Broadmoor Police Protection District MSR, 05-08-2024

Item 4 May 8, 2024 To: LAFCo Commissioners From: Rob Bartoli, Executive Officer Subject: Consideration of Final Municipal Service Review for the Broadmoor Police Protection District Executive Summary This Municipal Service Review (MSR) for the Broadmoor Police Protection District (BPPD) highlight several areas of concern including the fiscal health of the District and the ability to continue to provide police services to residents. BPPD has had significant budget deficits in five of the last six fiscal years for a total loss of $1.4 million. BPPD’s net position has been negative every year since the end of Fiscal Year 2017. These budget deficits, and the reduction of fund balance, have now directly impacted the District. BPPD has made dramatic cuts to spending since the start of FY23-24 by eliminating two officer positions, eliminating some per-diem officers and moving other per-diem officers into unpaid volunteer positions. These cuts have lowered the number of sworn officers to 7, a decrease from 9 officers just last year. Many of these budget cuts occurred shortly after the BPPD Commission adopted the FY23-34 budget. These cuts though were not included as part of the proposed budget document. The need for these unplanned cuts concerns LAFCo staff about if BPPD and the public have a full understanding of the fiscal health of the District. This report explores potential governance and service changes including dissolution of the BPPD or if BPPD filed for bankruptcy. In Sept. 2023, BPPD passed a resolution declaring that the District was fiscally insolvent and facing a financial emergency and requested that BPPD staff pursue steps towards bankruptcy. In January 2024 this resolution was rescinded. No action by LAFCo has been taken toward BPPD other than the publication to this and previous studies. While there are many different scenarios of either maintaining status quo, changing the governance of BPPD or changing the agency that provides polices service to the Broadmoor area, any governance change would require a separate application and action before the LAFCo Commission. If BPPD was to be dissolved, the specifics about what level of COMMISSIONERS: KATI MARTIN, CHAIR, SPECIAL DISTRICT ▪ RAY MUELLER, VICE CHAIR, COUNTY ▪ VIRGINIA CHANG-KIRALY, SPECIAL DISTRICT ▪ HARVEY RARBACK, CITY▪ TYGARJAS BIGSTYCK, CITY ▪ WARREN SLOCUM, COUNTY ▪ ANN DRAPER, PUBLIC ALTERNATES: CHRIS MICKELSEN, SPECIAL DISTRICT ▪ ANN SCHNEIDER, CITY ▪ JAMES O’NEILL, PUBLIC ▪ NOELIA CORZO, COUNTY STAFF: ROB BARTOLI, EXECUTIVE OFFICER ▪ VACANT, MANAGEMENT ANALYST ▪ TIM FOX, LEGAL COUNSEL▪ DIANE ESTIPONA, CLERK May 8, 2024 BPPD MSR Page 2 service would be provided and how the service would be funded (including information about the status and use of any supplemental property tax) would need to be developed by the agency applying to LAFCo as part of a plan for service. In this scenario, other governance change options, or if BPPD declared bankruptcy, it would be very likely that BPPD rate payers would still be required to pay for any legacy costs associated with BPPD, such as outstanding liability. Again, while this report does not advocate for any governance change, the report does include recommendations to BPPD that could assist both the District and public in gaining a clearer picture about the financial ability of BPPD to continue to provide services to residents. Updates to Final Circulation MSR Edits to the MSR include: • On April 18, 2024, BPPD selected a consulting firm, NBS, to assist the District with developing a budget for this fiscal year, the creation of a long-term financial plan, and research and analysis for a potential property tax measure for the upcoming November 2024 election. LAFCo staff will continue to monitor these efforts and provide updates to the LAFCo Commission as needed. • Clarification that currently, the cost per officer are similar to other surrounding agencies. • A revised recommendation regarding exploring hiring or gaining additional staff, consultants, or volunteers to assist in performing human resource functions and administrative tasks, including budget support. • Minor typographical corrections. Background LAFCo prepared comprehensive Sphere of Influence (SOI) studies and adopted SOIs for cities and special districts in 1985 and has subsequently reviewed and updated spheres on a three- year cycle. Updates focused on changes in service demand within the boundaries of cities and special districts. After enactment of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (CKH Act) and the new requirement to prepare MSRs in conjunction with or prior to SOI updates, LAFCo began the process of preparing Municipal Service Review (MSR) and SOI updates in late 2003. This Circulation Draft Municipal Service Review is the third MSR for the Broadmoor Police Protection District. In 2015, San Mateo LAFCo adopted the North County Cities and Special District Municipal Service Review (MSR) and Sphere of Influence (SOI) Study, which included a review of the Broadmoor Police Protection District (BPPD). As part of the 2022-2023 LAFCo workplan, the Commission authorized a special study of BPPD to evaluate operations and services provided by the District since the adoption of the Municipal Service Review, which focused on BPPD’s operations, finances, and governance. The Special Study was adopted by the Commission on March 15, 2023 meeting. From March 2023 to February 2024, LAFCo staff has provided an update to the Commission about the fiscal status of BPPD and the status of the implementation of the recommendations from the 2023 Special Study. This MSR encompasses these update, new data, and revised recommendations. May 8, 2024 BPPD MSR Page 3 During this time period, San Mateo LAFCo staff has also attending several town hall and community meetings to present to the BPPD residents about the adopted Special Study, the work that the LAFCo Commission has done in relationship to the District, and to emphasized that, to date, the Commission has not taken any action towards BPPD. Broadmoor Police Protection District The Broadmoor Police Protection District was formed in 1948 to provide police and ambulance services to the unincorporated community of Broadmoor and surrounding incorporated area. In 1957, BPPD contracted with the Town of Colma to provide ambulance and radio dispatch services. That contract was amended in 1964 to include partial police protection services. In 1967, ambulance services were discontinued, and police patrol services to the Town of Colma ended in 1976, at which time Colma established its own full-time police department. BPPD’s service boundaries total 0.55 square miles and include the unincorporated area of Broadmoor Village and an unincorporated area adjacent to Colma. BPPD’s service territory also includes three small parcels in unincorporated Daly City directly west of Broadmoor Village, each of which is developed with a single-family home. District’s boundaries are irregular and include non-contiguous areas that resulted from annexation of areas to the City of Daly City over time. As these annexations occurred, the territory was concurrently detached from the BPPD since the City has a full-service police department. The BPPD service area includes single and multi-family housing, and commercial and retail development. Governance BPPD was formed under California Health and Safety Code Sections 20000-20322. The BPPD is the only operational police district in California that employs its own officers. The formation of new Police Protection Districts now is prohibited. Code Section 20007 of Health and Safety Code states: “No district shall be created or organized pursuant to this chapter after October 1, 1959. The organization, existence, or powers of any district heretofore created by, or organized pursuant to this chapter, shall continue to exist and any such district may exercise any of the powers conferred upon it by this chapter.” Per Code Section 2008, “...any district in existence on January 1, 2008, in an unincorporated town, may protect and safeguard life and property, and may equip and maintain a police department, including purchasing and maintaining ambulances, and otherwise securing police protection.” BPPD is governed by a three-member Board of Commissioners elected by voters within the service district. The Commission meets monthly on the second Tuesday of each month. Current Key Issues Key issues identified in compiling information on the City of Burlingame include the following: 1. BPPD has had significant budget deficits in five of the last six fiscal years for a total loss of $1.4 million. BPPD’s net position has been negative every year since the end of FY17. The BPPD Commission has adopted unbalanced budgets for FY17, FY18, FY19 and FY23. To address the budget losses and unbalanced budgets, the District has relied on the fund balance to address these deficits. As such, the fund balance, the only reserve for the District, has been drawn down over the past several budgets. The District currently projects a budget deficit of approximately May 8, 2024 BPPD MSR Page 4 $450,000 for FY22-23. 2. BPPD has made dramatic cuts to spending since the start of FY23-24 by eliminating two officer positions, eliminating some per-diem officers and moving other per-diem officers into unpaid volunteer positions. The Chief of Police also reduced his pay for a period and now is back at full pay. These cuts have lowered the number of sworn officers to 7, a decrease from 9 officers just last year. Many of these budget cuts occurred shortly after the BPPD Commission adopted the FY23-34 budget. These cuts though were not included as part of the proposed budget document. The need for these unplanned cuts concerns LAFCo staff about if BPPD and the public have a full understanding of the fiscal health of the District. 3. Just two months after the adoption of the FY23-24 Budget, BPPD approved and later rescinded a resolution that declared that BPPD was insolvent and facing a fiscal emergency. The resolution also directed BPPD staff to take steps to file for bankruptcy protection. 4. BPPD does not prepare a separate report of actual revenue and expenditures at the end of each fiscal year. The District does not produce long-term financial planning documents for use in the budgeting process. 5. The District does have independent audits which are shared with staff and Board members; however, it does not appear that these audits are agendized for discussion at Board meetings. 6. BPPD does not have a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles. BPPD has stated that they have contacted the California Special Districts Association regarding hiring a company to produce a strategic fiscal plan for the District. 7. The lack of long-term fiscal plans, budget deficits, and growing costs to the District may negatively impact service delivery. 8. BPPD has three main revenue sources: 1) Property taxes, 2) Excess Education Revenue Augmentation Fund (Excess ERAF) and 3) a Supplemental parcel tax that BPPD voters approved in 2000. Excess ERAF comprises 12% of the District’s overall budget and is considered to be an unstable revenue source. In addition, the State has taken an interest in potentially redirecting some Excess ERAF to the State. There is a risk that Excess ERAF may not be available in future years for local agencies. 9. BPPD lacks fiscal, governance and administrative policies and procedures that would help address and potentially prevent many of the issues identified above. 10. The District should explore ways to address budget shortfalls and unbalanced budgets, either through enhanced revenue or reduced costs. This could be conducted along with the creation of long-term financial planning documents and discussions with residents and District employees about future funding and District services. Proposed MSR Recommendations As required by State law, there are seven areas of determination, including local policies as set forth in Section 56430. 1. Growth and population projections for the affected area. May 8, 2024 BPPD MSR Page 5 2. The location and characteristics of any disadvantaged unincorporated communities1 within or contiguous to the SOI. 3. Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. 4. Financial ability of agencies to provide services. 5. Status of, and opportunities for, shared facilities. 6. Accountability for community service needs, including governmental structure and operational efficiencies. 7. Any other matter related to effective or efficient service delivery, as required by LAFCo policy. a. Water Resiliency and Climate Change b. Impact of Natural Hazards and Mitigation Planning For the Circulation Draft, LAFCo has the following determinations and recommendations: 1. Growth and Population Determination The territory served by BPPD is not expected to experience significant population growth and therefore will not require a change in the agency’s service needs, demands or service boundaries. 2. Disadvantaged Unincorporated Communities Determination The unincorporated area served by BPPD does not contain any disadvantaged unincorporated communities within its service area. 3. Capacity and Adequacy of Public Facilities and Services Determination and Recommendations BPPD provides police protection to the unincorporated area of Broadmoor Village and an unincorporated area adjacent to Colma. BPPD operates with 7 full-time sworn officers, 1 full time admin secretary, 1 part time secretary, and 1 paid part time officer, and 14 unpaid reserve or volunteers. The District has a lower ratio of officer per 1,000 persons compared to the City of Daly City due to the loss of two positions over the last year. BPPD appears to provide a similar level of protection (based on Part I crime and clearance rates) than neighboring Daly City. Recommendations - 1. The District should explore cost sharing with adjacent cities or other alternatives to contract for or consolidate services to reduce costs. Potential options are explored in more detail in Accountability, Structure and Efficiencies. 1 “Disadvantaged community” means a community with an annual median household income that is less than 80 percent of the statewide annual median household income. This area of determination does not apply to the study area. May 8, 2024 BPPD MSR Page 6 2. The District may consider developing and monitoring performance measures, which could include measurements of response times for calls and volume of calls to demonstrate the benefit of the higher costs associated with higher levels of performance. 4. Financial Ability Determination and Recommendations BPPD has had significant budget deficits in five of the last six fiscal years. BPPD’s net position has been negative every year since the end of FY17. The BPPD Commission has adopted unbalanced budgets for FY17, FY18, FY19 and FY23. For these budget losses and unbalanced budgets, the District has relied on the fund balance to address these deficits. As such, the fund balance, the only reserve for the District, has been drawn down over the past several budgets. While cost saving measures were implemented to stabilize the financial situation at BPPD, these measures were implemented shortly after the adoption of the FY23-24 budget by the BPPD Commission. These measures were not included as part of the adopted budget. LAFCo staff is concerned that BPPD and the public do not have a full and accurate view of fiscal status of the District. BPPD does not prepare a separate report of actual revenue and expenditures at the end of each fiscal year. The District does not produce long-term financial planning documents for use in the budgeting process. The District does have independent audits which are shared with staff and Board members; however, it does not appear that these audits are agendized for discussion at Board meetings. Delays in the timely production of audits can negatively impact budget preparation. BPPD has three main revenue sources: 1) Property taxes, 2) Excess Education Revenue Augmentation Fund (Excess ERAF) and 3) a Supplemental parcel tax that BPPD voters approved in 2000. Excess ERAF, which comprises 12% of the District’s overall budget, is considered to be an unstable revenue source. Furthermore, the State has taken an interest in redirecting some Excess ERAF to the State, so there is risk that Excess ERAF may not be available in future years. BPPD does not have a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles. BPPD is currently in conversation with the California Special Districts Association regarding hiring a company to develop a strategic plan for the District. The District replaces vehicles as needed through its annual budget process and does not foresee the need for facility upgrades in the near future. The District does not currently have any adopted fiscal policies. The District does not currently adopt a Gann Appropriation Limit, as was recommended in the 2015 MSR and the 2023 Special Study. BPPD legal staff is currently reviewing this issue. Although the District does not have outstanding debt, it does carry significant pension liabilities that may pose a threat to its long-term financial health. In addition, a lack of a reserve fund and the continuing use of the District’s fund balance puts the District in a vulnerable position to withstand a financial crisis, such as economic recession, termination of Excess ERAF or unexpected expenses, while still be able to maintain its high level of service. Should the District face insolvency, legacy costs like pension payments for current and retired personnel, would still need to be addressed by the agency that absorbs the provision of police protection services May 8, 2024 BPPD MSR Page 7 for Broadmoor. That agency would be entitled to receive District revenue, including the supplemental parcel tax, which could be used to pay for pension costs and other legacy costs. The successor agency would need to evaluate if the supplemental parcel tax or other potential additional taxes should continue to be collected as part of a plan for service. Recommendations - 1. Prepare a quarterly financial report which presents the District’s financial condition in a user-friendly way so board members and staff can better understand financial data. At a minimum the financial data should include a balance sheet, income statement and a budget-to-actual report to detect potential errors. The reports should reference final actual numbers from the previous fiscal year and should be compared to budgeted numbers. In years where there are deficits, the impact to the District’s fund balance should be discussed in the budget documents. 2. Develop long-term fiscal documents that will assist the District in planning for expenditures, such as retirement costs. The Board could engage in a strategic planning session that will help prioritize goals and review the District’s fiscal ability to meet these goals. 3. Budget documents should show the amount of funds that are allocated to the District fund balance/reserve. 4. Independent audits should be presented to the Board for discussion at public meetings. The audit should include management letters and a review of any recommendations for the audit process and fiscal ability of the District. Audits should be conducted in a timely manner. 5. Develop accounting, financial, governance and general administrative policies to help guide its decision making in a consistent manner. This should include policy regarding the development of a reserve fund as well as a policy about how reserve funds are utilized. 6. Explore the development of a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles to help plan for long-term capital costs. LAFCo encourages BPPD to continue to work with the California Special District Association to identify a consulting firm to provide this service. 7. Adopt annual Gann Appropriation Limit resolutions. 8. Explore ways to reduce reliance on Excess ERAF for routine District operations and maintenance and divert Excess ERAF to a reserve fund that the District can draw from for unexpected expenses. 9. The District should explore ways to address budget shortfalls and unbalanced budgets, either through enhanced revenue or reduced costs. This could be conducted along with the creation of long-term financial planning documents and discussions with residents and District employees about future funding and District services. It is recommended that BPPD conduct outreach and engagement with residents regarding the fiscal outlook for the District and potential changes to levels of service. 10. Continue to post budget documents and audits on the District’s website. May 8, 2024 BPPD MSR Page 8 5. Shared Service and Facilities Determination and Recommendations BPPD should explore gaining additional staff, consultants, or volunteers to perform human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. BPPD stated that the number of human resource functions is minimal and that share shared services for these types of functions would not be feasible as they are not essential functions of providing police protection. Recommendation 1. Where feasible, BPPD should explore gaining additional staff, consultants, or volunteers to assist in performing human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. 6. Accountability, Structure, and Efficiencies Determination Public meeting agendas are posted on the District’s website, but staff reports are not typically available. The District does record Board meetings, but currently, the records are not posted to the website and are only available at cost to members of public who request copies. The Police Chief/General Manager provides all administrative and human resource function for the District. Recommendation: 1. LAFCo recommends the creation of staff reports for Board of Commissioners agenda items. The creation of staff reports for Board items can increase transparency and raise public awareness of the issues that are being reviewed and acted on by the commissioners. The District could explore sharing services with cities or other special districts to assist in creating the staff reports and compiling an agenda packet. 2. In light of on-going fiscal concerns for BPPD, the District should provide updates to the community about the current fiscal status of BPPD, efforts that BPPD has made. 3. Explore providing video/audio of Board meetings should be posted on the District’s website for public viewing. 4. Continue to provide Brown Act training for all Commissioners. 5. Explore hiring or gaining additional staff, or consultants, or volunteers to assist in performing human resource functions and administrative tasks, including budget support These functions could also be shared services with neighboring agencies. 6. Develop accounting, financial, governance and general administrative policies to assist the Commission and District staff. This should include the creation of policies regarding meeting agendas and noticing, Brown Act training, and audit and budget review. 7. Provide information to the residents of BPPD about status of pursuing bankruptcy for the District. The information should include data about the current and future fiscal health of BPPD. 7. Other Issues Determinations and Recommendations There are no other issues that LAFCo has identified through the MSR/SOI process. The Broadmoor Police Protection District is charged with providing police protection services within May 8, 2024 BPPD MSR Page 9 its service boundaries. BPPD does not provide services related to water resiliency, climate change and natural hazards and mitigation planning. Sphere of Influence Determination LAFCo is required to make five written determinations when establishing, amending, or updating an SOI for any local agency that addresses the following (§56425(e)): 1. The present and planned land uses in the area, including agricultural and open-space lands. The boundaries of the BPPD encompass the unincorporated Broadmoor and unincorporated Colma communities, which are predominantly developed with urban uses. The Sphere of Influence designation for BPPD is zero (dissolution) as established in 1976 and reaffirmed several times since then, most recently in 2015. 2. The present and probable need for public facilities and services in the area. The territory served by BPPD is not expected to experience significant population. growth and therefore will not require a change in the agency’s service needs, demands or service boundaries. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. BPPD provides police protection to the unincorporated area of Broadmoor Village and an unincorporated area adjacent to Colma. BPPD operates with 7 full-time sworn officers, 1 full time admin secretary, 1 part time secretary, and 1 paid part time officer, and 14 unpaid reserve or volunteers. The District has a lower ratio of officer per 1,000 persons compared to the City of Daly City due to the loss of two positions over the last year. BPPD appears to provide a similar level of protection (based on Part I crime and clearance rates) than neighboring Daly City. BPPD has made dramatic cuts to spending since the start of FY23-24 by eliminating two officer positions, eliminating some per-diem officers and moving other per-diem officers into unpaid volunteer positions. The Chief of Police also reduced his pay for a period and now is back at full pay. These cuts have lowered the number of sworn officers to 7, a decrease from 9 officers just last year. Many of these budget cuts occurred shortly after the BPPD Commission adopted the FY23-34 budget. These cuts though were not included as part of the proposed budget document. The need for these unplanned cuts concerns LAFCo staff about if BPPD and the public have a full understanding of the fiscal health of the District. The most recent audit for BPPD affirms LAFCo’s ongoing concerns about the District’s financial health. The report states “….the district has suffered recurring significant loss in last several years, has a net deficiency in net assets and has stated that substantial doubt exists about the district’s ability to continue as a going concern.” May 8, 2024 BPPD MSR Page 10 4. The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. There are no social or economic communities of interest within the Broadmoor Police Protection District’s SOI. 5. For an update of a SOI of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. No change to the Sphere of Influence of the Broadmoor Police Protection District is proposed at this time. Governance Options for BPPD: In light of the fiscal, structural and administrative concerns raised in this report and the 2023 Special Study, a discussion of alternative service and governance options is pragmatic. The 2015 MSR for BPPD identified three government structure alternatives for the District: Status Quo District would remain as is, with a three-member elected board and police services provided by officers and staff hired by the District. However, based on LAFCo’s review of recent BPPD audit and budget documents it is probable that changes to the level of service provided by the District or the levels revenue or expenditures would need to change due to budget constraints in the future. The supplemental parcel tax could be increased on property owners to raise revenue, or service and operations could be cut to reduce expenditures. These will be decisions that the BPPD Commission will need to evaluate. As part of the review of the potential changes to services or an increase in revenue, BPPD should engage with the residents of Broadmoor to understand their views on these issues and on the District. If services were not able to be provided by BPPD, the San Mateo County Sheriff’s Office or other neighboring agency may be able to assist, but BPPD should engage in discussions with those agencies if the need arises. Merge Broadmoor Police Protection District with City of Daly City Merging BPPD with the City of Daly City (with concurrent annexation of BPPD’s service territory) has the potential benefit of reducing overall service costs by eliminating duplicative staffing, administrative, and facility expenses. San Mateo LAFCo has identified Daly City (through adoption of the spheres of influence) as the long-term, logical service provider for both Broadmoor and unincorporated Colma. Daly City has its own full-service police department with its headquarters located less than one-quarter mile from the BPPD headquarters. Furthermore, the Broadmoor Unincorporated area is wholly surrounded by the City of Daly City and unincorporated Colma islands are fully bordered by Daly City on three sides and the Town of Colma. Formation of a County Service Area (CSA) or a Community Services District (CSD) and Contract with the County or Daly City for Services The Broadmoor Village subdivision receives services from the County of San Mateo, Broadmoor Police Protection District and Colma Fire Protection District. The District could reorganize either May 8, 2024 BPPD MSR Page 11 to a County Service Area (a dependent district under the jurisdiction of the County) or as a Community Services District (an independent special district with a five-member board). The reorganized agency could contract for police services. As discussed in the 2015 MSR, the CSA or CSD could also consider contracting for fire and solid waste services. Any application for a County Service Area (CSA) or a Community Services District would need to include a plan for service that outlined the proposed police protection services that would be provided and information about how those services are proposed to be funded. Contracting with Another Agency without Reorganization An additional alterative for the District that was not included in the 2015 MSR is that the District could consider contracting for service with another public safety agency to provide police services to the BPPD service area. Under this scenario, no LAFCo action would be required to enter into a service contract and the District remains intact. In California, there are three remaining Police Protection Districts, BPPD, the Fig Garden Police Protection District, and the Orange Cove Police. These two other districts, both located in Fresno County, contract with the Fresno County Sheriff’s Office for enhanced police protection. The Board of Commissioners for these two districts continue to meet and the district themselves continue to operate. BPPD could explore the option of contracting for service as a way for the District to better control costs and provide for improved economies of scale. Administrative functions such as Human Resources and payroll could be provided by the contracting agency and would no longer need to be provided by the District. Contracting with a public safety agency could also allow greater access to additional police resources and services for the Broadmoor community. While the scope of this special study does not include the fiscal analysis for contracting for services, if contracting is pursued, the District should analyze if there would be the potential for reducing or eliminating the special parcel tax. Dissolution BPPD could also be dissolved, either through a petition from registered voters or property owners residing in the District, a resolution from the BPPD Commission or another affected agency, or by LAFCo. This would require a LAFCo process and in most cases, would be subject to a protest proceeding. If the District was dissolved and Broadmoor remained unincorporated, police services could be provided by the San Mateo County Sheriff’s Office, similar to other unincorporated areas in the County. The specifics about what level of service would be provided and how the service would be funded (including information about the status and use of any supplemental property tax) would need to be developed by the agency applying to LAFCo as part of a plan for service. Government Code Section 57451 states that if the territory of a dissolved district is located entirely within the unincorporated territory of a single county, the county is the successor for the purposes of winding up the affairs of the dissolved district. The successor agency also received control over all money and funds. To pay for remaining legacy costs for the District, such as pension liability, the County of San Mateo could use the property tax and supplement property tax revenue that the District currently receives. In this case, revenue would still be collected to pay for legacy costs associated with BPPD even though the District would no longer be providing services. This could mean that rate payers within BPPD would pay for legacy costs May 8, 2024 BPPD MSR Page 12 associated with BPPD, even though BPPD is no longer providing police service. Two flow charts outlining the dissolution process are attached to the report as Appendix C. Bankruptcy While not a governance change, the BPPD Commission adopted Resolution 2023/24-03 on September 18, 2023 to file for Chapter 9 bankruptcy stating that the agency was facing a fiscal emergency and was insolvent. The resolution was rescinded on January 9, 2024. The cost reduction measures put into place by BPPD have reduced expenditures for the FY23-24 to a point where it seems that the District will have sufficient funds to continue to provide service through the end of this fiscal year, barring any large unforeseen expenditure. While it is challenging for LAFCo to project what an outcome of a bankruptcy proceeding would have on BPPD and service to residents there are several potential outcomes: • BPPD stabilizes and continues to provide service (status quo) • BPPD declares bankruptcy, restructures debt and stabilizes • BPPD declares bankruptcy, restructures debt and still is insolvent, cannot provide service It is unknown and beyond LAFCo staff’s ability to be able to predict if a bankruptcy judge would change the amount of the supplemental property tax (or any revenue from a future property tax measure) that is being paid for by residents of BPPD. Public/Agency Involvement The primary source of information used in this MSR has been information collected from agency staff and adopted plans, budgets, reports, policies, etc. On February 28, 2024, a Notice of Public Hearing for the Draft MSR was released by LAFCo and published in the San Mateo County Times. In addition, notices were sent to every “affected agency”, meaning all other agencies and school districts with overlapping service areas. On April 9, LAFCo staff presented to draft MSR to the BPPD Commission. On April 18, LAFCo staff gave a presentation to the Broadmoor Property Owners Association. Two comments were received during the comment period. One letter dated April 24, 2024, was from Paul Davis, BPPD’s legal counsel (Attachment D). The letter is a response to a public comment letter from Andrea Hall that was part of the March 20, 2024 LAFCo Agenda Packet for the draft BPPD MSR. The second letter is from Andrea Hall (Attachment F) dated May 1, 2024. Both of these letters discuss the status of previous or on-going litigation related to BPPD or former and current BPPD employees. Ms. Hall also expresses her concern about the potential financial impact to regarding on-going litigation and insurance costs. Environmental Review/CEQA The MSR is categorically exempt from the environmental review requirements of the California Environmental Quality Act (CEQA) under Section 15303, Class 6, which allows for the basic data collection, research, experimental management, and resource evaluation activities that do not result in a serious or major disturbance to an environmental resource. The MSR collects data for the purpose of evaluating municipal services provided by an agency. There are no land use changes or environmental impacts created by this study. May 8, 2024 BPPD MSR Page 13 The MSR is also exempt from CEQA under section 15061(b)(3), the common sense provision, which states that CEQA applies only to projects which have the potential to cause a significant effect on the environment and where it is certain that the activity will have no possible significant effect on the environment, the activity is exempt from CEQA. The MSR and SOI update will not have a significant effect on the environment as there are no land use changes associated with the documents. Recommendation 1. Open the public hearing and accept public comment. 2. Accept the Final Municipal Service Review for the Broadmoor Police Protection District 3. Adopt the Municipal Service Review Determinations and Recommendations contained in this report. Attachment A. Municipal Service Review for the Broadmoor Police Protection District B. Resolution No. 1319 for the Broadmoor Police Protection District Municipal Service Review C. MSR Areas of Determinations and Recommendations for the Broadmoor Police Protection District D. Letter from Paul Davis (April 24, 2024) E. Letter from Andrea Hall (May 1, 2024) LAFCo Municipal Service Review for the Broadmoor Police Protection District Final Adopted May 15, 2024 LAFCo Municipal Service Review of the Broadmoor Police Protect District SUBJECT AGENCY: Broadmoor Police Protect District 388 88th Street Broadmoor CA 94015-1717 Contact: Michael Connolly, Chief of Police CONDUCTED BY: San Mateo Local Agency Formation Commission 455 County Center, 2nd Floor Redwood City, CA 94063 (650) 363-4224 Commissioners: Commission Alternates: Kati Martin, Chair, Special District Member Chris Mickelsen, Special District Member Ray Muller, Vice Chair, County Member James O’Neill, Public Member Tygarjas Bigstyck, City Member Noelia Corzo, County Member Virginia Chang-Kiraly, Special District Member Ann Schneider, City Member Harvey Rarback, City Member Warren Slocum, County Member Ann Draper, Public Member Staff: Rob Bartoli, Executive Officer Diane Estipona, Commission Clerk Tim Fox, Legal Counsel LAFCo Municipal Service Review and Sphere of Influence Update Broadmoor Police Protection District Table of Contents Section 1: Introduction ............................................................................................... 4 San Mateo Local Agency Formation Commission ................................................................4 Local Government in San Mateo County .............................................................................5 Purpose of a Municipal Service Review/Sphere of Influence Update ....................................5 Section 2. Summary of Key Issues .............................................................................. 7 Section 3. Affected Agencies .................................................................................... 11 Section 4: Background & History ............................................................................... 11 Section 5: Areas of Review ....................................................................................... 12 1) Growth & Population ................................................................................................... 12 2) Disadvantaged Unincorporated Communities .............................................................. 13 3) Capacity and Adequacy of Public Facilities and Services ................................................ 14 4) Financial Ability ........................................................................................................... 17 5) Shared Service and Facilities ........................................................................................ 29 6) Accountability, Structure and Efficiencies ..................................................................... 30 7) Other .......................................................................................................................... 35 Section 5: Sphere of Influence Review and Update............................................................ 35 Determinations ............................................................................................................... 35 Appendix A. Broadmoor Police Protection District Fact Sheet ................................... 38 Appendix B. References ........................................................................................... 39 Final Municipal Service Review – Broadmoor Police Protection District Section 1: Introduction This report is a Municipal Service Review (MSR) and Sphere of Influence (SOI) update for the Broadmoor Police Protection District (BPPD). California Government Code Section 56430 requires that the Local Agency Formation Commissions (LAFCos) complete MSRs and SOI updates on all cities and special districts. LAFCo is an independent entity with jurisdiction over the boundaries of cities and special districts. An SOI is a plan for the boundaries of a city or special district. The MSR and SOI update do not represent a proposal1 for reorganization of agencies, but rather a State-mandated study of service provisions of an agency. Once adopted, the MSR determinations are considered in reviewing and updating the SOI pursuant to Section 56425. The SOI, which serves as the plan for boundaries of a special district, is discussed in the second part of this report. This State-mandated study is intended to identify municipal service delivery challenges and opportunities and provides an opportunity for the public and affected agencies to comment on city, county, or special district services and finance; and opportunities to share resources prior to LAFCo adoption of required determinations. San Mateo Local Agency Formation Commission San Mateo Local Agency Formation Commission (LAFCo or “the Commission”) is a State- mandated, independent commission with county-wide jurisdiction over the boundaries and organization of cities and special districts including annexations, detachments, incorporations, formations, and dissolutions. LAFCo also has authority over extension of service outside city or district boundaries and activation or divestiture of special district powers. Among the purposes of the Commission are discouraging urban sprawl, preserving open space and prime agricultural lands, planning for the efficient provision of government services, and encouraging the orderly formation and development of local agencies based upon local conditions and circumstances. LAFCo operates pursuant The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (CKH Act) contained in Government Code Sections 56000 and 57000. The Commission includes two members of the County Board of Supervisors, two members of city councils from the 20 cities, two board members of 21 of the 22 independent special districts, a public member, and four alternate members (county, city, special district, and public). LAFCo prepared comprehensive SOI studies and adopted SOIs for cities and special districts in 1985 and has subsequently reviewed and updated spheres on a three-year cycle. Updates focused on changes in service demand within the boundaries of cities and special districts. After enactment of the CKH Act and the new requirement to prepare MSRs in conjunction with or prior to SOI updates, LAFCo began the process of preparing MSR and SOI updates in late 2003. Studies were first prepared on sub-regional and County-wide independent special districts, followed by South County cities and special districts. 1 An application for annexation may be submitted by 5 percent of the voters or landowners of territory proposed for annexation or by resolution of the District. 4 Final Municipal Service Review – Broadmoor Police Protection District Local Government in San Mateo County Municipal service providers in San Mateo County include the County, 20 cities, 22 independent special districts, five subsidiary districts governed by city councils, and 33 County-governed special districts. It merits emphasis that the County plays a dual role that differs from cities or districts. Districts provide a limited set of services based on enabling legislation, while cities generally provide basic services such as police and fire protection, sanitation, recreation programs, planning, street repair, and building inspection. The County, as a subdivision of the State, provides a vast array of services for all residents, including social services, public health protection, housing programs, property tax assessments, tax collection, elections, and public safety. Along with independent water, sewer, and fire districts, the County also provides basic municipal services for residents who live in unincorporated areas. According to Census 2020 data, 63,205 of the County’s total 765,417 residents live in unincorporated areas. Purpose of a Municipal Service Review/Sphere of Influence Update This MSR/SOI Update examines the Broadmoor Police Protection District. LAFCo prepares the MSR and SOI update based on source documents that include Adopted Budgets, Basic Financial Reports and Audits, Capital Plans, Urban Water Management Plans, and Planning Documents, including the General Plan. Draft MSRs and SOI updates are then circulated to the agencies under study, interested individuals and groups. The Final MSR and SOI update will include comments on the circulation draft and recommended determinations for Commission consideration. MSR determinations must be adopted before the Commission updates or amends an SOI. Per Section 56430, the areas of MSR determination include: 1. Growth and population projections for the affected area. 2. The location and characteristics of any disadvantaged unincorporated communities2 within or contiguous to the SOI. 3. Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. 4. Financial ability of agencies to provide services. 5. Status of, and opportunities for, shared facilities. 6. Accountability for community service needs, including governmental structure and operational efficiencies. 2 “Disadvantaged community” means a community with an annual median household income that is less than 80 percent of the statewide annual median household income. This area of determination does not apply to the study area. 5 Final Municipal Service Review – Broadmoor Police Protection District 7. Any other matter related to effective or efficient service delivery, as required by LAFCo policy. a. Water Resiliency and Climate Change b. Impact of Natural Hazards and Mitigation Planning Sphere of Influence Determinations: LAFCo is required to make five written determinations when establishing, amending, or updating an SOI for any local agency that address the following (§56425): 1. The present and planned land uses in the area, including agricultural and open-space lands. 2. The present and probable need for public facilities and services in the area. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. 4. The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. 5. For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. Disadvantaged Unincorporated Communities SB 244 (Chapter 513, Statutes of 2011) made changes to the CKH Act related to “disadvantaged unincorporated communities,” including the addition of MSR determination #3 and SOI determination #5 listed above. Disadvantaged unincorporated communities, or “DUCs,” are inhabited, unincorporated territories (containing 12 or more registered voters) where the annual median household income is less than 80 percent of the statewide annual median household income. The BPPD does not have any disadvantaged unincorporated communities within its SOI, as the adopted SOI is dissolution and coterminous with the BPPD boundaries. Background of MSR In 2015, San Mateo LAFCo adopted the North County Cities and Special District Municipal Service Review (MSR) and Sphere of Influence (SOI) Study, which included a review of the Broadmoor Police Protection District (BPPD). As part of the 2022-2023 LAFCo workplan, the Commission authorized a special study of BPPD to evaluate operations and services provided by the District since the adoption of the Municipal Service Review, which focused on BPPD’s operations, finances, and governance. The Special Study was adopted by the Commission on March 15, 2023 meeting. From March 2023 to February 2024, LAFCo staff has provided an update to the Commission about the fiscal status of BPPD and the status of the implementation of the recommendations from the 2023 Special Study. This MSR encompasses these update, new data, and revised recommendations. During this time period, San Mateo LAFCo staff has also attending several town hall and 6 Final Municipal Service Review – Broadmoor Police Protection District community meetings to present to the BPPD residents about the adopted Special Study, the work that the LAFCo Commission has done in relationship to the District, and to emphasized that, to date, the Commission has not taken any action towards BPPD. Section 2. Summary of Key Issues Key issues identified in compiling information on Broadmoor Police Protection District include the following: 1) BPPD has had significant budget deficits in five of the last six fiscal years for a total loss of $1.4 million. BPPD’s net position has been negative every year since the end of FY17. The BPPD Commission has adopted unbalanced budgets for FY17, FY18, FY19 and FY23. To address the budget losses and unbalanced budgets, the District has relied on the fund balance to address these deficits. As such, the fund balance, the only reserve for the District, has been drawn down over the past several budgets. The District currently projects a budget deficit of approximately $450,000 for FY22-23. 2) BPPD has made dramatic cuts to spending since the start of FY23-24 by eliminating two officer positions, eliminating some per-diem officers and moving other per-diem officers into unpaid volunteer positions. The Chief of Police also reduced his pay for a period and now is back at full pay. These cuts have lowered the number of sworn officers to 7, a decrease from 9 officers just last year. Many of these budget cuts occurred shortly after the BPPD Commission adopted the FY23-34 budget. These cuts though were not included as part of the proposed budget document. The need for these unplanned cuts concerns LAFCo staff about if BPPD and the public have a full understanding of the fiscal health of the District. 3) Just two months after the adoption of the FY23-24 Budget, BPPD approved and later rescinded a resolution that declared that BPPD was insolvent and facing a fiscal emergency. The resolution also directed BPPD staff to take steps to file for bankruptcy protection. 4) BPPD does not prepare a separate report of actual revenue and expenditures at the end of each fiscal year. The District does not produce long-term financial planning documents for use in the budgeting process. 5) The District does have independent audits which are shared with staff and Board members; however, it does not appear that these audits are agendized for discussion at Board meetings. 6) BPPD does not have a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles. BPPD has stated that they have contacted the California Special Districts Association regarding hiring a company to produce a strategic fiscal plan for the District. 7) The lack of long-term fiscal plans, budget deficits, and growing costs to the District may negatively impact service delivery. 8) BPPD has three main revenue sources: 1) Property taxes, 2) Excess Education Revenue Augmentation Fund (Excess ERAF) and 3) a Supplemental parcel tax that BPPD voters approved in 2000. Excess ERAF comprises 12% of the District’s overall budget and is considered to be an unstable revenue source. In addition, the State has taken an interest in potentially redirecting 7 Final Municipal Service Review – Broadmoor Police Protection District some Excess ERAF to the State. There is a risk that Excess ERAF may not be available in future years for local agencies. 9) BPPD lacks fiscal, governance and administrative policies and procedures that would help address and potentially prevent many of the issues identified above. 10) The District should explore ways to address budget shortfalls and unbalanced budgets, either through enhanced revenue or reduced costs. This could be conducted along with the creation of long-term financial planning documents and discussions with residents and District employees about future funding and District services. Previous Recommendations 2023 Special Study After the completion of the 2023 Special Study, LAFCo requested responses from BPPD about if the District agrees or disagrees with the recommendation, comments on the recommendations, and planned date for change or implementation. As part of this MSR, LAFCo staff requested any updates to these status of the recommendations from BPPD. The following table shows the original recommendations and updates for the MSR: Table 1 BPPD Response to 2023 Special Study Recommendations LAFCo Recommendation BPPD Responses 1. The District should explore cost sharing with This refers to matters other than routine adjacent cities or other alternatives to contract for Investigative and patrol functions. BPD shares some or consolidate services to reduce costs. costs e.g., dispatching services as do all agencies reliant on County Services. As of July 2023, SM County has elected to cease payroll services for Broadmoor PD. As a result we had to find a private vendor to handle our payroll services. This has caused severe operational and tax filing issues. AS of todays date, the private vendor is unable to resolve issues with federal tax filing. 2. The District may consider developing and monitoring The national average for priority call response is performance measures, which could include approximately 8 minutes. BPD average priority call time is measurements of response times for calls and call approximately 2 minutes. volume. Many factors go into prioritizing call response and BPD is adhering to best practices. 