Letter to Olympia City Council opposes proposed regional fire authority

Larry Dzieza sent this to the Olympia City Council earlier today. 

Dear Olympia City Council,

I believe I have followed the development of the proposed Regional Fire Authority (RFA) more closely than any other non-government person. I did so because Olympia’s excellent fire and emergency services are important to me, my family and my community. I attended meetings, did public records request to get information about the hows and the whys of the proposal. 

I researched the other RFAs that have Fire Benefit Charges (FBC), contacted other states, and spoke with legislative staff for the committees that have the RFA code under their jurisdiction. I even created an online calculator that estimates the cost for apartments, single-family homes and businesses. I was also the sole non-fire person at the RFA Town Hall and had an opportunity to hear and talk with both city managers, the fire chief on other fire personnel. You might say, I’ve done a deep dive into it. Here are my conclusions.

This is a manufactured crisis. 

There is no evidence whatsoever that the City of Olympia cannot continue to provide and even improve its emergency services. In fact, you are well on your way to do that already with the CARES and Basic Life Support. Moreover, we know that what is driving response times is medical, not fire emergencies. 98% of callouts are non-fire related. 

There is evidence to the contrary that you lack the capacity with current revenue sources to maintain and enhance fire department activities. The advocates argue that the RFA offers a more “sustainable” revenue source. No, it does not. It narrows the revenue types to two, many less than the streams of revenue going to the general fund today, such as the sales tax and B&O tax. And this so-called sustainable tax still must go to a vote of the people but would need a super-majority. The property tax will also need periodic levy lifts to maintain purchasing power. And any future city council could withdraw from the RFA at any time, according to the RCW. So how is this more reliable? 

I watched the Planning Committee struggle at many meetings to come up with compelling arguments for the RFA.  Frankly, it was shocking to see how hard it was for them to come up with a compelling and documented rationale.  Repeatedly, members of the Committee referred to the need to “sell” this to the public.  Ultimately, in the absence of data, they fell back to the argument that “we are the experts, and you just have to trust us”. 

When I directly asked both fire chiefs in the presence of both city managers whether the huge increase in funding would reduce response times to the level they set to alarm the public, the answer was, “no, we can’t say that.” 

The 2019 “Regional Fire and Emergency Services Study’ that kicked-off the selling of the RFA actually states that Olympia is not stressed. (The full study is attached to this article.)

The graphic below is from page 68 of the report. Olympia had a score of 14.73, actually better than the “ideal commitment range”. The study advises, “Units in the study area departments that are at or approaching 25 percent utilization should be monitored and evaluated for consequences of the workload and the potential need for additional resources.”

Another sign of Olympia’s capacity is that it is the largest donor of services to other fire departments. The 2019 study graphic below shows that Olympia (OFD) responded to other jurisdictions 3 times more than it received. 

The RFA never demonstrated that competition for dollars in a city government means inadequate funding.  It may not be the 45% increase a department may wish they had, but from a taxpayer's perspective, that is exactly what we want our elected officials to grapple with. 

Our city has competing demands and limited resources. Protecting a function like fire and emergency services from the essential priority-setting function of the Council ensures higher spending without motivation for rigorous oversight.  Worse, because it would be another level of government, the already inadequate public scrutiny from the media would assure that the public will not be informed or engaged.  Witness me being the sole “civilian” at the October 20 RFA Town Hall meeting. 

The argument of competition harming our safety is countered with 100-plus years of our fire department competing with city services that nevertheless has allowed it to become, until recently, second to none in Washington state for a city its size. Indeed, it is only behind Seattle because our state’s largest city moved up one level last year.  

There would be no efficiencies from this consolidation. 

Far from it. The proposed budget and worksheets show greater inefficiency. Almost a $1 million a year in duplication and overlap of work is currently done as part of the cities’ regular workload. The RFA plan calls for new hiring for budget, accounting, HR, IT, legal, and communications – nine FTEs in total. These are not staff to respond to emergencies. They are duplicated administrative positions that will cost as much as buying a new fire truck every year for cash. 

There is no advantage from consolidating Tumwater and Olympia that cannot otherwise be realized through interagency agreements. This was even suggested by the 2019 study on consolidation.

While the RFA Committee talks about efficiencies from regionalization, this is not a regional proposal. That same 2019 fire study analyzed regional fire authorities that included the largest city, Lacey, and this proposal does not. The reason is that Lacey looked at the cost and benefit of regionalization and came to this conclusion and unanimously rejected joining, as indicated in this excerpt from an August 2020 letter from then-Lacey Fire District #3 Commissioner Gene Dobry to Tumwater City Manager John Doan"

“…our careful review and deliberation of the findings in the ESCI Study do not offer any apparent enhancements to service delivery or positive impacts to associated costs for our citizens and taxpayers. To the contrary, the initially published fiscal analysis and subsequent more detailed review with the consultant outline anticipated increased costs to our citizens without any clear statement regarding added value.”

