LA County Fire Quote – By the Numbers
Many residents are asking me:
“John, what was the Quote from LA County Fire and why do you believe there are not enough savings to justify outsourcing our Local Fire Department to LA County Fire? “
Great question. In fact, it’s the right question to ask. Thank You!
Before we start, here are some documents to reference:
- LA County Feasibility Study (phase 1) – Provides Ongoing Costs, not conversion costs.
- Updated Appendix K, Option A, for 19/20 year.
- Updated Appendix L, Option B, for 19/20 year.
- Budget & Finance Report 07/11/19 – Details “Remaining Costs” for the City
The LA County Feasibility Study (phase 1) is used to determine Ongoing costs of outsourcing to LA County Fire. The next step in the process (phase 2) is more detailed assessment that addresses “conversion costs” and you begin negotiating on the 5.5% annual cost increases.
Quick note: Check out the LA County Feasibility Study, bottom of Page 11 – Conversion Costs assessment which costs $24,000. The Firefighter’s Union has offered to pay for this assessment. Thanks Guys!
LA County Fire Quote – By the Numbers
To start, what is Redondo Beach’s current Fire Department budget?
Our current 19/20 Redondo Fire Budget is $23,367,488.
This budget is primarily personnel costs, but it also carries “overhead” costs that would remain with the City whether you stay Local or outsource to LA County Fire.
For 19/20, this Fire Department “Overhead” is $6,409,480. This overhead consists of CalPERS Unfunded Liability ($3,279,710) and also “internal accounting charges” for support services and other items ($3,129,770) – See the #4 -Budget & Finance report for a look at the 18/19 costs that remain with the City.
Why are the “Remains with the City” Costs Important?
To make sure we arrive at the “True Costs” of our Fire Department, we need to account for these “Remaining Costs” when looking at the LA County Fire Quote. These “overhead” costs remain whether we remain a Local Fire Department or outsource to LA County Fire.
So, when looking at the LA County Fire Department Quote, you need to add on $6,409,480 to the quote, to really understand the “True Costs” associated with going with LA County Fire.
Here’s the Quote from LA County Fire for 19/20:
Option A: $16,648,590 (Reduced Staffing) – LA County proposed that RB remove a “Paramedic Assessment Unit” and 9 Fire Dept Personnel from Fire Station #2 (North Redondo Grant Ave.), reducing the on-going costs in Option B by $2,583,345 per year. (Check out #2 – Appendix K above)
- Quick Option A Impact Explanation: North Redondo’s Fire Station #2 would lose a Paramedic Assessment Unit and 9 personnel (3 shifts worth), and this loss would be “covered” by LA County Fire Stations in the vicinity – Lawndale, Hermosa, Gardena and Hawthorne.
Option B: $20,138,696 (Current Staffing) – LA County proposed operating with same staffing as we currently have. (Check out #3 – Appendix L Above)
So, let’s do the Year-1 Math:
Redondo Beach’s current 19/20 Fire Department Budget: $23,367,488.
LA County Option A (Reduced staffing): $16,648,590 + $6,409,480 = $23,058,070
Option A Result: Saves the City $309,418 in the First Year.
LA County Option B (Current staffing): $20,138,696 + $6,409,480 = $26,548,176
Option B Results: Costs the City an extra $3,180,688 (Yes, more money!)
CONCLUSION: There’s little or no savings in the first year for Option A, and Option B is not even close.
OK John. But how does it look over the next 10 years?
Sounds good, let’s look at it. Here’s the LA County Quote extended out 10 years (the life of the contract), and with the quoted put in the 5.5% increase that LA County would charge for the first 5 years, and assume they never increase above 5.5%.
Note: this is RBFA Kenny Campos’ spreadsheet that he and I worked on for 4 months. Thank you Kenny for acknowledging that we both agreed to these figures – it’s your spreadsheet and was submitted on August 20th as a “Blue Folder” item into the Official City Record.
When you look at the top half of the spreadsheet, WOW, there’s a lot of savings!
But, when you look at the lower half, that shows the “Remains with the City” Costs – there’s quite a different picture.
Option A (Reduced Staffing): 10-year projection Costs Redondo Beach an additional $3,825,905 (yes, that’s projected extra money, not savings.)
Option B (Current Staffing): 10-year projection Costs Redondo Beach an additional $45,080,193 (again, projected extra money, not savings!)
So, WOW – that’s quite a difference! There’s no projected savings! What?
Where’s the $4M – $7M in annual savings we were promised? Is City Staff reporting the numbers correctly?
All good questions to ask.
How I Read the LA County 10-year Quote:
Given this financial information, there’s no savings, even with Option A (Reduced Staffing) over 10 years (and, Kenny and I are being very conservative with the cost escalations).
For 4 months, I sat with Kenny Campos and the Firefighter’s Union Consultants. We agreed that these numbers were correct, based upon the Redondo Beach Finance’s analysis.
As noted, we all have questions about how Redondo Beach creates its budgets, what are true overhead costs, and other items that we need to clarify. But for now, this information is the best financial info we have.
My Bottom Line:
So, based on this financial information, I found that there are not enough savings to justify closing our Local Fire Department and outsourcing to LA County Fire.
If the Ongoing Costs don’t add up, Shall we proceed to the Conversion Costs (phase 2), even if the Firefighters want to pay the $24,000?
Here’s my decision: No. The Ongoing costs do not make sense. Further, we need to step forward together. Until we all agree on Overhead and “True Costs” of our Fire Department, moving forward does not make sense.
So, What’s Next?
Redondo Beach needs to fix its Internal Issues:
- We have an amazing Redondo Beach Fire Department. We are Safe.
We need need to make sure our Community remains Safe as we continue to grow. - Agree on “Overhead Costs” in our budgeting.
- Find ways to financially “pay” for upgrades to our Local Fire Department (staffing, equipment, etc.)
- Complete contract negotiations with the City’s Unions
Also, we need to pay close attention to LA County Fire – they are having some hard times. There are many articles that discuss how they are running with old equipment, and 3-man crews to save money.
Also, LA County Fire may need to assess a $1.4 Billion parcel tax to pay for this. So, if we using LA County Fire’s services, we would be responsible for our portion of this parcel tax!
Lastly, it’s very important to note:
Once we go to LA County Fire… It’s Gone. Never to be Local again.
Therefore:
I believe our best option is to KEEP OUR LOCAL REDONDO BEACH FIRE DEPARTMENT.
I made this very important decision to Keep our Local Fire Department based on the above noted information, plus numerous other documents, discussions and factors. And, we continue to look at our current costs and overhead.
But for now, we are staying local. What do you think?
For more detailed information, contact me at 323-813-5929 or John.Gran@Redondo.org
January 24, 2020 @ 5:39 am
Awesome post! Keep up the great work! 🙂
January 25, 2020 @ 1:18 pm
Awesome post! Keep up the great work! 🙂