CITY COUNCIL: Policy Direction Regarding Options for Future Carmel Fire Department Management

Meeting Date: December 2, 2008
Prepared by: George E. Rawson
Public Safety Director

City Council
Agenda Item Summary

Name: Receive report and provide policy direction regarding options for future Carmel Fire Department management.

Description: Staff is seeking City Council direction regarding which options to pursue regarding the future management of the Carmel Fire Department. Staff has prepared a report containing three options and preliminary findings/comments concerning each option. Staff recommends the option of “contracting” as the preferred option to pursue.

Overall Cost:
City Funds: $2.9-$3.1 million – detailed costs to be determined pending final Council policy direction.

Staff Recommendation: Staff is requesting that City Council review the options contained in the staff report and provide policy direction. Staff recommends contracting as the next best step to managing the Fire Department.

Important Considerations: Staff will diligently work towards the preparation of a report for final City Council action in early 2009.

Decision Record: At its meeting of October 2, 2007, City Council provided policy direction authorizing Carmel to participate in a joint study with Monterey and Pacific Grove concerning fire department consolidation.

Reviewed by:

______________________________ _________________
Rich Guillen, City Administrator Date


TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: GEORGE E. RAWSON, PUBLIC SAFETY DIRECTOR
DATE: NOVEMBER 24, 2008
SUBJECT: RECEIVE REPORT AND PROVIDE POLICY DIRECTION REGARDING OPTIONS FOR FUTURE FIRE DEPARTMENT MANAGEMENT

RECOMMENDED MOTION:
Provide policy direction regarding options for future fire contract services.

BACKGROUND:
Beginning in 2005, staff began discussions with the cities of Monterey and Pacific Grove relative to the merits and interest of consolidating fire departments. In 2006, the three city councils jointly authorized and funded a fire services consolidation feasibility analysis study by Citygate Associates, LLC. The study was completed in June 2007 and presented at a joint City Council meeting. The study concluded consolidation was feasible and there were operational advantages to doing so.

In October 2007, a Fire Consolidation Executive Committee, consisting of the city managers and fire chiefs was established to further explore the feasibility of a “headquarters” consolidation. The ensuing discussions and research determined that the “headquarters” model posed significant risk management obstacles.

In January 2008, Carmel postponed their involvement as a consolidation partner due to firefighter labor negotiations, but continued attending consolidation meetings with the understanding Carmel might be a potential partner at a future date. Public Safety Director George Rawson attended the Executive Committee meetings to remain apprised of the progress and process of how a fire department consolidation would occur. Ultimately, the cities of Monterey and Pacific Grove abandoned the idea of a “headquarters consolidation” in favor of a contract model as a better solution to integrate the two fire departments in a single stop as soon as practical.

Also, in June of 2008, Carmel established an ad hoc committee comprised of the City Administrator, the Administrative Services Director, the Public Safety Director, and representatives of the Carmel Firefighters Association to study alternative fire department management options. The details of the committee’s preliminary findings are highlighted in Exhibit “A” attached, and are discussed in more detail under “Staff Review.”

On December 16, 2008, the Pacific Grove Fire Department will be consolidated with the Monterey Fire Department. Consequently, by the end of the day on December 15, 2008, Pacific Grove will cease providing fire administrative services to the Carmel Fire Department (CFD). As a result, the Director of Public Safety met with the Monterey Fire Chief to arrange continuation of administrative and Division Chief services to Carmel. Assuming City Council approves the proposed Monterey contract at its meeting of December 2, 2008, the Monterey Fire Department will begin to provide fire administrative services to Carmel commencing on December 16, 2008, through February 28, 2009. Because time is critical, the City of Carmel-by-the-Sea must finalize its study of options for future long-term fire management services and approve a new agreement in sufficient time to become effective on or before February 28, 2009.

STAFF REVIEW
Staff is seeking policy direction regarding the best alternative for the future management of the fire department. An ad hoc committee comprised of the contracted Fire Chief, staff and fire department labor performed some preliminary research on the following alternatives.

