Alternative Delivery Options for Fire & EMS Services Washington city/County Management Association Annual Conference WALLA WALLA, Washington AUGUST 18, 2016 Alice Ostdiek Stradling, Yocca Carlson & Rauth PC Seattle, Washington AOstdiek@sycr.com | 206-829-3002

Alternative Delivery Options “All or Nothing” Retain City Service New revenue options? Annexation Into Fire District Into RFA “Somewhere In Between” Interlocal Contracting Regional Fire Authority Formation Alice Ostdiek | AOstdiek@sycr.com

Framework for Analysis Political Considerations Is City control important? Levels of service and service areas? Where is the accountability? City Council? Alternate governing body? Service improvements? Ease of administration? Economies of scale? What are the labor & employment challenges? Bargaining environment Alice Ostdiek | AOstdiek@sycr.com

Framework for Analysis Financial Considerations What is the effect on levy capacity? City, FPF, EMS, other Jr. levies Do you need new revenue sources? New taxes? Fire Benefit Charge? What about capital financing needs (and challenges)? Are there timing and transition issues? Alice Ostdiek | AOstdiek@sycr.com

Paying for City Fire Services Source: State Auditor’s Office, Local Government Financial Reporting System (LGFRS) Alice Ostdiek | AOstdiek@sycr.com

Understanding Aggregate Levy Rates 1% Limit ($10/$1,000) $5.90 Limit “Other” 50¢ Other Issues Firefighters’ Pension Levy? Sound Transit Levy? Alice Ostdiek | AOstdiek@sycr.com

All or Nothing? Retaining City Fire Services Retain City control Levels of service Service areas Budget Debt Issuance Alternative tools to enhance revenues? Alice Ostdiek | AOstdiek@sycr.com

Retaining City Fire Services Additional Property Tax Options: Fire Pension Fund RCW 84.52.763 / RCW 41.16.060 Levy Lid Lift RCW 84.55.050 (50% vote) EMS Levy RCW 84.52.069 (60% vote; 40% turnout) Renewal of unexpired levy or levy lid lift – 50% vote Bond Levy RCW 84.52.056 (60% vote; 40% turnout) No replacement of equipment Other Revenue Sources Fire Benefit Charge RCW 35.13.256 (*New since 2012) City must have annexed territory since 2006 Max 60% of Department Budget 60% vote; other administrative steps REET RCW 82.46.010 and .015 (2016 Amendments) Capital Facility Maintenance only (operations thru 2016) $100k or 25% per year (up to $1 million per year) Alice Ostdiek | AOstdiek@sycr.com

All or Nothing? Annexation Change boundaries of Fire District / RFA Adds new “overlapping” district City gives up control over services Except through contract? Effect on existing levy City levy reduced by FPD/RFA levy rate FPD - Increase max rate from $3.375 to $3.60 before offset Potential for levy bumping issues (FPF, Jr taxes) Alice Ostdiek | AOstdiek@sycr.com

Mechanics of Annexation into a Fire District City* may initiate annexation into FPD ** City Council must adopt ordinance Public interest finding Fire District Board must concur County Board/Council must adopt resolution to put on ballot: "Shall the [city of . . . ] be annexed to and be a part of . . . . . . fire protection district? YES NO Requires “dual” simple majorities: 50+% approval in City AND 50+% approval in Fire District Statutory citation: RCW 52.04.061 et seq * Not available to cities over 300,000 population (Seattle) ** FPD must be adjacent to city Mechanics of Annexation into a Fire District Alice Ostdiek | AOstdiek@sycr.com

Mechanics of Annexation into a Regional Fire Authority City may initiate annexation into RFA* City Council may adopt resolution requesting annexation RFA Board may: Adopt resolution setting terms of annexation and amending RFA Plan** Return resolution and Plan amendments to City City Council must approve RFA resolution and Plan amendments Ballot measure Submitted within City only; simple majority If Plan amendments require vote of RFA, that would be separate (timing?) Statutory citation: RCW 52.26.300 * RFA must be adjacent to city ** Subject to RFA Plan requirements for amendments Mechanics of Annexation into a Regional Fire Authority Alice Ostdiek | AOstdiek@sycr.com