3. Prepare a quarterly financial report which presents This was discussed in 2021 and was never implemented the District’s financial condition in a user- friendly after June 2021. This will be implemented immediately way so board members and staff can better with end of year review with FY 2022/23. understand financial data. At a minimum the The first projected report is anticipated to be in financial data should include a balance sheet, September/ October 2023. income statement and a budget-to- actual report to detect potential errors. The reports should The data has been collected and sent to the Board of reference final actual numbers from the previous Police Commissioners. We are unable to find an entity fiscal year and should be compared to budgeted that can validate the raw data we have compiled. numbers. In years where there are deficits, the impact to the District’s fund balance should be discussed in the budget documents. 8 Final Municipal Service Review – Broadmoor Police Protection District 4. Develop long-term fiscal documents that will assist The Department is in current close discussions with the District in planning for expenditures, such as CalPERS with adherence to best practices retirement costs. The Board could engage in a Long Term retirement fiscal costs are predicated upon strategic planning session that will help prioritize CalPERS rising costs. In recent years, BPD members goals and review the District’s fiscal ability to meet contributions have risen significantly. these goals. We have reached out to the California Special District’s for assistance on strategic planning on their website. Additionally, we are engaged in discussions with a private vendor in a broad discussion about strategic fiscal planning 5. Budget documents should show the amount of Our reserve funds have been consumed by funds that are allocated to the District fund mandated corrections by CalPERS to adjust and balance/reserve. remedy past evasive practices employed by former District Managers. Significant litigation has severely impacted the budget. The County of San Mateo has issued several documents which forecast our anticipated revenue. Along with our fiscal planning document, we plan to initiate our budget process in March 2024 with a goal to reduce further spending in an attempt to build a reserve fund. 6. Independent audits should be presented to the The 2023 Audit is in DRAFT form and will be sent out Board for discussion at public meetings. The audit from our auditor in the coming weeks. should include management letters and a review of any recommendations for the audit process and fiscal ability of the District. Audits should be conducted in a timely manner. 7. Develop accounting, financial, governance and Unable to implement at this time. This will be general administrative policies to help guide its reviewed when the appropriate time comes. decision making in a consistent manner. This should include policy regarding the development of a reserve fund as well as a policy about how reserve funds are utilized. 8. Explore the development of a Master Plan, Strategic We have reached out to California Special Districts Plan or Capital Improvement Plan that plans for asset vendors listed on their website (Regional Government Services) management and replacement, such as facility Additionally, we are engaged in discussions with a upgrade or repairs and replacement of equipment private vendor in a broad discussion about strategic and vehicles to help plan for long-term capital costs. fiscal planning There are currently no plans for any type of facility upgrade or needed repairs. Vehicle replacements are on an as needed basis. 9. Consider allocating accounting and auditing services This is already in practice and has been for 15 years to two separate firms to enhance fiscal oversight and BPPD is in discussion with vendors. 9 Final Municipal Service Review – Broadmoor Police Protection District and transparency 10. Adopt annual Gann Appropriation Limit Awaiting a legal and fiscal determination by BPPD resolutions Legal Counsel 11. Explore ways to reduce reliance on Excess ERAF for The district always looks for ways to reduce reliance routine District operations and maintenance and on uncertain funds; however, income from grants and other uncertain sources has been reliable and divert Excess ERAF to a reserve fund that the District most agencies rely upon such income streams. can draw from for unexpected expenses. 12. Post budget documents and audits on the District’s This has been accomplished and past budget and website audits have been posted as well as past audit reports. 13. LAFCo recommends the creation of staff reports for IN PROGRESS Board of Commissioners agenda items. The creation of staff reports for Board items can increase transparency and raise public awareness of the issues that are being reviewed and acted on by the Commissioners. The District could explore sharing services with cities or other special districts to assist in creating the staff reports and compiling an agenda packet. 14. Video/audio of Board meetings should be posted POLICY IS BEING DEVELOPED on the District’s website for public viewing. 15. Provide Brown Act training for all Commissioners. There has been no change in Elected Commissioners at Broadmoor. Current Commissioners are in compliance. BPPD Counsel advises the BPPD Board of Commissioners accordingly when an issue arises. 16. Explore hiring additional staff or consultants to This would not be a good use of limited resources. perform human resource functions and The District believes that the efficient use of tax dollars must be limited to essential needs, which do administrative tasks, including budget support. not include hiring personnel that are not absolutely These functions could also be shared services with essential to the mission of providing police services. neighboring agencies. 17. Post position salary and compensation data on the This is available on the Transparent California District’s website. website and our Budget documents posted on our website. The District does not have a full-time webmaster and the cost of hiring someone for this purpose would be fiscally challenging given competing priorities. 18. Post contracts and hiring policies on District’s Applicants for Peace Officer and other positions are website posted when needed. 19. Develop accounting, financial, governance and There is no district staff. Any administrative support is general administrative policies to assist the either internal staff or identified consultants. Additional staff would incur costs that the District is Commission and District staff. This should include not fiscally prepared for. the creation of policies regarding meeting agendas and noticing, Brown Act training, and audit and budget review 10 Final Municipal Service Review – Broadmoor Police Protection District As many of these recommendations are still in the process of being implemented to reviewed by the District, San Mateo LAFCo will continue to include these recommendations in this MSR. The full response table is in the report as Appendix D. Section 3. Affected Agencies County and Cities: San Mateo County, City of Daly City, Town of Colma School District: Jefferson Elementary School District Independent Special Districts: San Mateo County Harbor District and San Mateo County Mosquito & Vector Control District Section 4: Background & History of Broadmoor Police Protection District The Broadmoor Police Protection District was formed in 1948 to provide police and ambulance services to the unincorporated community of Broadmoor and surrounding incorporated area. In 1957, BPPD contracted with the Town of Colma to provide ambulance and radio dispatch services. That contract was amended in 1964 to include partial police protection services. In 1967, ambulance services were discontinued, and police patrol services to the Town of Colma ended in 1976 after Colma established its own full-time police department. BPPD’s service boundaries total 0.55 square miles and include the unincorporated area of Broadmoor Village and an unincorporated area adjacent to Colma. BPPD’s service territory also includes three small parcels in unincorporated Daly City directly west of Broadmoor Village, each of which is developed with a single-family home (600 Washington Street, 620 Washington Street, and 1590 Annie Street) (Attachment A). District’s boundaries are irregular and include non-contiguous areas that resulted from annexation of areas to the City of Daly City over time. As these annexations occurred, the territory was concurrently detached from the BPPD since the City has a full-service police department. The BPPD service area includes single- and multi-family housing, and commercial and retail development. Broadmoor Police Protection District was formed under California Health and Safety Code Sections 20000-20322. The BPPD is the only operational police district in California that employees its own officers. The two other remaining police protection districts, both located in Fresno County, contract with the sheriff’s office for staffing. The formation of new Police Protection Districts now is prohibited. Code Section 20007 of Health and Safety Code states: “No district shall be created or organized pursuant to this chapter after October 1, 1959. The organization, existence, or powers of any district heretofore created by, or organized pursuant to this chapter, shall continue to exist and any such district may exercise any of the powers conferred upon it by this chapter.” Per Code Section 2008, “…any district in existence on January 1, 2008, in an unincorporated town, may protect and safeguard life and property, and may equip and maintain a police department, including purchasing and maintaining ambulances, and otherwise securing police protection.” BPPD is governed by a three-member Board of Commissioners elected by voters within the service district. The Commission meets monthly on the second Tuesday of each month. The 11 Final Municipal Service Review – Broadmoor Police Protection District District also publishes a newsletter and sends email updates from staff and the Board to residents of the District. Current Sphere of Influence The boundaries of the BPPD encompass the unincorporated Broadmoor and unincorporated Colma communities. The Sphere of Influence designation for BPPD is zero (dissolution) as established in 1976 and reaffirmed several times since then, most recently in 2015. Section 5: Areas of Review The boxes checked below are potentially significant, as indicated by “yes” or “maybe” answers to the key policy questions in the checklist and corresponding discussion on the following pages. 1) Growth & Population Growth and population projections for the affected area. Mayb Yes No e a) Is the agency’s territory or surrounding area expected to experience any significant population change or development X over the next 5-10 years? b) Will population changes have an impact on the subject agency’s X service needs and demands? c) Will projected growth require a change in the agency’s service X boundary? Discussion a) Is the agency’s territory or surrounding area expected to experience any significant population change or development over the next 5-10 years? The Broadmoor Police Protection District provides police protection services to approximately 7,200 residents in BPPD does not provide any other services in the District’s service area. unincorporated Broadmoor Village and an unincorporated area adjacent to Colma. The area is largely residential with some commercial uses and primary built out. BPPD’s service area is wholly comprised of unincorporated territory with the County of San Mateo acting as the land use planning agency. b-c) Will population changes have an impact on the subject agency’s service needs and demands or require change in service boundaries? The territory served by BPPD is not expected to experience significant population growth or development over the next 5-10 years. Currently, the County of San Mateo Housing Element is exploring rezoning some properties in the unincorporated Colma area, but these are still in progress. No changes in the development pattern of the Broadmoor Village area is proposed by the County. 12 Final Municipal Service Review – Broadmoor Police Protection District Growth & Population Determinations The territory served by BPPD is not expected to experience significant population growth and therefore will not require a change in the agency’s service needs, demands or service boundaries. Recommendation None 2) Disadvantaged Unincorporated Communities The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. Yes Maybe No a) Does the subject agency provide public services related to sewers, municipal and industrial water, or structural fire X protection? b) Are there any “inhabited unincorporated communities” within or adjacent to the subject agency’s sphere of influence that are X considered “disadvantaged” (80% or less of the statewide median household income)? c) If “yes” to both a) and b), it is feasible for the agency to be reorganized such that it can extend service to the X disadvantaged unincorporated community (if “no” to either a) or b), this question may be skipped)? a-c) Disadvantaged Unincorporated Communities The unincorporated area served by BPPD does not contain any disadvantaged unincorporated communities within its service area. Disadvantaged Unincorporated Communities Determinations The unincorporated area served by BPPD does not contain any disadvantaged unincorporated communities within its service area. Recommendation None 13 Final Municipal Service Review – Broadmoor Police Protection District 3) Capacity and Adequacy of Public Facilities and Services Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and Yes Maybe No structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the sphere of influence. a) Are there any deficiencies in agency capacity to meet service X needs of existing development within its existing territory? b) Are there any issues regarding the agency’s capacity to meet X the service demand of reasonably foreseeable future growth? c) Are there any concerns regarding public services provided by X the agency being considered adequate? Discussion: a-c) Capacity to serve customers: BPPD operates out of its headquarters building located at 388 88th Street in Daly City, just outside of the District’s boundaries. The facility, completely rebuilt between 2001 and 2003, provides 3,000 square feet. Two other police department headquarters are located in close proximity to the BPPD: (1) the Daly City Police Department headquarters, located at 333 90th Street, Daly City, is less than one-quarter mile from the BPPD headquarters; and (2) the Town of Colma Police Department headquarters, located at 1199 El Camino Real, Daly City, is approximately two miles away. As of March 2023, BPPD currently operates with 7-full sworn officers, including the Chief of Police, a reduction of two officers from 2022. There are also 1 full time admin secretary, 1 part time secretary, and 1 paid part time officer, and 14 unpaid reserve or volunteers. While there are five per diem officers, which are typically paid positions, all of these officers have transferred to non-paying reserve positions since November 2022 for budgetary reasons3. From August 2023 to March 2024, the Chief of Police/General Manager salary was reduced by 50%, however the position remained full time. Since the start of March 2024, the position salary has been reinstated to 100%. The part-time Commander position has been vacant since November 20234. Per BPPD, the District does not have specific ratio for sworn officers to residents. Currently minimum staff is one officer per patrol shift with a sergeant working a split days/night schedule to supervise and assist with patrol and patrol supervisory duties. Reserve officers are used when available to support or augment patrol shifts There are four officers, one corporal and one sergeant assigned to patrol5. When the Special Study was published in 2023, BPPD operated with 9 full-time sworn officers, 3 BPPD Response to LAFCo 3/1/2024 4 Ibid 5 Ibid 14 Final Municipal Service Review – Broadmoor Police Protection District including a Commander of Police and Chief of Police, 6 per-diem officers, which include a training manager lieutenant and investigations sergeant (per-diem officers can work only 960 house per year), 7 volunteers, and one administrative staff member. Prior to 2021, BBPD had a reserve officer unit that was staffed with a minimum of 10 reserve officers. Per District staff, In October 2021, the reserve officer unit was decommissioned due a lack of participation by the reserve officers. Since 2019, BBPD provides patrol services through 12-hour shifts, with two officers per shift. Per District staff, prior to 2019, assistance from the San Mateo County Sheriff’s Office was required to supplement BPPD patrols. Per-diem officers fill patrol vacancies as needed and also provide administrative functions for the District. BPPD is a signatory to the countywide emergency response joint powers authority (JPA) and has received assistance on a few occasions from neighboring police agencies as well as assisted other agencies when requested. In the 2023 Special Study for BPPD, the district had a ratio of 2.04 officers per 1,000 residents. With the reduction of two officer positions, the ratio has dropped to 1.03 officers per 1,000 residents, a ratio lower than the City of Daly City. Table 2. Officers Per Residents (Budgeted positions as of 3/5/2024) Agency Residents Full Time- Officers Per 1,000 Officers Residents BPPD (FY24) 7,206 7 1.03 City of Daly City PD (FY22) 104,901 111 1.06 Town of Colma PD (FY22) 1,507 19 12.61 County Service Area 1 (Contacted with San Mateo County Sheriff) 4,767 3 0.63 (FY22)6 Table 3. Comparison of Costs of Police Services Agency Police Budget Calls for Service Cost per Call for Service BPPD (FY22) $2,692,985 6,772 $398 City of Daly City PD (FY22) $48,030,642 57,177 $840 Town of Colma PD (FY22) $9,167,209 23,458 $390 6 The contract with County Service Area 1 (Highlands) includes 18 hours of patrol service, 12 deputy hours per day shift and six deputy hours per night shift seven days a week. Response outside of those hours is provided out of the San Mateo County Sheriff’s Office and response requiring more than one deputy or additional service such as detectives, etc. are funded by the Sheriff’s Budget 15 Final Municipal Service Review – Broadmoor Police Protection District County Service Area 1 $866,555 2,110 $411 (Sheriff Service) (FY22) The Broadmoor Police Protection District handles a variety of public assistance, patrol, traffic enforcement, as well as emergency Priority 1 response calls. The overall calls for service in FY 21-22 totaled approximately 6,772 calls and with a budget of $2,692,985, that equates to $398 per call response. The District’s cost per call is comparable to the Town of Colma and County Service Area 1 (Highlands), both of which, like Broadmoor, are small communities with less than 10,000 residents. A review of Part I violent crime (defined by the Federal Bureau of Investigation [FBI] as homicide, rape, robbery and aggravated assault) in Broadmoor and Daly City over the past 10 years reveals a comparable annual violent crime rate of approximately 2,000 violent crimes per 100,000 residents. In contrast, the Part I property crime (defined by the FBI as arson, burglary, larceny-theft and motor vehicle theft) was significantly higher in Daly City, reflecting the abundance of commercial businesses in Daly City compared to the mostly residential Broadmoor (Figure 1)7. In addition, Daly City has seen a higher clearance rate for both violent and property crimes (57% and 20%, respectively) over the past ten years compared to Broadmoor (44% and 10%), although the gap is narrowing for violent crime clearance in recent years (Figure 2). The Part I crime and clearance data demonstrate that the likelihood of experiencing a violent crime is similar for residents in Broadmoor and Daly City, and that the likelihood of a crime being cleared (“solved”) is higher for residents of Daly City. This suggests that the two police departments are providing a similar level of police protection to their residents. Figure 1. Part I Crime rates in Broadmoor and Daly City 2000 1500 1000 500 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 BPPD Violent Crime BPPD Property Crime Daly City Violent Crime Daly City Property Crime 7 FBI Crime Explorer, https://cde.ucr.cjis.gov/LATEST/webapp/#/pages/home 16 stnediser K001 rep emirC Final Municipal Service Review – Broadmoor Police Protection District Figure 2. Part I Clearance Rates in Broadmoor and Daly City 100% 80% 60% 40% 20% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 BPPD violent crime BPPD Property crime Daly City violent crime Daly City Property crime Capacity and Adequacy of Public Facilities and Services Summary and Recommendations BPPD provides police protection to the unincorporated area of Broadmoor Village and an unincorporated area adjacent to Colma. BPPD operates with 7 full-time sworn officers, 1 full time admin secretary, 1 part time secretary, and 1 paid part time officer, and 14 unpaid reserve or volunteers. The District has a lower ratio of officer per 1,000 persons compared to the City of Daly City due to the loss of two positions over the last year. BPPD appears to provide a similar level of protection (based on Part I crime and clearance rates) to neighboring Daly City. Recommendations 1) The District should explore cost sharing with adjacent cities or other alternatives to contract for or consolidate services to reduce costs. Potential options are explored in more detail in Accountability, Structure and Efficiencies. 2) The District may consider developing and monitoring performance measures, which could include measurements of response times for calls and volume of calls. 4) Financial Ability Financial ability of agencies to provide service Yes Maybe No a) Does the organization routinely engage in budgeting practices that may indicate poor financial management, such X as overspending its revenues, failing to commission independent audits, or adopting its budget late? b) Is the organization lacking adequate reserve to protect X against unexpected events or upcoming significant costs? 17 etaR ecnaraelC Final Municipal Service Review – Broadmoor Police Protection District c) Is the organization’s rate/fee schedule insufficient to fund an adequate level of service, and/or is the fee inconsistent with X the schedules of similar service organizations? d) Is the organization unable to fund necessary infrastructure X maintenance, replacement and/or any needed expansion? e) Is the organization lacking financial policies that ensure its X continued financial accountability and stability? f) Is the organization’s debt at an unmanageable level? X a) Budget practices: The BPPD Commission reviews and adopts budget proposals each fiscal year. Budget proposals typically include anticipated revenue and expenditures for the upcoming fiscal year along with a summary of prior year revenues and expenditures. However, the most recent budget proposals for however, the FY 23-24 budget does not include a summary of FY21-22 estimated actuals. The District does not have a reserve fund and its only “reserve” is any excess fund balance that carries over from one year to the next. The adopted budget proposals do not indicate how prior year surplus or losses impact the current year’s budget. BPPD does not prepare a separate report of actual revenue and expenditures at the end of each fiscal year. The District does not produce long-term financial planning documents for use in the budgeting process. Actual revenue and expenditures for each fiscal year can be found in the annual audit reports and are described in Table 4. The largest expenditures are employee salary and benefits, including CalPERS pension contributions. BPPD experienced a budget loss each year from FY17 through FY22 and estimates a budget loss of over $250,000 for FY23. Although expenditures did not exceed revenue in FY21, the budget underestimated its expenditures by over $300K. While not explicitly stated in budget documents, it appears from audit documents that the District’s fund balance is being utilized to address these losses. In an analysis done by LAFCo, if all revenue collected by the District were to increase by 5%, including the supplement tax, property tax, and Excess ERAF, total revenue would only increase by approximately $150,000. BPPD deficits have been an average of $250,000 over the last six years. 18 Final Municipal Service Review – Broadmoor Police Protection District Table 4. FY17 through FY23 Revenues and Expenditures8 Adopted Budget Actual Revenue & Expenditures FY24 FY23 FY22 FY21 FY20 FY19 FY18 FY17 Revenue Property taxes $1,502,500 $1,525,000 $1,601,244 $1,513,527 $1,404,010 $1,300,497 $1,236,826 ERAF $500,000 $500,000 $566,781 $420,737 $395,540 $302,068 $267,015 $2,708,371 Supplemental $700,000 $700,000 $716,207 $684,129 $651,210 $651,210 $620,852 Assessment Other misc. $275,000 $289,000 $338,198 $330,142 $330,963 $356,781 $406,283 $331,749 TOTAL $2,977,500 $3,014,000 $3,222,430 $3,038,513 $2,949,356 $2,807,541 $2,660,058 $2,456,442 REVENUE Expenditures Personnel $1,960,559 $1,986,613 $2,186,905 $2,049,242 $2,495,139 $2,294,409 $2,233,012 $1,739,329 Office $142,650 $136,200 $126,038 $189,449 $207,209 $138,999 $327,396 expenses Insurance $644,500 $630,054 $478,216 $278,251 $144,716 $113,942 $93,838 Professional contract $354,700 $296,700 $370,234 $231,142 $210,465 $220,765 $200,193 services $920,274 Other professional $35,500 $54,350 $198,327 $78,072 $194,551 $120,209 $65,652 services Vehicle $107,500 $78,500 $41,643 $131,583 $106,928 $72,393 $78,845 maintenance Other $87,875 $85,375 $120,621 $55,168 TOTAL EXPENDITURE S $3,333,284 $3,267,792 $3,521,984 $3,024,684 $3,403,636 $3,158,278 $2,899,320 $2,505,253 Surplus (loss) ($355,784) ($253,792) ($299,554) $13,829 ($454,280) ($350,737) ($239,262) ($48,811) The BPPD Commission has adopted unbalanced budgets for FY17, FY18, FY19, FY23 and FY24. This was planned for this in FY17 (due to increased costs related to a lawsuit) and FY23 (increased insurance fees as result of lawsuits), but there were no explanations in FY18 and FY19. Although BPPD received more revenue than projected between FY17 through FY21, it underestimated annual expenditures from as little as $134,183 in FY17 to as much as $874,958 in FY20 (Figure 1). The budget items that were most significantly underestimated were salaries and wages, retirement, contracts, professional services and insurance (Table 5). 