HomeMy WebLinkAboutItem 01- ESF Governance Final Feasibility Study Report Presentation AGENDA ITEM SUMMARY Meeting Date: 7/1/2024
Meeting Type: Work Session
Staff Contact/Dept.: Mike Caven
Staff Phone No: (541)682-7115
Estimated Time: 90 minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Strengthen Public Safety
by Leveraging
Partnerships and
Resources
ITEM TITLE: EUGENE SPRINGFIELD FIRE GOVERNANCE FINAL FEASIBILITY STUDY
REPORT PRESENTATION
ACTION
REQUESTED:
Review presentation of the five governance options reviewed as part of the
feasibility study and provide guidance on next steps.
ISSUE
STATEMENT:
Eugene Springfield Fire (ESF) staff will present information regarding the final
findings of the ESF Governance Feasibility Review project that will inform how
ESF could move forward. AP Triton representatives will present information and
answer questions about the ESF Feasibility Final Report.
ATTACHMENTS: 1. Council Briefing Memo
2. ESF Governance Final Feasibility Study Report presentation
DISCUSSION/
FINANCIAL
IMPACT:
The review of the final report covers a variety of options for the future of ESF with
varying financial impacts depending on what model is selected moving forward.
The report covers each model’s financial impact.
1
M E M O R A N D U M City of Springfield
Date: July 1, 2024
To: Nancy Newton, City Manager COUNCIL
From: Michael Caven, Fire Chief
Niel Laudati, Assistant City Manager
BRIEFING
Subject: Eugene Springfield Fire Governance Review
Update
MEMORANDUM
ISSUE: In 2022, the City of Eugene and City of Springfield formed a Eugene Springfield Fire
Governance Review Panel to evaluate current system structure and consider options to create the
most efficient and effective system for fire and life safety services for the community. In the fall of
2023, the cities hired a consultant to conduct a feasibility study. The study is focused on the
governance structure, administrative staffing, and functional considerations to address current
system challenges. City Council will receive an update on the status of the study and next steps in
completing the assessment.
COUNCIL GOALS/MANDATE:
Strengthen Public Safety by Leveraging Partnerships and Resources
In 2009, Eugene Fire and EMS Department and Springfield Fire and Life Safety Department
commissioned a Cooperative Services Feasibility Study with Emergency Services Consulting
International (ESCI). The study determined a merger was both feasible and advisable for the two
cities. In 2010, the two cities entered into a functional consolidation which involved the sharing of
several key management and administrative positions through an IGA. Since 2010, Springfield and
Eugene have been working as a functionally consolidated agency. As the next step in this process,
the Cities are examining governance models for Eugene-Springfield Fire.
In 2022, a joint-elected Governance Review Panel (GRP) was formed. The GRP consists of two
City Council members from Eugene and Springfield and the City Manager for each City. The
Eugene Springfield Fire Governance Review Panel was established in 2022 to evaluate and identify
the next steps for the governance of the two departments. This work continues efforts to create the
most efficient and effective system for fire and life safety services within our community.
The panel spent several months discussing current operations and functional delivery. The GRP is
also discussing whether the current structure and governance method continues to be the best
method or if additional efficiencies can be created through a different governance and service
delivery model. The goal of these discussions is to provide sustainable Fire and EMS services to the
citizens of Eugene and Springfield.
In August, 2023, the cities hired AP Triton to complete a Feasibility Study. The consultant team has
extensive experience evaluating service operations, finances, and service delivery models.
Attachment 1
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AP Triton began meeting with the GRP to provide a full overview of the study and capture their
thoughts about the process.
Coordination between ESF and City staff launched in September. ESF Staff completed requests
from the consultant related to data, operational and structure information to support a full
assessment of current conditions.
In late October, the consultant team was on site in Eugene/Springfield to conduct stakeholder
interviews. The team engaged with more than 50 people, including elected officials from both cities
and the fire districts receiving service from ESF, city administration and support, ESF Staff, and
IAFF Local 851. In addition, they also toured key facilities in both Eugene and Springfield.
In February, 2024, City Council received an update on the complete of Phase I of the Feasibility
Study. Phase I included assessment of the current conditions to include Fire Administration,
internal services provided by City Departments, departmental revenue and expenditures. AP Triton
identified effective and efficient operational deployment and increased capacity in delivery of
services to the Eugene and Springfield communities as critical system advantages as a result of the
functional consolidation. AP Triton reported inefficiencies in day-to-day operations, financial
management and reporting to two city structures creates challenges for the ESF and staff for both
cities.