Follow the Money. This is a huge, $10.5 million tax increase that drives a 45% increase the budget in one year! And the way it is funded is through a FBC that has been inaccurately presented to you and the public throughout the process. 

The same consultants have cookie-cutter the same solution as other RFAs

They are selling a product. A product that produces a regressive tax and harms the very people you say have historically suffered from our structural biases that produce income inequality and all the related harm that comes from that. So, you would create even worse inequalities with the Fire Benefit charge.

The tragedy is that the RCW is clear that you have the flexibility to design the FBC in a way that avoids regressivity. But your “risk averse” leadership believes going along with the other RFAs who bought into the so-called expert consultants’ unfair taxing scheme is the safest way to go.

In fact, the consultants and the RFA committee members themselves apparently do not understand or don’t want the public to understand what it is they are proposing. Here is an example. The RFA Planning Committee has presented to the council and the public that apartments will be charged based on the total size of the apartment. But, the Plan says it will be based on the average size of each unit of the apartment complex. So what? Well, it means that the numbers that have been presented to date are three to four times lower than they actually would be. This is just one of many errors in the development of this proposal. Just last meeting, the consultants found an additional 25 million square feet of commercial space. Where were those buildings hiding? And how confident should you be that the necessary staff work and due diligence has been done?

How regressive is this proposal? More than I ever imagined. Apartments were already on track to be the most regressive category, but then I found that the language in the Plan calls for calculating the charge by average unit size. A 10,200 s/f apartment with 10 units under the presentations made by the Committee shows a charge of $1,557. But that is not what they would be charged. The Plan treats apartments and multifamily housing differently. They have a big “but” in the plan that results in a charge of $4,925, more than $490 per apartment. If you don’t think that gets passed on to the renters, you are not being serious. Just to be clear, this means that in this example, the square foot charge for the FBC is 48 cents. By comparison, if you had a 10,200 s/f house would pay 5 cents per square foot. If you had a 20,001 s/f commercial building, you would pay just 15 cents per square foot. In what world does this feel fair? 

Don’t trust my analysis? Trust your own eyes. Here is what the Committee’s proposed plan says,

“The same formula is applied to this category, but first the total square feet of the complex is divided by the number of units to produce an average unit square footage. That figure is then inserted into the formula resulting in an average BC (Benefit Charge) for each unit. This average is then multiplied by the number of units to get the total BC to be collected from the parcel owner."

Here is what the South County RFA (https://www.southsnofire.org/about-us/funding/benefit-charge) says,

“Multi-Family/Apartments:

The same formula is applied to this category, but first the total square feet of the complex is divided by the number of units to produce an average unit square footage. That figure is then inserted into the formula resulting in an average BC for each unit. This average is then multiplied by the number of units to get the total BC to be collected from the parcel owner.”  -- https://www.southsnofire.org/home/showpublisheddocument/3061/637783773812670000

I asked how they implement this language and the reply was unequivocally confirming the plain reading of their Plan. This email excerpt is from Leslie Hynes, the public information officer of the South County Fire Authority in Snohomish County, just north of Seattle. 

“Hi Larry,

 The square root of square footage is applied first:

 We take the total sq ft and divide number of units to get average unit sq ft.  then the formula is:

 ((SqRoot of AvgSqFt) * Number of Units) * 18 * MultiFam Factor * Cost per Gallon * Balancing Factor * Sprinkler Discount”

That you and the public have been misinformed about the impact of your proposal should raise a host of questions and concerns. From transparency to competence to just plain trusting consultants to do your homework for yourselves. For the record, I have raised my concerns about the consultants’ work repeatedly with the city managers and fire chiefs. I urged them to do due diligence and hire someone to check their work. At times, they have corrected their mistakes but this last failure affecting apartments and multi-family housing is the most egregious yet and evidence that this proposal is not ready for prime time.

The inequality and unfairness are not just limited to renters or owners of condos. The average residential property owner will see a 28% increase in their bill from the assessor for what they pay for Olympia services. Million-dollar properties see a 16% increase while properties between 200k and 300k pay 26% more, from $100k to $200k, 33% more. You can probably look up how much it will cost you here: https://www.citizentoolbox.org/what-will-it-cost-me.

Note that despite repeated requests by members of the Committee, there has yet to be produced the online calculator they were promised. 

I also urge you not to lose sight of the biggest, least considered factor in the use of a benefit charge formula designed around how many gallons of water should be put on a fire when only 2% of Olympia’s emergency calls are even fire-related. This is a structural flaw in the design of the FBC as promoted by the Committee and their consultants.

Pseudo-Science

The marketing of the Plan couches the FBC in a veneer of science that does not hold up to even cursory scrutiny. The marketing language sells the basis for the fee as being,

“…based on a national standard and considers required firefighting resources, the size of the building(s) on a property, and the hazards associated with those building(s). For example, a business storing pressurized gas products would pay a larger FBC than an office building of the same size.”