8 Lamorena & Chang CPA audits for BPPD 19 Final Municipal Service Review – Broadmoor Police Protection District Figure 1. Proposed versus Actual Budget Expenditures for FY17 through FY22 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- FY 23 FY 22 FY 21 FY 20 FY 19 FY 18 FY 17 Proposed Actual Table 5. Proposed versus actual expenditures FY17-229 Retirement Proposed Actual Insurance Proposed Actual FY17 $ 246,895 $238,795 FY17 $ 91,000 $ 93,838 FY18 $ 536,345 $515,608 FY18 $ 51,442 $113,942 FY19 $ 395,672 $603,300 FY19 $ 95,000 $144,716 FY20 $ 393,226 $682,820 FY20 $ 120,000 $278,251 FY 21 $ 308,134 Unk FY 21 $ 283,690 Unk FY 22 $ 325,514 Unk FY 22 $ 325,000 $478,216 Professional Other contract Proposed Actual professional Proposed Actual services services FY17 $ 147,696 $200,193 FY17 $ 52,500 $ 65,652 FY18 $ 148,132 $220,765 FY18 $ 69,300 $120,209 FY19 $ 159,632 $210,465 FY19 $ 91,700 $194,551 FY20 $ 167,632 $231,142 FY20 $ 91,700 $ 78,072 FY 21 $ 192,371 Unk FY 21 $ 92,200 Unk FY 22 $ 197,371 $370,234 FY 22 $ 113,000 $198,327 Between FY17 and FY20, the general fund balance decreased annually. The general fund increased minimally in FY21 by $13,829 and reported an ending fund balance of $1,104,416 at the end of FY2110. However, the District experienced another decrease in FY 22 and reported an ending fund balance of $804,862 on June 30, 2022. Based on unaudited estimated actuals for FY23 , the District had an estimated fund balance of an estimated $400,000 at the June 30, 9 Ibid 10 Lamorena & Chang CPA audits for BPPD 20 Final Municipal Service Review – Broadmoor Police Protection District 2023. While the fund balance has continued to decrease, fund balance amounts have not been shown in budget documents. The District had negative cash on-hand for two months during FY22-23, and on December 1, 2023, was removed from the San Mateo County Voluntary Investment Pool for violating the requirement that Pool participants maintain a minimum balance requirement of $250K during three months in calendar year 2023. The County Treasurer’s Office, in coordination with Controller’s Office, removed the District from the County Pool to protect other Pool participants should the District become insolvent or file for bankruptcy. BPPD funds has been transferred to an independent bank account that is maintained by the Treasurer’s office. BPPD provided a spreadsheet regarding revenue and expenditures for 2021-2024 that also presented at a BPPD Commission meeting. The document submitted to LAFCo was presented in calendar years. Based on this data LAFCo staff created the following table showing these revenues and expenditures by Fiscal Year: BPPB Budget Data11 FY21-22 FY22-23 FY23-24 Expenditures Revenue Expenditures Revenue Expenditures Revenue July $315,561 $15,261 $273,380 $50,366 $276,639 $5,463 August $246,067 $306,404 $293,740 $276,503 $120,301 $428,932 September $230,022 $6,601 $262,595 $5,779 $216,517 $2,610 October $337,409 $144,076 $375,815 $75,373 $104,213 $182,879 November $394,790 $119,512 $203,709 $158,301 $80,292 $105,528 December $302,184 $1,064,787 $366,066 $1,153,092 $262,699 $1,151,159 January $220,116 $479,825 $398,905 $486,999 $304,170 $500,074 February $237,279 $42,572 $183,669 $32,937 $95,907 March $228,413 $117,679 $238,750 $125,481 April $391,924 $632,441 $253,928 $701,698 May $301,940 $212,797 $440,208 $231,361 June $410,655 $57,543 $434,679 $53,869 Totals $3,616,359 $3,199,499 $3,725,444 $3,351,758 $1,460,739 $2,376,646 Net Income (Loss) ($416,860) ($373,686) $915,907 Currently final audited actuals for FY2022- 2023 are not available. BPPD has stated that the budget for FY 2022-2023 were offset by unknown 2022 debt and reduced expenditures. However, in review of the data provided by BPPD, the District lost $373,686 in FY22-23 and expenditures increased over the last year. As of this report, BPPD has not clarified this issue. The data provided by BPPD to LAFCo also includes financial data that differs from the final actual reported in the 2022 audit for BPPD. 11 BPPD Response to LAFCo 3/1/2024 – Broadmoor Fiscal Breakdown 21 Final Municipal Service Review – Broadmoor Police Protection District Per the District’s audits and correspondence with District staff, two legal cases pending. One is related to a litigation and settlement with CalPERS. Per BPPD, it is unknow what the fiscal impact will be to the District other than ongoing legal fees. The other case is awaiting an appellate court decision with a tentative trail date in 2025. If there is a payment, the District risk pool insurance will cover expense and settlements, but there may be impacts to liability insurance costs for the District with impacts to the District’s General Fund. BPPD’s net position has been negative every year since the end of FY17. The amount of change in net position is volatile (e.g., a 23% decrease in FY17 and 490% decrease in FY19). This negative net position is due to the District’s liabilities exceeding its assets. The majority of this outstanding liability is related to long-term pension costs. These long-term pension costs have continued to grow at a faster rate than assets. Despite multiple years of reporting a negative net position, the audits during this time period did not include a discussion about any recommendations in the audit process. In 2017 a separate Management Letter was drafted highlighting several recommendations for financial accounting, internal controls, depreciation, and the creation of several policies. While some of these were implemented, there is no follow up documentation in subsequent audits for the majority of these recommendations. As of June 30, 2022, the District has a negative net position of $1,262,01112. The District was able to reduce its long-term liabilities by $1,402,544 during FY22, however, it is unclear to LAFCo staff how this reduction occurred. The most recent audit affirms LAFCo’s ongoing concerns about the District’s financial health. The report states “….the district has suffered recurring significant loss in last several years, has a net deficiency in net assets and has stated that substantial doubt exists about the district’s ability to continue as a going concern.” Specifically, “Given the agency maintained only $779,573 operating cash balance as of June 30, 2022, management believes that it may not [have] sufficient capital to operate over the next 12 months. This is [the] third years of consecutive net loss of $112,080 for 2022, 2021 is $258,072, and 2020 is $454,291.”13 In addition to the net losses for the past several years, the increase in legal and insurance costs contribute to the uncertainty to lawsuits facing the District. While the District does undertake independent audits the audits are not presented at BPPD Commission meetings. Due to these mounting financial challenges, the District took several actions shortly after adoption of the FY 23-24 budget, including14: • Elimination of 2 full-time positions and 0.5 of a Commander position. • Suspended operations of non-critical staff that augment patrol and furloughed investigations staff. 12 Ibid 13 Ibid 14 Correspondence with BPPD 22 Final Municipal Service Review – Broadmoor Police Protection District • Immediate reduction of some staff members’ positions from full-time hours to part-time (Note: this included a reduction the Chief of Police’s salary, but not work hours) . • Further reduced of the Commander position to .25 FTE (10 hours per week). • Implemented efforts to reduce overtime expenditures. • Reinstituted the Reserve Police Officer program (currently have 1 reserve officer with 2 in the immediate hiring phase). • Building volunteer staff (currently 2 volunteers who handle facilities and vehicles). • Developing plans to drastically reduce the District’s vehicle fleet. • Working with vendors to extend the timelines for paying outstanding bills. While these actions were taken by the District, in a review by LAFCo staff of agenda, meeting minutes, and resolutions from this time, it does not appear that the BPPD Commission took these actions or formally gave direction to the Chief of Police/General Manger. There were no staff reports outlining why these actions were taken, why one action was taken over another, or any period for input from the public. These expenditure reducing actions were also taken shortly after the BPPD adopted the FY23-24 budget. None of these cost saving measures were included in the adopted budget. In addition, the Commission adopted Resolution 2023/24-03 on September 18, 2023 to file for Chapter 9 bankruptcy stating that the agency was facing a fiscal emergency and was insolvent. The resolution was rescinded on January 9, 2024. The cost reduction measures put into place by BPPD have reduced expenditures for the FY23-24 to a point where it seems that the District will have sufficient funds to continue to provide service through the end of this fiscal year, barring any large unforeseen expenditure. Budget projections for the rest of the fiscal year are not available from BPPD at this time. Since expenditures are drastically different from previous years, LAFCo staff is unable to provide an accurate forecast of future fund balances for BPPD. Future Ballot Measure and FY24-25 Budget The District is exploring the option of increasing the District’s supplemental parcel tax above the maximum 5% annual increase effective July 1, 2024. Any increase above the 5% current special tax would require a ballot measure and voter approval. As of the writing of this report, the District has not yet submitted a ballot measure of the November 5, 2024 election. BPPD has not made public the amount of the increase or what level of service the District envisions would be possible in the long-term with a supplemental parcel tax increase. The District is looking to contract with an accounting firm regarding a financial analysis for the potential tax measure. The District anticipates that the FY24-25 Budget process will commence in March 2024. As part of this process, BPPD staff has stated that they will providing budgeting projections. On April 18, 2024, BPPD selected a consulting firm, NBS, to assist the District with developing a budget for this fiscal year, the creation of a long-term financial plan, and research and analysis for a potential property tax measure for the upcoming November 2024 election. LAFCo staff will continue to monitor these efforts and provide updates to the LAFCo Commission as needed. 23 Final Municipal Service Review – Broadmoor Police Protection District Pension Liability BPPD is currently contending with a CalPERS investigation in which CalPERS alleges that several retirees of the District received full-time compensation as employees while also receiving retirement benefits and two retirees received large lump sum payments in addition to their regular pay. In a letter submitted by CalPERS to BPPD, CalPERS “noted instances of non- compliance with employment of retire annuitants, publicly available pay schedules, and incorrect reporting or non-reporting of payrates, earnings, and special compensation15.” In response, District staff has noted that they have initiated a more robust hiring process that includes a review of an employee’s status with CalPERS. The District is continuing to work with CalPERS to address this issue. The District is seeing rising pension costs and increases to the District’s net pension liability (Table 6). At the end of FY21, BPPD’s net pension liability had increased $638,612 since FY17, bringing the total long-term liabilities to $3,301,465. BPPD offers four plans, a Safety Plan, a PEPRA Safety Police Plan, a Miscellaneous Plan and a PEPRA Miscellaneous Plan16. Currently, the largest liability is with the Safety Plan. While pension liability and unfunded liability is not unique to the BPPD, having a negative net position (where liabilities exceed assets 3 to 1), the potential for unbudgeted payments to CalPERS in response to ongoing investigations, and budget deficits in several of the last fiscal are circumstances that many other agencies do not have. Table 6. Annual Pension Contributions and Long-Term Pension Liability CalPERS Pension Long-Term Pension Change from Prior Year Contribution Liability FY21 $571,490 $3,301,465 $237,944 FY20 $682,820 $3,063,521 $167,823 FY19 $603,300 $2,895,698 $(31,664) FY18 $515,608 $2,927,362 $ 309,509 FY17 $238,795 $2,617,853 Not available Other Post-Employment Benefits (OPEB) BPPD does not provide any other post-employment benefits for medical or life insurance. b) Agency Reserves: The District does not have a reserve to protect against unexpected events or upcoming significant costs. Instead, the District relies on the fund balance for unanticipated expenses. As noted previously, budget documents do not track the fund balance amount. 15 CalPERS Office of Audit Services Employer Compliance Review – “Review of Broadmoor Police Protection District” December 2021 16 The California Public Employees' Pension Reform Act (PEPRA), which took effect in January 2013, changes the way CalPERS retirement and health benefits are applied, and places compensation limits on members. The changes included setting a new maximum benefit, a lower-cost pension formula for safety and non-safety employees with requirements to work longer in order to reach full retirement age and a cap on the amount used to calculate a pension. 24 Final Municipal Service Review – Broadmoor Police Protection District In review of independent audits for BPPD, the Districts fund balance has continued to decrease. For FY20-21, the ending fund balance was $1.1 Million. This was decreased by $299,544 for a total new fund balance of $804,862 by FY21-2217. If data provided by BPPD is utilized for estimated FY22-23 revenue and expenditures, the ending fund balance on June 30, 2023 was $431,176. c) Service charges and other revenue sources: BPPD has three main revenue sources: 1) Property taxes, 2) Excess Education Revenue Augmentation Fund (ERAF) and 3) a Supplemental parcel tax that BPPD voters approved in 2000. In 1978, voters passed Proposition 13, which limited local agencies to a fixed 1% property tax, and each County Controller determines how to allocate the resulting revenues among various districts and agencies. The property tax revenue received by BPPD is unrestricted and can be used for all District business. Between FY17 and FY20 property taxes accounted for 50% of BPPD’s revenue. Property taxes are a consistent source of revenue but are subject to economic growth and decline. The supplemental parcel tax is the second largest source of revenue and accounts for an average of 22% of BPPD’s revenue. The parcel tax was established in 2005 after receiving voter approval from Broadmoor residents in 2000 and is restricted to police activities. The supplemental parcel tax is a reliable source of funding, as each parcel is subject to a flat fee annually. The tax includes an escalation factor of up to five percent (per fiscal year) based upon the Consumer Price Index. The District increased the rate for the first time since FY 21-22 on August 8, 2023 (effective July 1, 2023). The FY 23-24 rate for residential dwellings is $507.15 and $1,108.01 for commercial or industrial parcels. There is no sunset date for this special parcel tax. Noticing is required every year to continue the existing rate, decrease or increase the rate. As described above, the District is exploring the option of increasing the District’s supplemental parcel tax above the maximum 5% annual increase effective July 1, 2024. Any increase above the 5% current special tax would require a ballot measure and voter approval. As of the writing of this report, the District has not filed the paperwork to add a ballot measure to the November 5, 2024 election. BPPD has not made public the amount of the increase or what level of service the District envisions would be possible in the long-term with a supplemental parcel tax increase. Between FY17 and FY20, Excess ERAF accounted for approximately 12% of BPPD’s revenue and represents the District’s third largest source of revenue18. BPPD receives this revenue through the County as part of the ERAF calculation that limits funding shifts to school districts. When property tax revenues exceed a calculated amount, excess funds are allocated to other agencies, like BPPD, that receive property taxes. The County Controller does not recommend that agencies budget these supplemental funds for ongoing operations as they are determined 17 Lamorena & Chang CPA audits for BPPD 18 In the early 1990s, the Legislature permanently redirected a significant portion of the property tax revenue from cities, counties, and special districts to schools and community colleges. Revenue from ERAF is allocated to schools and community colleges to offset the funding these entities otherwise would receive from the state General Fund. In a few counties (including San Mateo), ERAF revenue is more than enough to offset all of the General Fund allocated to schools and community colleges. The portion of ERAF not needed for schools and community colleges is dispersed to other agencies in the county. The revenue shifted through this process is known as excess ERAF. (Source: California Legislative Analyst's Office) 25 Final Municipal Service Review – Broadmoor Police Protection District each year and are not a reliable source of revenue on an ongoing basis. Furthermore, the State has taken an interest in redirecting some of the excess ERAF to the State and away from local agencies. In 2022, as part of the proposed California State Budget, Excess ERAF was proposed to be capped at current levels for cities and counties and completely eliminated for special districts. If this had passed, the loss of ERAF funds would reduce the District’s revenue moving forward by 12%. While the proposal was not ultimately included in the State budget, the issue of Excess ERAF will continue to be of interest to the State as California is facing projected budget deficits in upcoming fiscal years. Other sources of revenue include BPPD’s trust fund, court fines, interest, grant revenue and bad debt recovery. Gann Appropriation Limits In 1979, California voters approved the Gann Appropriation Limit Initiative, which established requirements for cities, counties, and most special districts that used property taxes or proceeds from property taxes to calculate an appropriation limit each year to reduce the amount of growth in expenditures for each agency19. This requirement applies to all cities and districts that receive 12.5% or more of the 1% property tax. The District receives approximately 26% of the 1% property tax in District boundaries. A formula was developed to increase the limit by the change in agency population and the Consumer Price Index (CPI) from the prior year. In the 2015 Municipal Service Review (MSR) for North County Cities and Special District, which included BPPD, noted that the District had not adopted an annual resolution setting the Gann Appropriation Limit. The MSR recommended that BPPD should complete an analysis of its Gann Appropriation Limit and adopt resolutions annual. In a review of records and correspondence from the BPPD Police Chief, resolutions for the Gann Appropriation Limit have not been adopted. Currently, District Counsel is reviewing the statutes and legal obligations of the Gann Appropriation on the Broadmoor Police District. d) Infrastructure maintenance: BPPD does not have a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles. The District replaces vehicles as needed through its annual budget process and does not foresee the need for facility upgrades in the near future. e) Fiscal policies and administrative policies: Per District staff, BPPD does not have any adopted financial policies. The District does not have a Board-approved policy on setting reserves. f) Agency debt: BPPD does not report any outstanding debt. Financial Ability Summary and Recommendations BPPD has had significant budget deficits in five of the last six fiscal years. BPPD’s net position has been negative every year since the end of FY17. The BPPD Commission has adopted 19 Government Code Section 7900 et seq. 26 Final Municipal Service Review – Broadmoor Police Protection District unbalanced budgets for FY17, FY18, FY19 and FY23. For these budget losses and unbalanced budgets, the District has relied on the fund balance to address these deficits. As such, the fund balance, the only reserve for the District, has been drawn down over the past several budgets. While cost saving measures were implemented to stabilize the financial situation at BPPD, these measures were implemented shortly after the adoption of the FY23-24 budget by the BPPD Commission. These measures were not included as part of the adopted budget. LAFCo staff is concerned that BPPD and the public do not have a full and accurate view of fiscal status of the District. BPPD does not prepare a separate report of actual revenue and expenditures at the end of each fiscal year. The District does not produce long-term financial planning documents for use in the budgeting process. The District does have independent audits which are shared with staff and Board members; however, it does not appear that these audits are agendized for discussion at Board meetings. Delays in the timely production of audits can negatively impact budget preparation. BPPD has three main revenue sources: 1) Property taxes, 2) Excess Education Revenue Augmentation Fund (Excess ERAF) and 3) a Supplemental parcel tax that BPPD voters approved in 2000. Excess ERAF, which comprises 12% of the District’s overall budget, is considered to be an unstable revenue source. Furthermore, the State has taken an interest in redirecting some Excess ERAF to the State, so there is risk that Excess ERAF may not be available in future years. BPPD does not have a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles. BPPD is currently in conversation with the California Special Districts Association regarding hiring a company to develop a strategic plan for the District. The District replaces vehicles as needed through its annual budget process and does not foresee the need for facility upgrades in the near future. The District does not currently have any adopted fiscal policies. The District does not currently adopt a Gann Appropriation Limit, as was recommended in the 2015 MSR and the 2023 Special Study. BPPD legal staff is currently reviewing this issue. Although the District does not have outstanding debt, it does carry significant pension liabilities that may pose a threat to its long-term financial health. In addition, a lack of a reserve fund and the continuing use of the District’s fund balance puts the District in a vulnerable position to withstand a financial crisis, such as economic recession, termination of Excess ERAF or unexpected expenses, while still be able to maintain its high level of service. Should the District face insolvency, legacy costs like pension payments for current and retired personnel, would still need to be addressed by the agency that absorbs the provision of police protection services for Broadmoor. That agency would be entitled to receive District revenue, including the supplemental parcel tax, which could be used to pay for pension costs and other legacy costs. The successor agency would need to evaluate if the supplemental parcel tax or other potential additional taxes should continue to be collected as part of a plan for service. Recommendations 27 Final Municipal Service Review – Broadmoor Police Protection District 1) Prepare a quarterly financial report which presents the District’s financial condition in a user-friendly way so board members and staff can better understand financial data. At a minimum the financial data should include a balance sheet, income statement and a budget-to-actual report to detect potential errors. The reports should reference final actual numbers from the previous fiscal year and should be compared to budgeted numbers. In years where there are deficits, the impact to the District’s fund balance should be discussed in the budget documents. 2) Develop long-term fiscal documents that will assist the District in planning for expenditures, such as retirement costs. The Board could engage in a strategic planning session that will help prioritize goals and review the District’s fiscal ability to meet these goals. 3) Budget documents should show the amount of funds that are allocated to the District fund balance/reserve. 4) Independent audits should be presented to the Board for discussion at public meetings. The audit should include management letters and a review of any recommendations for the audit process and fiscal ability of the District. Audits should be conducted in a timely manner. 5) Develop accounting, financial, governance and general administrative policies to help guide its decision making in a consistent manner. This should include policy regarding the development of a reserve fund as well as a policy about how reserve funds are utilized. 6) Explore the development of a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles to help plan for long-term capital costs. LAFCo encourages BPPD to continue to work with the California Special District Association to identify a consulting firm to provide this service. 7) Adopt annual Gann Appropriation Limit resolutions. 8) Explore ways to reduce reliance on Excess ERAF for routine District operations and maintenance and divert Excess ERAF to a reserve fund that the District can draw from for unexpected expenses. 9) The District should explore ways to address budget shortfalls and unbalanced budgets, either through enhanced revenue or reduced costs. This could be conducted along with the creation of long-term financial planning documents and discussions with residents and District employees about future funding and District services. It is recommended that BPPD conduct outreach and engagement with residents regarding the fiscal outlook for the District and potential changes to levels of service. 10) Continue to post budget documents and audits on the District’s website. 28 Final Municipal Service Review – Broadmoor Police Protection District 5) Shared Service and Facilities Status of, and opportunities for, shared facilities Yes Maybe No a) Is the agency currently sharing services or facilities with X other organizations? If so, describe the status of such efforts. b) Are there any opportunities for the organization to share X services or facilities with neighboring or overlapping organizations that are not currently being utilized? c) Are there governance options to allow appropriate facilities and/or resources to be shared, or making excess X capacity available to others, and avoid construction of extra or unnecessary infrastructure or eliminate duplicative resources? a) Is the agency currently sharing services or facilities with other organizations? If so, describe the status of such efforts. BPPD has contracts with the County of San Mateo for both dispatching and crime lab services. b) Are there any opportunities for the organization to share services or facilities with neighboring or overlapping organizations that are not currently being utilized? In the 2023 Special Study, LAFCo recommended that BPPD explore hiring additional staff or consultants to perform human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. BPPD stated that the number of human resource functions is minimal and that share shared services for these types of functions would not be feasible as they are not essential functions of providing police protection. c) Are there governance options to allow appropriate facilities and/or resources to be shared, or making excess capacity available to others, and avoid construction of extra or unnecessary infrastructure or eliminate duplicative resources? Staff has not identified potential any governance options that would allow for additional facility or resource sharing, make excess capacity available to others, or avoid duplication of resources. Shared Service and Facilities Determinations BPPD should explore gaining additional staff, consultants, or volunteers to perform human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. BPPD stated that the number of human resource functions is minimal and that share shared services for these types of functions would not be feasible as they are not essential functions of providing police protection. 