SR - AGR-6346 - PARTICIPATION AGREEMENT ANIMAL CARE SERVICESAGENDA ITEM
May 10, 2016
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TO: Honorable Mayor and
Members of the City Council
THRU: Rick Otto,
City Manager
FROM: Irma Hernandez
Deputy City Manager
ReviewedNerified B
City Manager
Finance Director
To Be Presented By:
Irma Hernandez, Deputy
City Manager
Cons Calendar
City Mgr Rpts
Council Reports
Legal Affairs
Boards /Crates
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Plan/Environ
1. SUBJECT
Consideration of an Animal Care Shelter Participation Agreement and a 10 -year Animal Care
Services Agreement with Orange County for Animal Care and Shelter Services.
2. SUMMARY
These agreements provide for continued Animal Care Services to be provided by Orange County to the
City of Orange for the next 10- years.
3. RECOMMENDED ACTION
Approve and authorize the Mayor and City Clerk to execute:
1. Participation Agreement between the City of Orange and Orange County Animal Care;
2. Services Agreement between the City of Orange and Orange County Animal Care.
4. FISCAL IMPACT
Per the Participation Agreement, the cost of City's Share of the new Animal Care Shelter is
approximately $2.4 million, although the cost could be as high as $3.2 million. The City will have the
option to make a one -time payment or pay quarterly payments over a 10 year period. The funding for
the Annual Service Agreement is reviewed on an annual basis as part of the City's budget review and
adoption process.
15. STRATEGIC PLAN I
3e. Develop and strengthen collaborative partnerships to enhance and promote quality of life programs,
projects, and services.
ITEM # a1• 1 5/10/16
6. GENERAL PLAN IMPLEMENTATION
Public Safety Element, Goal 6.0: Provide public safety services of the highest quality.
7. DISCUSSION and BACKGROUND
Since 1976, the City of Orange has contracted for complete animal services with the County of Orange.
These services include animal care field services, special services, shelter services, and barking dog
complaint services. The County of Orange requests that the City enter into a 10 -year Participation
Agreement and accompanying Service Agreement in order for a new shelter to be completed in 2017.
Animal Shelter Construction Costs:
The County's estimated total construction costs for the new shelter is approximately $35.0 million.
The County is assuming $5.0 million in costs, leaving a remainder of $30.0 million for participating
cities. Orange's share of the remaining costs represents 8.22% based on the number of client cities
and the historic demand for services from the County. It is important to note the City's share of
construction costs may increase based on a reduction in the number of cities participating in the
build out of the new facility, and conversely, may decrease based on the final design of the facility.
Currently, the City's estimated share of costs is $2,467,472 based on 18 contract cities.
As of this date, 10 cities (Anaheim, Cypress, Tustin, Santa Ana, Yorba Linda, San Juan Capistrano,
Fountain Valley, Lake Forest, Villa Park, and Huntington Beach) have opted to continue contracting
with the County. Laguna Hills, Rancho Santa Margarita, Garden Grove, and Stanton have opted to
contract elsewhere, but are eligible to rejoin after three years. Brea, Fullerton, and Placentia will make
a decision in early May and are expected to remain. Unless otherwise communicated with the County,
it is expected that all current partners will make a final decision by May 17, 2016. Based on a total of
14 cities participating in the new shelter, the cost could exceed $3.0 million dollars, with final costs
based on final design of the facility.
Annual Service Contract Costs
The FY 2015/16 Adopted Budget contains an appropriation of $749,811 for the animal control
services contract with Orange County which reflected on an increase of $115,684. This increase is
due in part to the County's January 1, 2016 adjustment to now bill cities quarterly for uncollectable
fee revenue, based on that City's residents' unpaid animal care fee and licensing bills. Additionally,
costs were incurred due to labor agreements, vehicle replacement, filling critical animal care officer
vacancies, and efforts related to improving operations at the current future shelter.