The assessment of current conditions provided the foundation for completing a strategic analysis of
five governance models. The analysis considers information received through the stakeholder
interviews and analyzes existing conditions in the organization for the following options:
1. Continue as currently organized with some modifications to existing IGA
2. One City providing service to another
3. Establishing an Intergovernmental Entity through an IGA
4. Establishing a Fire District
5. Dissolving Functional Merger
A summary of the five options is included in Attachment A. The assessment of each option
considers governance structure, financial impacts, and operational advantages for each of the
options. AP Triton will provide a detailed overview of each option at the upcoming work session.
For additional information related to the GRP process please refer to the Governance Review Panel
website.
RECOMMENDED ACTION: Informational only – no council action is requested.
Attachment 1
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518
FEASIBILITY STUDY
Administrative Staffing &
Governance Structure
EXECUTIVE SUMMARY
Eugene Springfield
Fire Department
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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INTRODUCTION
The Cities of Eugene and Springfield retained AP Triton (Triton) to conduct a study to review
the feasibility of five governance options for Eugene Springfield Fire (ESF): continuing the
existing operational merger between the cities of Eugene and Springfield with a few
modifications, establishing an IGA that allows one city to provide service to the other,
establishing an IGA to form an intergovernmental entity, establishing a fire district, and
dissolving the functional merger and returning to individual city departments.
This study focused on the
governance structure,
administrative staffing, and
functional considerations for ESF.
The evaluation of current
operational performance was not
included in the scope of work for
this study.
Triton spent considerable time
interviewing stakeholders, assessing
the current conditions, and evaluating the options available. ESF Staff, Eugene and
Springfield City Administrations, and Lane Council of Governments worked with the Triton
Team to ensure the options explored in the report were fully assessed and evaluated on
the following desired outcomes that were expressed by the stakeholders:
• Single governance and administration are achieved.
• Operational advantages of functional consolidation are retained.
• Oversight by the Cities on service levels, policy, and financial issues is ensured.
• Financial impacts are manageable.
• ESF staff’s experience is positive.
• Impact on City Administration and Support Services is reduced.
• Financial, administrative, and service delivery sustainability is achievable.
• Long-term planning for Fire/EMS is achievable.
• Recommendation is implemented within a reasonable timeframe.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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OPTIONS EVALUATED
Each of the five options are detailed in the full report, however, a summary of each option
and how it meets the desired outcomes, including challenges, risks, and additional
evaluation required are described in this executive summary.
Through functional consolidation, the capacity of ESF to manage both routine and
significant emergencies has significantly improved. This collaboration allows for a more
consistent response to emergencies and more effective preparation for the next event
compared to operating as individual cities.
Functional consolidation has allowed the cities to collectively eliminate 11.25 administrative
positions, resulting in an annual cost reduction of an estimated $2.5 million in 2023 wages
and benefits. The City of Eugene’s portion of the cost reduction is $1.2 million, and the City
of Springfield’s is $1.3 million.
Continue as Currently Organized with Some Modifications to the IGA
The key challenges of functional consolidation involve the administrative management
and coordination with two separate city councils, and city managers, with differing
delegated authority. ESF staff also serve as employees of either Springfield or Eugene with
different policies and benefit systems. This structure of governance creates complexity and
inefficiency for ESF staff and both cities. The impacts are mostly related to administrative
processes, including budgeting, purchasing, payroll, human resources, labor negotiations,
disciplinary actions, health benefits, and hiring processes. The different operational
processes and policies create complexities often resulting in duplication of effort and
additional time. These challenges occur almost daily and create inefficiencies.
In the administrative and support areas, both cities and ESF have made progress in
managing the complexities, but persistent issues remain, some large and some small, that
cannot seem to be solved.
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Executive Summary – Governance Review Study Eugene Springfield Fire
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The following table identifies the findings for this option related to the desired outcomes
identified from stakeholder interviews.
Desired Outcomes Continuing as Currently Organized with Some Modifications
Single Governance and
Administration
The current model does not provide single governance or
administration, however, modifying the IGA to include a
shared governance/City Manager role to oversee ESF could
streamline oversight, including the budget process for ESF.
Operational Advantages of
Consolidation
Both cities retain the operational advantages gained from
functional consolidation.
Oversight by City Both cities retain oversight of their city’s financial obligations.
Financial Impacts
• Five additional administrative positions are recommended
as part of managing the administrative complexities of ESF
at an estimated cost of $900,000.
• Potential increased costs for city departments to manage
the existing complexity of the system.
ESF Staff Experience
• Employees work well together as a team; however, they
work for different employers and experience frustrating
administrative challenges daily.
• Administratively, the duplication of work with both cities is
not sustainable.
