With the contract dispute between Palo Alto and Stanford University over fire services dragging into its fourth year, the two parties have reached an interim deal that will maintain the 40-year partnership between the local Fire Department and the university at least until June 30, 2017.
The agreement, which the City Council unanimously approved last week, ensures that the city will continue to provide fire services to Stanford for a fee of $4.8 million. This would bring Stanford's total fee for the year to $6.2 million, about $1.9 million less than the city had budgeted for.
The nine-month contract is the second stop-gap agreement that the council approved this year, as negotiations between the two institutions continued to drag on, hampered by disagreements over staffing levels and costs. In January, the council approved a contract that expired in October. The new agreement covers the period between Oct. 9 and June 30.
The city has been providing services to Stanford since 1976, under a 50-year agreement that gives each party the option to terminate. In October 2013, Stanford notified Palo Alto about its intention to exercise the option.
Though both sides agree that the service level remains high, Stanford maintained that it is being significantly overcharged. In 2012, fire services at Station 7, near the Stanford Linear Accelerator (SLAC) in Menlo Park were transferred from Palo Alto to the Menlo Park Fire Protection District.
Stanford argued over the course of negotiations that the station's closure should significantly reduce the university's fees, from about 30 percent of the Fire Department's total costs to about 15 percent.
City officials countered that the costs of providing Fire Department service, which includes medical response, far exceeds the revenues the department receives from user fees. In a June 2015 letter to Stanford, City Manager James Keene noted that the city has a long-standing policy of not offering city-funded services at below cost to surrounding communities.
"Stanford's unwillingness to contribute to this gap presents Palo Alto with a dilemma," Keene wrote. "Is the university asking the city's general fund subsidize service to the campus, or is Stanford requesting a lower service level than provided in the city and historically at Stanford?"
The new contract suggests that the two sides have inched closer to an agreement since then. Both now acknowledge that Stanford's contribution will fall below historical levels.
Both are also expecting to see some service changes in the years ahead. While the Palo Alto Fire Department no longer oversees the SLAC station, it continues to operate one fire station Stanford campus: Station 6 at 711 Serra St. This will continue, at least in the near term, though the contract indicates that staffing levels may soon change.
According to the new contract, Stanford and Palo Alto have agreed on a new staffing model that intends to "reduce the costs of providing services while maintaining services standards." The city and the university have agreed that the reduced-staffing model is "appropriate," the contract notes, though it doesn't specify the new staffing levels. Furthermore, the reduced staffing levels have yet to be implemented because of state laws that require the city to meet and confer with the firefighters union, the International Association of Fire Firefighters, Local 1319. Thus, Station 6 continues too be staffed with eight firefighters, even though Stanford's contribution to the city has decreased.
Fire Chief Eric Nickel said the city and Stanford are still trying to figure out exactly what the new service model will look like, Over the course of the city's negotiations with Stanford, both agencies and the firefighters union have considered various alternatives for providing fire services both to Stanford and to the Palo Alto community. The goal, Nickel told the Weekly, is to find a model that allows the department to meet its goal of responding to a call in 8 minutes or less at least 90 percent of the time while at the same time keeping the "unit hour utilization" (a measure of how busy each firefighter is) at 30 percent, which allows for things like fire inspections, prevention efforts and training.
The department hasn't yet determined what the new service model will look like, Nickel said. But the city is already preparing for a decrease in Stanford contributions. Recent statistics from the Fire Department suggest that, at least on the basis of calls received, the decrease is justified. According to a quarterly report the department released in late November, the Fire Department responded to a total 2,215 calls for service in the first quarter of fiscal year 2017 (which began on July 1). While 83 percent of the calls were generated from Palo Alto, only 12 percent were from Stanford, the report stated (the rest from from neighboring cities or requests for regional fire deployment).
In a recent discussion of the city's long-term financial outlook, city officials acknowledged that Stanford's fire fees are among the "known unknowns" of the coming budget season. In November, the council Finance Committee considered a report from budget staff that outlined a series of items that contribute to the structural deficit in the city's budget. This included a reduction of about $2 million annually in Stanford's contract payments for fire services.
Nickel said that while the two sides haven't completed their negotiations over fees, they are getting close.
"I believe at the end of the day we're still Stanford's fire department," Nickel said. "It's going to look different and right now, we're working through the different options of what can look different."