For FY 2016/17, it is anticipated the cost of the contract with the County will increase to
approximately $800,000. The County is conducting an OC Animal Care budget workshop on May 5,
2016, to solicit input from all participants to determine the total budget for FY 2016/17. This cost
will be incorporated into the FY 2016/17 Budget to be presented to the City Council in June 2016
for approval. Annual contract costs will be included in the annual budgets for the remainder of the
10 -Year Agreement. On a positive note, the City of Santa Ana has agreed to utilize the County's
field services operations. Previously, Santa Ana used its own staffing and vehicles. This inclusion of
a very large city should help share operational costs and potentially provide for less of an increase in
future years.
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Currently, the City of Orange is one of 18 cities that currently contract with Orange County Animal
Care (OCAC), a division of the Orange County Community Resources Department of the County of
Orange. OCAC provides all animal care services on behalf of the City, including control services,
special services, shelter services, and barking dog complaint services. Sheltering services include
feeding and care of animals and associated costs to provide this service.
The OCAC shelter is currently located at 561 The City Drive South in Orange, from which it provides
services 24 hours a day, 365 days a year. The current shelter was built in 1941 and is suffering from
severe dilapidated physical conditions, lack of space, and other deficiencies which have been the
subject of numerous complaints and several Grand Jury reports. In 1995, the Orange County Board of
Supervisors allocated $5 million towards the development of a new shelter to be located at the former
Marine Corps Air Station in Tustin. However, due to several issues, including working with the
Department of Navy on contamination and transfer issues, it is only recently that the County has been
able to push forward with plans to construct a new shelter.
Over the past year, the County and its contract partners affirmed their mutual desire to accelerate the
construction of the new animal shelter. The County took the lead in these efforts and has made
significant progress. The County has gained control of a 10 -acre parcel site on the former base via a
Lease Agreement and Amended Land Exchange Agreement between the County and South Orange
County Community College District. In addition, the County completed CEQA compliance and
prepared a conceptual design for the shelter site. The conceptual design served as the basis for a
Request for Proposal to construct the shelter using the design/build delivery method. In addition to
moving forward with the new shelter, the County hired a shelter consultant to evaluate its operations
and to make recommendations on best practices for the new shelter. The evaluation includes working
with contract cities and animal welfare stakeholders and will result in an action plan for shelter
operations.
At the Board of Supervisors' meeting on April 12, 2016, the Board approved items related to the new
shelter including an award to Snyder Langston L.P. for design and construction of a new OC Animal
Care Facility for a not to exceed amount of $32,825,000. Attachment 4 is the conceptual rendering of
the new shelter. Construction is scheduled to commence in July 2016 and be completed by October
2017. In order to adhere to the accelerated schedule, the County is requesting that contract cities
approve Agreements by May 31, 2016, which will provide each City's intention to remain with the
County for animal care services and commit to funding their proportionate share of construction costs
for the new shelter.
Over the last two months, a subcommittee comprised of two large cities and one small city negotiated
both agreements on behalf of the member cities. The agreements have been reviewed by City
Attorney's from two of the large cities on behalf of all contracting cities. The County is requiring
contract cities to confirm their participation by entering into two separate, but related agreements, with
the County:
(1) a Participation Agreement that outlines the roles and responsibilities of the County and contract
cities for the construction and ongoing maintenance of the new shelter, and affirms the cities
commitment to fund their proportionate share of construction costs for the shelter; and
(2) an Agreement for the Provision of Animal Care Services ( "Services Agreement ") to provide animal
care and shelter services for a term of ten (10) years.
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Participation Agreement - The Participation Agreement provides that the County will contribute $5.0
million (14 %) of the estimated $35.0 million project cost. The remaining $30.0 million (86 %) is to be
funded by the contract cities based upon a historical five -year average of Animal Care Days at the
shelter.
