Stand up or bow down

Tuesday will be a day of reckoning – perhaps the first of many – for newly elected Vice Mayor John Knox White.

Since 2017, the fire department – acting, no doubt, with the knowledge, if not at the direction, of the Alameda firefighters’ union – has tried twice to get Council to add a new, highly paid management position to its command staff.

Both times, Council members Jim Oddie and Malia Vella, who owe their seats to the firefighters’ union and its comrades in organized labor, readily endorsed the proposal.

But both times, it failed to attract the third vote necessary for a majority.  Mayor Trish Spencer and Councilman Frank Matarrese were opposed, and then-Councilwoman and now Mayor Marilyn Ezzy Ashcraft declared herself unconvinced.

Now, however, Ms. Spencer and Mr. Matarrese have left the dais.  Ms. Ashcraft has taken the mayor’s chair, and Tony Daysog and John Knox White have replaced Ms. Spencer and Mr. Matarrese.

It is possible that, having twice found fault with the idea of spending so much money to create another managerial slot for the fire department, Ms. Ashcraft will change her mind this time.  But unless she has become more willing than she has said in the past she is to buy a pig in a poke, she should remain a no vote.  For his part, Mr. Daysog surely will be disinclined to do any favors for those who funded and/or spearheaded the smear campaign against him in the last two elections.  So count him as a likely no, too.

If these predictions are right, four of the Council members will split 2‑to‑2 – and Mr. Knox White will find himself squarely in the limelight (which he may enjoy) and on the hot seat (which he may not).

As we recently noted, it has been said that the firefighters’ union’s endorsement and financial support come with a price.  And Mr. Knox White got both benefits during his successful campaign:  the union endorsed him, and the IAFF Local 689 PAC, according to its campaign finance disclosure filings, spent $10,116.17 promoting his candidacy.  (Mr. Knox White and Mr. Oddie formed a “can-do team who will protect our 911 and quality of life services,” said one mailer paid for by the union.)  We have every reason to believe that former firefighters’ union president and current Fire Deputy Chief/Division Chief Jeff DelBono will come knocking on Mr. Knox White’s door if he hasn’t already.

(Once again, we’re uncertain about Mr. DelBono’s correct title.  A recent article in the union’s house organ, the East Bay Citizen, referred to him as “deputy chief.”  But when we asked Sarah Henry, the City’s Public Information Officer, to identify the members of the current fire department management team, she reported that Rick Zombeck was still the “deputy fire chief,” and Mr. DelBono was the “B Shift Division Chief,” having been appointed to that position on January 6, 2019.)

At the Merry-Go-Round, we don’t know whether Mr. Knox White will answer Mr. DelBono’s knock, and we wouldn’t presume to advise him how to respond when it occurs.  (Not, of course, that he’d ever ask us for advice.)  But we think it’s instructive to review how the issue has landed once again on the Council agenda.

Fire Marshal block quoteThe push to add a new fire management position really began in April 2017, when the department convinced a majority of Council to turn the existing fire prevention bureau, which at the time had two civilian employees, into a fire department division staffed by three union firefighters (as well as the two civilians).

One of the three union firefighters would hold the rank of captain, and it was his stated responsibility to supervise the inspectors.  But when then-Fire Chief Doug Long presented the proposal, he informed Council that, in addition to a captain, a job should be created for a new division chief to oversee the bureau.  “[We] need that position,” the Chief said, “but we’re willing to study it, see what we can get with the implementation of the fire prevention bureau, and come back at a later date with an analysis of where we stand on the work we’re getting done.”

The later date turned out to be one month later.

As part of the process of preparing the budget for fiscal years 2017-18 and 2018-19, staff solicited requests from every City department for new spending.  The fire department asked for money to replace a fire engine and an ambulance – and for $306,000 to create a new senior management position beginning in FY 2018-19.

At the time, the fire department’s management team consisted of the chief, a deputy chief, and four division chiefs.  It wasn’t clear exactly what the title of the new position would be – the staff report said it was “deputy chief”; the slideshow presentation called it “division chief/fire marshal” – but the stated job description was to “provide Management and oversite [sic] of the Fire Prevention Bureau (FPB) and Disaster Preparedness Division.”  (Bringing the latter division under the new chief’s wing didn’t impose much of an extra burden, since its only employee was a fire captain assigned to the new Emergency Operations Center.)

When Chief Long explained the request to Council, he didn’t have much to add.  The new division chief/fire marshal, he said, would “oversee the new fire prevention bureau and disaster preparedness with the construction of the new Emergency Operations Center, continuing and scheduling training, resiliency for the City – there is a lot of interaction with outside agencies – to develop a plan and coordinate the needs of the City.”

