News

Fire budget sparks uncertainty

Residents call on City Council to release the details on proposal to save $1.3M

The Fire Department budget is rarely a hot topic in Palo Alto, where a healthy economy has set the stage for a smooth transition to a new fiscal year.

But as the City Council prepares to adopt the new budget Tuesday night, a proposal to slash $1.3 million in fire expenditures is stoking anxieties among some residents, who are calling on the city to be more judicious and transparent about potential cuts.

The proposal to cut $1.3 million in to-be-determined expenditures is included in the budget that the Finance Committee reviewed and approved last month. If the council follows the committee's recommendation, the budget for fiscal year 2018 (which begins on Saturday) will be adopted Tuesday night.

Even with the proposed cuts, the Fire Department's budget is set to rise by 9.8 percent, from $29.8 million to $31.8 million. By far, the biggest factor in this is the growing costs of salaries and benefits, which are set to rise from $24.8 million in the current year to $27.7 million in 2018. The rising costs are a product of both the statewide trend toward higher pension and health care costs and the city's recent contract with its public-safety unions.

In April 2016, the council approved a three-year contract with the International Fire Fighters Association, Local 1319, that gave firefighters a 7.5 percent raise spread out over three years, along with market adjustments that brought some salaries up to the level of the market median. And in March, the council voted to approve a 15.5 percent raise to the Fire Department's four battalion chiefs. As part of both contracts, the council also capped the city's contributions toward employees' health care costs.

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At the same time, the Fire Department has been mired in negotiations with Stanford University for more than four years over a new fire-services contract. The city has been providing Stanford with fire-protection services since 1976, though the two sides have been rethinking their relationship ever since Station 7 was closed in 2012. Fire Chief Eric Nickel told the Finance Committee last month that finalizing the city's negotiations with Stanford over the emergency contract is one of the department's initiatives for this year.

"I believe we're getting quite close with that," Nickel said.

The proposed budget states that while "progress has been made" in negotiations, the two sides have not yet reached an agreement on a full set of terms. Fire Department administrators are also engaged in talks with the union about "alternative staffing strategies."

"Although final agreement has not been reach(ed) in either negotiation, the City continues to pursue and anticipates being able to achieve savings of $1.3 million annually," the budget states.

Even though the city's economic climate has been relatively healthy for some time, the department has been loath to increase staffing or fill its vacancies, which currently total 14 positions. Nickel said that because of uncertainty surrounding the Stanford contract, the department has been "running with almost double-digit vacancies for a couple of years."

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"It was my fear that we would either no longer be their provider or have a dramatically different contract amount that we would have to turn around and layoff firefighters, so we've been running very lean and using overtime to fill those vacancies," Nickel said at the May 9 meeting.

The decision to cut $1.3 million in deployment expenditures won the support of the Finance Committee, which voted 2-1, with Greg Tanaka absent, to approve the proposed Fire Department Budget. Committee Chair Eric Filseth, the lone dissenter, argued that the department should do even more to cut costs and to make sure that structural expenses don't grow faster than revenues.

Filseth proposed asking the Fire Department to cut an additional $1 million in costs, though his colleagues Karen Holman and Adrian Fine would not support the additional cut. Filseth argued on May 9 that the current trends, in which the city's revenues are growing by about 6 percent while the public-safety budgets are increasing by nearly 10 percent ever year, are not sustainable for the community. Part of the long-term solution, he said, could be switching from sworn firefighters to civilian positions for medical services.

Nickel noted that cutting an extra $1 million would mean closing a fire station or, at the very least, taking an engine company out of service.

But while the Finance Committee didn't support the additional $1 million cut proposed by Filseth, it approved the $1.3 million reduction that was part of the submitted budget. This despite the fact that the budget gives virtually no indication of where exactly the cuts would come from.

For some residents, this omission is a problem. Fred Balin, a College Terrace resident, predicted that the cuts will likely come at the expense of engine service, rather than the revenue-generating ambulance-transport services. At the June 12 council meeting, Balin asked staff to be more transparent about where the savings will come from.

"Citizens have a right to know," Balin said. "The purpose of a budget process is to elicit an informed public reaction. Bring forth the details."

Mark Nadim, who lives in the Palo Alto Hills, said he and his neighbors are particularly worried about the threat of wildfires in the part of the city that abuts Foothills Park. These concerns became amplified last year, he said, as the city closed down Station 8, a seasonal station that the city had in the past opened during fire-risk seasons.

