Squeezed by the economy and diminishing tax dollars, fire departments from coast to coast are embracing alternative methods of generating revenue and cutting costs.
For decades, a popular way to raise money for a fire department was to sell food — spaghetti dinners, turkey legs or a fish fry — and it still is for many departments. If the current economy has you trying to decide whether to buy a lottery ticket or look for a magic wand to pull money out of your helmet, then take heart. Alternative revenue sources for fire departments exist that go beyond the traditional food sales.
Labor Day weekend is when Sister Bay, Wis., holds its annual Marina Festival. Several local non-profit organizations participate in the event, as does the Sister Bay/Liberty Grove Fire Department. Indeed, the festival is the department’s main fundraiser, Chief Chris Hecht said.
The success of the one-day festival — which features musical acts and a water-ski show — largely depends on the weather, but on average, the fire department will raise between $12,000 and $14,000 — sometimes higher. The village gets 10% back to help defray costs, said Hecht, who added that the village’s cooperation is a key factor in the success of the event.
The day starts with a pancake breakfast at the fire station, just off the main highway, and then moves to the marina where the fire department volunteers to cook brats, hamburgers and corn on the cob, and to sell beer. Hecht explained that the department contracts with a two-man company that mass-produces fresh pancakes for the breakfast. The event at the marina is higher risk, given the investment in 500 pounds of brats, 200 pounds of burgers and a trailer full of fresh-picked corn.
“There’s a higher risk factor, but the profit is higher also,” Hecht said. “With a breakfast contractor, the level of risk is pretty low. The downside of the contractor is we give him about 50% of the revenue from the breakfast. But the pancake breakfast is labor-friendly and we clear about $2,000 to $3,000.”
Hecht added that the event receives 100% participation from department members, either early in the week or on festival day. Help also arrives from outside the department but from within the brotherhood.
“We don’t ask for help, but typically other departments will come and help, [and] we help others with their Fourth of July events,” Hecht said. “It’s what I tell people about mutual aid; everybody thinks its helping on a call out, but it can be so much more than that year round.”
In the Northeast, the Ellington (Conn.) Fire Department’s capital and operating expenses are covered by the town. However, the department supplements its coffers by hosting an annual carnival, parade and raffle, an effort that generates about $15,000, some of which is used for recruitment and retention programs.
The department also has found additional revenue among the area’s large industrial sites by hiring out personnel as safety officers. “Our personnel will do safety standbys while the workers go inside and do welds or inspections on the big tanks,” Chief Michael Varney said. “Those funds are used to pay the personnel, and a portion is put into a special fund for training and equipment.”
In addition, the fire department’s training sessions are available to other organizations in the area. “We teach classes for our own members — some are basic like emergency medical technicians — and open those classes to other departments for a fee, which generates revenues for the training kitty,” Varney said. “We charge the going rate, but rather than a private contractor taking the fees, we put them in the pot and buy training supplies.”
Varney said that the department also has one of the best photographers in the area, which provides another revenue source. “We offer photography classes, lighting classes and an admissibility-in-court class,” he said. Fire, police and the public come to the classes. The photographer teaches for free, and after we take out the cost for the book we use, the rest of it goes into the kitty.”
In Bahama, N.C., Len Needham, chief of the town’s fire department, looked behind his fire station one day and discovered a new revenue source. Through the local cellular service provider, the department applied for local permission to construct a cellular tower behind the fire station.
“I started talking to [the provider] because we didn’t have good cell-phone service,” Needham said. “However, we had 21 acres to build our stations and we had good local support. The company came back with a proposal, and everything looked good.”
While Needham originally wanted a 200-foot tower, local zoning restrictions ultimately limited its height to 120 feet. Nevertheless, he is pleased with the income that the tower is generating — and the increased quality of the cell connections. The department signed a 30-year contract with the cellular provider and initially will receive $700 per month in the form of a tower-rental fee; however, every five years, the fee will increase by 15%. The arrangement may represent only the beginning, as the department — which currently has two stations and is building a third — is considering a contract for a second cell tower. Access to this tower will be leased to other cellular carriers that serve the area.
In an interesting twist, the tower is camouflaged. “It looks like a pine tree and it’s in the woods behind the cemetery on the corner of our property,” Needham said. He added that most people don’t recognize it as a cell tower — proving the adage that you can’t see the tower for the forest.
Cut Out the Middle Man
The city of West University Place, near Houston, is one of a handful of municipalities in the state that were grandfathered into a law that now prohibits cities from running their own alarm-monitoring systems.
In 1997, the city developed DirectLink, an alarm-monitoring system that connects local homes and businesses directly to the fire and police dispatch center. A call from an activated alarm goes directly into the DirectLink dispatch center rather than to an independent alarm company, which would first call the home to confirm the problem and then call the police or fire dispatch center. “There’s that extra step in the process that we eliminated and it helps with response time,” DirectLink Coordinator Trish Cormier said.
For a fee of $25 a month, about 1,400 homes have burglar and fire alarms connected to the city’s system. Funds go directly to the city’s general fund, but some of the money is distributed to the department on an as-needed basis, Cormier said.
