The Santa Ana City Council Tuesday night approved an agreement with the Orange County Fire Authority to absorb the city’s fire department beginning April 20.
The move to outsource is a major component of the city’s effort to plug a $30-million budget deficit going into next fiscal year. The agreement calls for the city to pay $33.7 million to OCFA for the first year of services, which will shave $10.5 million off the deficit.
The council vote was 6-0, with Councilwoman Michele Martinez recusing herself from voting because of a conflict of interest.
Interim City Manager Paul Walters said that because of labor agreements with police and service employees and other cost-cutting measures, the city now is projecting a budget surplus by the end of next fiscal year.
Council members called the night “bittersweet,” expressing optimism at nearing the end of a massive budget crisis and sadness at nearing the end of the city’s 128-year-old fire department.
Councilman Vincent Sarmiento said the home he lives in now was saved from a fire by the Santa Ana Fire Department just a year before he bought it. Nonetheless, assuring the city’s fiscal soundness was the top priority, he said.
“We realize sometimes that the city’s solvency and the city’s health does come first,” Sarmiento said.
Some of the savings will come from OCFA’s staffing model, which calls for a minimum of 48 firefighters to be stationed in the city’s 10 fire stations. Santa Ana’s fire department staffed at least 63 firefighters.
There will be no layoffs of Santa Ana firefighters. Some will assume empty positions at OCFA.
The outsourcing, however, will significantly cut compensation for transitioning firefighters. Under OCFA, firefighters contribute 9 percent of their salaries toward their pensions, a sharp increase from the 1.4 percent Santa Ana firefighters contribute now.
Even with the reduced staffing, the expectation from council members is that OCFA will provide a level of service comparable to the Santa Ana Fire Department, which is rated excellent. “It’s been said that if you want to have a heart attack anywhere in Orange County, you want to have it in Santa Ana,” said Councilman David Benavides.
Partly because of its staffing model, the city’s fire department earned the highest rating from the Insurance Services Office, which appraises fire departments for the insurance industry.
Most of the areas OCFA serves have a class-three rating, which is highbut two notches below the city’s rating.
Councilwoman Claudia Alvarez raised a few concerns before casting her yes vote.
Alvarez said she was concerned that the fire authority has built-in clauses to protect itself financially but that Santa Ana has no exit clause should OCFA services fall short of expectations. The protections in the agreement arose from uncertainties about the city’s cash flow.
Under the terms, the city will pay month by month for services and by Sept. 30 obtain either a bond worth one month’s payment or put one month’s payment into an escrow account. If the city couldn’t make a payment, the OCFA could draw from the escrow account or cash in the bond. The city would then have to restore the bond or escrow account within 30 days.
Alvarez compared the situation to moving into a new home. “What if somebody moves into a place and it’s ridden with roaches and you can’t get out?” Alvarez said.
Alvarez warned that the city will be closely monitoring OCFA’s performance. The city has “an evaluation system in place,” she said.