29 Final Municipal Service Review – Broadmoor Police Protection District Recommendation 1) Where feasible, BPPD should explore gaining additional staff, consultants, or volunteers to assist in performing human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. 6) Accountability, Structure and Efficiencies Accountability for community service needs, including governmental structure and operational efficiencies Yes Maybe No X a) Are there any issues with meetings being accessible and well publicized? Any failures to comply with disclosure laws and the Brown Act? X b) Are there any issues with staff turnover or operational efficiencies? X c) Is there a lack of regular audits, adopted budgets and public access to these documents? X d) Are there any recommended changes to the organization’s governance structure that will increase accountability and efficiency? X e) Are there any governance restructure options to enhance services and/or eliminate deficiencies or redundancies? X f) Are there any opportunities to eliminate overlapping boundaries that confuse the public, cause service inefficiencies, unnecessarily increase the cost of infrastructure, exacerbate rate issues and/or undermine good planning practices? a) Are there any issues with meetings being accessible and well publicized? Any failures to comply with disclosure laws and the Brown Act? BPPD is governed by a three-member Board of Commissioners elected by voters within the service district. The Commission meets monthly on the second Tuesday of each month. Meetings are open to the public and are held in the BPPD headquarters. The District posts copies of meeting agendas to their website, however, the full meeting packet is not available. Currently, staff reports for agenda items are not produced. 2024 agenda are not archived on the BPPD website. While all Commission meetings are recorded, video or audio recordings of Commission meetings are not available on the District’s website. Per District staff, recordings are available 30 Final Municipal Service Review – Broadmoor Police Protection District upon request and the requesting party would be responsible for all costs associated in preparing the recordings. In 2019, a BPPD Commissioner was appointed Police Chief by the Commission. During this selection process, the Commissioner participated in the search and selection for a new Police Chief and “advocated for a non-agendized vote on the decision that would result in his appointment.20” The Commissioner was appointed to the Police Chief’s position on a 2-0 vote. BPPD stated that meeting notices for public meetings are published three public locations as well as posting electronic notices on social media, including Facebook and Nextdoor platforms. BPPD staff also have presented at the Broadmoor Property Owners Association, several of which were attended by LAFCo and County staff. b) Are there any issues with staff turnover or operational efficiencies? Per the BPPD staff, the District has been able to meet staffing requirements. BPPD continues to have applicants but in lower numbers.. The Police Chief/General Manager provides all administrative and human resource function for the District. An outside account provides accounting functions, and an outside auditor provides auditing services. The District has a Memorandum of Understanding that covers all line personnel, civilian employees, and per-diems. This MOU expired at the end of FY22-23 and negotiations are currently ongoing21.The position of Chief of Police and Police Commander are covered by separate contracts. The BPPD Commission reviews and approves the initial contract and any amendments to the Chief of Police contract. c) Audits and transparency: As of the publication of this report, the latest independent audit is not available on the District’s website. The website does include budgets for 2016 through 2023The only audit available for review on the District’s website is for FY 2017. In review of agenda and minutes for the District, independent audits including the most recent 2022 audit, were not brought to the Commission for review and approval. The County of San Mateo provided payroll services to the District, this contract ended on June 30, 2023. The District now contracts with a private provider for payroll services. Per BPPD, there are going operational and tax issues regarding payroll that the private provide has not been able to address, including with federal tax filings22. The Broadmoor Police Protection District’s website provides basic contact information, meeting notices, agendas, and minutes, and a community events calendar. Copies of minutes, agenda, and resolutions are now available from 2017 to 2023 are available on the BPPD website. Agendas for 2024 are currently not archived. As mentioned previously, written staff reports are 20 Jason Green and Robert Salonga “Ex-Broadmoor police chief pleads no contest to conflict-of-interest charge” The Mercury News 8/4/2021. 21 BPPD Response to LAFCo 3/1/2024 22 Ibid 31 Final Municipal Service Review – Broadmoor Police Protection District not created for agenda items. Salary information for District positions is included in budget documents and adopted salary ranges for positions and classifications are now available on the District’s website. d-f) Governance Options: In light of the fiscal, structural and administrative concerns raised in this report and the 2023 Special Study, a discussion of alternative service and governance options is pragmatic. The 2015 MSR for BPPD identified three government structure alternatives for the District: Status Quo District would remain as is, with a three-member elected board and police services provided by officers and staff hired by the District. However, based on LAFCo’s review of recent BPPD audit and budget documents it is probable that changes to the level of service provided by the District or the levels revenue or expenditures would need to change due to budget constraints in the future. The supplemental parcel tax could be increased on property owners to raise revenue, or service and operations could be cut to reduce expenditures. These will be decisions that the BPPD Commission will need to evaluate. As part of the review of the potential changes to services or an increase in revenue, BPPD should engage with the residents of Broadmoor to understand their views on these issues and on the District. If services were not able to be provided by BPPD, the San Mateo County Sheriff’s Office or other neighboring agency may be able to assist, but BPPD should engage in discussions with those agencies if the need arises. Merge Broadmoor Police Protection District with City of Daly City Merging BPPD with the City of Daly City (with concurrent annexation of BPPD’s service territory) has the potential benefit of reducing overall service costs by eliminating duplicative staffing, administrative, and facility expenses. San Mateo LAFCo has identified Daly City (through adoption of the spheres of influence) as the long-term, logical service provider for both Broadmoor and unincorporated Colma. Daly City has its own full-service police department with its headquarters located less than one-quarter mile from the BPPD headquarters. Furthermore, the Broadmoor Unincorporated area is wholly surrounded by the City of Daly City and unincorporated Colma islands are fully bordered by Daly City on three sides and the Town of Colma. Formation of a County Service Area (CSA) or a Community Services District (CSD) and Contract with the County or Daly City for Services The Broadmoor Village subdivision receives services from the County of San Mateo, Broadmoor Police Protection District and Colma Fire Protection District. The District could reorganize either to a County Service Area (a dependent district under the jurisdiction of the County) or as a Community Services District (an independent special district with a five-member board). The reorganized agency could contract for police services. As discussed in the 2015 MSR, the CSA or CSD could also consider contracting for fire and solid waste services. Any application for a County Service Area (CSA) or a Community Services District would need to include a plan for service that outlined the proposed police protection services that would be provided and information about how those services are proposed to be funded. 32 Final Municipal Service Review – Broadmoor Police Protection District Contracting with Another Agency without Reorganization An additional alterative for the District that was not included in the 2015 MSR is that the District could consider contracting for service with another public safety agency to provide police services to the BPPD service area. Under this scenario, no LAFCo action would be required to enter into a service contract and the District remains intact. In California, there are three remaining Police Protection Districts, BPPD, the Fig Garden Police Protection District, and the Orange Cove Police. These two other districts, both located in Fresno County, contract with the Fresno County Sheriff’s Office for enhanced police protection. The Board of Commissioners for these two districts continue to meet and the district themselves continue to operate. BPPD could explore the option of contracting for service as a way for the District to better control costs and provide for improved economies of scale. Administrative functions such as Human Resources and payroll could be provided by the contracting agency and would no longer need to be provided by the District. Contracting with a public safety agency could also allow greater access to additional police resources and services for the Broadmoor community. While the scope of this special study does not include the fiscal analysis for contracting for services, if contracting is pursued, the District should analyze if there would be the potential for reducing or eliminating the special parcel tax. Dissolution BPPD could also be dissolved, either through a petition from registered voters or property owners residing in the District, a resolution from the BPPD Commission or another affected agency, or by LAFCo. This would require a LAFCo process and in most cases, would be subject to a protest proceeding. If the District was dissolved and Broadmoor remained unincorporated, police services could be provided by the San Mateo County Sheriff’s Office, similar to other unincorporated areas in the County. The specifics about what level of service would be provided and how the service would be funded (including information about the status and use of any supplemental property tax) would need to be developed by the agency applying to LAFCo as part of a plan for service. Government Code Section 57451 states that if the territory of a dissolved district is located entirely within the unincorporated territory of a single county, the county is the successor for the purposes of winding up the affairs of the dissolved district. The successor agency also received control over all money and funds. To pay for remaining legacy costs for the District, such as pension liability, the County of San Mateo could use the property tax and supplement property tax revenue that the District currently receives. In this case, revenue would still be collected to pay for legacy costs associated with BPPD even though the District would no longer be providing services. This could mean that rate payers within BPPD would pay for legacy costs associated with BPPD, even though BPPD is no longer providing police service. Two flow charts outlining the dissolution process are attached to the report as Appendix C. Bankruptcy While not a governance change, the BPPD Commission adopted Resolution 2023/24-03 on September 18, 2023 to file for Chapter 9 bankruptcy stating that the agency was facing a fiscal emergency and was insolvent. The resolution was rescinded on January 9, 2024. The cost 33 Final Municipal Service Review – Broadmoor Police Protection District reduction measures put into place by BPPD have reduced expenditures for the FY23-24 to a point where it seems that the District will have sufficient funds to continue to provide service through the end of this fiscal year, barring any large unforeseen expenditure. While it challenging for LAFCo to project what an outcome of a bankruptcy proceeding would have on BPPD and service to residents there are several potential outcomes: • BPPD stabilizes and continues to provide service (status quo) • BPPD declares bankruptcy, restructures debt and stabilizes • BPPD declares bankruptcy, restructures debt and still is insolvent, cannot provide service It is unknown and beyond LAFCo staff’s ability to be able to predict if a bankruptcy judge would change the amount of the supplemental property tax (or any revenue from a future property tax measure) that is being paid for by residents of BPPD. Accountability, Structure, and Efficiencies Determination Public meeting agendas are posted on the District’s website, but staff reports are not typically available. The District does record Board meetings, but currently, the records are not posted to the website and are only available at cost to members of public who request copies. The Police Chief/General Manager provides all administrative and human resource function for the District. Recommendations: 1) LAFCo recommends the creation of staff reports for Board of Commissioners agenda items. The creation of staff reports for Board items can increase transparency and raise public awareness of the issues that are being reviewed and acted on by the commissioners. The District could explore sharing services with cities or other special districts to assist in creating the staff reports and compiling an agenda packet. 2) In light of on-going fiscal concerns for BPPD, the District should provide updates to the community about the current fiscal status of BPPD, efforts that BPPD has made. 3) Explore providing video/audio of Board meetings should be posted on the District’s website for public viewing. 4) Continue to provide Brown Act training for all Commissioners. 5) Explore hiring or gaining additional staff, or consultants, or volunteers to assist in performing human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. 6) Develop accounting, financial, governance and general administrative policies to assist the Commission and District staff. This should include the creation of policies regarding meeting agendas and noticing, Brown Act training, and audit and budget review. 34 Final Municipal Service Review – Broadmoor Police Protection District 7) Provide information to the residents of BPPD about status of pursuing bankruptcy for the District. The information should include data about the current and future fiscal health of BPPD. 7) Other Any other matter related to effective or efficient service Yes Maybe No delivery, as required by commission policy. a) Are there any other service delivery issues that can be X resolved by the MSR/SOI process? b) Water Resiliency and Climate Change N/A i) Does the organization support a governance model that enhances and provides a more robust water supply capacity? ii) Does the organization support multi-agency collaboration and a governance model that provide risk reduction solutions that address sea level rise and other measures to adapt to climate change? c) Natural Hazards and Mitigation Planning N/A i) Has the agency planned for how natural hazards may impact service delivery? ii) Does the organization support multi-agency collaboration and a governance model that provides risk reduction for all natural hazards? a) Are there any other service delivery issues that can be resolved by the MSR/SOI process? There are no other issues that LAFCo has identified through the MSR/SOI process. b-c) Water Resiliency and Climate Change and Natural Hazards and Mitigation Planning The Broadmoor Police Protection District is charged with providing police protection services within its service boundaries. BPPD does not provide services related to water resiliency, climate change and natural hazards and mitigation planning. Other Area Determination There are no other issues that LAFCo has identified through the MSR/SOI process. The Broadmoor Police Protection District is charged with providing police protection services within its service boundaries. BPPD does not provide services related to water resiliency, climate change and natural hazards and mitigation planning. Section 5: Sphere of Influence Review and Update Determinations Section 56425 requires the Commission to make determinations concerning land use, present and probable need for public facilities and services in the area, the capacity of public facilities 35 Final Municipal Service Review – Broadmoor Police Protection District and adequacy of public services that the agency provides or is authorized to provide, and the existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. These include the following determinations: 1) The present and planned land uses in the area, including agricultural and open space lands. The boundaries of the BPPD encompass the unincorporated Broadmoor and unincorporated Colma communities, which are predominantly developed with urban uses. The Sphere of Influence designation for BPPD is zero (dissolution) as established in 1976 and reaffirmed several times since then, most recently in 2015. 2) The present and probable need for public facilities and services in the area. The territory served by BPPD is not expected to experience significant population growth and therefore will not require a change in the agency’s service needs, demands or service boundaries 3) The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. BPPD provides police protection to the unincorporated area of Broadmoor Village and an unincorporated area adjacent to Colma. BPPD operates with 7 full-time sworn officers, 1 full time admin secretary, 1 part time secretary, and 1 paid part time officer, and 14 unpaid reserve or volunteers. The District has a lower ratio of officer per 1,000 persons compared to the City of Daly City due to the loss of two positions over the last year. BPPD appears to provide a similar level of protection (based on Part I crime and clearance rates) than neighboring Daly City. BPPD has made dramatic cuts to spending since the start of FY23-24 by eliminating two officer positions, eliminating some per-diem officers and moving other per-diem officers into unpaid volunteer positions. The Chief of Police also reduced his pay for a period and now is back at full pay. These cuts have lowered the number of sworn officers to 7, a decrease from 9 officers just last year. Many of these budget cuts occurred shortly after the BPPD Commission adopted the FY23-34 budget. These cuts though were not included as part of the proposed budget document. The need for these unplanned cuts concerns LAFCo staff about if BPPD and the public have a full understanding of the fiscal health of the District. The most recent audit for BPPD affirms LAFCo’s ongoing concerns about the District’s financial health. The report states “….the district has suffered recurring significant loss in last several years, has a net deficiency in net assets and has stated that substantial doubt exists about the district’s ability to continue as a going concern.” 4) The existence of any social or economic communities of interest in the area if the Commission determines that they are relevant to the agency. There are no social or economic communities of interest within the Broadmoor Police Protection District’s SOI. 36 Final Municipal Service Review – Broadmoor Police Protection District 5) For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, that occurs pursuant to Section 56425(g) on or after July 1, 2012, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. No change to the Sphere of Influence of the Broadmoor Police Protection District is proposed at this time. On the basis of the Municipal Service Review: Staff has reviewed the agency’s Sphere of Influence and recommends that a SOI Update is NOT NECESSARY in accordance with Government Code Section 56425(g). Therefore, NO CHANGE to the agency’s SOI is recommended and SOI determinations HAVE NOT been made. Staff has reviewed the agency’s Sphere of Influence and recommends that a SOI Update IS NECESSARY in accordance with Government Code Section 56425(g). Therefore, A CHANGE to the agency’s SOI is recommended and SOI determinations HAVE been made and are included in this MSR/SOI study. 37 Final Municipal Service Review – Broadmoor Police Protection District Appendix A. Broadmoor Police Protection District Fact Sheet Michael P. Connolly, Interim Chief of Police Broadmoor Police Protection District 388 88th Street Daly City, CA 94015-1717 (650) 755-3840 Date of Formed: December 21, 1948 Commissioners: Three-member board of commissioners elected to four-year terms. Membership and Term Expiration Date: James Kucharszky (January 2024), Ralph Hutchens (November 2024), and Marie Brizuela, (November 2024) Compensation: No compensation to Commissioners Public Meetings: The Commission meets the second Tuesday of every month at 7:00 pm at Broadmoor Police Protection District headquarters. Services Provided: Police Protection Area Served: 0.55 square miles Population: Approximately 7,206 Number of Personnel: 7 full-time sworn officers, including a Chief of Police, 1 full time admin secretary, 1 part time secretary, and 1 paid part time officer, and 14 unpaid reserve or volunteers Sphere of Influence: Zero (Dissolution) Budget: See the Broadmoor Police Protection District website page (https://www.broadmoorpolice.com/) 38 Appendix B. References Correspondence with BPPD staff BROADMOOR UNINCORPORATED COLMA DALY CITY COLMA Legend Community Boundaries Esri, HERE, « Garmin, (c) Broadmoor Police Protection District Source: Esri, Maxar, GeoEye, Earthstar Geographics, CNES/Airbus DS, USDA, Broadmoor Police Protection District BPPD Response Matrix 1/26/2024 Does BPPD AGREE/ NOT PLANNED DATE FOR DETAILS OF AGREE with COMMENTS OR REASON RECOMMENDATION CHANGE OR CHANGE OR UPDATES FOR MSR recommendation FOR NON- AGREEMENT IMPLEMENTATION IMPLEMENTATION (YES/NO) Capacity and Adequacy of Public Facilities and Services 1. The District should explore Agree in part. On-going and operational We do not use other facilities N/A This refers to matters other cost sharing with adjacent with local agencies. Daly unless a protracted than routine Investigative cities or other alternatives to COMMENT: City and Colma Police investigation may call for and patrol functions. BPD contract for or consolidate This refers to matters other Department provide mutual aid. While Police shares some costs e.g., services to reduce costs. than routine Investigative cover units as back up departments generally assist dispatching services as do and patrol functions. BPD and occasionally will each other in crisis all agencies reliant on shares some costs e.g., handle calls for service. situations, they do not share County Services. dispatching services as do all Broadmoor Police also costs for service delivery. agencies reliant on County provides this service for This is evidenced by the fact As of July 2023, SM County Services. other agencies based that every agency must pay has elected to cease payroll upon high priority calls. booking fees to the SO and services for Broadmoor PD. As Broadmoor Police also Lab fees to the Crime Lab. a result we had to find a provide linguistics/ private vendor to handle our Translation services for payroll services. This has both field and caused severe operational and investigative support. tax filing issues. AS of todays (Spanish/ Cantonese) to date, the private vendor is numerous agencies. unable to resolve issues with federal tax filing. 2. The District may consider Agree in part. We have statistics Call Response times are N/A See attached Dispatch call developing and monitoring going back to 1999. currently reviewed, and priorities breakdown. performance measures, COMMENT: In 2021, a new standards are classified in 5 The national average for priority which could include The District already has in method of categories for response call response is approximately 8 measurements of response place procedures for Computer Assisted time. We do track this. minutes. BPD average priority times for calls and call monitoring employees' Dispatching (CAD) Response times are generally call time is approximately 2 volume to demonstrate the performance, which was implemented dictated by the severity of minutes. benefit of higher costs includes cost of providing and tracks all the incident. Our metrics of Many factors go into prioritizing associated with higher service along with efficiency metrics. response time are reviewed call response and BPD is levels of performance. of such service. by me to ensure we are adhering to best practices. Employees' supervisors complying with best practices. prepare regular evaluations Higher levels of service are being accomplished through community advocacy and discussion. Page 1 BPPD Response Matrix 1/26/2024 Call Volume is measured in several ways: Calls for Service. Incident reports generated, number of arrests. Arrest violations are broken down to ascertain crime trends. Moving vehicle citations are tracked to identify problem areas where vehicle enforcement may need additional attention. Financial Ability 1. Prepare a quarterly Agree District Annual Audits are This was discussed in 2021 and The first projected The data has been collected financial report which prepared for the District, was never implemented after report is anticipated to and sent to the Board of Police presents the District’s County and State in a June 2021. This will be be in September/ Commissioners. We are financial condition in a user- timely manner. The report implemented immediately with October 2023 unable to find an entity that friendly way so board is directly sent to the Board end of year review with FY can validate the raw data we members and staff can and adopted through 2022/23. have compiled. This data will better understand financial public meetings be included in the documents data. At a minimum the sent to Director Bartoli financial data should include a balance sheet, income statement and a budget-to- actual report to detect potential errors. The reports should reference final actual numbers from the previous fiscal year and should be compared to budgeted numbers. In years where there are deficits, the impact to the District’s fund balance should be discussed in the budget documents. 