A report issued by the San Mateo County Civil Grand Jury on July 12 questions whether the Menlo Park Fire Protection District is prepared to meet the challenges brought on by the rapid development and population growth within the district, criticizing the district for lacking long-term strategic and fiscal planning.

The 96-page report discusses the massive changes taking place within the district's boundaries, an area that includes Menlo Park, East Palo Alto, Atherton and adjacent unincorporated San Mateo areas including North Fair Oaks and West Menlo Park. The report concludes that the district is ill-equipped to deal with the changes.

In a press release announcing the report, Grand Jury Foreperson Richard Edminster said that "the district’s firefighters perform their duties admirably every day, and the community can have great confidence in their skills and abilities."

"However," he said, "the district’s board has failed to perform even the most basic strategic and financial planning the community reasonably expects from a public agency with an annual budget of nearly $55 million."

District Chief Harold Schapelhouman said in a statement released late Thursday afternoon that the district will respond to the report within the 90 days given to public agencies to respond to grand jury reports.

"Before responding, the District will carefully review the report with input from its Board and welcomes public comments from constituents. As always, we seek constructive input on our services to the residents of our communities and appreciate the Grand Jury’s recommendations," Schapelhouman said.

He said the board, chief and staff "are committed to a fully transparent, engaged and inclusive discussion and public review of the Civil Grand Jury’s findings and recommendations."

No long-term strategic planning

The grand jury report says that "the District has operated without a strategic plan ... since at least 2010."

"The absence of a multiyear strategic plan hinders the District's evaluations of future demand for services, revenue streams and resource needs, and denies the public the opportunity to measure the District's progress in achieving stated goals."

The lack of long-term planning "impairs the District's ability to allocate its resources effectively and hurts the District's efforts to obtain support from the jurisdictions it serves for the imposition of fees on new developments to be paid to the District," the report says.

The report lays the blame for the lack of long-term planning on the independent district's governing board, which currently is made up of President Chuck Bernstein, and members Peter Carpenter, Rob Silano, Virginia Chang Kiraly and Robert Jones.

"The district's governing board is ultimately responsible for the failure to dedicate adequate resources to the planning process, and the failure to develop a multi-year strategic plan which includes a financial analysis component," the report says.

When reached late Thursday morning, Bernstein said he and other board members had received the grand jury report from Schapelhouman Tuesday night, but that work responsibilities had kept him from being able to read it closely or look at all the exhibits attached to the report.

However, he said, some of the issues in the report "are things that we're talking about that are being done and need to be done." He said the board will discuss the report, but probably not until its August meeting, as the agenda for the July 24 meeting is already packed.

He agreed that "the board of directors is the ultimate authority in the fire district," and a strategic plan is one of its responsibilities.

Bernstein said it is true the district doesn't have a strategic plan, but that the Strategic Planning Committee, made up of him, board member Carpenter and Menlo Park resident Sean Ballard, has been meeting monthly since December.

Board members agreed at their June meeting to try to schedule a board study session devoted to strategic planning, which Bernstein said should take place by August.

"We need and want to have a strategic plan. That's happening," he said.

Impact fees

The report calls out several actions taken by the district as problems stemming from the lack of long-term planning, including the district's inability to get the county, Menlo Park, Atherton and East Palo Alto to approve its request that they impose impact fees on new development to go into the district's coffers.

"Without a strategic and financial plan showing a need, the District was unsuccessful in its attempt to gain impact fees on development projects," the report says. By state law, a special district such as the fire district can't impose impact fees, but must get municipal or county government to approve them for the district.

After the local entities failed to impose the impact fees, "the district developed a go it alone philosophy in its relationship with local governments," the report says. "The current relationship between the District Board and local governments has been described as strained, contentious and unproductive," the grand jury report says.

Ethical issues

The district's subsequent decision to negotiate directly with major developers "raises ethical issues," the report says.

"The District exercises enforcement of local and state ordinances and statutes, and reviews the construction plans of businesses located within its boundaries, including Facebook for compliance with applicable codes," the report says.

"Accepting donations of cash, or soliciting impact fees directly from these businesses, can create the appearance of favorable treatment or disparate application of rules and laws," it says.

Bernstein said the district has made at least three agreements with developers for impact fees after the local entities wouldn't impose them. "We went directly to the developers," he said.

The district has put the money collected in a separate account and "we are only going to spend (those funds) on things that are growth-related," he said.