The estimated distribution share for the City of Orange is $2,467,472. This is 8.22% of the total share
for the current contracting cities. A Project Cost and Funding Summary as approved by the Board of
Supervisors is included as Attachment 3. It is important to note that while four cities have opted not to
continue their participation in the new shelter, the County is revising the design to eliminate kennel
buildings, thus reducing the overall cost. Among the four cities opting out, the City of Garden Grove
represented a significant share of the cost at 13.81%. At the current design level, it is estimated that
our cost could increase by over $600,000 to include the loss of Garden Grove, Laguna Hills, Stanton,
and Rancho Santa Margarita. However, as mentioned prior, the County is now undergoing a review of
the final design, and with the loss of the four cities, will redesign the shelter to reflect the demand of
the 14 cities and County service area. If, after an initial three year period, additional cities join in the
new County shelter, the Participation Agreement has a provision that costs would be redistributed.
The Major Terms of the Participation Agreement include:
• Each city has the option of paying its proportional amount of the new animal shelter costs
upfront in a lump sum or paying over a ten -year period at an interest rate of less than 0.77 %.
The City of Orange's cost is estimated to be $2,467,472 or $250,000 each year for a ten -year
period. Payments would be due quarterly beginning in October 2016.
• After year five, each city's percentage share will be recalculated based upon the previous five
years usage. If a city's share increases or decreases more than 5 %, then the city's total share of
the maximum construction costs shall be recalculated so the original percentage shall be
applied to 50% of the maximum construction costs and the recalculated percentage shall be
applied to 50% of the maximum construction costs. For those cities that paid the initial lump
sum, a credit will be issued.
• Should a participating city default on its payments, the remaining cities would make up the
shortfall. The County will pursue all legal remedies. Should the non - paying city pay any
amount owed, the increased cost to other cities will be reimbursed.
• No "new" city will be added to OCAC for three years to allow for appropriate sizing and
establishing operational protocols for the new shelter. New cities will be required to pay a pro
rata portion of the maximum construction costs based on a formula.
• Any excess funds (maximum construction costs less actual construction costs) shall be credited
to cities against future charges under each city's Services Agreements.
• If the County elects to discontinue providing animal sheltering services, the cities have the
option to take over the operation of the shelter under a ground lease agreement. This option is
valid for 50 years.
• Participating cities must also sign the OCAC Services Agreement.
• The County will award the design/build contract and manage all aspects of the animal shelter
project.
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• A Design Advisory Board, consisting of members from participating contract cities, will have
the ability to review and provide input on the design and construction of the new shelter. The
Design Advisory Board will consist of 11 members: three representatives of OCAC contract
cities; three representatives from rescue groups; two representatives from the Community
Outreach Committee; two representatives of OCAC staff; and one representative of the
veterinary community chosen by the Southern California Veterinary Medical Association.
County staff indicates the Design Advisory Board will operate as a staff level working group. It
is expected that the City of Orange will be on the Design Advisory Board.
OCAC Services Agreement — In an effort to provide financial certainty and continuity, OCAC is
requesting approval of a 10 -year service agreement with contract cities for provision of animal care
services to replace the existing agreements for all cities electing to participate in the Participation
Agreement. Service Agreements confirm the provision of specific animal care services to be provided
and recover the associated service cost through approved user fees and contract city payments. Similar
to the existing agreement, the new 10 -year agreement confirms that the County will issue an annual
Notice of Intent (NOI), which will include the specification of annual costs for each contract city. The
major terms of the Services Agreement include:
• As is the case with the current service agreement, the City's costs will be based on actual
services provided, less actual revenues generated.
• Ten year term with submittal of an annual Notice of Intent to indicate desired OCAC services
and projected costs.
• May be terminated by County immediately upon default by a city under the Services Agreement
or the Participation Agreement. County will no longer be able to terminate Services Agreement
without cause.
• City and County may agree to individualized services if the resulting service level will not
conflict with state or federal statutes and not endanger the public health. Additional costs for
services will be at the expense of requesting city.
