Sometimes people work very hard to save pennies even while they're frittering away large sums of money without any consideration of the consequences.

For example, I remember an incident involving a budget item for a 35mm camera. The total budget under discussion for the fire department was in excess of $3 million, but a city councilman was pounding away at the fact that the 35mm camera being proposed cost a couple of hundred dollars more than the one he had bought recently at a local store. That's penny-wise and pound-foolish!

Budgets pose today's most basic questions facing many fire protection administrators: What is the cost of providing fire protection, and what is a fair share of community resources to support that fire protection? I'm not talking about the current debate on staffing issues, nor am I talking specifically about issues such as labor management and salary agreements. What I am talking about is the strategic vision of how much fire protection a community can afford.

Of course, very small fire departments have different financial needs than very large ones. The best way I could refer to this is scaling of priority. Most departments have essentially three forms of expenditures: personnel costs; physical assets; and the cost of doing business, which includes workers compensation, risk and liability insurance, and inter-departmental charges.

First off, we ought to cut this debate into two distinct categories: those who own all of their funding sources and those who must share their funding sources with others. An example of the former would be a fire protection district. Because it has its own tax base, benefit assessment and special override considerations, an independent district with its own funding source is quite frankly in a very good strategic position. An independent fire district can afford any level of fire protection that it can convince its citizens to fund.

The more complicated circumstance is when you must share your basic funding resource with other entities, such as law enforcement, public works, parks and recreation, garbage disposal, and street maintenance. What is the fire service's fair share of the pie that must be divided?

Unfortunately, there's no simple answer. It has been stated over and over again there are thousands of fire protection agencies in this county. Each and every one of them has a different relationship with its funding source. We could start examining this topic by dividing fire departments simply into those with a tax base and those without.

For example, I know of a particular fire department without a tax base that is entirely supported by car washes and bingo games. Without belaboring any of the details, the time, effort and energy spent raising the funds to operate have become more of a drain on the department than the time spent fighting fires and handling other emergencies.

When it comes to those agencies supported by taxes, they usually keep an eye on one thing, assessed evaluation, because property tax has been used to a very large degree to provide fire protection resources in most locations. Some fire agencies may receive minimal revenue streams from other sources, but for the most part most of the money comes from property.

Once the revenue has been collected, the most fundamental method of understanding the cost of fire protection is called the budget. We often think of budgets as spending plans, but they more accurately can be regarded as policy goals, which are a reflection of what the community wants, needs and is willing to pay for. Therefore, one of the first things we need to do in looking at the funding of fire protection is to consider the people who live in a community or the property being protected.

If we look at the people who live in a community, we could take the total dollars being spent on fire protection and divide it by the population to determine the per capita cost. In a simplified example, if we had a fire department budget of $100,000 and there were 1,000 people living in that community, the cost per person would be $100.

In terms of property being protected, we would look at the total assessed evaluation and divide it by the budget. This gives the approximate amount of money generated by every million dollars of assessed evaluation. Another simplified example would be a community that had $200 million in assessed evaluation and a fire department budget of $100,000. That would place the level of effort at $2,000.

Regardless of which perspective you use to look at the revenue stream, the amount of money being generated to operate the fire department is called the level of effort. It's a reflection of the commitment of either the taxpayers or the political system to provide funds for fire protection. Unfortunately, no one is keeping track of this on a nationwide basis. If you visited 50 fire departments and examined the revenue and expenditure stream of each, you likely would find a bunch of different answers to the same question.

Fire departments tend to fall into one of three categories. There is no scientific definition for these categories, but I'll give it my best effort.

The first of these I would classify as isolated, rural, basic-service communities. I'm referring to the thousands of fire departments that are created because a neighborhood turns into a crossroads, which turns into a small community that requires fire protection. Historically these departments have been staffed almost entirely with volunteers. I hesitate to call these departments “small,” because size has nothing to do with it. For example, I know fire departments that have only a small volunteer cadre protecting hundreds of square miles. They aren't small in any sense. However, my definition includes three dimensions of the department: Fire protection is being driven by the low density of calls, resources and demands.