Impact on City Administration
and Support Services
The workload for the City Administration will continue to be
inefficient and complex compared to other city departments.
ESF staff employed by either Eugene or Springfield is a
significant cause of this inefficiency.
Sustainability The workload involved in managing the challenges and
inefficiencies is not sustainable.
Long-Term Planning for
Fire/EMS
• Each city can plan for its needs in the long term.
• ESF is unable to plan long-term due to the ability to
terminate the agreement; however, enhancing the
involvement of both City Managers in working with ESF Staff
could allow for longer-term planning.
Time to Implement This model is currently in place and would only require time to
implement any enhancements or modifications.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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One City Providing Service to Another Through an IGA
This option would transition the day-to-day operation and employment of staff for ESF to be
administered and supported by one of the cities; however, the two City Managers could
agree to collaborate in
addressing issues such as
budgeting, strategic planning,
standards of cover, and other
items that can have a future
financial and service level impact
on both cities fire and EMS
service.
The following table identifies the
findings for this option related to
desired outcomes identified from
stakeholder interviews.
Desired Outcomes One City Providing Service to the Other
Single Governance and
Administration
Provides single governance and administration from the city
chosen to oversee and support ESF
Operational Advantages of
Consolidation
Both cities retain the operational advantages gained from
functional consolidation.
Oversight by City
The city providing the service would have more decision-
making authority and influence over ESF, however, this could
be minimized with language in the IGA providing collaboration
between the two cities.
Financial Impacts
• Five additional administrative positions are recommended
as part of managing the administrative complexities of ESF
at an estimated cost of $900,000.
• Increased costs for the city selected to provide service and
a potential challenge in “right sizing” the support costs for
the city no longer supporting the fire department.
• If Springfield provides the service, the cost of health
benefits and PERS costs would be reduced by an
estimated $3.2 million for ESF, however, a new actuarial
evaluation of Springfield’s PERS rate may impact all
Springfield employees.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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Desired Outcomes One City Providing Service to the Other
• If Eugene provides the service, the cost of health benefits
and PERS retirement would be increased by an estimated
$1.2 million for ESF.
• Either City not providing health benefits may be
challenged in sustaining their city’s health plan.
ESF Staff Experience
This option would streamline administrative services for ESF Staff
while maintaining the operational benefits of the functional
consolidation.
Impact on City Administration
and Support Services
• The city taking on the responsibility will need to determine if
they can manage a larger workforce and additional
facilities for the Fire Department and at what cost.
• The city not assuming the responsibility would need to
“Right Size” their support services, leading to sharing the
infrastructure costs among a smaller number of city
departments. Both cities have indicated they may not be
able to reduce these support service costs.
Sustainability This option would be sustainable if the city selected determines
it has the capacity to provide the service.
Long-Term Planning for
Fire/EMS
This option would improve the long-term planning for ESF,
however, the city not providing the oversight may not have as
much influence in its fire service delivery.
Time to Implement
Both cities’ administrations would require time to assess the
capacity and cost of the transition and then determine the
time it would take to develop capacity for the city selected to
provide service.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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Establishing an Intergovernmental Entity through an IGA
An intergovernmental entity (IGE) is a public body and a municipal corporation with
governmental powers and responsibilities provided to the entity by the cities through an
IGA (an IGA does not have the ability to levy taxes).
An IGE is created when two or more governments enter into a written agreement,
approved by a vote of the founding governments’ governing bodies (for example a city
council). This agreement delegates certain governmental tasks and responsibilities to a
newly created Board with representatives from the governments creating the IGE.
Intergovernmental entities typically provide a single government service.
AP Triton has proposed a member
fee structure to provide accurate
and transparent cost sharing and
allow each city to add unique
services that do not impact the
other city. A detailed review of this is
available in the full report.
The following table identifies the
findings for this option related to the
desired outcomes identified from
stakeholder interviews.
Desired Outcomes Establishing an Intergovernmental Entity
Single Governance and
Administration
Forming an IGE Board with representatives from both Councils
along with the City Managers will provide a single governance
and administration for ESF.
Operational Advantages of
Consolidation
Both cities retain the operational advantages gained from
functional consolidation.
Oversight by City
Both cities maintain policy and financial oversight through
representation on the IGE Board and each council retains the
authority to approve the proposed ESF budget.
Financial Impacts
• Five additional administrative positions are recommended
as part of managing the administrative complexities of ESF
at an estimated cost of $900,000.
• Forming a new entity provides the option to use either
independent or pooled rates (SLGRP) from PERS.
The independent rate could offer an estimated $4 million
per year in savings on PERS costs for the first two years.