Somewhere In Between Interlocal Contracting Retain some control / give up some control Flexible design Relies on Parties’ continuing cooperation Finances & Debt Decisionmaking Does not provide: New revenue sources Additional debt capacity Alice Ostdiek | AOstdiek@sycr.com

Considerations for Interlocal Contracting Revenue Who pays whom? How much? From what source? Services What levels of service? Whose standards? Other Employment / Labor issues Facilities / Assets O&M costs Debt issuance? Alice Ostdiek | AOstdiek@sycr.com

Somewhere In Between Regional Fire Authority Retain some control (indirectly?) Flexible design (mostly) New revenue & debt capacity for fire Adds new overlapping taxing district Potential levy “bumping” issues Effect on existing City levies No increase to $3.60; offsets against RFA levy Alice Ostdiek | AOstdiek@sycr.com

Regional Fire Authorities RFA Basics Overview: Parties - 2+ Jurisdictions (FPDs, Cities) Formation Steps Create RFA Planning Committee Carefully draft RFA Plan Vote – Each participating jurisdiction 60% Approval if Taxes/FBCs Revenues Property Taxes FBCs Other Fees Carefully Drafted RFA Plan is Key!! Alice Ostdiek | AOstdiek@sycr.com

Review: Framework for Analysis What goals are you trying to achieve? Are the primary goals financial? Increase resources available for fire services? Relieve General Fund pressure? Grapple w/ levy limitations? New service areas? Need for new capital investments? Are the primary goals political? Improve service levels or integrate new service areas? Improve decisionmaking or accountability? Alter bargaining environment? Alice Ostdiek | AOstdiek@sycr.com

Stradling, Yocca Carlson & Rauth PC Seattle, Washington Discussion? Alice Ostdiek Stradling, Yocca Carlson & Rauth PC Seattle, Washington AOstdiek@sycr.com | 206-829-3002 Alice Ostdiek | AOstdiek@sycr.com

Alternative Fire and EMS Service Delivery August 18, 2016

Regional Fire Authority A municipal corporation in Washington State and is considered a separate taxing district. Boundaries must be coextensive with two or more fire protection jurisdictions (fire districts, city, tribal entity or existing RFA) that want to cooperate and form such an entity. Created by the vote of the people. An RFA operates pursuant to a Plan, which is formulated by a Planning Committee and approved by the voters.

Regional Fire Authority The Planning Committee is responsible to approve the RFA “Plan”. This establishes how the RFA will operate, receive revenues, and governance. The Planning Committee is comprised of three (3) elected officials from each participating entity. The Plan (and its sub-sections) are developed by the use of subcommittees. The subcommittees submit recommendations to the Planning Committee at intervals throughout the process for consideration, input, and ultimate approval.

Recommended Sub-Committee’s Organizational Design Administrative Finance Operations Prevention Facilities Human Resources Fleet Communications

Planning Committee Work Flow Planning Committee (Elected Officials) Work Product & Deliverables Identified by Planning Committee Timeline Determined and Assignments Made to Sub-Committee(s) Sub-Committee Produces Work Product and Deliverables Sub-Committee Delivers Work Product and Deliverables to Planning Committee for Consideration

Implementing the “Plan” Fire Authority Created Approved by City A Council YES Adopted by Planning Committee Approved by District Board Voted on by the People NO

Camas-Washougal Experience Alternative Fire and EMS Service Delivery Camas-Washougal Experience August 18, 2016

Camas-Washougal What We’ll Cover Description of current model Background Process Issues Results to Date

Camas-Washougal ILA Model ILA between cities of Camas and Washougal for full portfolio of Fire and Emergency Medical Services Services provided by the City of Camas Stations owned individually Apparatus and equipment owned by Camas

Camas-Washougal ILA Model Cost of service shared based upon proportionate share of three service demand factors 50% allocated based on structure assessed value Fire “protection” component 25% allocated based on population Fire & EMS “protection” component 25% allocated based on total calls for service Fire & EMS “demand” component

Camas-Washougal Background Over a 30 year history of partnership in delivery of Fire, EMS and Ambulance services Three party ILA between Camas, Washougal and East County Fire and Rescue District for ALS and transport services Revenue based cost sharing (EMS levies, lid lift) Program costs always a concern Prior efforts to explore enhanced partnership and/or alternative service delivery models did not bear fruit New Washougal Mayor in 2010 – renewed emphasis on exploring enhanced partnership