I would classify the second category for a fire protection agency as community corporations with a diversified tax base and an easily identified risk hazard and value exposure — Suburbia, U.S.A. Almost all of these communities came from small towns and have begun to develop a sphere of influence. Many of them began as a commercial crossroads on a countywide basis.

The last classification would be the urbanized, highly dense, service-driven cities. It shouldn't be hard to understand what I'm talking about here. They are basically the metropolitan fire departments.

Now if I went back and looked at these from a standpoint of their dimensions, smaller communities tend to be those of 25,000 or less, and they tend to be disconnected from neighboring communities by virtue of distance — there are open spaces between them that are often agricultural, state or federal land. These fire departments tend to be totally volunteer with the exceptions of those that have incorporated EMS; they may fall into the beginnings of a combination department.

The second category are those departments that protect between 25,000 and about 65,000 residents. They tend to be communities that abut other communities of similar size and configuration. These departments often are combination at the lower end of the population spectrum and evolving into full-time, paid fire departments as they reach the upper level.

The third classification are those departments that cover 75,000 people and up. There really isn't any top on this number, as many of the metropolitan regions in the United States number in the millions. These departments are almost exclusively fully paid, but not all of them are in the EMS business. It isn't uncommon for very large cities to have a third-party EMS provider.

So if we go back and start talking about who is getting the fair share of the budget, we need to ask what the fiscal demands are to operate these three different kinds of fire departments, and we need to know how each community establishes fiscal equity.

About the only way to look at the cost of the first category of fire departments is on a per capita basis. After examining many fire departments both in California and out of state, I discovered that the range of per capita expenditures for departments of this size ranges from as little as $10 per person all the way up to $250 per person. The average is somewhere around $125.

This is not a lot of money, but remember what we are looking at here. These are fire departments that depend on direct community support through fund-raising to make their budgets work. Imagine a community of about 2,000 people who support the annual firefighters' ball, go to the bingo games and attend the annual pancake breakfast. The total amount of money available to that small fire department using that per capita cost of $125 would be about $250,000 a year. In view of what it costs to operate fire departments, that amount of money is barely able to take care of utilities, fuel and perhaps some operational capacity such as protective clothing and breathing apparatus, but is it adequate?

Very few of the fire departments that begin to employ full-time personnel ever rely on a funding source that is that unpredictable. As you move into the next range of departments, you begin to find that tax bases and revenue streams must be in place to create the predictability that allows strategic decisions on staffing and deployment. Because we are now dealing with annual revenues and expenditures that to some degree can be counted on, these departments can start planning for a better level of service. In other words, as their level of effort improves, their level of service improves.

This brings us to our second definition. The Commission on Fire Accreditation International defines level of service as those assets that can be delivered to the scene of an emergency within a specified time goal. To the degree that any organization can provide a high level of service with a low level of effort, it could be construed as being extremely cost-effective. An organization that has a very high level of effort but is unable to produce an adequate response would be considered ineffective.

Of course, when we get to the metropolitan fire agencies we usually are dealing in mega-bucks. Providing an adequate level of service and having a quantified level of effort in the metropolitan departments is much more intense than it is at the other two levels. By intense I'm not talking about any difference in the type of activity but rather the level of financial activity. The number of zeroes behind the dollar sign for a major metropolitan fire department is significantly different in the political arena than for the other two levels of departments. That isn't to imply any more importance, nor does it mean that the other levels of service are insignificant. It is merely political reality.

This takes us to the next concept in examining the fair share. When you start looking at tax-based organizations, it might be valuable to look at both per capita fire effort and the assessed value effort to see if the trends and patterns can demonstrate which is carrying the burden of fire protection, the people or the property.