While this sure sounds “sciency” alright, it is not what you are proposing. There are no hazard considerations in the Plan and FBC formula. 

Instead of basing your charge on fire science, you ignore it. National standards do consider Hazard factors (as do several other RFAs in Washington) and the type of building materials the building is made of and proximity to other buildings, but that is not part of your plan. This cloak of science is an illusion and a misrepresentation of the Plan. To put a point on it, a commercial building made of match sticks housing fireworks adjoining a nursing home is charged with the same risk factor as a brick structure warehousing full water bottles sitting in an empty parking lot. 

You cannot have a formula that is claimed to be based on science and disregard major elements of it for policy purposes or ease of administration. This creates a veneer of science while being a policy and politically-driven formula. For example, there is no “reasonable” or fire science reason to exclude mobile homes or to charge apartments of all sizes the same rate of 1.5. Common sense and insurance estimator worksheets recognize a 10-story apartment is more difficult than a single-story apartment complex. 

The exclusion of the mobile homes from the charges is very likely a violation of the RCW. The law requires that “A benefit charge imposed must be reasonably proportioned to the measurable benefits to property resulting from the services afforded by the authority…” (RCW 52.26.180). Excluding an entire class of structures that would, in fact, receive benefits from the fire authority is not authorized. 

While the Committee has argued that the virtue of adopting a disliked formula that is already in place in other jurisdictions is that it has been “tried and true”,  no other RFA excludes mobile homes. Regarding the virtue of being “tried and true”, that also is a false claim. No RFA to date has had the formula tried in court… yet.

The deliberations of the Committee about excluding mobile homes were not about fire science. It was about how many mobile home residents are low-income and how little money will be lost to the RFA. Not a word about fire science. The fact is that all low-income persons who qualify for a property tax exemption would also qualify under the law for an exemption from the proposed FBC. 

Another hole in the science argument is the discount for fire sprinklers varies widely among RFAs. The NFPA says it could be worth as much as 75%, yet the proposed Olympia Tumwater RFA choose 10%. Other RFA jurisdictions in Washington use as high as 50% in the NorthShore Kenmore and Lake Forest Park fire district. 

A key element of the RFA Plan is the “Cost per Gallon”. The very name implies what it costs to bring a gallon of water to a fire but that turns out to be misleading at best. The CPG is nothing, but a number set by dividing how much money they want to raise and dividing it into the square root of square footage formula. It has nothing to do with a calculation of actually delivering water on fires. It is not an analysis of delivering water to a fire, it includes everything – from the cost of the public information officer that will need to be hired to the cost of holding periodic elections to reset the $1.00 RFA property tax levy to keep up with inflation. Other RFAs were more candid about what this element means. 

Renton writes, “CPG (Cost per Gallon) is a balancing factor used as an adjustable multiplier to finely tune the FBC calculation across all properties to reach the desired target FBC amount.”. Northshore writes, “The “Cost per gallon” is the multiplication factor that when used with the modified fire flow calculations will produce a value equal to the desired benefit charge collection”.”  This is not fire science, this a budgetary mechanism and one that every government entity wished they could use to adjust their fees to match their spending desires. 

Conclusion

Please refrain from scare tactics that say we have a crisis, an emergency, and that without an RFA we cannot address increasing response times. You know that we will already address that with or without an RFA. 

There is no reason to eliminate our Olympia Fire Department. The voters are more likely to be willing to lift our levy to meet any need for fire department funding with a simple majority vote than approve an unfair, difficult to understand and poorly designed RFA. Further, the levy capacity is there due to the dramatic rise in assessed valuations.

As the 2019 study said, "Usually, higher valued structures and complexes carry a greater risk to the community from loss by fire; consequently, assessed value also tends to approximate the property at risk within an area." This argues that using the official, readily available, and accepted data about property values is the best alternative to provide additional funding for fire services. 

Fortunately, we can do so with a levy lid lift. The 2019 study also states, "Because a third party (the assessor) establishes AV in accordance with state law, it is generally viewed as an impartial and fair measurement for cost apportionment. Fire protection is typically considered a property-related service; thus, allocation tied to property value has merit."

When it comes to the voters, please listen to them. For example, until it was pointed out by citizens, the Committee was unaware of the negative impact on voter approved parks funding.

This is an unnecessary, ill-designed and socially harmful proposal. Please vote it down. Take the time to do critical analysis with truly objective inputs. Then, after you fully understand what it is you are proposing, have the political courage worthy of your values.

Sincerely,

Larry Dzieza

Larry Dzieza is a former budget director and budget analyst for multiple state agencies. For several years also served as an adjunct professor at The Evergreen State College, teaching budget and finance and “digital government” to students in the college’s Master of Public Administration graduate program.

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