"The proposed budget cuts to the Fire Department of $1.3 million in the coming fiscal year gets us in the Foothills even more concerned as it will lead to even less available staff to man engines, or even a less number of available engines," Nadim told the council on June 5. "I urge you to take a closer look at budget and make sure there is no cut to the Fire Department budget."

For Andrew Milne, the issue hits particularly close to home. In March 2016, he suffered a cardiac arrest and was "clinically dead" before being revived by local paramedics, who arrived at his house within five minutes of the call. Milne described his ordeal at the June 5 council meeting and then returned the following week, on June 12, to urge council members not to make any cuts to the Fire Department without fully understanding the consequences.

Milne asked the council to "pause, take a deep dive and understand the factors that go into performance."

"This is not a library renovation or a pedestrian footbridge," Milne said on June 12. "Lives like mine and those of my family will be impacted by the decision you make. The council has a fiduciary obligation to protect the interest of residents of Palo Alto and protecting lives has primacy in that."

City Manager James Keene responded to residents' concerns last week, when he asserted that the city "is not concealing any information" about where the cuts will be made. He noted at the June 19 meeting that the city is currently in negotiations with the union about potential changes, which he said "are not even in place yet."

He also noted that the budget is just a plan and that it does not necessarily obligate the city to put into place the things it is considering.

The council, he added, will get a "clear explanation" of the Fire Department plan when it considers the budget on June 27.

On Monday, Nickel responded to residents' concerns with a letter in which he noted that the city is facing a gap of up to $2.6 million in reimbursements from Stanford and that, even with the proposed reduction, the department's overall budget will be going up by 9.8 percent. Without the reduction, he noted, the increase would have been 14.3 percent.

"That would have been by far the largest departmental budget increase, nearly 30 percent more than the next closest department, Police," Nickel wrote. "The increase is due primarily to wage and pension costs. In fact, the Fire Department's budget has increased by more than $5 million in the past two years."

Nickel also noted that the budget does not actually make any changes to current staffing levels.

"It anticipates them, but as we are still in discussions with our labor union, we do not have a final proposal," Nickel wrote. "If and when we do, that proposal will need to go the City Council for full public discussion and Council approval, which will not occur until this fall."

"Every model the City is considering does not reduce effective service levels," he added. "It does expect that we will be able to do some things differently."

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Fire budget sparks uncertainty

Residents call on City Council to release the details on proposal to save $1.3M

by / Palo Alto Weekly

Uploaded: Mon, Jun 26, 2017, 4:14 pm

The Fire Department budget is rarely a hot topic in Palo Alto, where a healthy economy has set the stage for a smooth transition to a new fiscal year.

But as the City Council prepares to adopt the new budget Tuesday night, a proposal to slash $1.3 million in fire expenditures is stoking anxieties among some residents, who are calling on the city to be more judicious and transparent about potential cuts.

The proposal to cut $1.3 million in to-be-determined expenditures is included in the budget that the Finance Committee reviewed and approved last month. If the council follows the committee's recommendation, the budget for fiscal year 2018 (which begins on Saturday) will be adopted Tuesday night.

Even with the proposed cuts, the Fire Department's budget is set to rise by 9.8 percent, from $29.8 million to $31.8 million. By far, the biggest factor in this is the growing costs of salaries and benefits, which are set to rise from $24.8 million in the current year to $27.7 million in 2018. The rising costs are a product of both the statewide trend toward higher pension and health care costs and the city's recent contract with its public-safety unions.

In April 2016, the council approved a three-year contract with the International Fire Fighters Association, Local 1319, that gave firefighters a 7.5 percent raise spread out over three years, along with market adjustments that brought some salaries up to the level of the market median. And in March, the council voted to approve a 15.5 percent raise to the Fire Department's four battalion chiefs. As part of both contracts, the council also capped the city's contributions toward employees' health care costs.

At the same time, the Fire Department has been mired in negotiations with Stanford University for more than four years over a new fire-services contract. The city has been providing Stanford with fire-protection services since 1976, though the two sides have been rethinking their relationship ever since Station 7 was closed in 2012. Fire Chief Eric Nickel told the Finance Committee last month that finalizing the city's negotiations with Stanford over the emergency contract is one of the department's initiatives for this year.

