Loading...
HomeMy WebLinkAboutItem 04 Update on Fire Merger AGENDA ITEM SUMMARY Meeting Date: 9/10/2012 Meeting Type:Work Session Staff Contact/Dept.: Randy Groves F&LS/HR/CAO Staff Phone No: 541-726-2292 Estimated Time: 30 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: Provide Financially Responsible and Innovative Government Services ITEM TITLE: UPDATE ON FIRE MERGER ACTION REQUESTED: None. Update the Council on the costs associated with the fire merger. ISSUE STATEMENT: Since last reporting to the Council in March, Springfield and Eugene have been working together to fully consolidate the cities’ two fire departments. The purpose of this Memorandum is to update the Council on how Springfield has benefited from the merger thus far and provide information about the costs involved in fully consolidating the two departments. ATTACHMENTS: Attachment 1: Council Briefing Memo DISCUSSION/ FINANCIAL IMPACT: At its meeting of March 12, 2012, the City Council directed the City Manager to negotiate an intergovernmental agreement that implements the merger of the two fire departments and also negotiate labor agreements that reflect a merged organization. The Cities of Springfield and Eugene have been working together to consolidate their fire departments by using an incremental approach where the first step in the merger was the sharing of certain key administrative personnel. The next step in the process is to normalize the collective bargaining agreements for both cities and form a single department for operations as well as administrative personnel. An update regarding the costs and benefits of the merger is being presented to better inform the discussions regarding labor negotiations. M E M O R A N D U M City of Springfield Date: 9/10/2012 To: Gino Grimaldi COUNCIL From: Springfield Fire & Life Safety and City Bargaining Team BRIEFING Subject: Fire Merger MEMORANDUM ISSUE: Since last reporting to the Council in March, Springfield and Eugene have been working together to fully consolidate the cities’ two fire departments. The purpose of this Memorandum is to update the Council on how Springfield has benefited from the merger thus far and provide information about the costs involved in fully consolidating the two departments. COUNCIL GOALS/ MANDATE: Financially Responsible and Stable Government Services BACKGROUND: The purpose of this memo is to update the Council on the progress of the merger and provide information on the costs associated with completing it based on the following analysis: • Labor costs for Springfield associated with merging with Eugene. • Labor costs for Springfield if there was no Merger and Springfield was engaged in traditional bargaining with Local 1395. • The cost for Springfield to unwind the merger. Benefits of the Merger The merger has already benefited the City of Springfield in several important ways that are relevant to this discussion. 3-Battalion System: The 3-Battallion System provides a rapid, two department response for situations where there are several simultaneous small incidents or one large scale localized incident. The ability to draw on both departments ensures an adequate level of protection for the entire metro area. For example, in FY 12 there were 37 calls in Springfield that before the 3-Battallion System would have most likely resulted in extra overtime costs because extra personnel would have had to been called back to assist. The merger could offer other similar reconfiguration opportunities, particularly for emergency medical transports. Apparatus / Equipment Purchasing and Sharing: Both departments must purchase specialized equipment that is often costly. During the administrative consolidation both cities have come up with methods for sharing equipment or purchasing items together that take advantage of economies of scale. For example, the two departments have an intergovernmental agreement to share reserve apparatus. This agreement was utilized when Springfield did not have a tower truck and was able to use Eugene’s reserve apparatus. Then, by using Eugene specifications, Springfield was able to save approximately $200,000 when they subsequently purchased their own tower truck. Eugene and Springfield were also awarded a $400,000 grant to replace extrication equipment resulting in both departments having the same equipment, replacement parts and standardized procedure. In addition, the cities are working on a joint bid for replacing MEMORANDUM 9/6/2012 Page 2 ambulances, increasing savings by taking advantage of economies of scale. This cooperation also extends to more ‘every day’ equipment as well, where the cities will be able to realize cost savings by ordering larger quantities of the same types of equipment. Joint Recruitment /Selection: In 2011 Springfield and Eugene began participating in a joint recruitment and selection process that included a joint Firefighter Recruit Academy. The savings from the joint selection process in FY 13 was $15,000 and the estimated costs from running a joint recruit academy was approximately an additional $15,000 because the merged training staff was able to deliver the training without bringing in line personnel to assist and resulting in additional overtime costs. Sharing in Administrative Staff Costs: The administrative staffs of both departments have been combined to achieve cost savings and efficiencies for both cities. For example the cost savings for Springfield since FY 11 are as follows: FY 11 $285,952; FY 12 $413,608; FY 13 $573, 608. Those