The idea behind the Orange County Fire Authority, which provides emergency fire and medical services for unincorporated areas and 22 cities, is that by combining resources into a regional fire agency, everyone saves money.
But officials in Irvine argue that their city is getting a lousy deal. They say Irvine taxpayers are subsidizing other cities’ cost of services by $18.4 million.
That claim is substantiated at least in part by figures provided to Voice of OC by the Fire Authority that show Irvine taxpayers pay more than $57 million, even though the services the city receives are valued at closer to $39 million.
Irvine residents also contributed more than 25 percent of the $219.6 million in total funds collected from OCFA cities in the 2010-11 fiscal year, the figures show.
“Clearly, this is way out of whack at this point,” said Councilman Larry Agran.
The issue, which has been simmering in recent months, surfaced as the Santa Ana City Council is poised to vote on a proposal to have OCFA take over its fire services. The proposal calls for Santa Ana, which is considering the move as part of a solution to its $30-million budget deficit, to pay significantly less per resident than Irvine does.
OCFA officials argue that to say Irvine is overpaying oversimplifies a complex issue. They say the problem can be traced to California’s taxing system. It’s also a “problem with no solution,” according to OCFA spokesman Kris Concepcion.
This is how OCFA officials explain the situation:
- Cities have two different arrangements under OCFA. First, there are cities that pay for their services through cash payments from their general funds. For other cities, like Irvine, the county distributes directly to the fire authority property tax revenue collected from taxpayers.
- The distribution of that property tax revenue is not equal. When the revenue is doled out to different taxing agencies, the share that goes to OCFA depends on how many taxing agencies were collecting from the cities before the 1978 passage of Proposition 13, which limits property taxes.
- Because Irvine was a new city, it had fewer taxing agencies asking for property tax revenue, so the county carved out larger allocations toward fire services. The county allocates, on average, 12.45 percent of Irvine taxpayers’ property tax payments to OCFA, the largest such disbursement. Taxpayers in Cypress, which is an older city, pay an average of 8.7 percent, the smallest such disbursement.
“It’s not as simple as saying [Irvine is] overpaying,” Concepcion said. “There’s no real control over those revenues. Those are property tax revenues that we receive.”
Yet it is clear from the OCFA figures that all the cash-contract cities are underpaying for their services. Tustin, for example, underpays by $5.5 million. Tustin spokeswoman Lisa Woolery said that Tustin officials wouldn’t comment on the issue until it is brought up at an OCFA board meeting.
And it is clear from the perspective of Irvine officials that their city is picking up the tab. “Somebody has to pay the bill,” said Irvine Mayor Sukhee Kang. “Somebody has to take more burden than others.”
Irvine officials also don’t buy the argument that the issue is unsolvable. “I appreciate the acknowledgment that it is a problem,” Agran said. “And it’s a big problem. Some might characterize it as an $18-million a year problem.”
“I don’t accept the suggestion that this is a problem without solution,” he said. I think there are solutions.”
The Santa Ana Deal
Agran suggested that mounting fiscal challenges will lead to more cities like Santa Ana wanting to join the Fire Authority as a way to cut costs. But they may have to pay more under future negotiations, Agran said.
“It may be that the price tag has to be considerably higher to them [new OCFA cities] in order to be fair to us,” Agran said.
The issue, however, is unlikely to derail Santa Ana’s bid to join OCFA at its current price tag. The OC Fire Authority Board of Directors already approved the agreement, making it binding if the Santa Ana City Council also approves it.
“They would have to go out and reopen our contract,” said Santa Ana Councilman David Benavides. “If we were not going to be able to obtain a significant savings, then it wouldn’t make sense for us to go to OCFA.”
The agreement, which is slated for council approval Tuesday, calls for Santa Ana — a city of more than 324,000 — to pay $33.7 million for its first year of fire services. That’s $24.3 million less than taxpayers in Irvine — a city of 212,000 — paid in the 2010-11 fiscal year.
Irvine taxpayers paid approximately $270 per resident last fiscal year for fire protection, but under Santa Ana’s agreement, its taxpayers would pay $104 per resident.
OCFA officials say it is unfair to compare cash-contract cities to Irvine because Irvine isn’t paying from its general fund. There is no guarantee that Irvine could recoup all $57 million collected from its taxpayers should the city pull out of OCFA.
Irvine officials also say their city is targeted first when the OCFA cuts its budget.
The OCFA board slashed $3.3 million from its budget in 2010, in part by eliminating a medic van from a fire station near the Orange County Great Park. The cut, which Kang said totaled about $1 million, came before construction opened dozens of new parkland acres to the public.
In a compromise, the OCFA staffed an additional paramedic at the station, Kang said.
There has also been a push to cut firefighting resources at John Wayne Airport, and Kang argues that any such cuts will mean Irvine’s firefighting resources are burdened even more. “We expect fair treatment. We expect a fair thought process on policymaking,” Kang said.
Agran says he wants a new equity study to address the problem and devise possible solutions. The last such equity study was done in 1999, when Irvine residents were paying $3.8 million more than the value of services they were receiving.
Irvine’s membership in the fire authority expires in 2020. If city officials believe pulling out and forming an Irvine fire department is a better deal, the city could quit OCFA at that time and take the authority’s largest source of revenue with it.