• Cities may adopt user fees that differ from the County's fee schedule. OCAC will collect those
fees as services are rendered.
• Operational costs for animal care services have been increasing over the past few years and the
County and its contract partners have been engaged in active discussions regarding options and
methods for controlling costs. To this end, the new Service Agreement includes language that
preserves and expands the role of the cities' financial oversight and advisory functions.
• The Financial and Operations Advisory Board ( "FOAB ") will be changed to the City Managers
Association Animal Care Committee ( "CMAAC ") and will be constituted at the discretion of
the cities. The County will have no ability to change the constitution of the committee.
• No less than once every three years, the County will hire an external auditor to review city
billings for accuracy. Cities also reserve the right to conduct audits, at their expense, more
frequently if desired.
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• An adoption center's primary focus is housing and actively seeking suitable homes for the
adoptable, companion animals in their care. The new OCAC contract enables customization of
services. The City may consider changes or additions, such as:
o Funding an Animal Behaviorist to work with Orange animals with temperament issues to
improve their potential for adoption
o Funding a local Adoption Center to increase adoption of Orange animals
o Enacting new Ordinances, such as mandatory microchipping for dogs (to increase the
likelihood of reuniting stray dogs with their owners) to be enforced by OCAC as part of
annual dog licensing.
o Additional outreach and education
Alternative Animal Control Solutions
In reviewing what a continued partnership with the County means for Orange, the City did its due
diligence and looked at alternative solutions for animal care services. A significant issue in Orange
County related to animal sheltering services is that of available space for the animals. A poll of
shelters in the County showed available space is limited and currently several shelters do not have the
physical space to house the number of animals from Orange that require sheltering.
One alternative to entering into the Agreement with the County is for the City of Orange to establish
its own animal services department /division. The costs to establish and manage an in -house animal
control program for Orange are difficult to estimate. That said, the City of Irvine operates its own
shelter and animal control program at a total annual cost of approximately $3,400,000 after animal
licensing revenue is considered.
Another alternative studied extensively was the establishment of a Joint North Orange County Animal
Shelter. Several cities in North County including the cities of Brea, Placentia, Fullerton, and Yorba
Linda looked at options to build and run an Animal Shelter via a Joint Powers Authority.
Unfortunately, having researched the feasibility of such a facility it was determined that the costs
would be in excess of participation with OCAC for animal care services.
Over the last decade, staff has researched alternative animal care providers /shelters serving the
surrounding communities and inquired about their ability to provide service to the City of Orange.
Staff has concluded that alternative animal service providers will not offer better service, be more cost
effective, or provide residents with a more convenient shelter location. Nevertheless, staff will
continue to assess options to ensure animal control services are available in a cost effective manner.
Review of Orange County Animal Care Services
In considering the potential continuation of the City's partnership with the County and participating
cities, the City understands that over the years there have been several Grand Jury reports critical of
the current shelter and operations. With regard to shelter concerns, it is expected that the new shelter
will cure the deficiencies and be the most up -to -date shelter in the County.
Operationally, the City has communicated its shared concerns and the County has responded with
many positive actions to enhance its operations at the current shelter. These changes will be carried
forward with new operational controls at the new shelter. Exhibit 5 is a response matrix from the
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County regarding prior Grand Jury reports. More importantly, recent actions not fully reflected in the
response matrix include:
• Conducting a legal review of all OCAC policies and procedures;
• Hiring JVR Shelter Strategies to conduct a thorough review to improve policies, procedures,
training, and sheltering practices;
• Hiring an animal behaviorist to assist assessment of hard to place animals;
• Developing a web -based application to increase public awareness on mobile devices for
adoption purposes;
• Training a new class of 12 animal control officers to increase reaction time to calls; and,
• Increasing focus on professional development for all staff related to sheltering best
practices.