However, the PERS actuaries will reassess the liabilities
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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Desired Outcomes Establishing an Intergovernmental Entity
approximately two years after forming the IGE, which
could result in an increase in rates.
The SLGRP Pool Rate will increase PERS costs for ESF by an
estimated $630,000 each year. This rate could also change
after the actuaries assess ESF, however, employers in the
pool are more insulated from certain impacts to their rate
through the “pooling” of the risk, leading to potentially
more stable rates over the long term.
Note: If ESF chooses to be rated as an Independent, they
can move to the SLGRP in the future. Once an entity joins
the SLGRP, that decision is irrevocable.
• Health Insurance costs will need to be evaluated further. If
all employees are transferred to the Springfield plan, ESF
could experience an estimated savings of $1.3 million each
year. If all employees are transferred to Eugene’s health
plan, ESF would see an estimated increase of $580,000.
• Either City not providing health benefits may be
challenged to maintain sustainability of their health plan.
ESF Staff Experience
This option would streamline the experience and provide
additional control of some administrative services for ESF Staff
while maintaining the operational benefits of the functional
merger.
Impact on City Administration
and Support Services
• The new IGE would have the opportunity to determine
where they will receive support services for finance, HR,
and IT. This process will require each city to consider if it
can support ESF and what the cost would be. ESF would
consider the services they would retain, and which would
be contracted to one of the cities.
• Facilities and apparatus maintenance and replacement
are proposed to remain the responsibility of each city.
Sustainability
ESF should be sustainable once the cities reach consensus on
the development of the IGA and see value after the review of
the costs.
Long-Term Planning for
Fire/EMS
This option provides reasonable long-term planning if a ten-
year agreement is established, however, the ability for either
city to terminate the agreement will hamper true long-term
planning and infrastructure development for ESF.
Time to Implement
Implementing this option is anticipated to take 12–18 months
to work through all the specifics of the agreement and finalize
cost estimates. Implementation may take another 3-6 months.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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Establishing a Fire District
Special districts are a form of local government that provide specific services within a
defined local service area. A special district is an independent entity with its own elected
Board and the ability to levy taxes, separate from the governance and funding from a city
or county.
The following table identifies the findings for this option related to the desired outcomes
identified from stakeholder interviews.
Desired Outcomes Establishing a Fire District
Single Governance and
Administration
The new Fire District Board provides single governance and
administration.
Operational Advantages of
Consolidation
Both cities retain the operational advantages gained from
functional consolidation.
Oversight by City Neither city will have oversight of the Fire District; the Board of
Directors would be elected by the citizens.
Financial Impacts
• The initial estimate of a tax rate for ESF would be at least
$2.52 per $1,000. Both cities should reduce their property
tax collection by an equal amount.
• Springfield could eliminate their fire levy and reduce the
overall city tax rate equivalent to $2.52.
• Springfield is currently experiencing compression for its two
local option levies. With the elimination of the fire levy, the
$155,000 current tax compression loss in the Fire Levy may
have an impact across the other levies. However, that
impact could be reduced if Springfield reduces their
overall tax collection greater than $2.52.
• Forming a new fire district provides the option to use either
independent or pooled rates (SLGRP) from PERS.
The independent rate could offer an estimated $4 million
per year in savings on PERS costs for the first two years.
However, the PERS actuaries will reassess the liabilities
approximately two years after forming the district, which
could result in an increase or decrease in rates.
The SLGRP Rate will increase PERS costs for ESF by an
estimated $630,000 each year for the first two years. This
rate could change after the actuaries assess ESF, however,
employers in the pool are more insulated from certain
impacts to their rate through the “pooling” of the risk,
potentially leading to more stable rates over the long term.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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Desired Outcomes Establishing a Fire District
Note: If ESF chooses to be rated as an Independent, they
could move to the SLGRP in the future. Once an entity joins
the SLGRP, that decision is irrevocable.
ESF Staff Experience
This option would streamline and provide additional control of
administrative services for ESF Staff while maintaining the
operational benefits of the functional merger.
Impact on City Administration
and Support Services
Both cities will be required to “right size” their support service
functions without their former Fire Department sharing in the
costs, both cities have indicated they may not be able to
reduce these support service costs.
Sustainability
This option is sustainable and will provide a level of service
consistent with the existing growth and limitations of the
Oregon Property Tax system.
Long-Term Planning for
Fire/EMS
This option provides long-term planning for Fire and EMS in the
total response area for ESF.
