10C Action 2007 0604 - Laserfiche WebLink

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Fire Services Ad Hoc Report Page 2 of5 EXHIBIT 5 May 3, 2007 $800k increase to their contract. The City Council pushed back resulting in authorization of a $600k increase. But by the end of the year, the actual overtime budget was predicted to come in at $200k over budget, which is why this fiscal year 06-07 they received more than $900k as an increase to their contract. In FY 2005-06, the initial budget request was for an increase of $863k. An increase of $600k was approved, reflecting a reduction in requested overtime. Actual expenditures exceeded budget by almost $13k at the end of the year. In FY 2005-06, AICo Fire's revenues fell short ofprojections by approximately $200k. 4. No matter what budget number is approved, the Alameda County Fire Department can invoice and will receive more money. The City's contract with AICo Fire provides for the City to pay AICo Fire the actual cost for providing services. A set annual contract amount would likely result in a higher cost of service as it would include a percentage contingency. Section 5 .b.1. City Payment "The City shall pay ACFD the actual cost incurred by ACFD for providing services under this Agreement, which may be more or less than the amount included within the budget." 5. Over the last 5 years, the Year End actuals have exceeded the budget amount on average of $162k per year. The way our contract is written, we have to pay and then we have to go on to approve an increase to the contract for the next year. The five-year average variance was $119,610. 6. Fore each of these overages, while the City is informed, there is no process to review and no process to refuse or reduce payments to overages of the contract. These amounts are regularly in excess of our City Manager's signing authority, yet the Council never reviews nor approves these contract changes. As indicated in the response to question 4 above, the City's contract requires the City to pay A1Co Fire for the actual cost of providing services. 7. As a regular process, the County Fire Department invoices in advance for services. For example, we pay in February for services rendered in March. This creates an ongoing $lM in negative cash flow to the City Reserves. According to Section 5.b.3. Method of Billing and Payment: The City may select one of two payment options: 1) pay AICo Fire quarterly within 30 days of the quarterly expense report, or 2) pay AlCo Fire 1/12 of the annual budget amount monthly. The quarterly expense report includes actual expenditures for the prior three-month period of time. The City could decide to change policies and pay quarterly in arrears, as invoiced. 8. The bargaining teams between the Firefighters and the County receive no input from any of the member agencies. San Leandro, Dublin, and Lawrence Berkeley Labs do not have