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Home My WebLink AboutItem 02 Fire MergerAGENDA ITEM SUMMARY Meeting Date: 4/2/2012 Meeting Type:Work Session Staff Contact/Dept.: Gino Grimaldi/Randall B. Groves Staff Phone No: 726-2292 Estimated Time: 60 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: Financially Responsible and Stable Government Services ITEM TITLE: FIRE MERGER ACTION REQUESTED: 1) Direct the City Manager to negotiate an intergovernmental agreement that implements the governance model outlined in the Council Briefing Memorandum (Attachment I) 2) Direct the City Manager to negotiate labor agreements under the assumption that the fire merger will take place ISSUE STATEMENT: Springfield Fire & Life Safety (SFLS) continues to operate as a functionally consolidated department with Eugene Fire & EMS under direction of joint city managers. This Work Session item is to discuss a proposed governance model for a merged fire organization and to seek City Council guidance regarding next steps. ATTACHMENTS: 1. Council Briefing Memo DISCUSSION/ he Mayor and four councilors on March 12, but is ince July 1, 2010, Springfield and Eugene Fire Departments have been cities to he primary benefit of a functional consolidation is that it permits both cities to f of ttachment 1 describes a proposed governance model. This would provide a on, he City Council has three options: 1) Direct the City manager to negotiate an intergovernmental agreement that at reflect r to stop discussions regarding the merger and take regarding the It is recCity Council implement option 1. FINANCIAL IMPACT: This item was discussed with t being brought back so the full Council can participate in the discussion. S operating under an intergovernmental agreement (IGA) between the two share the services of certain key administrative positions in both departments. T share savings resulting from eliminating redundant resources, taking advantage o existing vacancies of key personnel. Meanwhile, service levels are being maintained or improved as a result of joint efficiencies. In FY11, savings $606,999 we realized due to the functional consolidation, with Springfield’s share estimated at $286,952. Projected personnel savings for the City of Springfield for FY12 is $413,608, with a combined savings of $876,239 for the two cities. A ‘next step’ in the creation of a fully merged fire service organization. In additi should the City Council desire to continue to move forward with a fully merged organization, it will be necessary to negotiate labor agreement that reflect the merger and proposed governance model. T implements the governance model outlined in the Council Briefing Memorandum (Attachment I) and also negotiate labor agreements th a merged organization 2) Direct the City Manage actions needed to reestablish a separate fire department 3) Request additional information prior to giving direction governance model and labor agreements ommended that the Attachment 1, Page 1 of 10 mergency Medic Eugene Fire & Eal Services Office of the Chief 1705 W. 2nd Avenue Eugene, OR 97402 (541) 682-7100 (541) 682-7116 FAX Springfield Fire & Life Safety Office of the Chief 225 Fifth Street Springfield, OR 97477 (541) 726-3737 (541) 726-2297 FAX M E M O R A N D U M Date: 8 March 2012 To: Mayor and City Council From: Randall B. Groves, Chief of Department Subject: EUGENE and SPRINGFIELD FIRE SERVICE MERGER: PROPOSED FORM OF GOVERNANCE Since July 1, 2010, Springfield Fire & Life Safety (SFLS) and Eugene Fire & EMS (EFD) have operated as a functionally consolidated department under an intergovernmental agreement (IGA) between the two cities. The next step in the merger process is to determine a governance model that will serve as the framework for the metro fire service organization. BACKGROUND: In 2007, the Eugene and Springfield fire departments formed an integrated response system, known as the 3-Battalion System to improve response and the delivery of fire suppression, rescue and emergency medical response. In 2010, the cities took the next step and embarked on an incremental approach to a merged fire organization with a focus on administration, training and the Fire Marshal’s Office. This approach allowed both cities time to evaluate the feasibility of continued efforts based on progress reports, prior to the decision to proceed with a full merger. The primary benefit of the functional consolidation is that it permitted both cities to share financial savings resulting from eliminating redundant resources and take advantage of existing and projected vacancies of key personnel. Meanwhile, service levels have been maintained or improved as a result of joint efficiencies. In FY11, savings of $606,999 were realized due to the functional consolidation; with Eugene’s share $320,047 and Springfield’s share estimated at $286,952 (Table 1). Projected personnel savings for FY12 include $462,631 for Eugene and $413,608 Springfield, with a combined savings of $876,239 for the two cities (Table 2). In FY13 the projected savings will be a combined $1,169,639, with Eugene’s share $596,608 and Springfield’s share estimated at $573,0311 (Table 3). 