"I believe we're getting quite close with that," Nickel said.

The proposed budget states that while "progress has been made" in negotiations, the two sides have not yet reached an agreement on a full set of terms. Fire Department administrators are also engaged in talks with the union about "alternative staffing strategies."

"Although final agreement has not been reach(ed) in either negotiation, the City continues to pursue and anticipates being able to achieve savings of $1.3 million annually," the budget states.

Even though the city's economic climate has been relatively healthy for some time, the department has been loath to increase staffing or fill its vacancies, which currently total 14 positions. Nickel said that because of uncertainty surrounding the Stanford contract, the department has been "running with almost double-digit vacancies for a couple of years."

"It was my fear that we would either no longer be their provider or have a dramatically different contract amount that we would have to turn around and layoff firefighters, so we've been running very lean and using overtime to fill those vacancies," Nickel said at the May 9 meeting.

The decision to cut $1.3 million in deployment expenditures won the support of the Finance Committee, which voted 2-1, with Greg Tanaka absent, to approve the proposed Fire Department Budget. Committee Chair Eric Filseth, the lone dissenter, argued that the department should do even more to cut costs and to make sure that structural expenses don't grow faster than revenues.

Filseth proposed asking the Fire Department to cut an additional $1 million in costs, though his colleagues Karen Holman and Adrian Fine would not support the additional cut. Filseth argued on May 9 that the current trends, in which the city's revenues are growing by about 6 percent while the public-safety budgets are increasing by nearly 10 percent ever year, are not sustainable for the community. Part of the long-term solution, he said, could be switching from sworn firefighters to civilian positions for medical services.

Nickel noted that cutting an extra $1 million would mean closing a fire station or, at the very least, taking an engine company out of service.

But while the Finance Committee didn't support the additional $1 million cut proposed by Filseth, it approved the $1.3 million reduction that was part of the submitted budget. This despite the fact that the budget gives virtually no indication of where exactly the cuts would come from.

For some residents, this omission is a problem. Fred Balin, a College Terrace resident, predicted that the cuts will likely come at the expense of engine service, rather than the revenue-generating ambulance-transport services. At the June 12 council meeting, Balin asked staff to be more transparent about where the savings will come from.

"Citizens have a right to know," Balin said. "The purpose of a budget process is to elicit an informed public reaction. Bring forth the details."

Mark Nadim, who lives in the Palo Alto Hills, said he and his neighbors are particularly worried about the threat of wildfires in the part of the city that abuts Foothills Park. These concerns became amplified last year, he said, as the city closed down Station 8, a seasonal station that the city had in the past opened during fire-risk seasons.

"The proposed budget cuts to the Fire Department of $1.3 million in the coming fiscal year gets us in the Foothills even more concerned as it will lead to even less available staff to man engines, or even a less number of available engines," Nadim told the council on June 5. "I urge you to take a closer look at budget and make sure there is no cut to the Fire Department budget."

For Andrew Milne, the issue hits particularly close to home. In March 2016, he suffered a cardiac arrest and was "clinically dead" before being revived by local paramedics, who arrived at his house within five minutes of the call. Milne described his ordeal at the June 5 council meeting and then returned the following week, on June 12, to urge council members not to make any cuts to the Fire Department without fully understanding the consequences.

Milne asked the council to "pause, take a deep dive and understand the factors that go into performance."

"This is not a library renovation or a pedestrian footbridge," Milne said on June 12. "Lives like mine and those of my family will be impacted by the decision you make. The council has a fiduciary obligation to protect the interest of residents of Palo Alto and protecting lives has primacy in that."

City Manager James Keene responded to residents' concerns last week, when he asserted that the city "is not concealing any information" about where the cuts will be made. He noted at the June 19 meeting that the city is currently in negotiations with the union about potential changes, which he said "are not even in place yet."

He also noted that the budget is just a plan and that it does not necessarily obligate the city to put into place the things it is considering.

The council, he added, will get a "clear explanation" of the Fire Department plan when it considers the budget on June 27.

On Monday, Nickel responded to residents' concerns with a letter in which he noted that the city is facing a gap of up to $2.6 million in reimbursements from Stanford and that, even with the proposed reduction, the department's overall budget will be going up by 9.8 percent. Without the reduction, he noted, the increase would have been 14.3 percent.