Camas-Washougal: Process 2010 - Washougal administration initiated conversation with Camas re: expanded partnership 2010-2011 – Ad Hoc Committee consisting of councilmembers from each city July 2011 - Staffing and operations consolidated on a trial basis via ILA (MOU with IAFF) Feb 2012 - RFA Planning Committee formed (Ad Hoc committee)

Camas-Washougal: Process March 2012 – Chief positions consolidated April 2012 – Overtime pools consolidated (MOU with IAFF) Early 2013 – Decision to pursue formalizing consolidation (ILA model – not RFA) Jan 1, 2014 – ILA effective for consolidation

Camas-Washougal Issues Prior suspended efforts resulted in skepticism re: efficacy of partnership generally Baby steps Re-strengthen partnership Concerns re: loss of control in decision making Concerns re: balancing different financial situations Same IAFF local in both cities - supportive Minor wage differences between cities

Camas-Washougal Findings Levy equalization issues complicate RFA consideration Consolidation offers the overall cost advantages of forming an RFA, is less complex, affords flexibility for cost sharing model, and retains policy control with the cities Consolidation could serve as a first step in forming an RFA in the future

Camas-Washougal Results to Date Enhanced services Regional policy consistency Cost neutrality Anticipated future cost savings On-going risks and challenges

Regional Fire Authority Annexation The Tukwila Experience Good evening, Mayor and Councilmembers. WCMA Conference – August 2016 David Cline, Tukwila City Administrator

The Big Takeaways After years of discussions, Tukwila chose to not annex to Kent Regional Fire Authority in 2016 There wasn’t a crisis, yet Finances didn’t pencil out – not a huge cost savings in the short term Council and Community didn’t see need for change, while the Fire Union did A Few Public Comments “We love OUR fire department, why would we change?” “We are willing to pay more to keep our OWN Fire Department” - 65 Firefighters, - 4 stations, - $11 million annual budget - 8 square miles

History Regionalization discussed for several years 2010 – Study of merging with City of SeaTac 2011-2016 – Kent Regional Fire Authority Several Workgroups and Study 2011 – First Steering Committee put on Hold as Kent RFA and SeaTac created contract model 2014 – Internal City Committee reviewed alternatives, recommended RFA as best option 2015 – Second Steering Committee, split recommendation to annex to Kent RFA 2016 – City Council decided not to annex to Kent RFA and focus on City Fire Department 2016 – City Council put public safety bond on Nov. 8 Election Replacing 3 stations and fund Fire apparatus and equipment Criminal Justice Center for Police and Courts

The Big Takeaways After years of discussions, Tukwila chose to not annex to Kent Regional Fire Authority in 2016 There wasn’t a crisis, yet Finances didn’t pencil out – not a huge cost savings in the short term Council and Community didn’t see need for change, while the Fire Union did A Few Public Comments “We love OUR fire department, why would we change?” “We are willing to pay more to keep our OWN Fire Department” - 65 Firefighters, - 4 stations, - $11 million annual budget - 8 square miles

History Regionalization discussed for several years 2010 – Study of merging with City of SeaTac 2011-2016 – Kent Regional Fire Authority Several Workgroups and Study 2011 – First Steering Committee put on Hold as Kent RFA and SeaTac created contract model 2014 – Internal City Committee reviewed alternatives, recommended RFA as best option 2015 – Second Steering Committee, split recommendation to annex to Kent RFA 2016 – City Council decided not to annex to Kent RFA and focus on City Fire Department 2016 – City Council put public safety bond on Nov. 8 Election Replacing 3 stations and fund Fire apparatus and equipment Criminal Justice Center for Police and Courts

This was a general time frame presented by the 2014 Exploratory Committee.

The Big Takeaways After years of discussions, Tukwila chose to not annex to Kent Regional Fire Authority in 2016 There wasn’t a crisis, yet Finances didn’t pencil out – not a huge cost savings in the short term Council and Community didn’t see need for change, while the Fire Union did A Few Public Comments “We love OUR fire department, why would we change?” “We are willing to pay more to keep our OWN Fire Department” - 65 Firefighters, - 4 stations, - $11 million annual budget - 8 square miles

This was a general time frame presented by the 2014 Exploratory Committee.

