a front-line unit getting daily use. However, this vehicle could feasibly function this long with good care and maintenance.
For the vehicle replacement analysis, the annual amount needed was calculated on 11 more years of life to reach the vehicle’s 15-year City of Visalia life, and $750,000 was used for a replacement amount. Seven-hundred and fifty thousand dollars is an amount that seems definite to expect a vehicle costing $501,200 in 2006 would cost to replace with a comparable vehicle in 2035. It is reasonable to suspect a comparable vehicle will cost more than $750,000 and partnering agencies will evaluate replacement estimates and reimbursement in future terms of the MOU and could seek grant funding to fund the vehicle or offset costs. The idea is to plan for and collect some replacement funding and not need to rely on collecting an even greater amount in the future or securing a grant in the event grant funding, or enough grant funding, is not available.
Recognizing the City of Visalia gains some benefit from having the vehicle available within their jurisdiction, the plan is not to charge the whole $750,000 to the MOU cost-share. To quantify how much of the burden Visalia accepts, Fire Administration calculated the percentage of hazmat calls the Hazmat unit responded to in the first term of the MOU. Forty-seven percent of the incidents were within the City of Visalia, so 47% of the vehicle replacement cost will be covered by the City of Visalia. Using this approach, Visalia would be responsible for $32,045 annually and the other parties in the MOU, except for Hanford until their credit for transferring ownership is spent, would be responsible for $36,136.36 annually. This amount would be split amongst the remaining parties based on population and not including Visalia’s or Hanford’s populations.
A breakdown of the operational cost share and the vehicle replacement cost share is included in the Exhibit A - Cost Responsibility attachment included with this staff report.
Fiscal Impact:
The partnering agencies of the MOU agree that each agency will be responsible for its respective share of the costs, paid to the City of Visalia, to equipment and maintain on an annual basis a Hazmat Team in accordance with Exhibit A - Cost Responsibility. Additionally, the City of Visalia will be responsible for $32,045 annual contribution for vehicle replacement.
Prior Council Action: This history was taken from the October 21, 2019 staff report when the most recent MOU was developed and executed. March 1995 - Hazmat agreement adopted. September 21, 2009 - Hazmat response team update to approve short-term funding of the Hazmat team. August 2, 2010 - Council approved the renegotiation of Hazmat response contracts to include a provision for local participating agencies to pay a proportional share of the ongoing operational costs of the program. July 18, 2011 - Amend Hazmat agreement with Tulare County agencies including Rates and Fees. October 21, 2019 - Execute amended and new agreement with partnering agencies into the current MOU.
Other: None.
Alternatives: Request staff to provide additional information and return to Council at a later date.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to execute the amendment and extension to the Tulare - Kings County Interagency Hazmat Team MOU and to make minor changes if necessary.
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Environmental Assessment Status: N/A
CEQA Review: N/A
Attachments: 1. Tulare-Kings County Regional Hazardous Materials Team MOU
2. Amendment and Extension of Tulare-Kings County Interagency Hazardous Materials Team MOU
3. Hazmat Agreement Exhibit A - Cost Responsibility