Real estate purchases

The report also questions the district's recent real estate purchases. "Without a strategic plan showing any present or future need for the properties, the District purchased five properties for cash exceeding $21.9 million in the last two years," the report says.

It calls out the purchase of a single-family home at 28 Almendral Ave. in Atherton for $4.6 million in cash in June 2017, just months after the district's board had unanimously approved a consultant's report recommending that the fire station next door to the house "be relocated to improve service coverage in the area," the report says.

That Citygate "standards of coverage" report, which looked at how to provide the most rapid response throughout the district, "concluded that the first step in developing a plan for station relocation was to move" the Almendral Avenue fire station, the grand jury report says.

The grand jury report quotes from the Citygate report that moving the Almendral station "to the west is the first step or the 'key to the door.' If that relocation becomes possible, the other sites more readily fall into place."

The report cites the lack of follow-through on board requests or resolutions made regarding the Citygate report, including a resolution that the chief provide the board an updated long-term fire station and land acquisition plan for the entire district.

"The Grand Jury could not find any evidence ... that such a plan was ever developed," the report says.

At that same meeting, the grand jury report says, fire board member Chuck Bernstein asked the chief to schedule a meeting to discuss Citygate's recommendations "to develop station site location strategies and policies, and to involve local government partners in the process."

"The Grand Jury has found no evidence that ... (i)such a meeting ever occurred, (ii) staff used the Citygate Report data to prioritize current Fire Station locations and to develop a land acquisition plan, or (iii) the District followed the four steps recommended" by the Citygate consultant, the report says.

"Instead, District documents show that less than 3 months after the Board accepted the Citygate Report, the Fire Chief rejected Citygate's recommendation to move Station #3," the report says. It says Schapelhouman sent an email to Atherton City Manager George Rodericks on May 2, 2017, saying: "The Fire District has absolutely NO PLANS to close or MOVE Fire Station 3 in Atherton!"

The report says the purchase of the Almendral property "was reactive to learning that the property became available for sale rather than an implementation of a plan."

No clear plan

The report also says "the district does not appear to have had a clear plan for how it would use the property" when it was purchased. The district's board at first recommended the property be rented on the open market, but, the report says, the district's "Finance Committee recommended on December 5, 2017, that 28 Almendral be used for a 'Chief Officer Residence.' On December 19, 2017, the Board approved a proposal to allocate $500,000 for site and building improvements associated with occupancy" of the property. By February, district personnel were living in the house.

Bernstein said the house is going to be rented on the open market, as the board originally directed. Currently, "it's not supposed to be being used for anything," he said. "Nothing's been authorized by the board."

"We're getting bids on doing some things to the property so that we can rent it," he said.

Schapelhouman said in addition that the district is exploring options including tearing down the house, moving it and building a new modular building further back on the lot, or doing nothing.

The house, he said, "needs lots of work to publicly rent it."

However, Bernstein said, buying the property does not mean the district has ruled out moving the Atherton station. Buying the property is an opportunity for the district to "park some of its money" in a property that it could later use to expand the Almendral station, or sell to buy property elsewhere.

"I don't think it's an unwise investment," Bernstein said.

The report also says "the district has pursued accreditation since 2011," but has failed to achieve it, in main part because it does not have a strategic plan, a requirement of accreditation by the Commission on Fire Accreditation International.

Bernstein said the district is continuing to work on accreditation and "we expect to have it done within two years. It's typically a two-year process," he said.

Recommendations

The report's recommendations for the district are:

• "Develop and maintain an effective multi-year strategic plan, and achieve accreditation."

• "Ensure its administrative functions operate effectively regardless of competing priorities created by on-going emergency response operations."

• "Engage with its local government partners to review District resources and determine if additional resources are required to maintain effective service levels."

• "Review the consultant recommendations relative to the location of Station 3 and re-examine the basis for purchasing the Atherton property."

• "Adopt a policy not to accept donations from companies or individuals with which the District has enforcement or inspection responsibilities over."

The report also says many people do not realize the fire district is an independent special district, not part of the city of Menlo Park, and that it needs to make that clear on its website, along with an explanation of what a special district is.

In an email, Schapelhouman said the district "started working with the Civil Grand Jury over a year ago and have spent hundreds of hours providing them with information on every aspect of our operations. We responded to many records requests and sent out copious amounts of background information for their review. We also had face to face interviews. I’m pleased that they acknowledged that we provide exceptional service to the community related to our core mission which is the protection of life, property and the environment."