One of the best examples I can give of this significant difference would be bedroom communities versus industrialized communities. There are cities in this country that have almost a zero sales tax base. They are essentially bedrooms for other parts of the country. Their primary source of revenue is the property tax on the single-family dwelling. Granted, they may have a few strip malls here and there, and they may even have a couple of businesses that have a very high employment rate.

On the other side of the spectrum are those communities that are essentially commercial- and industrial-based with a minimum amount of residential occupancies. There are areas in this country where the transportation corridors have created communities that are just like this. They have a very high daytime population, which might give you an incorrect impression about the per capita costs. However, they have an extremely low nighttime population, and the primary source of revenue is from either commercial property or sales taxes.

All of these facts lead me to my last observation about what is equitable. I have looked at thousands of budgets over the last 40 years. The first thing that becomes clear in most cases is that we are in competition with one other public safety function that has a high societal priority. You guessed it! It's law enforcement. Looking at the generic budget for most communities, the cost of providing law enforcement is almost twice what it costs to provide fire protection.

In general, the cost of fire protection and the cost of law enforcement usually make up about 50% of a municipal corporation's total budget. Hypothetically, if we had a community with a $100 million budget, it could be expected that about $50 million of that budget would go for police and fire. And if the rule of thumb applies that the cops get about two-thirds of that amount, we would get about 33% of $50 million. That would result in the police department getting about $36 million and the fire department about $18 million.

Bear in mind that this is a rule of thumb and not a statement of fact. However, this leads us to another baseline and benchmark. There usually is a significant difference between the line item of fire department budgets versus law enforcement budgets. In areas where there are fully paid fire forces — the upper end of the suburban agencies and throughout almost all of the metro departments — the cost of doing business is about 90% personnel costs and 10% other expenditures. Law enforcement tends to have a different mix because they have different criteria for technology.

Coming around full circle, what does all this tell us? You have to be careful when you are comparing one type of fire protection against another type of fire protection. When you look at the overall impact of dollars and cents on fire departments, those departments that are more adequately funded are those with a much higher demand for service, a much higher level of secured funding and a much higher level of expectation in the community. If I were going to place these departments on a spectrum of willfully inadequate to actually overpriced, I would have to ask a multitude of questions before placing any specific department anywhere on that line.

The benchmark I come up with for adequate funding is simply this: Fire agencies which have a level of effort that provides adequate staffing and adequate equipment to put an effective response force on the street, all of which is consistent with their communities' expectations, are doing OK. It's not hard to find a fire department that wishes it had more money. It's not hard to find firefighters who wish that they were paid more for what they do. But it is hard to find a taxpayer who wants to pay more. It is really hard to find an administration or budget analyst who wants to spend more on fire protection just because money is available.

Now for my last observation about fire department fiscal planning: Those departments that really have to have their act together on what they do with their money are better-funded than those that don't. At the risk of over-simplification, the manner in which we put people on the fireground is directly related to policy-makers' perception of whether the fire department is a credible organization.

I will grant you that there are some fire departments with a lot of money available to them that have very low credibility in the political arena. I can show you fire departments that are operating on a shoestring that have high credibility. Fire chiefs should prepare for the fact that they need to do everything they can to qualify, quantify and communicate good fire protection policy if they want all of their department's needs to be adequately addressed.

There is a tendency on the part of some people arguing this case that we are the experts, so whatever we demand they should pay for. I suppose law enforcement could take that same point of view. As a matter of fact, so could parks and recreation, and the highway maintenance department. The more sophisticated we become in the fire service by really understanding the fiscal environment, the more likely we will get what we need to do our jobs better.

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A 40-year veteran of the fire service, Ronny J. Coleman has served as fire chief in Fullerton and San Clemente, Calif., and was the fire marshal of the State of California from 1992 to 1999. He is a certified fire chief and a master instructor in the California Fire Service Training and Education System. A Fellow of the Institution of Fire Engineers, he has an associate's degree in fire science, a bachelor's degree in political science and a master's degree in vocational education.