Time to Implement
Forming a Fire District will require several steps, including a vote
of the people to accept the new taxing district and election of
the Board of Directors.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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Dissolving the Functional Merger
Dissolving the functional merger and returning ESF to individual city fire departments may
be necessary if none of the other options are palatable for both cities. The following table
identifies the findings for this option related to the desired outcomes identified from
stakeholder interviews.
Desired Outcomes Dissolving the Functional Merger
Single Governance and
Administration
The cities would be providing governance and administration
services for their Fire Department.
Operational Advantages of
Consolidation
The cities would not retain the benefit of the shared
operational services, however, retaining the same operational
protocols would assist in interoperability between the two
agencies for major emergencies.
Oversight by City Each city will provide full oversight for its Fire Department.
Financial Impacts
• Triton recommends Eugene add a minimum of five
positions at an estimated cost of $1.1 million.
• Triton recommends Springfield add a minimum of three
positions at an estimated cost of $800,000.
• Springfield support services have allowed the City of
Eugene to take responsibility for several support functions;
Springfield would need to enhance their support for fire
department support service requirements.
ESF Staff Experience The ESF staff would be separated and operate only in their city;
very few of the staff desire a separation.
Impact on City Administration
and Support Services
Each city would support its individual city fire department,
reducing the complexity of its support services.
Sustainability
Returning to individual city fire agencies is sustainable,
however, the depth of service experienced with ESF would not
be achievable for either city.
Long-Term Planning for
Fire/EMS
Both cities would be able to plan long-term for their city’s
needs.
Time to Implement
Triton estimates it would take approximately 12 months to work
through the action items identified for separation, however,
the existing IGA allows for two fiscal years to terminate the
agreement.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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Recommendation
The creation of a new intergovernmental entity (IGE) with shared governance provided by
both cities best meets most of the desired outcomes we heard from stakeholders.
Creating a new IGE to operate the
fire department would provide a
feasible solution to many of the
challenges faced while maintaining
accountability to both governing
bodies. This new entity can be
structured in a way that ensures
appropriate representation and
decision-making power from both
cities. The Cities will have to
determine if the governance is
equally distributed or weighted in
some manner to the larger city.
Both entities stand to benefit from ongoing annual cost reductions from the shared
administration. Triton is recommending the addition of five additional administrative
positions as part of operating ESF at an estimated cost of $900,000.
ESF may see an initial decrease in PERS costs amounting to an estimated $4 million per year
in the first two years by establishing a new entity the independent rate or see an initial
increase of $630,000 per year for the first two years using the SLGRP “Pool” rate. Both rates
are subject to adjustment once the PERS actuaries evaluate the new entity. The SLGRP rate
shares the cost of certain rate impacts with a pool of employers where the individual rate is
directly impacted by their experience. The cities will have to determine which plan they
want ESF to participate in. If the independent rate is initially chosen, ESF can move to the
SLGRP rate in the future. Once the SLGRP rate is chosen the decision is irrevocable.
Attachment 2
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Executive Summary – Governance Review Study Eugene Springfield Fire
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The suggested member fee model, tailored to reflect the demand for services, ensures that
the shared expenses of ESF are precisely defined and transparently accounted for in a fair
proportional manner.
Triton is recommending that all ESF staff transition to employment with the new entity and
the bulk of city-level support services be provided by one city or the other or by ESF itself.
Eugene and Springfield would retain ownership and responsibility of their fire stations and
apparatus.
Implementation
Triton has developed action plans to advance toward the development and
implementation of an IGE. Triton advocates taking incremental steps, focusing on a few
action items at a time. This approach allows both cities to ensure their needs are addressed
and that the chosen solutions for each issue are mutually acceptable.
While there are a multitude of issues that
need to be evaluated by both cities as
they work through the action items, the
most critical issue to address is defining
governance and the voting weight for
each city for the new entity.
Closing
Through functional consolidation, the capacity of ESF to manage both routine and
significant emergencies has significantly improved for both cities. The cities also benefit
from some cost reductions through shared administration, however, the value of ESF is
more in the depth of service to the community than the cost savings.
Triton considers the IGE is the best option for continuing to provide this higher level of
service in a sustainable manner for both communities. The remaining three options
(continuing with functional consolidation; one city contracting with the other; or forming a
fire district) did not meet enough of the desired outcomes to be a consideration.
If the cities are unable to reach a consensus as they work through the action items or find
insufficient value in this endeavor, Triton advocates for dissolution of the functional
consolidation agreement and a return to individual fire departments. As part of this study,
Triton has developed detailed action plans for dissolution, ensuring a smooth transition if
such a decision is reached.
CRITICAL ISSUE
The Cities will need to agree on
Governance as the first step in
establishing an IGE.
Attachment 2
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