This was a little too vague for Mr. Matarrese.  The Councilman asked the Chief – four times – if any of the services currently being provided by the fire department would suffer if the new position was not authorized.  Ultimately, Chief Long conceded that there would be no impact on the department’s ability to respond to emergencies.  Rather, not having a division chief would undermine the effort to “build a robust fire prevention bureau.”  Nevertheless, he acknowledged that the duties contemplated for the new chief could be “shared” by current fire management.

At this point then-City Manager Jill Keimach threw Chief Long a lifeline – and what was perhaps the real reason for the proposal to establish and fund a new senior management position emerged.

Since 2013, the salary and benefits of one of the four division chiefs had been paid with funds provided by a grant from the County for the “community paramedicine program.”  But that grant was due to expire in November 2017.  If it was not renewed, the fire department would lose funding for a division chief.  By creating a fifth slot now – and committing to spend City funds to pay for it – Council could ensure that the size of the fire department management team wouldn’t be reduced if that happened.

Mr. Matarrese wasn’t persuaded.  Neither was Mayor Spencer.  And when Ms. Ashcraft stated that the proposal for a new division chief “gives me pause,” staff concluded that there wasn’t a majority on Council who favored it, and they didn’t include it in the final two-year budget proposed and later adopted.

The budget came up for “mid-cycle” review in May 2018, and the fire department was back at the trough, proposing two new positions to be added in the upcoming fiscal year – a “fire captain/training” . . . and a “fire marshal,” whose job description was remarkably similar to the one for the previously requested “division chief/fire marshal”:  to provide “Management and oversight to the AFD’s Fire Prevention and Community Paramedicine Program.”  (At the same time the fire department was asking for the new fire-marshal position, it also was seeking a supplemental appropriation to keep the community paramedicine program – with its funding for one of the four division chiefs – going through November 2018.)  The estimated cost for the new position went from $306,000 for the “division chief/fire marshal” to $365,723 for the “fire marshal.”

By this time, Chief Long had retired, and Edmond Rodriguez had become fire chief.  With all due respect to Chief Long, Chief Rodriguez was a smoother politician than his predecessor.  Before the budget workshop, he dropped the request for a “fire captain/training” so that he could focus on the fire-marshal position.  And, in his presentation to Council, he emphasized how “critical” – he used the word three times in the space of a few minutes – it was to create the new job.  “[I]f we really want to keep Alameda the best fire-safe community in our county,” he proclaimed, “it is a paramount position that is sorely needed.”

This time, it was Mr. Oddie rather than Mr. Matarrese who asked about the consequences of not granting the department’s request.  “I have a real hard time filling my chief officer ranks because of the workload, and this actually will help alleviate some of the workload on the existing chief officers that I do have and also my [own] workload,” the Chief replied.  “We’re coming up on a number of critical chief officer retirements in the future, and I’m really struggling to get qualified applicants to even step into the job because they know what the workload is for those who have had the job before them.”  (It appears that this prospect didn’t faze the most recently appointed division chief, Mr. DelBono.)

So, if we didn’t create the new job, you’d be more of a fire marshal than a fire chief?  Mr. Oddie continued. “More than likely,” Chief Rodriguez replied.  Well, Mr. Oddie sniffed, “Correct me if I’m wrong, but we hired you to be a fire chief.”

Chief Rodriguez also was ready with an answer when Ms. Ashcraft expressed concern about authorizing a new “PERSable position” – i.e., a job that would require the City to spend General Fund money not only to pay a salary but also to make pension contributions.  There’d be no need to tap the General Fund, the Chief suggested, because the salary and benefits for the new fire marshal could be paid from new and increased fees assessed for fire department services.  Indeed, the department had hired a consultant to perform a “fee study” to pursue precisely this option.  “I’m very confident,” the Chief said, that the additional expense created by the new position “could be cost-recoverable once the position’s up and running. . . .”

And then he offered an analogy:  “Every day the fire department walks by a pile of cash on the table.  It’s ours.  We just have to have the ability to pick it up.”

Not surprisingly, this analogy didn’t sit well with Mayor Spencer – that “pile of cash,” she said, belonged to the taxpayers, not to the fire department – and both she and Mr. Matarrese opposed the proposal for the fire-marshal position.  So did Ms. Ashcraft – in her own way.  “I can’t, in good conscience, support” the request, she said.  “I’m enthused to hear about the fire department cost recovery plans, but I don’t think we can base a budget on projections.”