The initial findings of each option are included below:

1. Full Service – Stand-Alone Fire Department: This option is very expensive and is not recommended. Establishing a stand-alone fire department would be an arduous process that would necessitate an immediate recruitment effort to hire additional personnel to include a Fire Chief, Division Chiefs, and other personnel to oversee fire prevention and training. Undertaking this effort would impose an enormous burden on existing staff to perform a myriad of personnel-related duties, including recruitment, testing, background checks, and pre-employment medical testing. The recruitment costs alone associated with this process are estimated to be $20,000 to $25,000. The costs of salary and benefits for a new fire department administration, including a Fire Chief, three Division Chiefs, a Fire Marshal, and administrative secretary is estimated at $850,000 plus. These costs do not take into account
the risks of worker’s compensation and/or other costs relating to liability, nor any of staff’s time attempting to coordinate and process such a recruitment effort.

2. Contracting: This option is the most logical and will probably be the most economical.
Contracting, if done in the right way with the right agency, will act as a force multiplier that significantly increases firefighting capabilities in all contexts. Interoperability and operational readiness will be enhanced, thus making it much more probable that extensive firefighting resources can be quickly dispatched to an actual fire. Options to consider for providers of contracting include the Carmel Valley Fire Protection District, Cal Fire, and the City of Monterey fire department. Since 2000, the Monterey fire department has included binding arbitration as part of the collective bargaining agreement. However, the City of Monterey has never invoked binding arbitration to resolve fire department negotiations.

The exact costs for contracting are unknown at this time. Preliminary estimates indicate the total operations budget for contracting range from $2.9 to $3.1 million. Staff will need additional time to evaluate the scope of services and the methodology of the formula associated for these services.

3. Joint Powers Authority (Merger/Consolidation): Establishing a Joint Powers Authority (JPA) to govern a merger of fire services is a possibility, but such an undertaking is contingent on with which agency Carmel ultimately merges. The committee believes the JPA option may be more expensive than contracting due to staffing needs that are similar to Option #1 (Stand-Alone). The process of establishing a JPA also can be arduous and very time consuming. Based on the narrow window of time Carmel has to execute a new contract, it would be prudent to focus on contracting (Option #2). If a JPA is ultimately desired, the possibility of a contract transitioning to a JPA can be explored in the future.

Important decisions must be made within the next 60 days regarding future management of the Fire Department. The challenge before us cannot merely be resolved by hiring an interim fire chief. It is essential that an entire system of fire services be considered in the deliberations of the next best step. This includes acquiring a Division Chief response system, fire prevention and inspections, training, and administrative support.

Pending direction from City Council, staff must immediately move forward with acquiring information that can be brought before the City Council in early 2009 for final approval and implementation.

FISCAL IMPACT:
$2.9-$3.1 million – detailed costs to be determined pending final Council policy direction.

SUMMARY:
The requested action is consistent with the City Administrator’s goal to identify future options for managing the Fire Department. It is important that final decisions are based on both quality of services and cost analysis.

EXHIBIT “A”
PRELIMINARY ANALYSIS
CARMEL FIRE DEPARTMENT ALTERNATIVES
STAND-ALONE
Pros Cons
Local control
Promotional opportunities
Local knowledge (streets, hydrants, lack of addresses, etc.)
Productivity potential and increased oversight

Cons
Very costly!
Retention
Difficulty in recruiting

CONTRACT
Pros
Admin. team/shared costs Relinquish control of personnel costs
Improved staffing & infrastructure of
resources
Workers’ comp liability reduced
HR responsibilities reduced
Preserves local knowledge
Favorably disproportionate share of costs

Cons
Relinquish control of personnel costs

MERGER/JPA
Pros Cons
Better control of salary Marginal return on investment
Local knowledge Need to hire more staff (Duty Chiefs
Shared HR duties and responsibilities and other admin. staff)
Distribution of operational costs Partnering with agencies with
Shared workers’ comp uncertain financial status
Risk management liability exposure