After months of negotiating over insurance coverage, the San Juan Bautista City Council approved a seven-year contract with the city of Hollister for fire protection at its Feb. 19 meeting.
In a 3-0 vote, the council approved the contract that includes a $5 million insurance policy and a workers compensation waiver to satisfy requirements for PARSAC, the city’s insurance company. Mayor Cesar Flores and City Manager Michaele LaForge were absent, as they were summoned by Gov. Gavin Newsom along with officials from other cities to address state housing requirements. Councilman Dan DeVries was also absent.
The approval had previously stalled because PARSAC required a $20 million liability policy, whereas the original contract between the two cities only covered $1 million.
Hollister City Manager Bill Avera told the Dec. 18 City Council session that it was impossible for Hollister to include a $20 million insurance policy because it was a self-insured municipal code operation. “Anything above two, five at the highest is going to cost us a significant amount of money,” Avera said at the time.
In addition to the $5 million insurance policy and workers comp, the fire services contract also indicates San Juan Bautista will get three firefighters instead of two.
Similar to Hollister’s fire services contract with the county, which was approved by the Hollister City Council on Nov. 5 and the San Benito County Board of Supervisors on Nov. 20, San Juan’s compensation will increase 3 percent annually. Additionally, the seven-year contract has three automatic optional years, essentially making it a 10-year contract if it’s not terminated.
“I think it’s a great idea that it increases to seven [because] we don’t want to do that all this often,” Councilman John Freeman said during the Feb. 19 meeting.
According to the meeting agenda packet, San Juan’s overall cost for fire services will decrease from $198,683 to $192,000 in the first year because Hollister will pay $36,000 for three years for rent of Fire Station No. 4 next to San Juan Bautista City Hall.
The cost is expected to increase to $40,800 per year for the following two years. For the final two years of the contract, San Juan Bautista is expected to rent the facility for $43,200 annually. If the contract continues through the optional years, Hollister will pay $45,600 to rent the fire station.
If San Juan Bautista were to terminate its fire services contract with Hollister, it has the option to buy any or all of three vehicles that Hollister will purchase upon contract execution. Those include type 1 and type 2 engines, and an off-road water tender.
Because of changes to the scope of the agreement, the contract will return to the Hollister City Council for approval likely in March.
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