1 FY13 projected savings do not include proposed Eugene fire company closure. Attachment 1, Page 2 of 10 TABLE 1 (FY11 - Actual Savings) FISCAL YEAR 2011 FIRE DEPARTMENT EXPENSE REDUCTIONS Agency Position Savings Functional Consolidation (FC) / Staff Reduction (SR) Springfield Fire Chief $157,952FC Springfield EMSO 115,000FC Spfd/Eug Joint Recruit Academy 14,000FC Eugene Fire Marshal 125,817FC Eugene Training Chief 125,817FC Eugene Sr. Admin. Specialist 68,413FC Total $606,999 Functional Consolidation $606,999 Total: $606,999 SFLS: $286,952 EUG: $320,047 TABLE 2 (FY12 - Projected Savings)2 FISCAL YEAR 2012 FIRE DEPARTMENT EXPENSE REDUCTIONS Agency Position Savings Functional Consolidation (FC) / Staff Reduction (SR) Springfield Fire Chief $157,952FC Springfield Senior Management Analyst 106,182SR Springfield Program Technician 46,789SR Springfield Program Technician 55,896SR Springfield Clerk 2 46,789SR Eugene Fire Marshal 128,081FC Eugene Training Chief 128,081FC Eugene Admin Specialist, Sr. 69,644FC Eugene Deputy Chief 136,825 FC Total $876,239 Functional Consolidation $620,583 Staff/Budget Reduction $255,656 Total: $876,239 SFLS: $413,698 EUG: $462,631 2 Savings presented for FY12 build on savings achieved in FY11. Attachment 1, Page 3 of 10 TABLE 3 (FY12 – Projected Savings)3 FISCAL YEAR 2013 FIRE DEPARTMENT EXPENSE REDUCTIONS Agency Position Savings Functional Consolidation (FC), Staff Reduction (SR), Budget Reduction (BR) Springfield Fire Chief $157,952FC Springfield Senior Management Analyst 106,182SR FY12 Springfield Program Technician 46,789SR FY12 Springfield Program Technician 55,896SR FY12 Springfield Clerk 2 46,789SR FY12 Springfield Deputy Chief EMS 160,000SR Eugene Fire Marshal 128,081FC Eugene Training Chief 128,081FC Eugene Admin Specialist, Sr. 69,644FC Eugene Deputy Chief 136,825 FC Eugene USAR Team 125,566BR Eugene Water Rescue Team OT 7,834BR Total $1,169,639 Functional Consolidation $620,583 Staff/Budget Reduction $549,056 Total: $1,169,639 SFLS: $573,608 EUG: $596,031 Total projected savings for the two cities over three fiscal years TABLE 4 (Year-To-Date Savings) FISCAL YEAR 2011, 2012, 2013 COMBINED SAVINGS BY CITY Springfield Eugene $1,274,258 $1,378,709 Total Springfield and Eugene combined savings: $2,652,967 3 Savings presented for FY13 build on savings achieved in FY11 and FY12. Attachment 1, Page 4 of 10 COST TO RESTORE SEPARATE FIRE DEPARTMENTS: Table 5 identifies positions, by city, that have been eliminated over the past three years and would need to be restored to minimally operate as separate fire departments. These additions do not restore both departments to pre-functional consolidation levels or capacity. The add-backs have been adjusted for inflation to FY13 dollars. TABLE 5 (Costs Inflated to FY13 levels) MINIMAL POSITIONS THAT MUST BE RESTORED SHOULD DEPARTMENTS SEPARATE Springfield Eugene Fire Chief $179,209Fire Marshal $146,141 Deputy Chief 166,564Training Chief 152,747 Program Technician 65,000Admin Specialist, Sr. 73,869 Program Technician 65,000USAR Team 125,566 Total $475,773Total $498,323 COST DIFFERENTIAL BETWEEN IAFF CONTRACTS: Staff also analyzed the cost differential between the two IAFF contracts. The analysis focused on calculating the overall cost of applying the current Eugene IAFF contract to the Springfield IAFF positions with the exception of the Springfield retirement article, which allows for the IAFF members to pay the employee pick-up portion of PERS. As part of the analysis, the cost of the employee PERS pick-up was applied to the Eugene IAFF members. The results projected a 3.25% cost increase over the FY11 contract for Springfield and a 1.28% cost increase over the FY12 contract for Eugene4. For Springfield, cost increases are due to differences in base wages, Kelly Days, and Medic Unit pay; Springfield’s cost decreases are attributed to reducing or eliminating costs for emergency medical technician certificate pay, adjusted pay rate for overtime, education pay, and 40-hr incentive pay. Expenditures not reviewed in this analysis include additional costs for field training paramedics, special team assignments, and serving as a college intern preceptor; time accrual differences and retirement payouts; citywide overhead; long-term impacts on PERS; health care costs; or one-time costs associated with system programming changes. (see Attachment A) It should be noted that