2. Develop long-term fiscal Agree The Department is in current Long Term retirement fiscal documents that will assist the close discussions with costs are predicated upon District in planning for CalPers with adherence to CALPERS rising costs. In recent expenditures, such as best practices. years, BPD members retirement costs. The Board As we work to mitigate contributions have risen could engage in a strategic significant mishandling of the significantly. Page 2 BPPD Response Matrix 1/26/2024 planning session that will CalPers accounts, we will We have reached out to the help prioritize goals and seek to address the Districts California Special District’s for review the District’s fiscal ability to address the fiscal assistance on strategic ability to meet these goals. needs. planning on their website. To be clear, these fiscal Additionally, we are engaged liabilities will be borne by in discussions with a private any successor agency. vendor in a broad discussion about strategic fiscal planning 3. Budget documents should Agree Any ability to address Our reserve funds have The County of San Mateo has show the amount of funds the District’s fund been consumed by issued several documents that are allocated to the balance will be a direct mandated corrections by which forecast our anticipated District fund balance/reserve. result from reduced CalPERS to adjust and revenue. Along with our fiscal legal costs. remedy past evasive planning document, we plan practices employed by to initiate our budget process former District Managers. in March 2024 with a goal to Significant litigation has severely reduce further spending in an impacted the budget. attempt to build a reserve fund. 4. Independent audits Agree This has been the Timely reporting and The 2023 Audit is in DRAFT should be presented to the operational practice for required reporting dates are form and will be sent out from Board for discussion at public several years. published. Our auditing firm our auditor in the coming meetings. The audit should ALL AUDITS are has been notified that the weeks. include management letters available for review County Controller is now and a review of any requesting the reports recommendations for the sooner. audit process and fiscal While the audits are ability of the District. Audits generally submitted in May should be conducted in a we plan to initiate earlier timely manner. reporting starting January 2024. 5. Develop Agree Unable to NO UPDATE AVAILABLE. accounting, financial, implement at this governance and general time. This will be administrative policies to help reviewed when the guide its decision making in a appropriate time consistent manner. This comes. should include policy regarding the development of a reserve fund as well as a policy about how reserve Page 3 BPPD Response Matrix 1/26/2024 funds are utilized. 6. Explore the development Agree The ability to determine a We have reached out to of a Master Plan, Strategic facility upgrade to facilitate California Special Districts Plan or Capital Improvement future needs is not practical. vendors listed on their Plan that plans for asset We are in a fixed complex website (Regional management and without the ability to upgrade. Government Services) replacement, such as facility Capital Improvements have Additionally, we are engaged upgrade or repairs and been made in FY 2020 to in discussions with a private replacement of equipment support BPD functionality to vendor in a broad discussion and vehicles to help plan for the residents. about strategic fiscal planning long-term capital costs. Facility infrastructure is updated and scheduled as needed to There are currently no plans maintain compliance with for any type of facility upgrade existing regulatory agencies. or needed repairs. Vehicle replacements are on an as needed basis. 7. Consider allocating Agree This is already in practice NO UPDATE AVAILABLE. accounting and auditing and has been for 15 years services to two separate In discussions with vendors firms to enhance fiscal oversight and transparency. 8. Adopt annual Gann Disagree The District is a single Awaiting a legal and fiscal Appropriation Limit purpose, non-enterprise determination by BPPD Legal resolutions. district. Almost all revenue Counsel derives from property taxes and a small amount of revenue derives from user fees. The Gann limitation does not apply to this District that existed on January 1, 1978, and for the 1977/78 fiscal year the amount of ad valorem taxes the District received was far less than the 12 1/2% cap provided by California Constitution Article XIII B §9(c). Page 4 BPPD Response Matrix 1/26/2024 Nevertheless, the District is in the process of reexamining this issue the appropriations limit is the budget itself. 9. Explore ways to reduce Disagree. NO UPDATE AVAILABLE reliance on Excess ERAF for The district always looks for routine District operations ways to reduce reliance on and maintenance and divert uncertain funds; however, Excess ERAF to a reserve fund income from grants and that the District can draw other uncertain sources has from for unexpected been reliable and most expenses. agencies rely upon such income streams. The District's revenue is essentially from property taxes and it receives no sales or other tax revenue. The District relies upon all sources of revenue. 10. Post budget documents Agree This has been accomplished NO UPDATE AVAILABLE and audits on the District’s and past budget and audits website have been posted as well as past audit reports. Accountability, Structure & Efficiencies 1. LAFCo recommends the Agree Reports and quarterly IN PROGRESS creation of staff reports for schedules are being built out for regular budget reports. Board of Commissioners As Audit reports become agenda items. The creation of available, these reports will staff reports for Board items be noted on public agendas can increase transparency and posted on our website. and raise public awareness of Other jurisdictions do not the issues that are being share services. The agenda reviewed and acted on by the packets are created and Commissioners. reviewed by the Police The District could explore commissions legal counsel. sharing services with cities or The Commission welcomes Page 5 BPPD Response Matrix 1/26/2024 other special districts to assist any suggestions for creating in creating the staff reports the staff reports without and compiling an agenda incurring further packet. expenditures. 2. Video/audio of Board Agree Equipment has been POLICY IS BEING DEVELOPED meetings should be posted purchased and is being on the District’s website for installed to comply with this public viewing. recommendation. 3. Provide Brown Act training Agree This has been provided by There has been no change in for all Commissioners. our insurance carrier in Elected Commissioners at 2021. A Risk management Broadmoor. Current position was created in 2021 Commissioners are in to ensure compliance. compliance. BPPD Counsel advises the BPPD Board of Commissioners accordingly when an issue arises. 4. Explore hiring additional Disagree The number of human NO UPDATE AVAILABLE staff or consultants to resource functions is perform human resource COMMENT: minimal. Our insurance functions and administrative This would not be a good carrier provides guidance tasks, including budget use of precious tax dollars. along with CA Peace Officer support. These functions The District believes that Standards and Training. The could also be shared services the efficient use of tax use of neighboring agencies with neighboring agencies. dollars must be limited to would incur a cost we essential needs, which do currently do not pay. not include hiring personnel that are not absolutely This would not be a good use essential to the mission of of limited resources. The providing police services. District believes that the efficient use of tax dollars must be limited to essential needs, which do not include hiring personnel that are not absolutely essential to the mission of providing police services. Neighboring agencies do not Page 6 BPPD Response Matrix 1/26/2024 engage in shared services of this kind. The needs of each agency vary so dramatically it would not be feasible to share these costs. 5. Post position salary and Disagree This is available on the NO UPDATE AVAILABLE compensation data on the Transparent California District’s website. website and our Budget documents posted on our website. The District does not have a full-time webmaster and the cost of hiring someone for this purpose would be fiscally challenging given competing priorities. 6. Post contracts and hiring Disagree Applicants for Peace Officer NO UPDATE AVAILABLE policies on District’s website. and other positions are posted when needed. The only contracted position is that of the Chief of Police. That will be posted when the Commission is seeking a permanent Chief/District Manager. When that happens, all relevant information will be posted. Currently, the District is served by an Interim Chief / District Manager. 7. Develop accounting, Agree The staff that is referenced NO UPDATE AVAILABLE financial, governance and here is both for the District and Commission. There is no district staff. Any general administrative Meeting agendas, noticing, administrative support is policies to assist the Brown Act facts are provided. either internal staff or Commission and District Page 7 BPPD Response Matrix 1/26/2024 staff. This should include the As we look to revamp our identified consultants. creation of policies regarding current website, we plan to Additional staff would incur post more relevant costs that the District is not meeting agendas and documents there. fiscally prepared for. noticing, Brown Act training, and audit and budget review. Page 8 Dissolution of a Special District Key Points Initiation by LAFCo, subject district, other LAFCO outside agency, or by Dissolution proposal must include a meeting petition of voters/ plan for service that describes: property owners • The services currently provided by the subject district • The level & range of those services • The successor agency that will provide services & when new service LAFCoapproval & protest LAFCoapproval LAFCodisapproval  will begin hearing waived (only if with protest Proposal terminated • Any improvements, upgrades or initiated by district)  hearing other conditions that the successor Successful Dissolution agency would require • How services will be financed & how liabilities will be paid Protest If initiated by other agency Protest thresholds: If initiated by LAFCo and: Hearing or by petition and: • Successful dissolution: <25% of registered voters OR <25% of landowners within the district who also own <25% of the assessed value of land in district. (Threshold is <10% Successful <10% protest <25% protest if LAFCo-initiated.) Dissolution • Proposal terminated: >50% of registered voters OR >50% of landowners who also own >50% of >50% protest Proposal terminated >50% protest assessed value of land in district. • Election is ordered: At least 25% & less than 50% of registered voters OR at least 25% & less than 50% of Election >10 and <50% protest >25 and <50% protest landowners who also own at least 25% & less than 50% of assessed value in district (Lower threshold is 10% if LAFCo-initiated.) Majority in favor of dissolution  Majority against dissolution  Successful Dissolution Dissolution terminated Dissolution of a Special District via SB 938 What is SB 938? Signed into law in 2022, SB 938 creates Commission adopts resolution a higher voter protest threshold for Complete municipal LAFCO to approve MSR and initiate LAFCo-initiated dissolutions that meet service review meeting dissolution based on one of the specific criteria (25% protest threshold (MSR) for district SB 938 findings (see box) instead of 10%). A minimum of a 12- month remediation period must occur before action can be taken. 12-month District may take steps to remedy the specified What are the requirements to remediation deficiencies and provide a mid-point report on the initiate dissolution using SB 938? period remediation efforts at a Commission meeting Commission must adopt a municipal service review (MSR) that includes a finding that at least one of the following conditions is met: LAFCorescinds notice LAFCO meeting • One or more documented chronic LAFCoapproval to of intent to dissolve dissolve district service provision deficiencies AND district (Minimum of 12 months later) Board management is not actively engaged in efforts to fix deficiencies • Expenditure of public funds in an unlawful or reckless manner AND no Protest Hearing action has been taken to prevent similar future spending • Willful neglect and failure to adhere to the California Public Records Act Successful and other public disclosure laws <25% protest Dissolution • Failure of Board to meet the min. # of times required by its principal act in the prior year AND no action has >50% protest Proposal terminated been taken to ensure future mtgs are held on timely basis • Consistent failure to perform timely Majority in favor of dissolution  Successful Dissolution audits over the last three years Election • Recent audits show chronic issues >25 and <50% protest with the district’s fiscal controls Majority against dissolution  AND no action has been taken to Dissolution terminated remediate the issue 15 May Tygarjas Bigstyck Virginia Chang-Kiraly Ann Draper Ray Mueller Harvey Rarback Warren Slocum Kati Martin None Exhibit B Municipal Service Review (MSR) Areas of Determination and Recommendations for the Broadmoor Police Protection District Areas of Determinations and Recommendations Growth and population projections for the affected area. Determination The territory served by BPPD is not expected to experience significant population growth and therefore will not require a change in the agency’s service needs, demands or service boundaries. Recommendation • None The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the SOI. Determination The unincorporated area served by BPPD does not contain any disadvantaged unincorporated communities within its service area. Recommendation • None Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the SOI. Determination BPPD provides police protection to the unincorporated area of Broadmoor Village and an unincorporated area adjacent to Colma. BPPD operates with 7 full-time sworn officers, 1 full time admin secretary, 1 part time secretary, and 1 paid part time officer, and 14 unpaid reserve or volunteers. The District has a lower ratio of officer per 1,000 persons compared to the City of Daly City due to the loss of two positions over the last year. BPPD appears to provide a similar level of protection (based on Part I crime and clearance rates) to neighboring Daly City. Recommendations 1) The District should explore cost sharing with adjacent cities or other alternatives to contract for or consolidate services to reduce costs. Potential options are explored in more detail in Accountability, Structure and Efficiencies. 2) The District may consider developing and monitoring performance measures, which could include measurements of response times for calls and volume of calls. Financial ability of agencies to provide services. Determination BPPD has had significant budget deficits in five of the last six fiscal years. BPPD’s net position has been negative every year since the end of FY17. The BPPD Commission has adopted unbalanced budgets for FY17, FY18, FY19 and FY23. For these budget losses and unbalanced budgets, the District has relied on the fund balance to address these deficits. As such, the fund balance, the only reserve for the District, has been drawn down over the past several budgets. While cost saving measures were implemented to stabilize the financial situation at BPPD, these measures were implemented shortly after the adoption of the FY23-24 budget by the BPPD Commission. These measures were not included as part of the adopted budget. LAFCo staff is concerned that BPPD and the public do not have a full and accurate view of fiscal status of the District. BPPD does not prepare a separate report of actual revenue and expenditures at the end of each fiscal year. The District does not produce long-term financial planning documents for use in the budgeting process. The District does have independent audits which are shared with staff and Board members; however, it does not appear that these audits are agendized for discussion at Board meetings. Delays in the timely production of audits can negatively impact budget preparation. BPPD has three main revenue sources: 1) Property taxes, 2) Excess Education Revenue Augmentation Fund (Excess ERAF) and 3) a Supplemental parcel tax that BPPD voters approved in 2000. Excess ERAF, which comprises 12% of the District’s overall budget, is considered to be an unstable revenue source. Furthermore, the State has taken an interest in redirecting some Excess ERAF to the State, so there is risk that Excess ERAF may not be available in future years. BPPD does not have a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles. BPPD is currently in conversation with the California Special Districts Association regarding hiring a company to develop a strategic plan for the District. The District replaces vehicles as needed through its annual budget process and does not foresee the need for facility upgrades in the near future. The District does not currently have any adopted fiscal policies. The District does not currently adopt a Gann Appropriation Limit, as was recommended in the 2015 MSR and the 2023 Special Study. BPPD legal staff is currently reviewing this issue. Although the District does not have outstanding debt, it does carry significant pension liabilities that may pose a threat to its long-term financial health. In addition, a lack of a reserve fund and the continuing use of the District’s fund balance puts the District in a vulnerable position to withstand a financial crisis, such as economic recession, termination of Excess ERAF or unexpected expenses, while still be able to maintain its high level of service. Should the District face insolvency, legacy costs like pension payments for current and retired personnel, would still need to be addressed by the agency that absorbs the provision of police protection services for Broadmoor. That agency would be entitled to receive District revenue, including the supplemental parcel tax, which could be used to pay for pension costs and other legacy costs. The successor agency would need to evaluate if the supplemental parcel tax or other potential additional taxes should continue to be collected as part of a plan for service. Recommendations 1) Prepare a quarterly financial report which presents the District’s financial condition in a user-friendly way so board members and staff can better understand financial data. At a minimum the financial data should include a balance sheet, income statement and a budget-to-actual report to detect potential errors. The reports should reference final actual numbers from the previous fiscal year and should be compared to budgeted numbers. In years where there are deficits, the impact to the District’s fund balance should be discussed in the budget documents. 2) Develop long-term fiscal documents that will assist the District in planning for expenditures, such as retirement costs. The Board could engage in a strategic planning session that will help prioritize goals and review the District’s fiscal ability to meet these goals. 3) Budget documents should show the amount of funds that are allocated to the District fund balance/reserve. 4) Independent audits should be presented to the Board for discussion at public meetings. The audit should include management letters and a review of any recommendations for the audit process and fiscal ability of the District. Audits should be conducted in a timely manner. 5) Develop accounting, financial, governance and general administrative policies to help guide its decision making in a consistent manner. This should include policy regarding the development of a reserve fund as well as a policy about how reserve funds are utilized. 6) Explore the development of a Master Plan, Strategic Plan or Capital Improvement Plan that plans for asset management and replacement, such as facility upgrade or repairs and replacement of equipment and vehicles to help plan for long-term capital costs. LAFCo encourages BPPD to continue to work with the California Special District Association to identify a consulting firm to provide this service. 7) Adopt annual Gann Appropriation Limit resolutions. 8) Explore ways to reduce reliance on Excess ERAF for routine District operations and maintenance and divert Excess ERAF to a reserve fund that the District can draw from for unexpected expenses. 9) The District should explore ways to address budget shortfalls and unbalanced budgets, either through enhanced revenue or reduced costs. This could be conducted along with the creation of long-term financial planning documents and discussions with residents and District employees about future funding and District services. It is recommended that BPPD conduct outreach and engagement with residents regarding the fiscal outlook for the District and potential changes to levels of service. 10) Continue to post budget documents and audits on the District’s website. Status of, and opportunities for, shared facilities. Determination BPPD should explore hiring additional staff or consultants to perform human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. BPPD stated that the number of human resource functions is minimal and that share shared services for these types of functions would not be feasible as they are not essential functions of providing police protection. Recommendation 1) Where feasible, BPPD should explore gaining additional staff, consultants, or volunteers to assist in performing human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. Accountability for community service needs, including governmental structure and operational efficiencies. Determination Public meeting agendas are posted on the District’s website, but staff reports are not typically available. The District does record Board meetings, but currently, the records are not posted to the website and are only available at cost to members of public who request copies. The Police Chief/General Manager provides all administrative and human resource function for the District. Recommendations: 1) LAFCo recommends the creation of staff reports for Board of Commissioners agenda items. The creation of staff reports for Board items can increase transparency and raise public awareness of the issues that are being reviewed and acted on by the commissioners. The District could explore sharing services with cities or other special districts to assist in creating the staff reports and compiling an agenda packet. 2) In light of on-going fiscal concerns for BPPD, the District should provide updates to the community about the current fiscal status of BPPD, efforts that BPPD has made. 3) Explore providing video/audio of Board meetings should be posted on the District’s website for public viewing. 4) Continue to provide Brown Act training for all Commissioners. 5) Explore hiring gaining additional staff, or consultants, or volunteers to assist in performing human resource functions and administrative tasks, including budget support. These functions could also be shared services with neighboring agencies. 6) Develop accounting, financial, governance and general administrative policies to assist the Commission and District staff. This should include the creation of policies regarding meeting agendas and noticing, Brown Act training, and audit and budget review. 7) Provide information to the residents of BPPD about status of pursuing bankruptcy for the District. The information should include data about the current and future fiscal health of BPPD. Any other matter related to effective or efficient service delivery, as required by LAFCo policy including the following: i. Water Resiliency and Climate Change ii. Impact of Natural Hazards and Mitigation Planning Determination There are no other issues that LAFCo has identified through the MSR/SOI process. The Broadmoor Police Protection District is charged with providing police protection services within its service boundaries. BPPD does not provide services related to water resiliency, climate change and natural hazards and mitigation planning. Recommendation - • None PAUL M. DAVIS SEATTLE paul m. davis (206) 497-1188 ATTORNEY AT LAW _______ WASHINGTON, DC 1 BLACKFIELD DRIVE also admitted in the (202) 241-1316 district of columbia SUITE 193 SAN MATEO and the (650) 349-0700 state of washington TIBURON, CALIFORNIA 94920-2053 ___________ TELEPHONE: (415) 884-2555 April 24, 2024 BY EMAIL ONLY rbartoli@smcgov.org Rob Bartoli, Director San Mateo County LAFCo 455 County Center, 2nd Floor Redwood City, California 94063 In re: Response to Letter of March 18, 2024, authored by Andrea Hall Dear Director Bartoli: On March 18, 2024, Andrea Hall of 1843 Sweetwood Drive in Broadmoor Village authored and sent to you a letter outlining myriad issues she claims to have with the Broadmoor Police Protection District ("District"). I did not become aware of that letter until very recently because she did not send the District a copy of it. The purpose of this correspondence is to respond to the inaccuracies contained in that letter and to present the correct facts. INTRODUCTION AND BACKGROUND In order to better understand the various issues involved in Andrea Hall's letter this letter hopefully will provide some context. For reasons that are not at all clear, Andrea Hall has, sadly, waged and continues to wage an all-out, relentless war against the District. Perhaps this is because of an incident in December 2022 when Broadmoor police were summoned to her home over a parking issue she was experiencing with an adjoining neighbor. Apparently, Andrea Hall was not pleased with the manner in which the responding officer handled that incident. The officer made it clear to Andrea Hall that he could not take any enforcement action against her neighbor because he did not observe a violation of any law. That infuriated Andrea Hall and led her to berate and yell at the officer. She shouted, "What's your Bar number?"1 As preposterous as this was, 1 This refers to permanent number assigned to each member of the State Bar of California. Director Rob Bartoli ( . . . cont'd.) April 24, 2024 Page Two ______________________________________________________________________________ she persisted in berating the officer and continued to demand to know his "Bar number" simply because the officer tried to explain the legal reasons why he could not take any enforcement action, which just seemed to infuriate her even more. Andrea Hall then bombarded the District with a Public Records Request, which was referred to me for response. I made several attempts to find out from Andrea Hall what it was that was upsetting her so much because I wanted to see if there would be anything I could do to allay any legitimate concerns she might have that she could articulate. Andrea Hall could not articulate a single cogent concern. Nevertheless, the District and I remain absolutely committed to responding to, addressing, and, to the extent possible, resolving any issue Andrea Hall might have with the District. I will provide the District's response to some, but not all,2 of the points that Andrea Hall has raised in her letter of March 18, 2024, which I will address in the order presented. J. WAYNE JOHNSON In December 2014, the late J. Wayne Johnson was an elected commissioner of the Broadmoor Police Commission on which he had honorably served for decades. The District was his life since the early Sixties. Mr. Johnson could be quite ridged at times and could be extremely difficult to deal with. Nevertheless, he always had the best interest of Broadmoor in mind. The District was his heart and soul. During public meetings of the Police Commission on which he sat Mr. Johnson constantly questioned District staff about the expenditure of District funds and constantly chided police chiefs in public about expenditures he questioned. Mr. Johnson was a great steward of public funds. A former Broadmoor chief and commander did not take kindly to Mr. Johnson's constant public wrath over expenditures and they did not receive his rather abrasive criticism very well, so they embarked upon a course of retribution. 