Councilmember Joyce Starosciak presented the report below at the November 20, 2006, meeting of the San Leandro City Council:
Mayor Young and members of the City Council,
You have been aware of the concerns I’ve expressed about the negative financial situation due to our contract with the Alameda County Fire Department. In the Finance Committee and in session with the entire Council I have asked questions and given opinions that express my frustration with our existing contract terms and yearly budget increases. Earlier this month I spent time with the management of the Alameda County Fire Department to better understand our mutual responsibilities. The conclusion of that meeting clarified my frustration. The Alameda County Fire Department has become a public agency operating as a private monopoly with no accountability. Cost increases are unchecked and will continue to grow out of control to the detriment of the City of San Leandro.
It is time for us to do something. Until I spent the time researching this, I did not see the extent of this problem. It is likely you are not aware of all of the contract terms that put San Leandro in an egregious financial position. Here are some of the facts.
In the last 6 years, our fire contract has increased $5 M [million] dollars, going from $10 M in 2000 to $15M this year. That is almost $1M increase per year and a 50% increase over 6 years.
Each year the City Council is approached with an increase, but we are given no choice but to approve it.
Last fiscal year 05-06, in order to balance our budget, the Police department cut 8 police officers to save over $1 M . In the same year the County Fire Department asked for an $800k increase to their contract. The City Council pushed back resulting in authorization of a $600k increase. But by the end of the year, the actual overtime budget was predicted to come in at $200k over budget, which is why this fiscal year 06-07 they received more than $900k as an increase to their contract.
No matter what budget number is approved, the Alameda County Fire Department can invoice and will receive more money.
Over the last 5 years, the Year End actuals have exceeded the budget amount on average of $162k per year. The way our contract is written, we have to pay and then we have to go on to approve an increase to the contract for the next year.
For each of these overages, while the City is informed, there is no process to review and no process to refuse or reduce payments to overages of the contract. These amounts are regularly in excess of our City Manager’s signing authority, yet the Council never reviews nor approves these contract changes.
As a regular process, the County Fire Department invoices in advance for services. For example, we pay in February for services rendered in March. This creates an ongoing $1M in negative cash flow to the City Reserves.
The bargaining teams between the Firefighters and the County receive no input from any of the member agencies. San Leandro, Dublin, and Lawrence Berkeley Labs do not have a seat at the table and their Governing Bodies have no input or say in the final contract negotiations.
The most recent contract with the Firefighters was a 7 year Memorandum of Understanding with raises guaranteed each year. In the years that our own City Employees sacrificed their raises to help keep the Budget balanced, the Firefighters were not given the opportunity to help us with that sacrifice. The County held them bound to their contract.
This year we will pay $12.4M in salaries and benefits. And we will pay $1.5 M in overtime which is 10% of the total contract.
While our salary calculation is based upon the number field staff we employ, our overtime calculation is based upon the total overtime of the county. We pay about $24,000 per employee just in overtime.
In the last 3 years, the City of San Leandro has sacrificed our Planning Fire Inspector services to offset some of the increased costs. In fact, we are paying more money now for less front line staff than we have ever had.
In the last two years the Alameda County Fire Department has added a full time Public Information officer and a full time Emergency Services Manager. The County Fire Department has required us to increase our payment for these overhead services while back here in the City we still do not have our full time fire inspector and are struggling to find money to put more cops on the street.
This past year, we paid the County Fire Department over $90,000 for truck maintenance, a cost that used to be handled in-house with our own vehicle maintenance crew.
The County Fire Department intends to build and operate a Maintenance Facility using a lease/purchase program to pay for the capital improvements. They cannot guarantee that they won’t pass the capital costs on to us through their maintenance charge-out rates.
Our fire trucks and engine equipment have been sacrificed year after year to pay for the County overhead increases. We have equipment well past its useful life and the capital program reserves have been diverted to pay the additional operation expenses.
There is no expiration date for our contract. These terms will continue forever unless we, the San Leandro City Council, do something about it. The management of the County Fire Department has already told me to expect a $400 - $600k increase to their contract for next year. Half of this year’s Measure I Business License Fee revenue has already been absorbed by the County Fire Department $1M Contract increase. The rest of Measure I will be gone within two years, completely absorbed by the Alameda County Fire Department.
This is the Best Kept Secret in San Leandro. The Alameda County Fire Department is a publicly funded monopoly with no accountability. The costs for this program are growing unchecked and the impact to San Leandro’s structural deficit is detrimental.
I have spoken with Supervisor Alice Lai-Bitker about our respective roles in overseeing the County Fire Department Budget. She cannot make any decisions regarding the expansion of the Alameda County Fire Department because their budget is not part of the General Fund. It is a separate entity with their income and expenses independently managed. So if the County Supervisors and the City of San Leandro have no controls, then who does? There is no elected or appointed agency willing or able to provide control to this budget. The County Fire Department has become a privately managed monopoly off of public funds. And San Leandro has suffered long enough.
We receive services from the highest quality fire department in the area, there is no doubt about that. For our dollars, it had better be that good. However, it has come time to be much more vigilant in how we spend our money. This sounds odd, coming from me, since I’ve been pushing to spend more money for Cops and the Cherry Festival as quality-of-life issues ever since the day I was elected. However, this is very different. The Alameda County Fire Department is an agency that acts like a Contractor when budgeting time comes and they need more money. Then they act like a City Department when their costs come in higher and they need more money. They cannot and should not have it both ways.
Either they are part of our family and they celebrate with us and sacrifice with us. Or they are a contractor and will be treated as outsiders.
San Leandro has always been proud to be called a full-service City. Our employees go above and beyond the usual service expectations to make San Leandro the great City that it is. Our Firefighters have always been part of our family. They are heroes and they deserve the best equipment, training and support our City can give. All of our employees deserve the best resources we can give. None of them should be a pawn in the game of monopoly. We need to focus our resources to give them ALL the best. We need to bring the Fire Department back to the City of San Leandro.
Mayor Young, I would like to ask you to follow-up on my discussions during our Finance Committee meetings to research this further. I would like you to create a committee of the Council to quickly review this matter and consider bringing the Fire Department back into the City Family. At a minimum we should review the contract for this year’s budget cycle to create terms that are much more favorable to the City of San Leandro. I have a list of 7 items for a committee to consider in that regard.
1) Our contract with this vendor should be reviewed for renewal every 5 years.
2) Our contract increases should be capped at a limit not to exceed CPI [consumer price index] or other inflation factor.
3) The maintenance of our Fire Equipment should be brought back in house.
4) Invoicing for services should be after services are rendered by the contractor.
5) The City Council should have line item veto power of budget items we feel are not required for basic fire services.
6) Our City Manager should have a seat at the bargaining table.
7) There should be Formal Council approval when invoicing exceeds the annual contract amount by more than the City Manager’s signing authority.
These terms would create a much more favorable condition for the City of San Leandro. However, these terms treat the Fire Department as a Vendor. I want to have them back as part of our Family. A committee can better discuss all of our options.
The Firefighters that serve San Leandro deserve to be part of a family, the San Leandro Family. I ask for the City Council to help find ways to bring it back.
Thank you for your consideration.
Councilmember Joyce Starosciak
November 20, 2006