The city contracts with three local service providers to install the alarm systems, execute upgrades and provide routine maintenance. Responsibility for maintaining the alarm equipment and telephone line rests with the resident or business owner, as does testing the alarm system on a regular basis. After the system is programmed and connected to DirectLink, and the required set-up forms and alarm permit application is received, the alarm signal is then monitored by the city’s emergency communications dispatch center.
Cormier said that prior to the advent of DirectLink, the average response time was eight minutes. Now, the average response time is two minutes for police and four minutes for fire department. “With us monitoring, we don’t call the home or business owner, it is their responsibility to contact us if it is a false alarm,” Cormier said. “If there are enough false alarms, then there is a charge.”
In 2005, Michael Spain assumed command as chief of the Bensenville (Ill.) Fire Department, which was village-owned and operated at the time. However, after years of a political grudge match pitting police against firefighters, Spain decided to turn the department into a fire protection district. Spain’s goal was to transition from a municipal department to a fire district.
However, taxpayers first had to be convinced that forming a fire-protection district made sense, and that it was feasible to fund it as a separate taxing body.
Bensenville’s mayor and village officials gave the fire department four months to put its proposal to a vote. Spain was concerned because four months is a very short amount of time to educate voters and get a referendum passed. Indeed, the mayor and administrators hoped the plan would fail and planned to terminate the firefighters and hire contract personnel to replace them.
Undeterred, Spain, together with the firefighter union, put together a presentation and took their message to the voters. Not only did the plan succeed, the referendum passed by a landslide in November 2006.
The new Bensenville Fire Protection District then had four months to finalize an intergovernmental agreement with the village. After considerable wrangling, the village ultimately agreed to allocate $3 million in tax revenues, while the new district agreed to assume all financial liabilities. The contract was signed in the final hours of April 30, 2007, and the district went live the next day.
The new district promised residents that it would provide three things: increased staffing; development of a strategic plan for replacing vastly outdated equipment; and more services, such as public-education programs.
Currently, the district trains with Harper College and has more visibility in the community. One of the goals was to raise the level of service and transition to hiring firefighter/paramedics. Since the department became its own taxing body, funds are coming in, but Spain still runs a tight ship. “We don’t have an administrative assistant, we don’t have secretaries,” he said. “It’s just me, a director of finance and administration, three battalion chiefs, three lieutenants and the rest are blue shirts.”
The district operates on a budget of less than $4 million per year and responds to about 4,000 calls annually out of two stations. While the previous department employed 12 firefighter/paramedics on a contract basis in addition to 18 career firefighters, the new district today has 27 firefighter/paramedics and another seven on work-back in order to save money. The district also runs two ambulances, 24 hours a day.
FEMA grants have helped send personnel to fire officer classes. “I feel very strongly about education,” Spain said. “An educated fireman/paramedic makes a much better firefighter/paramedic that better understands the global aspects of the job. I’m very strong on that.
Spain cautioned that in order to form a successful fire-protection district, a comprehensive business plan is essential, as is the mindset that the district will be run like a business — and that means downsizing is a possibility that sometimes must be contemplated and accepted. Spain also believes in strong alliances, particularly with the Illinois Mutual Aid Box Alarm System divisions.
Find the Upside
In the northwest U.S., Michael R. Duyck, chief of Tualatin Valley (Ore.) Fire & Rescue, believes the department has been fortunate compared with other departments across the country.
“We did not see a 40% downturn in real estate [values], but instead saw a 20% [decline],” said Duyck, has been with the department for 23 years, having spent seven years with the Lake Oswego (Ore.) Fire Department.
Despite the sharp decline in property values, the tax revenue distributed to the department has remained steady. “I’m not looking at a downturn like the rest of the country,” Duyck said.
The department has 525 personnel and 21 fire stations that serve a population of 440,000 scattered across nine cities and three counties near Portland. It has ambulance-service agreements with the three counties; one of the agreements allows the department to share in the savings that are realized because the private ambulance company used by the county for transport doesn’t have to put as many units on the street as it did before.
“We’re going to have our units respond anyway, so we can drive down the transportation costs for the patients and that’s good for everybody — us, the citizens and the ambulance companies, because … it cuts their overhead,” Duyck said.
The department currently is exploring other revenue opportunities that could be spawned from being part of the healthcare system, including the possibility of offering alternative methods for medical care in response to 911 calls.
“When someone calls 911 and we show up with the ambulance, the only place we can take them is the ER, and that’s the most expensive level of care they can get,” Duyck said. “The ambulance can’t take them to the doctor or urgent-care clinic, even though we know most calls don’t need to go to the ER.”
He added that Medicare won’t reimburse for emergency transport unless the patient is taken to an emergency department of a hospital.
To address this, Tualatin Valley is exploring alternatives that would save money and provide better care to patients.
“If our paramedics can evaluate the patient and determine that the best course of treatment is to put them in a cab and send them to their doctor or an urgent-care center [instead of an ER], we think we can save millions of dollars,” Duyck said.
He added that a physician’s assistant riding along with the ambulance crew would enable patients to even be transported to their homes in some cases, which is far less expensive than sending someone to an emergency room.
“We run 33,000 calls a year and it’s not out of this world to think we couldn’t street a physician and run around and have him evaluate the patient in their home,” Duyck said.
Editor’s note: What ways are you using to create new revenue sources? Write to us and tell us to be included in a follow-up to this article in an upcoming issue.
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