2 In the interest of brevity this letter will address only some of the highlights of Andrea Hall's letter of March 18, 2024. For example, Andrea Hall states that the District's cost per call for police services is $531.87. (Hall letter, fn 1) She is incorrect. The true fact is the cost per call is $328.29, which is below the cost of Daly City, Colma and the Sheriff. DAVIS LAW OFFICES CALIFORNIA •DISTRICT OF COLUMBIA •WASHINGTON STATE Director Rob Bartoli ( . . . cont'd.) April 24, 2024 Page Three ______________________________________________________________________________ In December 2014, the police chief at the time had fraudulently procured a search warrant to search Mr. Johnson's home. He had the soon-to-be police chief, then a commander, along with a posse of armed personnel, search Mr. Johnson's Broadmoor home using the fraudulently-obtained search warrant as the means to gain entry. The commander (soon-to-be police chief) proceeded to arrest Mr. Johnson inside his home without an arrest warrant. Hours later, the commander (soon-to-be chief) had Mr. Johnson transported and booked into the San Mateo County jail and held in custody on numerous felony and misdemeanor charges until he was able to arrange bail to get released from jail. After receiving the arrest report the district attorney concluded that Mr. Johnson had committed no crime thus no criminal charges were ever brought against him. Mr. Johnson retained legal counsel and filed a lawsuit for the damages he suffered as a result of the false arrest, the unlawful search of his home, and the confiscation of his property at the hands of the two former Broadmoor police chiefs. In her letter, Andrea Hall falsely asserts that a current commissioner (Hon. Ralph Hutchens), who was a commissioner at the time of the incident in December 2014, participated in the service of the 'allegedly forged warrant'. She could not be more incorrect. Why Andrea Hall finds it necessary or relevant to bring up an event that took place almost a decade ago is highly suspect. Nevertheless she does so in her ongoing war against the District. The facts Andrea Hall recited in her letter regarding Mr. Johnson are not all true. The true facts are as follows: 1. The "forged" search warrant to which Andrea Hall refers in her letter was not a forgery, it was fraudulently obtained by perjury contained in an affidavit. 2. Not only did Commissioner Hutchens have nothing to do with obtaining or serving the fraudulently-obtained search warrant, he did not even know or learn of the search warrant or the incidents stemming from it until a couple of days thereafter while he was mowing his lawn and someone commented to him about the event. In other words at no time prior to or at the time of the incident did Commissioner Hutchens know that a search warrant had been fraudulently obtained, he did not know that Mr. Johnson's home had been searched, DAVIS LAW OFFICES CALIFORNIA •DISTRICT OF COLUMBIA •WASHINGTON STATE Director Rob Bartoli ( . . . cont'd.) April 24, 2024 Page Four ______________________________________________________________________________ he did not know that the Broadmoor police commander and others had arrested Mr. Johnson inside his home without an arrest warrant, and he did not know that they took him to jail. Mr. Hutchens was completely in the dark. 3. Finally, contrary to Andrea Hall's assertions, the District did not expend any District funds to settle the lawsuit brought by Mr. Johnson. The entire settlement of $400,000 was paid by the District's insurance carrier. To be clear no District funds were used in that settlement or in the defense thereof. STEVEN LANDI Steven Landi was a retiree of the San Francisco Police Department when he was hired as an annuitant by the same administration that gave rise to the claim of Mr. Johnson. Andrea Hall asserts that the District paid about $170,000 to settle Mr. Landi's claim. That fact is not true. The true fact is that Mr. Landi's claim settled for a very small amount of money, all of which came from the District's insurance carrier. Again, no District funds were contributed towards that settlement or the defense thereof. The hypertechnical error made in connection with Mr. Landi's employment has not recurred and will not recur. CalPERS Andrea Hall next proffers a litany of incorrect facts in her letter that relate to former employees Ed Nakiso, Nathan Johnson, Randall Bandino and Mark Melville. The true facts are that both Ed Nakiso and David Parenti settled their cases directly with CalPERS for a fraction of what CalPERS had demanded of them. In both cases the District did not contribute anything towards the settlements, nor did the District become additionally indebted to CalPERS as a result of those settlements. In other words, the District neither paid out anything nor incurred any additional liability to CalPERS. Likewise, Nathan Johnson (no relation to J. Wayne Johnson) and Randall Bandino settled their cases directly with CalPERS without any contribution by the District and without any additional liability to CalPERS. DAVIS LAW OFFICES CALIFORNIA •DISTRICT OF COLUMBIA •WASHINGTON STATE Director Rob Bartoli ( . . . cont'd.) April 24, 2024 Page Five ______________________________________________________________________________ In the case of Mark Melville, CalPERS acknowledged that they had made an error and withdrew the notice of violation. The District incurred no additional liability to CalPERS as a result of that matter as well. To be clear, the District did not incur any additional obligation to CalPERS by reason of any of the settlements of these former employees. In each of these cases the District's liability to CalPERS remains unchanged. The District retains the same CalPERS obligations as it has with all retirees of the District. Andrea Hall goes on to falsely state that restitution in the amount of $4,257,485.82 is being sought from various former Broadmoor Ed Nakiso, David Parenti and Gregory Love relating to some perceived CalPERS issue. Once again, there is no truth to any that. As discussed above, those former employees have resolved their cases with CalPERS and none of them owe anything. Andrea Hall either seems to not understand the documents upon which she appears to rely in support that false assertion or her information is stale. In either event none of the alleged $4,257,485.82 is owed to CalPERS or to any other entity. The CalPERS pension plans for all District employees consist of several defined benefit pension plans.3 The District's funding obligation for the pension benefits accrues during each year of employment but pension benefits received upon retirement through CalPERS are calculated as a percentage of the employees' payroll4. This is the employer normal cost rate. The entire combination of employee contributions (set by statute) and employer contributions are invested by CalPERS. The idea is that the resulting amounts (contributions plus the return on that investment) will be sufficient to cover the benefits accrued during each year of employment; however, that usually is not the case. The difference between the actuarial cost of the benefits accrued, the combination of the employer and employee contributions, and the investment earnings ("assets") is referred to as the unfunded actuarial liability ("UAL"). The UAL is amortized over a number of years pursuant to the CalPERS Actuarial Amortization Policy resulting in the second component of the public employers' annual funding obligation to CalPERS, a fixed 3 There are four plans that apply to District employees: (i) Classic Safety Police Plan, (ii) a PEPRA Safety Police Plan, (iii) Classic Miscellaneous Plan, and (iv) a PEPRA Miscellaneous Plan. All four plans are very different defined benefit pension plans with CalPERS. All such plans, as public pension plans, are not subject to ERISA as are private defined benefit pension plans. 4 The employers' contribution percentages are set by statute reflected in actuarial reports published annually. These rates vary dramatically between plans and CalPERS contracting agencies. DAVIS LAW OFFICES CALIFORNIA •DISTRICT OF COLUMBIA •WASHINGTON STATE Director Rob Bartoli ( . . . cont'd.) April 24, 2024 Page Six ______________________________________________________________________________ contribution referred to as the "required payment on amortization bases" in the annual valuation. UAL arises because the return on the investments in the long term typically does not provide a return sufficient to meet the total accrued liability, thus the cities, counties, special districts and contract agencies have to make up the difference between the return on the investments and accrued liabilities. This problem (unfunded pension liability) was significantly exacerbated in Fiscal Year 2021/22 when CalPERS' investments actually resulted in a net loss instead of a positive return, which meant that instead of the unfunded pension liability being reduced by what would have been a positive return on investments, the unfunded pension liability was actually increased because the investments actually produced a negative return. That loss resulted in a significant system-wide unfunded pension liability that was allocated across the board among all CalPERS member agencies throughout the state, which included the District. As of July 29, 2022, CalPERS reported a pension debt of $611 billion, which was only 72% funded; therefore, the remaining 28% was the system-wide unfunded pension liability debt to be allocated across the board to all CalPERS member agencies. The District's legal obligation to pay the unfunded pension liability is no different than any other CalPERS member agency. The amount to be paid by the several CalPERS member agencies, which is determined by CalPERS' actuaries, varies greatly between the several plans and the employing agencies. Unfunded pension liability is simply a way of life with all public defined benefit pension plans. By way of illustration, the smallest jurisdiction in San Mateo County is the Town of Colma. As of June 30, 2022, Colma had unfunded pension liability to CalPERS in the amount of $7.5 million, which is down from $10.2 million five years earlier. Over the years unfunded pension liability in California had become so profound and out of control, and had imposed upon every jurisdiction (including the State of California) such a fiscal burden that was quickly becoming insurmountable, the Legislature in 2012 enacted the Public Employee Pension Reform Act, also known as PEPRA, which dramatically altered the entire public pension plan scheme throughout the State of California.5 5 Government Code §7522, et seq. [Stats. 2012, Ch. 296, Sec. 15. (AB 340) Effective January 1, 2013.] DAVIS LAW OFFICES CALIFORNIA •DISTRICT OF COLUMBIA •WASHINGTON STATE Director Rob Bartoli ( . . . cont'd.) April 24, 2024 Page Seven ______________________________________________________________________________ SYED HUSAIN AND VICTOR KHEDR Andrea Hall refers in her letter to Syed Husain and Victor Khedr as "former officers." Once again, that is not true. At all times during their tenure with the District they were reserve officers; neither was at any time a regular police officer. FORMER CHIEF LOVE Particularly striking, however, is Andrea Hall's bold and erroneous statement regarding former Chief Love. In her letter she states that "San Mateo County is currently trying to recover $1.2 million from former Chief Gregory Love." That fact simply is not true. The true fact is that San Mateo County has never asserted any claim or made any demand upon former Chief Love in the amount of $1.2 million or any other amount or anything at all relating to his former employment with the District. Moreover, former Chief Love is not indebted to San Mateo County, CalPERS or any other entity in the amount of $1.2 million or any other amount or at all relating to his former employment with the District. The District has neither paid any legal fees or expenses that former Chief Love might have incurred by reason of his former employment with the District nor has former Chief Love asked the District to do so. CHIEF CONNOLLY Andrea Hall boldly asserts that Chief Connolly pled nolo contendere to a "criminal Brown Act offense" (Andrea Hall letter, fn 3) and that he was "ousted." None of that is true. The true facts are that Chief Connolly did not plead nolo contendere to a Brown Act violation, and the case that had been brought against him was ultimately dismissed. Moreover, Chief Connolly was not "ousted." He was compensated for vacation time he had accrued while he served as Chief. Had the District not paid him the accrued vacation the District would have been in violation of state labor law and subject to payment of the accrued vacation pay plus penalties for non-payment. (Labor Code §§ 203(a), 227.3) CONCLUSION While the three police commissioners of the District are keenly aware of and acknowledge that many mistakes were made by previous commissions in terms of hiring and relying upon management to operate the District, they remain absolutely DAVIS LAW OFFICES CALIFORNIA •DISTRICT OF COLUMBIA •WASHINGTON STATE Director Rob Bartoli ( . . . cont'd.) April 24, 2024 Page Eight ______________________________________________________________________________ committed to ensuring that such mistakes do not recur. The unfortunate mistakes of the past cannot be undone; however, going forward the Commission has undertaken numerous corrective measures to begin the process of getting the District back on track. The District has been operating since 1948 with a rather stellar record of management until two recent back-to-back administrations made numerous unfortunate mistakes. Since 1948 the District has produced a significant number of highly respected, well-qualified professional law enforcement officers all over the state. Noteworthy is that every jurisdiction in San Mateo County has hired one or more Broadmoor police officers, several of whom have attained high-level supervisory positions6. The District is and remains absolutely committed to transparency and to delivering unparalleled police services at a low cost to the taxpayers. Sincerely, BROADMOOR POLICE PROTECTION DISTRICT Paul M. Davis (e-signature) Paul M. Davis District Counsel cc: Hon. David J. Canepa (Supervisor, District 5) James Kucharszky (Chair, Broadmoor Police Commission) Michael P. Connolly (ICOP / IDM) 6 The Broadmoor Police Protection District is very proud of its legacy. A couple of bumps in the road in a 76 year history cannot define the fine work and people produced by the District. The late J. Wayne Johnson served as Colma Chief of Police. Broadmoor also produced a Police Chief of a city in the Sierra Foothills. Daly City Police hired many Broadmoor officers, one of whom retired as a Lieutenant and the other is now a Captain. The Sheriff had at least one former Broadmoor officer who rose to the rank of Lieutenant and several former Broadmoor officers remain with the Sheriff to this day, including a Sergeant. A major District Attorney's office in this state has as its Chief Investigator a former Broadmoor officer, and another District Attorney's office has a former Broadmoor officer as a Captain. This list is merely illustrative and not exhaustive. The Broadmoor Police Department is well-recognized and represented throughout the State of California, including the LAPD, which is a testament to the high-quality training and personnel Broadmoor has produced for decades. DAVIS LAW OFFICES CALIFORNIA •DISTRICT OF COLUMBIA •WASHINGTON STATE Andrea M. Hall (SBN 317491) andreameghanhall@gmail.com 1843 Sweetwood Drive D +1 650-278-2912 Unincorporated Colma, CA 94015-2014 United States May 1, 2024 Via Email (lafco@smcgov.org) San Mateo LAFCo 455 County Center, 2nd Floor Redwood City, CA 94063 Re: Amended Public Comment Re: Broadmoor Police Protection District MSR Dear Commissioners: In my March 18, 2024 letter to the LAFCo, I detailed the Broadmoor Police Protection District’s long history of financial malfeasance and associated retaliation against individuals who have questioned how they will continue to provide police services, while also enriching themselves at the taxpayers’ expense. That history, I argued, proved that the BPPD were so committed to continuing to steal from taxpayers that the district was beyond redemption and must be dissolved immediately. For reasons explained more fully below, I must reiterate that request. The department is indisputably corrupt. Its commitment to enriching a few officials at the expense of the entire community and of slandering anyone who would stop it shocks the conscience. My prior letter explained that the BPPD’s suggestion that it faces limited liability arising from its failure to contribute to CalPERS and associated lawsuits is absurd. It has no basis in law, fact, or even common sense. Government Code section 20164.5 requires that agencies rather than individual retirees repay any pension overpayments by CalPERS, and Government Code section 815.2(a) unambiguously states that a public entity, such as the BPPD, “is liable for injury proximately caused by an act or omission of an employee of the public entity within the scope of his employment. . .,” while sections 825 and 995.8 allow public entities to defend and indemnify former employees in civil or criminal actions. In practice, former police officers’ requests for defense and indemnity are seldom, if ever, denied. Joanna C. Schwartz, Police Indemnification. 89 N.Y.U. L. REV. 885, 912 (2014); John Rapoport, How Private Insurers Regulate Public Police. 130 HARVARD L. REV. 1539, 1604 (“Neither insurance contracts nor indemnification laws contain many meaningful exclusions; both provide coverage in all but the most aberrant cases.”) LAFCo Re: Broadmoor Police May 1, 2024 Page 2 Further, even if it were denied, section 996.4 creates a private cause of action entitling a public employee “to recover from the public entity such reasonable attorney’s fees, costs and expenses as are necessarily incurred by him in defending the action or proceeding if the action or proceeding arose out of an act or omission in the scope of his employment as an employee of the public entity.” That is, a public entity like the BPPD must either pay to defend and indemnify its former officers now or it must pay legal expenses to fight officers’ claims for indemnity and contribution later. That is the law. The most recent BPPD agenda reflects that it faces “Pending/Threatened Litigation” from four former officers. Although the department hides behind privilege to avoid disclosing the nature of those’ claims, at least one of the former officers cited in the agenda, Edward Nakiso, received a letter from CalPERS on April 15, 2022 demanding he repay $1,254,568.84 in retirement benefits he received while employed as a sergeant at the BPPD. Ex. A. BPPD’s former chief, Greg Love, faces trial this August on four charges of aggravated theft. San Mateo County Superior Court, Case No. 22SF013823A. The most recent filings show Love places the blame on the BPPD and its commission for the faulty contributions to CalPERS. He writes that his “actions were all approved by the Police Commission,” which signed resolutions and letters allowing him to retire to collect a pension while continuing to work for double the pay. Ex. B, p. 2-3, 5. Regarding Love’s theft from CalPERS, former Commissioner Joseph Sheridan unrepentantly stated: [E]veryone was doing it. What I understood, that they were retiring and essentially not paying into the retirement system. They were collecting their retirement and double- dipping, essentially. . . . It was an okay thing. They were saving the district money by not paying into retirement. . . Ex. C, p.5:18-21. Ralph Hutchens, who remains a BPPD Commissioner, also recalled that the commission had signed off on shorting CalPERS to enrich the department: [T]hey were double-dipping. . . There was some discussion a little bit that they were going to save the department money somehow by charging so much and dealing with retirement and everything. Ex. C, p.4:24-5:4. The commission was aware of and sanctioned the faulty contributions to CalPERS leading to Love’s criminal prosecution. As a result, Love has LAFCo Re: Broadmoor Police May 1, 2024 Page 3 incurred associated defense costs and has also been forced to borrow against his home to repay the missing $1.2 million. Ex. B, at 3:11-12. Like the other four officers from the recent meeting agenda, Love will likely bring a claim against Broadmoor for indemnity given that he committed the thefts in the course and scope of his employment with the express consent of the Commission. Broadmoor remains unabashedly committed to attacking anyone who asks it to prepare for this reality and strategize regarding how it will pay these legal claims while continuing to provide adequate police services. The BPPD’s attorney, Paul Davis, repeatedly called the contentions in my March 18, 2024 letter “misinformation” and “false” during its April 9, 2024 commission meeting.1 Public court documents and Chief Connolly’s March 8, 2023 presentation to Broadmoor’s former insurer, GSRMA, support the statements in my letter to LAFCo. They are not false, nor misinformation. I write, however, not just to defend my honor, but to point out that, once again, Broadmoor refuses to grapple with the reality that it faces years of costly litigation and escalating insurance premiums. Taxpayers who fund the department are entitled to know how it proposes to fund that litigation while continuing to provide public safety services. Rather than using this forum as an opportunity to do so and rebuild the community’s trust, Broadmoor has decided yet again to refuse to produce credible financial records to LAFCo or the county and instead attack me personally. It will not reveal even the amount by which it proposes to raise its residents’ taxes, deciding it must instead spend $30,000 hiring a consultant to figure it out. A consultant hired by the county does not trust Broadmoor’s financial records, recently writing of the department “their spend rate is so low as to not be believable.” He continued: “it’s hard to fathom they cut that much and still could provide services.” Ex. D. Broadmoor provides no public safety services. It is a slush fund that pays its chief, lawyers, and other associated grifters inflated salaries, but provides nothing of value to its residents except a garish, gaudy reminder of the state’s police power at local Easter Egg Hunts. That is no police force, but it is what has been allowed to pass for one in Broadmoor for nearly 20 years. See Exs. E and F. 1 https://imgur.com/a/2VCFSuu During the same April 9, 2024 meeting, Mr. Davis also claimed that the warrant served on J. Wayne Johnson was “illegally obtained,” as opposed to “forged,” a distinction without any difference. The order denying the department’s motion for summary judgment in the Johnson case calls the document an “allegedly forged warrant,” making Mr. Davis’s contentions all the more bizarre. LAFCo Re: Broadmoor Police May 1, 2024 Page 4 I will not be slandered and intimidated by petty thieves with guns and badges, and neither should LAFCo. That is why I implore you to act to dissolve the department. I understand that LAFCo has limited funds and time with which to pursue a dissolution, but the public’s trust in the county government and the safety of Broadmoor’s residents depend on it. Sincerely, 1 MATTHEW G. JACOBS, GENERAL COUNSEL CHARLES H. GLAUBERMAN, SENIOR ATTORNEY, SBN 261649 2 CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM Lincoln Plaza North, 400 "Q" Street, Sacramento, CA 95811 3 P. O. Box 942707, Sacramento, CA 94229-2707 4 Telephone: (916) 795-3675 Facsimile: (916) 795-3659 5 Attorneys for California Public Employees’ Retirement System 6 7 BOARD OF ADMINISTRATION 8 CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM 9 10 In the Matter of the Appeal Regarding Post ) AGENCY CASE NO. 2022-0432 Retirement Employment ) 11 ) OAH NO. EDWARD S. NAKISO, ) 12 ) STATEMENT OF ISSUES 13 Respondent, ) ) 14 and ) Hearing Date: ) Hearing Location: Oakland 15 BROADMOOR POLICE PROTECTION ) DISTRICT, ) 16 ) 17 Respondent. ) ) 18 ) 19 California Public Employees' Retirement System (CalPERS) makes and files this 20 Statement of Issues states as follows: 21 I 22 Respondent Edward S. Nakiso (respondent Nakiso) became a CalPERS member through 23 employment with the City of Burlingame (Burlingame) on August 26, 1983 Respondent Nakiso 24 was last employed by Burlingame as a Police Sergeant. By virtue of his employment, respondent 25 Nakiso is a local safety-police member of CalPERS. 