Once again, not hearing a majority in favor of the proposal, staff dropped it from the list of mid-cycle amendments to the budget.  But at the meeting at which Council voted on the amendments, Mr. Oddie brought up the topic of the fire marshal again and got all of his colleagues (except Ms. Spencer) to agree that staff could renew the request after the “fee study” commissioned by the fire department had been done.  The consultant chosen to perform the “study” was a firm called NBS, whose website touts its expertise in showing local governments how to “uncover opportunities to decrease the pressures on general funds and increase the revenue needed to ensure the quality of life and business for those in your community.”

So now, nine months later – with the election occurring in the meantime – the fire department is back again with a proposal for “adding a Fire Marshal at the Division Chief level.”

Once again, the primary job for the new chief is to “Manage the Fire Prevention Division and assigned personnel [i.e., a captain and two firefighters].”  The staff report states that none of the current five division chiefs (which includes the deputy chief) has the “capacity to oversee” the fire prevention bureau.  (This is somewhat ironic, since the last job held by the most recently appointed division chief – Mr. DelBono – was to act as the captain in charge of the bureau.)  The staff report goes on to list 13 other tasks the new fire marshal can perform, and we don’t doubt that, if thrown a softball by Mr. Oddie or Ms. Vella at the March 5 Council meeting, Chief Rodriguez will be able to expand the list.

According to the staff report, the new fire marshal will cost the City $118,000 in salary and benefits for the remainder of FY 2018-19 and $355,000 annually thereafter, assuming no raises.  (This amount, the report notes, does not include any additional costs resulting from subsequent PERS contribution rate increases.)  In addition, the fire department wants to buy the fire marshal a $70,000 staff car.

And how is the City going to pay for this new position?  The answer should come as no surprise:  Just as Chief Rodriguez predicted it would, the fee study purports to show that new and increased fees will cover 97% of the cost of adding the fire-marshal slot next year.  According to the study, the new fee schedule will boost fire-department fee revenue by $347,571 in the first year, with further increases expected in later years due to planned annual hikes in the fee amounts.

The list of proposed increases in existing fees goes on for five pages.  In addition, Alamedans (or their insurers) will be required to pay two fees the City never previously assessed:  an “EMS First Responder Fee” and a “Vehicle Accident Collision Fee,” each of which is set at $388 per “incident.”  So that heart attack or fender bender is going to cost even more for any resident unlucky enough to experience one.  And imagine:  Some fools thought there were services they got just because they paid their taxes!

Needless to say, a fee study like the one commissioned by the fire department contains a host of assumptions, both in setting fees and estimating revenues.  How long does it take a fire inspector to conduct the “initial occupancy inspection” of a residential building with 3 to 10 units? What is the “fully burdened hourly labor rate” – which includes the cost of “division administration” – for performing that task?  What percentage of the resulting cost does the City want to “recover” as a fee?  (Those who say, “Whatever percentage is needed to raise enough cash to give the fire department what it wants,” can go stand in the cynic’s corner in the classroom.)

All those questions need to be answered to set the amount of just one fire inspection fee.  (The assumptions made by the study are two hours, $306 per hour, and – for the first year – 43%.)  And then, to determine how much revenue the fee will generate, one needs to estimate how many inspections in this category the inspector will perform annually.

Coming up with estimated annual revenue of $847,541, as the fee study does, requires this process to be performed many times over.  And – dare we say it – the more assumptions and computations one has to make, the greater the uncertainty of the final result.

If they follow their usual practice, Ms. Ashcraft and Mr. Knox White, and maybe Mr. Daysog, can be counted on to go through the appendices to the fee study – that’s where the data is – line-by-line.  But should they choose to look beyond the study itself, they’ll find that the fire department’s track record as a financial prognosticator isn’t exactly reassuring.

When Council was asked in April 2017 to authorize the three new sworn positions for the fire prevention bureau, the staff report estimated that increased inspections would generate $355,000 annually in additional fee revenue.  To keep tabs on this prediction, the report promised that, “Starting in January 2018, the Fire Department will present on an annual basis a report to the City Council on the number of commercial and residential inspections both needed and completed, percent of total scheduled inspections completed, and revenue generated by type of inspection.”

In fact, the fire department has presented only one report to Council about the operating results of the new fire prevention bureau.  In March 2018, Council got an “update” that contained data on the number of inspections – but no information about fee revenue.  At our request, Ms. Henry searched for other similar reports and couldn’t find any.  So we asked Finance Director Elena Adair if she could help – and she could.

Here’s the data she reported:  In FY 2016-17, the last fiscal year in which the fire prevention bureau operated with only civilian personnel, the City collected $245,029 in plan check, inspection, and hazmat fees.  The next year, with three firefighters now on board, the amount rose to $499,790.  For FY 2018-19 YTD (which includes the last six months of 2018), total fees are $312,435.