 Lessons Learned Know why you changing model – Financial, Service, Leadership? Do the detailed analysis Financial First, include all costs – if it doesn’t pencil out, stop there, Operational, Indirect, Capital needs, Equipment replacement Be objective – Make sure it isn’t run by the fire department Clearly state what the City will do with its excess capacity – Use it or lose it Recognize different stakeholders – Fire Union, City, Council, Community Don’t underestimate the passion “We love OUR fire department” to “I can’t believe the City Council/Mayor didn’t do this” Financial – is there a deficit? Is it negatively impacting other City Services? Service – is response time worsening? Need to close a station? Leadership/Direction –Department working well? Strong leadership?

Fire Benefit Charge – Key Issue in moving to RFA Allows charge based on need – can shift costs to Commercial from Residential Can be up to 60% of operating costs Has to be approved by 60% every six years Can vary by geographic areas, business type  

Fire Benefit Charge – Easily Explained Initial imposition of FBC requires 60% voter approval (RCW 52.26.220) Renewing existing FBC requires 60 for RFAs%, renew every 6 years (RCW 52.26.220) The FBC takes the place of the 3rd 50 cent property tax levy (RCW 52.26.240) Cannot exceed 60% of the annual operating budget (RCW 52.26.220) Imposed on personal property and improvements to real property (RCW 52.26.180) FBC is added to property tax bills County charges a fee to collect the funds (currently 1%) Formula shall be reasonably proportioned to the measurable benefits to property (RCW 52.26.180) Any other method that reasonably apportions the benefit charges is acceptable. (RCW 52.26.180) Exceptions, limitations: Property owned by religious organizations (RCW 52.26.180) Property not assessed and subjected to ad valorem taxation under Title 84 (RCW 52.26.180) Property that is subject to a contract for services (RCW 52.26.180) Low income, seniors that qualify for exemptions under RCW 84.36.381 through 84.36.389 are exempt from a portion of the FBC. 25%, 50% or 75% exemption

Fire Benefit Charge – Explained, Take 2 Kent Regional Fire Authority - Tukwila Service Area Benefit Charge Formula: Square root of total square footage X 18 X Category Factor X Fire Flow Factor X Response Factor X Risk Factor X Applicable Discount = FBC Total square footage of structure(s) Category Factors: 400 - 1,799 1,800 - 2,699 2,700 - 3,599 3,600 - 3,999 4,000 - 4,999 5,000 - 7,999 8,000 - 9,999 10,000 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 49,999 50,000 - 99,999 100,000 - 139,999 140,000 - 199,999 200,000 - 299,999 300,000 - 399,999 400,000 - 499,000 500,000 - 599,999 600,000 - 699,000 700,000 - 999,999 1,000,000 - and > Residential 0.70   Mobile Homes Apartments 1.60 3.25 6.70 8.60 11.10 14.25 Commercial 1.10 1.30 1.40 1.50 2.05 3.05 3.35 3.50 3.75 4.00 4.15 4.25 Fire Flow Factor:* 0.4923064* Response Factor:** Residental 1.00 1.35 1.65 2.25 Manufactured Homes 1.18 1.75 2.65 4.10 4.30 4.40 4.50 Risk Factor:*** Light Hazard Ordinary Hazard - 1 Ordinary Hazard - 2 Extra Hazard - 1 Extra Hazard -2 Discounts: Automatic Fire Sprinklers 0.900 Manual Local Alarm 0.980 Manual Central Alarm 0.950 Automatic Local Alarm 0.970 Automatic Central Alarm 0.925 Agricultural 0.250 *Fire flow factor is estimated until final tax and property data is certified by the King County Assessor **Response factor is based upon the number of firefighters needed to deliver the required fireflow *** Risk factors apply to commercial property, are defined by the NFPA and are assigned by inspection performed by the Fire Authority.

Tukwila Moving Forward Keep our Fire Department – Ask Voters for Financial Support for Capital Hire new Permanent Fire Chief Continue Regional Efforts through South King County Training Consortium

Questions?