The annual contract period with OCAC is from July 1 to June 30 of each year. Each year, the City of
Orange receives a Notice of Intent (NOI) from the County for animal care services for the upcoming
year. The Service Agreement attached to this report (Attachment 2) is a model agreement, approved to
form by the City Attorney's Office, which will be returned to the City for execution upon approval by
all participating cities. To date, the City has not received the NOI for the upcoming year July 1, 2016
-- June 30, 2017, but Staff estimates the costs to be approximately $800,000 but will have FY 2016 -27
allocations after the May Stn Animal Care budget workshop.
The inclusion of the City of Santa Ana, which formerly did not contract for field services, will help
spread the operational costs, however, the actual impact is not yet known. The total cost of the City's
animal control billing is composed of two components: field /special services, and sheltering services.
These expenses are reduced by revenue generated by licensing and shelter related revenue. The City
of Orange net costs for animal care services have been:
FY 2011/2012 - $470,717
FY 2012/2013 - $545,700
FY 2013/2014 - $657,861
FY 2014/2015 - $634,127
FY 2015/2016 - $749,811
Animal care service costs have increased mostly due to labor costs and OCAC improving the level of
animal care to meet community expectations in response to Grand Jury reports. From a longer term
perspective, employee benefits and general liability insurance have all experienced increases. However,
fee revenue has not kept pace with the increase in costs. In FY 2014 -15, user fees covered only about
55% of total costs. Specifically for Orange, the gross cost of providing services increased by about
59% between 2011 -12 and 2015 -16, however fee revenue for this period remained essentially flat.
In FY 14/15, OCAC completed approximately 4,447 service actions in Orange. They include:
• Nuisance /Barking dog complaints — 208
• Bite investigations — 868
• Animal cruelty investigations — 400
• Other investigations (kennel, vicious) — 232
• Sick/injured transport — 284
• Wild Animal Activities — 317
• Stray at Large — 1,348
• Deceased animal pickup — 646
• Other field services (assist Police Department, etc.) — 144
In FY 14 -15, OCAC sheltering services statistics for Orange were:
Dogs 840
3,552 days
4.2 avg days in shelter
Cats 831
3,245 days
3.9 avg days in shelter
Birds 187
341 days
1.8 avg days in shelter
Other* 360
663 days
1.8 avg days in shelter
Totals 2,219
In total, 2,219 Orange animals were sheltered at OCAC in FY 14 -15 including livestock and wildlife
(rats, raccoons, etc.). It is important to note that while OCAC does not shelter horses, there is a large
animal rescue network in place in Orange and beyond that will manage sheltering options during times
of emergencies. This network is working with OCAC to formalize this effort.
The following table list both mandated and non - mandated services that are provided by OCAC to
contract cities. Following the table is a summary of key services provided by OCAC to contract cities.
Mandated Services (must be done by
OCAC):
Non - Mandated Contract
Services (can be done by
city):
Non - Mandated, Non -
Contract Services:
• Rabies Control
• Dead Animal Pick -up
• Feral Cat Intake
• Emergency Response
• Wildlife Response
• Investigations
• Volunteer Coordination
• Shelter Services
• Rescue Group
• Animal Licensing
Coordination
• Impounding & Retention of Stray
• Public Education
Animals
• Canvassing
• Prompt Veterinary Care
• Evaluation, Redemption, and
Adoption of Animals
• Euthanasia and Proper Disposal
Veterinary Services - Veterinary services are available on site from 7 am to 6 pm 7 days a week,
including holidays and extended hours on Wednesdays. Veterinarians are on the premises 6 days a
week. OCAC also has contracts with multiple private veterinarians specializing in emergency
medicine, wildlife, internal medicine, and surgery. Additionally, they have a Medical Pets
Program whereby animals requiring care beyond what can be provided at OCAC (ie, orthopedic
surgery), appropriate care is facilitated via Noble Friends 5016 which raises funds to provide care
for the unique needs of these animals. OCAC maintains a premise permit and DEA license to
afford the delivery of prompt and necessary care and ensure the health of the shelter population.