both cities are sharing in an actuarial study to evaluate health care costs and weighing the benefits of moving to a shared, self-funded, healthcare pool for all city employees. There is the potential for significant savings in this area. (see Attachment B) LABOR MARKET: One question raised about merging fire departments is what effect this would have on the labor market and comparable jurisdictions? My experience has been that a municipal fire department’s comparable jurisdictions generally include cities that have a population base of between 50% and 150% percent of population of the target jurisdiction served. The two cities’ HR managers concur with this assumption. In the case of the Eugene and Springfield merger initiative, the Eugene Fire and EMS Department’s market of comparable jurisdictions traditionally has included: Salem (157,460); Gresham (105,594); 4 Springfield 3.25% cost gap does not take into account any wage increase in contract for FY12 which is open and under negotiation. Attachment 1, Page 5 of 10 Hillsboro (91,611); and Beaverton (89,803)5. It could also be argued that Bend (83,125) and Medford (77,485) could also be included The City of Springfield has contended that the Springfield market should include: Eugene (157,845), due to proximity; Bend (83,125); Medford (77,485); Corvallis (55,370); Albany (49,530). The Union contends that Hillsboro (91,611) and Beaverton (89,803) should be included. Since there has been no recent arbitration to establish market, no set criterion exists. However, given that Eugene is the second largest city in the State, and that Portland is statutorily excluded from comparison, our market under a merged organization would most likely remain similar to Eugene’s current market6. In other words, there is no new layer of comparable jurisdictions between Eugene and Portland. At the same time, even though the traditional Eugene market includes some larger jurisdictions than the market identified by the City of Springfield, the cost differential between the two contracts remains remarkably small. In addition, it should be noted that the statutory criterion sets comparability based on “comparable communities” as opposed to comparable employers. Subsequently, there have been several arbitrations in which very small jurisdictions have been compared to Tualatin Valley Fire and Rescue District because the district serves a number of small municipalities7. GOVERNANCE MODEL: Springfield and Eugene presently have an Intergovernmental Agreement (IGA) that allows for sharing some positions, but generally, the cities continue to operate the two fire departments as separate organizations. The cities can expand the IGA so that the two departments, although remaining legally separate, function more like one department. Under this proposed governance structure, the IGA would continue to provide that a single fire chief reports to both city managers. Each city manager would continue to receive policy direction in the same way as he currently does from the city council. Although the reporting relationship keeps the departments separate, at an organizational level, the proposed governance model proposes that the two departments begin functioning as much as possible as a single department. The two departments could be known publicly as a single metropolitan fire department. Administrative staff would be consolidated as much as possible at a single location. Firefighters would be able to operate out of any of the areas protected by the 16 fire stations, and work would be initiated to either merge, or normalize, labor agreements to achieve parity and the ability to cross utilize personnel. Currently, each department relies on a set of policies (including human resources, purchasing, fleet, etc.) applicable to that department’s city. Consequently, fire department staff must be familiar with and apply two different sets of policies. Under this proposed governance model, the metropolitan fire department would have a single set of policies that apply throughout the department. The city managers and fire chief would agree on whether a particular policy (for example, HR or purchasing) for the department would be Springfield’s policy or Eugene’s policy. The goal would be to use the policies from each city that work best for the combined department, with a secondary goal that the administrative burden on each city’s other administrative employees does not increase. The proposed governance model includes one major exception to the “single set of policies” objective. That exception is budget policy. To ensure that each City Council and city manager retain exclusive 5 Population estimates provided by Portland State University, College of Urban and Public Affairs Population Research Center for 2010. 