26 II 27 On June 11, 2012, CalPERS received respondent Nakiso’s application for service 28 1 STATEMENT OF ISSUES In Re the Matter of Edward S. Nakiso 1 December 1, 2012, through January 24, 2014, and repay retroactive contributions owed as an 2 active member for the reinstatement period. 3 XII 4 By letter dated March 4, 2022, respondent Nakiso, with copy to the District, was notified 5 of CalPERS’ determination and their appeal rights. 6 7 XIII 8 By letter dated April 1, 2022, respondent Nakiso, through his counsel, filed a timely 9 appeal and requested an administrative hearing. 10 XIV 11 By letter dated April 5, 2022, CalPERS confirmed respondent Nakiso’s reinstatement 12 from service retirement for his employment with the District effective December 1, 2012, with 13 membership under Safety-Police category. 14 XV 15 By letter dated April 15, 2022, CalPERS notified respondent Nakiso that it sought to 16 collect the retirement benefits he received following the commencement of his unlawful 17 employment (December 1, 2012) in the amount of $1,254,568.845 6. 18 XVI 19 On May 27, 2022, CalPERS received respondent Nakiso’s application for service 20 retirement with an effective date of January 25, 2014. Respondent Nakiso re-retired for service 21 with the District effective January 25, 2014, and began receiving his retirement allowance on July 22 1, 2022. 23 XV 24 The appeal is limited to the following issues: 25 5 CalPERS recovered from respondent Nakiso’s 2022 Federal and State taxes totaling $6,682.38 and 26 $2,555.12, respectively; and health premiums for the period from his reinstatement date to current totaling $216,256.35, and applied them to his repayment of $1,254,568.84, reducing it from $1,254,568.84 to $1,029,074.99. 27 6 Government Code section 21220 provides the penalties for working after retirement 28 violations. 12 STATEMENT OF ISSUES In Re the Matter of Edward S. Nakiso 1 1. Whether respondent Nakiso’s post-retirement employment from December 1, 2012, 2 through January 24, 2014, was in violation of the PERL, including but not limited to Government 3 Code sections 21224 and 7522.56, subdivision (d); and 4 2. Whether respondent Nakiso must be reinstated to active membership and be required to 5 repay CalPERS the retirement benefits he received due to his violation of the working after 6 retirement statutes, and repay retroactive contributions for his reinstatement period. 7 BOARD OF ADMINISTRATION, CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM 8 9 7/26/2022 10 Dated: BY _______________ RENEE OSTRANDER, Chief 11 Employer Account Management Division 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 STATEMENT OF ISSUES In Re the Matter of Edward S. Nakiso 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Motion to Set Aside Information People v. GREGORY LOVE Case No. 22-SF-013823-A waL ta yenrottA ,NEDYAH .B YERFFEJ 091 etiuS ,.tS drofdarB 333 36049 AC ,ytiC doowdeR 0075-863 )056( moc.rednefedlanimircruoy@nedyah 3/4/2024 11:33 PM JEFFREY B. HAYDEN SBN 147552 STATE BAR CERTIFIED CRIMINAL LAW SPECIALIST 333 Bradford Street, Suite 190 Redwood City, CA 94063 phone (650) 368-5700 /fax (650) 368-5736 hayden@yourcriminaldefender.com Attorney for Defendant Gregory Love IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO PEOPLE OF THE STATE OF CALIFORNIA, No. 22-SF-013823-A Plaintiff, NOTICE OF MOTION; MOTION TO SET ASIDE INFORMATION; vs. MEMORANDUM OF POINTS AND AUTHORITIES (Penal Code §995) GREGORY LOVE, Date: May 9, 2024 Time: 10:00 A.M. Defendant. Place: Dept. CR TO THE CLERK OF THE ABOVE-ENTITLED COURT, AND TO STEVEN M. WAGSTAFFE, DISTRICT ATTORNEY OF THE COUNTY OF SAN MATEO, AND/OR HIS REPRESENTATIVE: PLEASE TAKE NOTICE THAT on the above date and time, or as soon thereafter as the matter may be heard, in the above-entitled department of the San Mateo County Superior Court, defendant GREGORY LOVE, by and through counsel, will move this court for an order setting aside the Information. The motion will be made on the grounds that insufficient evidence was presented to the magistrate to justify a holding order on all counts, nor evidence of any crime committed within the jurisdiction of this Court.. This motion is based upon the attached Memorandum of Points and Authorities, the Reporter’s Transcript [“R.T.”] of the Preliminary Hearing, the Exhibits admitted into evidence at the preliminary hearing, the pleadings and files in the matter, and on such other authority and argument as will be presented at the hearing on the motion. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Motion to Set Aside Information People v. GREGORY LOVE Case No. 22-SF-013823-A waL ta yenrottA ,NEDYAH .B YERFFEJ 091 etiuS ,.tS drofdarB 333 36049 AC ,ytiC doowdeR 0075-863 )056( moc.rednefedlanimircruoy@nedyah STATEMENT OF THE CASE: On November 15, 2022, the prosecution filed a felony complaint charging a single count of Grand Theft (Penal Code § 487), alleged to have occurred on or between May 17, 2009 and December 1, 2012. A special allegation alleged a loss exceeding $200,000.00, within the meaning of former Penal Code §12022.6, repealed years before the complaint was filed. A second allegation alleges the loss was not discovered by law enforcement until it was discovered by Inspector Kevin Raffaelli was reviewing personnel records in April of 2021. The defendant charged herein is Chief Gregory Love, the retired Chief of the Broadmoor Police Protection District. By Information filed February 27, 2023, defendant Gregory Love is charged with Four Counts of Grand Theft (Penal Code §487(a)), the first of which is accompanied by special allegations pursuant to Penal Code sections 803(c) and 186.11(a)(2) respectively. The preliminary hearing was held December 18, 2023. This fatally-flawed prosecution is premised on the allegation that Chief Gregory Love worked for some three and one-half years after his retirement, while collecting his CalPERS retirement. Ironically, the investigator involved herein is also a retired law enforcement officer, working per diem, while collecting his retirement. The prosecution theory herein is that type of retirement made Chief Love ineligible to receive retirement while working, whereas other officials at all levels of government collect their retirement every day while collecting their retirement, and that Chief Love can be presumed to be aware of this distinction between the different types of retirement. It is undisputed that, having announced his retirement, Chief Love was asked to work part-time while the Broadmoor Commission sought an appropriate successor. On October 13, 2009, the Police Commission enacted Resolution 2009 / 2010 – OS, authorizing his separation, effective May 16, 2009. A copy of that resolution was attached to the demurrer filed on January 27, 2023. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Motion to Set Aside Information People v. GREGORY LOVE Case No. 22-SF-013823-A waL ta yenrottA ,NEDYAH .B YERFFEJ 091 etiuS ,.tS drofdarB 333 36049 AC ,ytiC doowdeR 0075-863 )056( moc.rednefedlanimircruoy@nedyah Also attached thereto was the notification, by letter dated June 3, 2009 and signed by Joseph P. Sheridan, Chairman, Board of Police Commissioners, Broadmoor Police Protection District, certifying to the office of the Controller of San Mateo County that Chief Love that Gregory Love has been appointed to the position of Interim Chief of Police, Job Class Code P003, at the rate of $173.077 per hour, at 45% of Full Time. Chief Love was contacted by CalPers in 2022, for the first time being notified that unlike other types of retirement, as his retirement was premised on an industrial disability within the meaning of the retirement law, that he was ineligible for the benefits he received while he was working. In contrast to others who successfully challenged the cessation of benefits much less repaid any, Chief Love thereafter borrowed against his home and repaid the entire amount in dispute. It was several months after Chief Love repaid the disputed amount that this prosecution was filed. The preliminary hearing was held on December 18, 2023. At the preliminary hearing, evidence was presented to suggest that the Broadmoor Police Department was located in San Mateo County. {PH: p.5 line 11.]. Nowhere in the transcript was it set out where Chief Love resided or how he received CalPERS payments. Nowhere was it even discussed where he filed documents – whether here or in Santa Clara county. In short, it was never established that Mr. Love was it established where he received the money at issue herein. Nowhere was it established where he cashed checks, where he submitted documents or statements to CalPERS, or anything else that gives rise to jurisdiction or venue within the County of San Mateo. // // // // // 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Motion to Set Aside Information People v. GREGORY LOVE Case No. 22-SF-013823-A waL ta yenrottA ,NEDYAH .B YERFFEJ 091 etiuS ,.tS drofdarB 333 36049 AC ,ytiC doowdeR 0075-863 )056( moc.rednefedlanimircruoy@nedyah POINTS, AUTHORITIES, AND ARGUMENTS NEITHER OF THE SPECIAL ALLEGATION CONFORMS TO CURRENT LAW NOR ESTABLISH THE RUNNING OF THE STATUTE OF LIMITATIONS PERIOD WAS TOLLED . EXCESSIVE TAKING ALLEGATION Chief Love is alleged to have taken more than $200,000, pursuant to formal Penal Code §12022.6(a)(2). Although Penal Code §12022.6(a)(2) was in effect during the timeframe alleged in the complaint (May 17, 2009 to December 1, 2012), §12022.6 it was repealed effective January 1, 2018. The complaint was filed on November 15, 2022, over three years since the repeal of §12022.6. It would appear that the Estrada rule should apply here because the repeal of §12022.6 lessened the potential penalty for a conviction of §487. TOLLING ALLEGATION Pen. Code, § 801.5, provides that prosecution of certain offenses, including grand theft, fraud and perjury, shall be commenced within four years after discovery of the commission of the offenses. Pen. Code, § 803, subd. (c), provides that the four-year statute of limitations does not commence to run until the discovery of the offense. If prosecution is not commenced within the period of time provided by the appropriate statute of limitations and the statute has not been tolled, the criminal proceedings must be terminated. (People v. Morris (188) 46 Cal.3d 1, 13, overruled on other grounds in In re Sassounian (1995) 9 Cal.4th 535; People v. Zamora (1976) 18 Cal.3d 538.) Failure to comply with the appropriate statute of limitations is a jurisdictional question. (People v. Morris, supra, Parnell v. Superior Court (1981) 119 Cal.App.3d 392, 406.) Accordingly, a statute of limitations challenge may be raised buy a demurrer under Penal Code § 1004 (4) or (5). (People v. Morris, supra, at p. 13, fn 4.; People v. Zamora, supra, at p. 526 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 Motion to Set Aside Information People v. GREGORY LOVE Case No. 22-SF-013823-A waL ta yenrottA ,NEDYAH .B YERFFEJ 091 etiuS ,.tS drofdarB 333 36049 AC ,ytiC doowdeR 0075-863 )056( moc.rednefedlanimircruoy@nedyah fn. 26; People v. Lopez (1997) 52 Cal.App.4th 233, 249.) For offenses punishable by imprisonment in a state prison for less than eight years, the statute of limitations is three years. (Penal Code § 801) However, for certain offenses relating to fraud listed in Penal Code § 803 (c) – which includes Penal Code § 487, Corporations Code § 25540/§ 25401, and § 25540/§ 25110, the statute of limitations is four years, because of the recognized difficulty of discovering their violation. If the statute of limitations for particular offenses are increased by the Legislature, then under Penal Code § 805.5, the new limitation may be applied to a case if the statute was amended before the original statute of limitations period had expired. (See also Lynch v. Superior Court (1995) 33 Cal.App.4th 1223, 1227.) Where the applicable statute of limitations has run, the prosecution may attempt to show under Penal Code § 803 (c) that the statute of limitations was tolled, because a listed offense had not yet been discovered – again Penal Code § 487, being included in that list. The prosecution must show both that the theft was undiscovered, and that it could not have reasonably been discovered. In this instance, the prosecution relies on language that “and no law enforcement agency chargeable/with the investigation and prosecution of said offense had actual or constructive knowledge . . . .” This is not sufficient, nor reflective of current law. “An offense is discovered when either the victim or law enforcement learns of facts which when investigated with reasonable diligence, would make the person aware a crime had occurred.” (People v. Bell (1996) 45 Cal.App.4th 1030, 1061-1062 [“‘The statute commences to run ... after one has knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud ...., thus putting him on inquiry.’”].) Moreover, the prosecution must allege why the offense could not have been discovered. There was no concealment of any information here. The actions were all approved by the Police Commission. 1 STEPHEN M. WAGSTAFFE, DISTRICT ATTORNEY County of San Mateo, State of California 2 State Bar No. 78470 4/11/2024 400 County Center, 3rd Floor 3 Redwood City, California 94063 By: Joseph L. Cannon, Deputy 4 Telephone: (650) 363-4636 Attorney for Plaintiff 5 6 7 8 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 IN AND FOR THE COUNTY OF SAN MATEO 10 THE PEOPLE OF THE STATE OF CALIFORNIA No. 22-SF-013823-A 11 Plaintiff, OPPOSITION TO DEFENDANT’S 12 v. MOTION TO SET ASIDE THE INFORMATION PURSUANT TO 13 GREGORY LOVE, PENAL CODE SECTION 995 14 Defendant. Date: April 15, 2024 15 Time: 10:00 AM Dept: CR 16 17 COMES NOW the Plaintiff, the People of the State of California, by and through their 18 attorneys, STEPHEN M. WAGSTAFFE, District Attorney, and JOSEPH CANNON, Deputy District 19 Attorney, respectfully submits the following Points and Authorities in Opposition to Defendant’s 20 Motion to Set Aside the Information Pursuant to Penal Code Section 995. The People’s opposition is 21 based on this memorandum, the pleadings and papers in the above captioned case, any arguments that 22 may be made at the hearing, and such evidence and documents as may be submitted. 23 \\\ 24 25 1 INTRODUCTION 2 The preliminary hearing in this matter was heard on December 18, 2023 by the Honorable 3 Jeffrey B. Jackson, who held Defendant to answer on all charges in the felony complaint, to wit: 4 Count 1: 487(a) PC and found the special allegations pursuant to 12022.6(a)(2) PC and 803(c) PC to 5 be true. 6 The People filed an Information alleging four counts of 487(a) PC each with a special 7 allegation pursuant to 186.11(a)(2) PC (essentially breaking down the singular, overarching theft 8 previously alleged in Count 1 of the Complaint into 4 separate counts – 1 for each year) as well as the 9 803 PC Zamora allegation as to all 4 counts. 10 Defendant now brings a PC § 995 motion. The People are opposed. 11 STANDARD OF REVIEW 12 13 In ruling on a motion brought pursuant to Penal Code Section 995, neither the Superior Court 14 nor an appellate court may substitute its judgment for that of the committing magistrate as to the 15 weight of the evidence. (People v. Hall (1971) 3 Cal. 3d 992, 996). “[I]f there is some evidence to 16 support the information, the court will not inquire into its sufficiency.” (Rideout v. Superior Court 17 (1967) 67 Cal. 2d. 471, 474). “[A]lthough there must be some showing as to the existence of each 18 element of the charged crime, such a showing may be made by means of circumstantial evidence 19 supportive of reasonable inferences on the part of the magistrate.” (Williams v. Superior Court (1969) 20 71 Cal. 2d 1144, 1148 (internal citation omitted)). “Every legitimate inference that may be drawn 21 from the evidence must be drawn in favor of the information.” (Rideout, 67 Cal. 2d at 474). In short, 22 an information should not be set aside pursuant to PC § 995 if there is some rational ground for 23 assuming the possibility that an offense has been committed and the defendant is guilty of it. Id. 24 25 2 1 STATEMENT OF THE FACTS 2 The following evidence was adduced at the preliminary hearing. 3 Defendant Gregory Love (hereinafter “Defendant”) served as Chief of Police of the 4 Broadmoor Police Department in San Mateo County. (TX 5, Line 8-12). Defendant obtained a 5 medical disability retirement on May 16, 2009 from Broadmoor PD but continued to work at 6 Broadmoor PD from May 2009 through the end of 2021 (TX 13). While Defendant continued to work 7 while collecting his disability retirement, he was paid twice the regular salary he had previously been 8 paid but reporting half as many hours as Police Chief (TX 11: LN17- TX12: LN 6.) 9 An investigation into fraud involving CalPERS benefits fraud began on March 10, 2021 when 10 San Mateo County District Attorney’s Office– e-mail sent by “Mike White” (an apparent pseudonym) 11 sent a complaint regarding former Broadmoor Police Chief Parenti regarding possible fraud against 12 CalPERS – no mention of Defendant had been made at that point (TX 5-6) DA Office’s Inspector 13 Kevin Raffaelli, a 45 year veteran of law enforcement, familiar with CalPERS benefits and reporting 14 requirements, was assigned to investigate. 15 As part of his preliminary investigation, Raffaelli contacted the San Mateo County 16 Comptroller’s Office to obtain payroll records for Broadmoor PD, which included records for 17 Defendant, to compare salaries to former Chief Parenti. (TX 6-8) Raffaelli noted that at certain times 18 during his employment, Defendant appeared to be receiving an hourly salary that was twice the 19 normal rate for similar positions at Broadmoor PD while claiming to work 18 hours per week. (TX 9: 20 LN 7-22) Inspector Raffaelli, determined that after May 16th, 2009 up until November 24th, 2012, 21 the defendant was being paid twice the regular salary he had previously been paid but 22 reporting half as many hours as Police Chief. (TX 11: LN17- TX12: LN 6)1 Inspector Raffaelli, based 23 upon his training and experience, was aware that CalPERS retired annuitants may only work 960 24 hours per fiscal year and can only work in a part-time or limited position to fill a vacancy (TX 11-12.) 25 3 1 At that point, Inspector Raffaelli suspected Defendant was defrauding CalPERS and reported those 2 suspicions to CalPERS on April 13, 2021. (TX 13) 3 Inspector Raffaelli’s investigation further revealed that Broadmoor PD, which patrols a very 4 small community and is a small department, has a unique organizational structure in which 5 the Chief of Police also functions as a City Manager, which is then overseen by a police commission 6 consisting of 3 commissioners. (TX 14) Raffaelli spoke with a number of Broadmoor PD employees 7 including accountant Robin Rose who was employed while Defendant was chief, advised her on 8 salaries. (TX 15) At one point, after Love had returned from retirement, Rose noted that Defendant’s 9 hourly rate had doubled and further, that she was further aware of CalPERS’ 960 hour per fiscal year 10 limitation. She discussed this with Defendant who stated he could simply cut his time in half and 11 double his salary, which she found unusual. (TX 17-18) Defendant told her the Commission had 12 approved it. (TX 18) 13 Raffaelli also spoke with Broadmoor PD Administrative Assistants Nicole Azzopardi and 14 Enissa Sosa Rios. (TX 21-25) Ms. Azzopardi, who had handled payroll advised that payroll 15 information (i.e. officers and the hours they worked) would be submitted to the County and CalPERS 16 through an online system (TX 21-22) CalPERS information was submitted on a bi-weekly basis and 17 included a list of all employees including retired annuitants. (TX 23) Ms. Sosa-Rios advised that 18 when Defendant returned from his surgery, he continued to work full-time and she was unaware that 19 he had actually retired due to a disability. (TX 25) MS. Sosa Rios further stated that either Chief Love 20 or Commander Parenti did all the data entry for payroll and CalPERS reporting. (TX 25) 21 Raffaelli also spoke with Police Commissioners Joseph Sheridan and Ralph Hutchens, both of 22 whom were on the commission while Defendant was Chief. Hutchens advised that he was unaware 23 that Defendant claimed half-time work while collecting full time pay post-retirement. specifically 24 stating, “Wow. In a sense it sounds like they were double-dipping" (TX 19). After confirming that the 25 1 Note: At this page, the transcript reads “March 16, 2009” which appears to be either as misstatement or a typo, as “May 4 1 Police Commission had, in fact, approved Defendant’s disability retirement, asked if he was aware 2 Defendant was working full time Hutchens stated, “ There was some discussion. I don't remember it 3 clearly. There was some discussion a little bit that they were going to save the department money 4 somehow by charging so much and dealing with retirement and everything. I had no clue. I don't 5 remember the details. I just kind of remember the fuzzy discussion.” (TX 34) 6 Hutchens also stated when he took his position on the Police Commission, he knew little 7 about the Broadmoor Police Department: "Things were kind of sketchy at the time. I came on from 8 the community, kind of representing the community, but I was not totally versed on how a police 9 station worked and everything really -- they didn't really put you through any training. So I started 10 going to a meeting once a month and absorbing what I could at the meetings. They did not. Things 11 were kind of slack that way"? (TX 35) 12 Commissioner Sheridan stated that Chief Love was hired initially as a full-time chief but then 13 retired and immediately returned as a “contract employee” for another two to three years. Sheridan 14 stated he was not aware of the salary or hourly rate that the defendant was being paid because the 15 budget only included the yearly total for salary. (TX 20-21). Sheridan initially stated that he did not 16 recall the Police Commission approving Defendant’s Disability Retirement, even though Broadmoor 17 PD records introduced at the prelim establish that the Commission had approved it. (TX 30) When 18 asked about that disparity Sheridan told Raffaelli, “(Defendant) was on a contract and everyone was 19 doing it. What I understood, that they were retiring and essentially not paying into the retirement 20 system. They were collecting their retirement and double-dipping, essentially." (TX 31) “ It was an 21 okay thing. They were saving the district money by not paying into retirement and we, only as the 22 commissioner [sic], we get what is told to us by the staff and that is what we went off of. (TX 31) By 23 staff, Sheridan meant the Police Chief or Commander including Chief Love (TX 32) 24 25 16, 2009” is the correct date as seen throughout the remainder of the transcript. 5 1 CalPERS Division Chief Lisa Renee Ostrander testified that CalPERS is a state agency 2 funded through member contributions, employer contributions and investment earnings made on 3 those funds. (TX 51) Ms. Ostrander testified that she initiated an audit of Defendant’s retirement 4 benefits after CalPERS had been notified of the fraud by Inspector Raffaelli in April 2021. (TX 51) 5 Prior to that time CalPERS received any complaints, anonymous or otherwise, regarding Mr. Love 6 working as a retired annuitant at Broadmoor PD (TX 52) CalPERS had no record of Mr. Love 7 resuming employment with Broadmoor PD on May 17th, 2009, after he retired (TX 52) 8 As both Chief of Police and as a retired annuitant working for a CalPERS employer, 9 Defendant was required by CalPERS regulation to report any post- retirement employment to 10 CalPERS. (TX 52-53) These reporting requirements are made clear to Police Chiefs and CalPERS 11 members and annuitants via online reference guides, circular letters, online and in-person training. 12 (TX 53-54) 13 Per Ms. Ostrander, Defendant defrauded CalPERS in 4 different ways: (TX57-58) 14 1. Defendant had employment which was not temporary, interim, or for a limited duration for 15 the time period May 17th, 2009 to December 1st, 2012. 16 2. Defendant received full-time salary as chief of police while receiving retirement 17 benefits and a pay rate that exceeded the maximum paid by the employer to other employees 18 performing comparable duties. 19 3. Defendant returned as a retired annuitant as the chief of police which was the same 20 position that he was approved of for industrial disability retirement. 21 4. Defendant as the employer did not report the retired annuitant to CalPERS; therefore, pay rate, 22 compensation, and hours worked were not reported 23 24 The total loss to CalPERS as a result of Defendant’s of fraud was 1.86 million dollars. (TX 59) 25 \\\ 6 Annabelle Gaiser From: Drew Corbett <drew@dkgconsultants.com> Sent: Wednesday, April 10, 2024 4:58 PM To: Heather Ledesma; Roberto Manchia Subject: Broadmoor Update Ck\YTB«J~E This errtail. ~riginclted fre>r-nc,ut~i~f Pf.~~n l\Jl~!e§ ·couri!V·Pnl~,sye>u .·rec~~nize tr:e senderis im~il ··address arid k.now . . . the.. c.· on.. 1 ...: · ..e.. n...t ...: .. is s~fe;donotclickliriks;open atta~hment~ o.t. r.ePI.Y.•.·.· . . ; ·.·· ,,, ,•·• ... · .·.·· ... ,-, .. , .... · ... ;.,,, ,, .;.·.·, .... • ·. .... ·,-.: ..·. . , ... ·,:.·-, ·.• · .. ·. Hi Robert and Heather- I wanted to give you a brief update on Broad moor and ask a question as well. I've been working on the analysis, and based on their financials over the last three years, as well as the adopted budget for this year, they've got significant problems. In 2021-22 and 2022-23, they spent a lot more than they brought in and ran significant deficits each year. For 2023-24, their Board adopted a deficit budget that would basically deplete them by the end of the fiscal year. With that said, the current fiscal year data I have received from them indicates that they have curtailed their spending significantly this fiscal year. In fact, their spend rate is so low as to not be believable. I've spoken with the Chief about this and one of the officers that handles the finances and they assure me that they cut spending significantly due to cash flow issues, but it's hard to fathom they cut that much and still could provide services. I know the County handles some (or all) aspects of their accounting. Would it be possible to get the information from the County on Broadmoor's revenues and expenditures y-t-d so I can confirm what I am seeing from them? Otherwise, I am working on a budget for them that reflects optimal staffing and service level to determine what additional revenue would be needed to support that. Things are moving along, and I am happy to share what I have done so far if you'd like to see it. Let me know if you have any questions. Thanks, Drew Corbett Principal Phone 408-569-8644 Web www.dkgconsultants.com Email drew@dkgconsultants.com