Trap Neuter Release Program - Feral cats brought to the shelter by members of the public are
held for their legal time to provide opportunity for owner identification. After this time (3 days)
the cats are spayed /neutered, vaccinated, flea treated, and microchipped. The cats are returned to
the areas from which they were found, as these areas are known territories for the cats. This
program was initiated in 2013. Prior to implementation of this program, feral cats were euthanized
as their temperament does not make them adoption candidates. OCAC has been releasing
approximately 1,700 cats per year since implementation of the program. This is a lifesaving
pathway available to an otherwise unadoptable animal.
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Canvassing- Canvassing hours are provided to each city based on a utilization percent of the
shelter by each participating city. Approximately 1,400 hours are spent canvassing contract cities
each month. Deployment of canvassers to city areas is determined based on past staffing patterns
and with attention to which cities have received canvassing attention previously. The goal is to
cover all or nearly all of a city and then repeat over the years. The average licensing compliance
rate for the state of California is 35 %. Orange has a compliance rate of approximately 60% as a
result of the strong canvassing efforts of OCAC.
Adoption- OCAC works with several animal rescue groups that meet criteria to become OCAC
adoption partners. In 2015, over 4,500 animals were transferred to 127 OCAC adoption partners
including 1,842 dogs and 2,468 cats. OCAC has an overall Live Release Rate for dogs of 93% and
a Live Release Rate for cats of 43 %. Additionally OCAC has implemented several programs to
decrease animal impounds and increase positive outcomes for Orange County animals. These
include:
Diversion
Late last year, OCAC succeeded in solidifying their relationship with the 5016, OC
Shelter Partners. This diversion program helps keep animals in their homes, rather than
relinquishing them to the OC Animal Shelter. While still in its infancy, this program
diverts more than 50 animals from entering the shelter by facilitating veterinary care,
behavior training and transfer to rescue.
Spay/Neuter
OCAC hosts mobile spay /neuter services twice monthly. This low cost service helps
decrease pet overpopulation while also improving the lives of owned pets in our
communities. Unneutered pets are over - represented in shelters, often for medical or
behavioral issues resulting from not being neutered.
Education
OCAC Community Outreach Team works with local schools to provide education to
children of all ages on the importance of responsible pet ownership. Pets are an important
component of kids' lives and responsible pet ownership helps ensure children have positive
experiences with animals and fosters the human - animal bond.
Adoption Events
OCAC hosts at least one adoption event monthly at OC Animal Shelter. In 2015, more
than 1,100 animals were adopted from these popular events.
Foster Program
Often animals are too young (requiring round - the -clock bottle feeding) to be placed up for
adoption or they need to convalesce from a trauma or surgery. OCAC foster partners
welcome these animals into their homes and provide love and care to the animals until they
can be made available for adoption. OCAC is focusing on elevating this program to
improve outcomes for the many underage orphan kittens that enter the shelter.
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Adoption Partners
OCAC Adoption Partners adopt approximately 30% of the animals that are in the shelter.
The animals adopted by 5016 organizations are often ones with temperament or medical
issues that require resources and time. OCAC Adoption Partners play an important role
with homeless pets.
For the last 10 years the City of Orange has been an active member of the OCAC
Financial /Operational Advisory Board. In that role, the City's representatives have been part of
many of the policy, budget, and new shelter discussions. Overall, the City has been pleased with
the services provided by OCAC to Orange residents and businesses. The City has continued to
express its desire to move forward with the construction of a new regional animal shelter which
will be a great benefit to our residents.
8. ATTACHMENTS
Attachment 1 — County of Orange and City of Orange Participation Agreement for the design and
construction of the new shelter.
Attachment 2 — Agreement for Provision of Orange County Animal Control Care Services
between the County of Orange and City of Orange
Attachment 3 — Project Cost and Funding Summary
Attachment 4 — Conceptual Design for the New Shelter
Attachment 5 — County Response Matrix to Grand Jury
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