efforts were increased this year when both cities shared an EMSO position that was paid for by Eugene. Consolidation of the Fire Marshal’s Office has also produced positive results in that personnel have been able to work back and forth between the cities during periods of lost time due to injury, sick leave and personal leave. Shared Software: Sharing in computer software has also helped the cities save resources and be more efficient. Both organizations use the same records management software and have just jointly purchased a staffing program. In addition, the departments coordinated for FCC compliance for spectral efficiency (narrow banding) Joint Work on Strategic Plan/Work Plans/Standard Operating Procedures: Collaboration in this area may not bare the same type of savings as evidenced by sharing equipment, but improving strategic plans, joint operating standards and work plans will decrease potential, costly legal liability by providing service that is more safe, efficient and consistent. Since the administrative consolidation the departments have updated all of the Standard Operating Procedures, developed a Metro Training Manual, a Metro Fire Strategic Plan and Metro Fire Work Plan. Future Benefits of the Merger: A merged organization will also bring added flexibility that will result in providing a better, more cost efficient service to the public. For instance, in a larger system management will have the ability to configure staffing differently by not requiring all firefighters to have the paramedic certification and thus be required to pay the associated costly Paramedic Incentive Pay. Management will also have the ability to move personnel between the two cities, resulting in a savings in Overtime costs. Other areas of potential cost savings include joint purchasing and ambulance billing. Other Cost Saving Opportunities: Outside of the fire department there are other possible savings that may be realized as a result of the merger discussions. City-wide, the City of Springfield has considered looking at self-insurancing for employee health insurance coverage but with the possibility of merger fire departments with Eugene, who is already self-insured for employee health insurance, the possibility of doing so became an active project. Currently the City is working with our benefits consultants and our current health plan carrier to develop an option for self-insurance that could potentially save the City city-wide up to $250,000 annually for this employee benefit coverage. MEMORANDUM 9/6/2012 Page 3 Labor Costs to Merge with Eugene: In order to merge the two labor contracts, Eugene and Springfield must address wage & benefit issues such as Kelly Days, PERS pick-up, base wages and incentives, Medic Unit Ride Time Incentive Pay, deferred compensation account contributions, scheduling days off and overtime pay as well as a number of smaller issues. Earlier cost estimates were made after making certain assumptions about how the two contracts might be normalized in a one or two year approach; however we are finding that normalizing the contracts will most likely occur over a four year period. Labor negotiations for a single contract ended on June 30, 2012 and the current negotiations that are tentatively looking at a three year agreement ending on June 30, 2015. The flexibility to consider different time lines for implementing different aspects of the contracts has become invaluable and has allowed both the City and the Union to consider alternatives. A more detailed discussion of these costs will be discussed in the Executive Session. Another issue relevant to the labor costs involved in the merger will be what kind of communities a merged Springfield/Eugene fire department will be compared to when determining future wage levels. As we have previously discussed, Oregon law requires public employers to set their wages at a level that is in line with communities of similar size. Once the departments merge they will most likely use the same comparables currently utilized by Eugene. Eugene’s comparables are Salem, Gresham, Hillsboro, Beaverton and Springfield. This selection of cities includes the Tualatin Valley Fire and Rescue District and their analysis for this bargaining cycle shows them to be approximately 4% behind their comparables for wages. Labor Costs associated with the Springfield Firefighters Union if there were no merger: City management has used traditional comparable analysis as a guide in crafting the plan to normalize the two collective bargaining agreements. Our most recent analysis using our comparables of Albany, Bend, Corvallis, Eugene and Medford show that Springfield currently lags behind the average by approximately 4% (approximately $380,000). If we look at the comparables the union will argue are relevant, Springfield is approximately 5.8% behind in wages (approximately $551,000). Costs to Unwind the Merger: If Springfield were to unwind the merger, the City would be subject to the costs involved in traditional bargaining discussed above ($380,000-$551,000) plus the cost to reconstitute its own administrative staff of a Fire Chief, Deputy Chief, and two Program Technicians ($475,773). In addition, the City would lose the efficiencies and cost savings associated with sharing equipment and purchasing items together along with the opportunity to provide better service to the greater community by reducing redundant operations and realizing savings on administrative and overtime costs.   RECOMMENDED ACTION: None.