"That would have been by far the largest departmental budget increase, nearly 30 percent more than the next closest department, Police," Nickel wrote. "The increase is due primarily to wage and pension costs. In fact, the Fire Department's budget has increased by more than $5 million in the past two years."

Nickel also noted that the budget does not actually make any changes to current staffing levels.

"It anticipates them, but as we are still in discussions with our labor union, we do not have a final proposal," Nickel wrote. "If and when we do, that proposal will need to go the City Council for full public discussion and Council approval, which will not occur until this fall."

"Every model the City is considering does not reduce effective service levels," he added. "It does expect that we will be able to do some things differently."

Comments

How's That Again?
Crescent Park
on Jun 26, 2017 at 6:12 pm
How's That Again?, Crescent Park
on Jun 26, 2017 at 6:12 pm

The final line of the article says: "I think the council will be able (when we go through the budget) to have a clear explanation," Keene said.

Yet the council has already been going through the budget for quite some time. The very final vote is tomorrow (Tuesday). And we still have no clue as to what $1.3 million will be cut.

Why hold off giving information until the very final day?

The article also quotes Keene as saying the city "is not concealing any information" about where the cuts will be made. Since no information has been provided, does that mean the city has no idea where the cuts will actually be? Why then project any cuts at all?

If the CEO of a private company tried this kind of obfuscation, he or she would be fired.


The fix is easy
Downtown North
on Jun 27, 2017 at 7:55 am
The fix is easy, Downtown North
on Jun 27, 2017 at 7:55 am

Ditch the out of control defined benefit pension, and switch to 401K. Even with an an employer contribution beyond what anyone in the private sector gets (say, 18K / year with no match required), the savings would be substantial. Turnover, if any, would be manageable, as there is plenty of demand for high six figure jobs that don't require a degree.

The union would probably hide behind the "California Rule" -- but the threat is empty as that precedent has been wrecked in court (the Marin County pension spiking rights case, which is to be heard and codified soon by the CA supreme court, or the SCOTUS if CA reverses the decision).


Impossible
Charleston Gardens
on Jun 27, 2017 at 8:19 am
Impossible, Charleston Gardens
on Jun 27, 2017 at 8:19 am

Calipers has buyout requirements to pull out of the state pension plan. It is priced prohibitively . For Palo Alto to switch to a 401k they would have to pay Calpers $1billion for the privilege of editing. We are trapped on a sinking ship.


taxpayer
Barron Park
on Jun 27, 2017 at 10:31 am
taxpayer, Barron Park
on Jun 27, 2017 at 10:31 am

Lets see, 500 applicants for every job opening. How many actual fires a year putting their lives on the line? And we are worried we can't find qualified replacement candidates. Let them walk and replace them with new fresh enthusiastic recruits.


Crescent Park Dad
Crescent Park
on Jun 27, 2017 at 11:12 am
Crescent Park Dad, Crescent Park
on Jun 27, 2017 at 11:12 am

Sarcasm alert.

Yes - so simple and so smart. Just chuck everybody and bring in raw, inexperienced people. While we're at it, let's throw out all of the captains and chiefs too. Bring in rookies for that as well. Great idea.


38 year resident
Old Palo Alto
on Jun 27, 2017 at 11:27 am
38 year resident, Old Palo Alto
on Jun 27, 2017 at 11:27 am

I don't know what the savings would be, but stop sending out two fire engines and crews to accompany an ambulance when someone calls 911 experiencing chest pain or any other medical emergency.


Mike
Professorville
on Jun 27, 2017 at 11:50 am
Mike, Professorville
on Jun 27, 2017 at 11:50 am

The whole concept of a "Fire Department" needs to be re-thought, here and elsewhere. The idea that we still pay trained firefighters to sleep (and eat, and food-shop, and prepare meals, and work out, etc.), and pay millions of dollars to refurbish facilities to provide for all those superfluous activities, while the number/impact of fires has dropped precipitously over the years, is ludicrous.
For starters, refocus around medical response (the vast majority of demand for "Fire Departments"); and restructure staff scheduling to be like any other organization (in the private or public sector -- like police) that needs to provide 24-hour coverage. Productivity, effectiveness, and cost reduction potential is significant.


Curmudgeon
Downtown North
on Jun 27, 2017 at 12:35 pm
Curmudgeon, Downtown North
on Jun 27, 2017 at 12:35 pm

"Nickel said that because of uncertainty surrounding the Stanford contract, the department has been "running with almost double-digit vacancies for a couple of years." "

Cut the pusillanimous flathats loose and get on with running the department for the citizens.