So the estimate of $355,000 in increased annual fee revenue appears to have been overstated, if not egregiously so.  But it doesn’t come close to covering the costs of bringing three union firefighters into the fire prevention bureau.  We asked Ms. Adair for this data, too, and here’s what she reported:  $53,782 in salaries and benefits for the new sworn personnel and $73,088 in startup equipment costs in FY 2016-17; $624,202 in salaries and benefits and $125,555 in startup equipment and “recurring costs” in FY 2017-18, and $309,791 in salaries and benefits and $7,718 in operating expenses in the first six months of FY 2018-19.

But the fire prevention bureau wasn’t sold as a division that would turn a profit for the City – or even pay for itself.  That distinction belongs to what was called the “Basic Life Support Transport Program,” which the Council led by Mayor Marie Gilmore approved back in February 2012.  Under this program, the fire department would provide, for a fee, “inter-facility” transports like taking a patient from a hospital to a nursing home.  Then-Fire Chief Mike D’Orazi  pitched the program as a money-maker for the General Fund:  in its first year of operation, he said, it would generate $342,911 in revenue and produce a net profit of $72,879; in its second year, the numbers would rise to $488,221 in revenue and $218,853 in net profit.

Well, it didn’t quite turn out that way.  After the two-year “pilot” period for the program was up, Chief D’Orazi returned to Council, hat literally in hand, to request an extension for another year.  He presented Council with a chart showing that the total revenue generated by the program in FY 2012-13 and FY 2013-14 was only $384,033.  This wasn’t enough even to cover expenses, and the net operating loss over the life of the program came to $4,208.  So much for being a money-maker.

Despite these results, Council agreed to extend the program for another year.  (If you remember who was sitting on Council at the time, you’ll understand why.)  But it instructed Chief D’Orazi to report back in a year about the results of his efforts to turn the program around.

He never did.  Instead, the BLS program disappeared entirely from the scene – except for the slide in the fire department’s FY 2014-15 budget presentation stating that “suspension” of the program would yield “projected departmental savings” totaling $279,000.  True enough – costs usually stop when the activity does.

This Tuesday, maybe Chief Rodriguez and his consultants will be able to persuade Mayor Ashcraft to jettison her previously expressed reluctance to spend real dollars today based on projected receipts in the future.  And maybe Mr. Knox White will decide that the fee study offered to justify the new position is just as reliable as the transit studies used to devise TDM programs with which he is intimately familiar.  We just hope that, if an objective analysis leads to a different conclusion, he won’t let obeisance to – or fear of – Mr. DelBono determine his vote.

Sources:

FY 2017-18 proposal: 2017-05-17 staff report – budget workshop; 2017-05-17 Presentation

FY 2018-19 proposal: 2018-05-18 Presentation – REVISED

Current proposal: 2019-03-05 staff report re new fee schedule & division chief; 2019-03-05 Ex. 1 to staff report – Fee Study

Fire prevention bureau: 2017-04-18 staff report re adding new positions; 2018-03-06 Presentation

BLS program: 2014-06-17 presentation re BLS

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in Budget, City Hall, Firefighters and tagged , , , , , , , , , , , , , . Bookmark the permalink.

5 Responses to Stand up or bow down

  1. Steve Gerstle says:

    Have we had fewer fires since hiring three fire prevention officers?

  2. Paul Beusterien says:

    What happened on Tuesday?

  3. continually municipally disappointed says:

    The fee discussion made me laugh out loud – as a small rental property owner (cue the sinister music), my experience is that AFD NEVER fails to miss its annual ‘inspection’ (seriously, like clockwork) which involves checking the date tag on 2 fire extinguishers at the rear of the building.

    And those guys (a whole truck full of them) are SO prompt in their billing ($150 for that 3 minute ‘inspection’ – it honestly takes them longer to block traffic/park and disembark from their massive truck than it does to walk down the driveway) that I can’t WAIT for that next bill when this nonsense is approved. I’ve often quipped they’re far busier (and more effective at?) doing inspections and sending out bills than putting out any actual fires. (Plus they don’t have to call Oakland for back up!)

    Perhaps they could collect additional fees by charging Safeway, Trader Joes and Starbucks a fee for the honor of parking their trucks outside – or maybe they could start charging all the little kids who want to stop and look at their firetrucks? Rescued cat fees? Anyone? Cause you know, it’s all about making Alameda the ‘most fire safe city in the country.”

  4. courtenayonline@gmail.com says:

    I really appreciate your posts.

    Sincerely,

    Courtenay

    Courtenay Davis courtenayonline@gmail.com 510-333-1049

  5. Michael Henneberry says:

    “Alameda Merry Go Round”? More like the Friday Fish Wrap.

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