Fullerton Fire DepartmentOCFA Proposal Review
Carol Jacobs, Chief Operating Officer
Andy Belknap, Senior Vice President
September 20, 2022
Project Workplan
2 Conducted interviews with key staff in the City of Fullerton and OCFA Reviewed the OCFA proposal provided to the City of Fullerton Gathered information from the Fullerton Fire Department, City staff, OCFA, and other Orange County departments Analyzed the information and developed observations and findings
Regionalization Can Bring Savings
3 Economies of scale
Management
Technology
Specialized services
Improvements in training, career opportunities, and some support services Most savings in fire typically from shared support services and overall management
OCFA Proposal
4 OCFA provided a proposal in October 2021 for the FY 2021-22 budget that totals $21,509,990 Only includes the fire service costs it will charge the City Does NOT include ongoing costs associated with the Fire Department For example: unfunded actuarial accrued liability on pensions, ambulance transport and billing, workers’ compensation, retiree healthcare, property insurance Fullerton will have to continue to pay those ongoing costs Does NOT include some revenue from fire services that the City will continue to receive
Service Delivery Comparisons
5 Staffing
Stations
Station improvement arrangements
Apparatus
Dispatch
Personnel
Startup costs
Permitting and fire prevention
Transition Considerations
6 Timing and approval
Adopt service agreement and related JPA
Agree on service start date
Adopt an ordinance appointing OCFA
Adopt OCFA amendments to CA Fire and Building Codes
Fiscal Considerations
7 Comparison of OCFA Proposal to Current Fire Department Budget, Four –Year Projection FY 2021-22
FY 2022-23
FY 2023-24
FY 2024-25
OCFA Services Charge
$21,509,990
$22,477,939
$23,489,447
$24,546,472
OCFA Percent Increase (Maximum)
4.50%
4.50%
4.50%
Fullerton Fire Department Budget3
$27,307,520
$29,183,547
$31,188,456
$33,331,103
Estimated Percent Increase4
8.26%
6.87%
6.87%
6.78%
Projected Annual Savings
$5,797,530
$6,705,607
$7,699,010
$8,781,632
Projected Cumulative Savings1, 2
$5,797,530
$12,503,137
$20,202,147
$28,986,779
Source: OCFA Proposal
1Excludes one‐time start‐up costs and the City’s annual Unfunded Actuarial Accrued Liability (UAAL) payment to the Public Employees’ Retirement System (PERS). Costs quoted are valid for the current fiscal year ending in June 2022. 2This table does not factor in other savings that the City should realize associated with workers’ compensation and other departmental efficiencies. 3FY 2020-21 Fire Budget (source: City of Fullerton FY 2020-21 Budget) 4Percent increase calculated using 7-year average increase in annual Fullerton Fire Department budget from FY 2015/16 to FY 2021/22.
Fiscal Considerations
8 City Fire Operations Compared with OCFA Contract Operations, Proposed Expense Category
FY 2022-23
City Fire Department Budget Costs
$27,680,291
Revenues
$(5,811,068)
Net Expenses
$21,869,223
OCFA Contract Costs
$21,838,035
Ongoing City Fire Costs
$10,960,158
Revenues
$(5,361,068)
Net Expenses
$27,437,125
Ten-Year Cost Comparison Projection
9 Salary variation
Minimum and top-step salaries are 10% and 16% (respectively) higher for OCFA, compared to Fullerton OCFA has 12 steps; Fullerton has 6 steps
Peer agencies pay, on average, 16% higher than Fullerton Forecast scenarios – three levels of growth rate
Cost Growth Scenario
City Salary Growth1 FY 2024-26
City Salary Growth1 FY 2027-32
City Health Growth
Other City Cost Growth
City Revenue Growth
OCFA Cost Growth FY 2024-26
OCFA Cost Growth FY 2027-30
OCFA Cost Growth FY 2031-32
Low
3.50%
2.75%
2.50%
2.00%
1.75%
3.50%
3.25%
3.00%
Medium
5.00%
3.00%
3.00%
2.50%
2.00%
4.00%
3.75%
3.50%
High
7.50%
3.25%
3.50%
3.00%
2.25%
4.50%
4.25%
4.00%
Ten-Year Cost Comparison Projection (continued)
10 Average Net OCFA Cost to City Over 10 Years (in millions) All growth scenarios result in added costs to the City, ranging from an annual average of $3.84 million to $6.96 million over the next ten years Average of the nine scenarios is $5.47 million
The higher the assumed growth in City costs, the lower the net cost at any given level City Low-Cost Growth
City Medium-Cost Growth
City High-Cost Growth
OCFA Low-Cost Growth
$5.76
$5.00
$3.84
OCFA Medium-Cost Growth
$6.35
$5.60
$4.43
OCFA High-Cost Growth
$6.96
$6.20
$5.04
Summary Forecast
OCFA vs City Fire Department Costs under the High-Cost Scenario for the City and Low-Cost Scenario for OCFA (in millions) 11 OCFA vs. City Fire Department Costs under the High-Cost Scenario for both City and OCFA (in millions)
Key Takeaways
12 Costs will be higher with OCFA than with a properly funded City Fire Department City would realize same or better level of service with OCFA Transition to the same service used by most cities in Orange County (OCFA) If Fullerton stays with its own Fire Department, it will have to increase annual expenditures relative to historical standards, to retain its firefighters and offer competitive compensation Expenditures in the current year budget increased significantly, and higher expenditures will be the norm for a sustainable department going forward in order to retain workers
Wrap Up
13 Either option represents a good public policy decision with its own pros and cons Value of local control over fire service delivery
Value of being able to focus on other public issues while letting OCFA handle fire service delivery A decision to contract with OCFA is a long-term decision, and not easily undone.
Thank you!
Carol Jacobs | [email protected]
Andy Belknap | [email protected]