38 year resident
Old Palo Alto
on Jun 27, 2017 at 1:19 pm
38 year resident, Old Palo Alto
on Jun 27, 2017 at 1:19 pm

@ Mike....Great post, but you make too much sense for the bureaucrats to understand when they unable to see the forest through the unionized trees.


Chris
University South
on Jun 27, 2017 at 1:37 pm
Chris, University South
on Jun 27, 2017 at 1:37 pm

If salaries are going up 7.5% over 3 years, why was the budget going up 14% in one year?
The article gives no explanation. Are they trying to cover over the Stanford shortfall?


margaret heath
College Terrace
on Jun 27, 2017 at 3:03 pm
margaret heath, College Terrace
on Jun 27, 2017 at 3:03 pm

Removing our seasonal fire station at Foothills is a disaster waiting to happen. Are our council member's memories so short that they have forgotten the foothills wildfire some years ago that spread so quickly a row of homes along Astradero were burnt down? There are many more homes in the Palo Alto foothills now than there were then. Can't wait to see the lawsuits after the next fire in the foothills occurs, which it will sooner or later with our tinder dry summers.

Safety should be the number 1 responsibility of the city council and staff. Yet council and staff will cut the fire and ems budget tomorrow while at the same time adding $8 million to the budget for bike improvements. How about not cutting the fire department budget, restoring the summer Foothills Park coverage, and allocating $6.7 million for biking instead?


Frank
Palo Alto Hills
on Jun 27, 2017 at 3:26 pm
Frank, Palo Alto Hills
on Jun 27, 2017 at 3:26 pm
@chris
Barron Park
on Jun 27, 2017 at 5:19 pm
@chris, Barron Park
on Jun 27, 2017 at 5:19 pm

Ding ding ding. You got that right. City is making up for the Stanford shortfall by cutting service for the tax paying citizens. It's all smoke and mirrors. Services will be cut. They'll tell you they aren't cutting anything but the way they will shuffle and cross staff apparatus it will be worse than closing a station. Politically they can't close down an engine so they'll strategically brown out engines throughout Palo Alto.
Palo Alto has the cheapest run fire department due to the revenue they make from Stanford, ambulances, and fire inspectors. It's really a shame what is happening.


Willis
Another Palo Alto neighborhood
on Jun 27, 2017 at 10:10 pm
Willis , Another Palo Alto neighborhood
on Jun 27, 2017 at 10:10 pm

Why must every city in Santa Clara County have their own set of 'chiefs' who gets paid an astronomical amount of money for such a small department? We can just have one chief, we must have assistant chiefs, training chiefs, ems chiefs, battalion chiefs, and the list goes on. There seems to be too much duplication of effort in just the top ranks of the department. Is it time to look at a County wide model or regional model?


Annette
College Terrace
on Jun 28, 2017 at 7:33 am
Annette, College Terrace
on Jun 28, 2017 at 7:33 am

Maggie Heath for City Council! Her observations are right on and her simple suggestion is sensible. And painfully obvious.

As for our City Manager's reported comments: it would be great to hear straight talk for a change. How is NOT PROVIDING details effectively different from concealing?

Thank you to How's That Again for pointing out that "If the CEO of a private company tried this kind of obfuscation, he or she would be fired". What's going on here is mind-boggling.


Fred Balin
Registered user
College Terrace
on Jun 28, 2017 at 3:02 pm
Fred Balin, College Terrace
Registered user
on Jun 28, 2017 at 3:02 pm

First out the chute, How’s That Again, nailed it … and maybe more.

Within three hours of the article and his/her skewer of an indefensible position, upon instructions from the city manager, the fire chief sent personalized emails to all residents who had written to the city. In it, he stated that when his proposal for deployment service changes is ready, expected to be in the fall, it would come to a public hearing and council decision, and, in the meantime, staffing models would not change.

If this hearing goes through in a proper manner (i.e., well-written and complete staff report released 10 days prior to the meeting, an informative and clear presentation at the meeting, and council clarification questions before the public speaks), we can have a meaningful discussion to assesses the trades-offs between any reduction in fire services and budgetary needs.

And hopefully, as a result of this public outcry, prevent a repeat of budgetary hide-and-seek.


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