6 ORS 243.746 7 Brown, Arbitrator Nancy, May 11, 2000, IAFF Local 3564 and the City of Grants Pass, OR; Lankford, Arbitrator Howell, October 25, 1999, IAFF Local 2406 and the City of North Bend, OR. Attachment 1, Page 6 of 10 control over the extent of funding provided by that city to the fire service, each city’s budget policies would continue to apply. NEXT STEPS: The ultimate goal of the fire service merger initiative is to create one organization. This step of implementing a governance model is the next step in the process and is needed to simplify administering and supporting the organization. Next steps will be to try and merge or at least normalize the two fire contracts with IAFF Local 851 (Eugene) and Local 1395 (Springfield). We will also initiate conversations with AFSCME and SEIU regarding our service work force. In addition, we will continue to work towards integrating our two departments’ information technologies systems where possible, and work to standardize the way in which we deliver support services to the two organizations. If you have any questions, please contact me. cc: Gino Grimaldi, Springfield City Manager file Attachment 1, Page 7 of 10 Attachment A Applying Eugene's 851 Contract to Springfield's 1395 Employees Title FTE Eugene FY12 Base Wages Eugene Wages adjusted for PERS3 Eugene EMT Cert Pay for FY12 adjusted for PERS3 Total Wages w/SPFD Fringe3 Springfield Current Health Plan Total Firefighter/Paramedic 45 $65,643 $69,582 $4,871 $4,105,523 $912,096 $5,017,619 Engineer/Basic 14 69,135 73,283 4,871 1,340,776 283,763 1,624,539 Captain/Paramedic 14 78,238 82,932 4,871 1,506,313 283,763 1,790,076 Captain/Intermediate 1 78,238 82,932 2,087 104,183 20,269 124,452 Engineer/Basic 1 69,135 73,283 ‐ 89,801 20,269 110,070 Deputy Fire Marshal1 4 79,789 84,576 1,218 420,528 81,075 501,603 Training Captain 1 83,824 88,853 4,871 114,850 20,269 135,118 Training Engineer 1 74,485 78,954 4,871 102,719 20,269 122,988 Emergency Medic Service Officer2 1 79,789 84,576 4,871 109,608 20,269 129,877 Other Eugene items not in current Springfield contract: FLSA Overtime Rate ‐ ‐ 1,386,187 ‐ 1,386,187 Kelly Days4 ‐ ‐ 291,997 ‐ 291,997 Medic Unit Pay5 ‐ ‐ 245,756 ‐ 245,756 Total 82 $9,818,241 $1,662,042 $11,480,283 Springfield cost of contract 9,509,613 1,662,042 11,171,655 Total Difference $308,628 $0 $308,628 Percent Change 3.25% Notes: 1Only 1 DFM has a paramedic certificate. Amount is 1/4 so the other calculations work correctly 2Eugene's EMS Training Coordinator position for comparison 3Using Eugene Wages inflated by 6% for EE PERS pick‐up and Springfield Fringe Rate of .2254 4 Kelly day assumes reduction in annual hours worked resulting in increased OT pay, reduction of 5th person off slot, and change in FLSA period 5 Medic Unit Pay (3 units, 24/365, plus 120 extras hours for late call or other OT) Attachment 1, Page 8 of 10 Attachment 1, Page 9 of 10 Attachment B Applying Eugene's 851 Contract to Springfield's 1395 Employees with Eugene Health Costs Title FTE Eugene FY12 Base Wages Eugene Wages adjusted for PERS3 Eugene EMT Cert Pay for FY12 adjusted for PERS3 Total Wages w/SPFD Fringe3 Springfield Current Health Plan Total Firefighter/Paramedic 45 $65,643 $69,582 $4,871 $4,105,523 $912,096 $4,736,783 Engineer/Basic 14 69,135 73,283 4,871 1,340,776 283,763 1,537,168 Captain/Paramedic 14 78,238 82,932 4,871 1,506,313 283,763 1,702,705 Captain/Intermediate 1 78,238 82,932 2,087 104,183 20,269 118,211 Engineer/Basic 1 69,135 73,283 ‐ 89,801 20,269 103,829 Deputy Fire Marshal1 4 79,789 84,576 1,218 420,528 81,075 476,640 Training Captain 1 83,824 88,853 4,871 114,850 20,269 128,878 Training Engineer 1 74,485 78,954 4,871 102,719 20,269 116,747 Emergency Medic Service Officer2 1 79,789 84,576 4,871 109,608 20,269 123,636 Other Eugene items not in current Springfield contract: FLSA Overtime Rate ‐ ‐ 1,386,187 ‐ 1,386,187 Kelly Days4 ‐ ‐ 291,997 ‐ 291,997 Medic Unit Pay5 ‐ ‐ 245,756 ‐ 245,756 Total 82 $9,818,241 $1,662,042 $10,968,537 Springfield cost of contract 9,509,613 1,662,042 11,171,655 Total Difference $308,628 ‐0‐ $308,628 Applying Est Savings of Offering Eugene’s Health Plan to Spld’s IAFF Members $308,628 ‐$270,000 $38,628 Applying Eugene’s Current Health Rate Per FTE $308,628 ‐$511,746 ‐$203,118 Notes: 1Only 1 DFM has a paramedic certificate. Amount is 1/4 so the other calculations work correctly 2Eugene's EMS Training Coordinator position for comparison 3Using Eugene Wages inflated by 6% for EE PERS pick‐up and Springfield Fringe Rate of .2254 4 Kelly day assumes reduction in annual hours worked resulting in increased OT pay, reduction of 5th person off slot, and change in FLSA period 5 Medic Unit Pay (3 units, 24/365, plus 120 extras hours for late call or other OT) Attachment 1, Page 10 of 10