By Steven Knight, Ph.D.
How often do we hear the phrase “do more with less?” Some agencies are able to find some efficiency and maintain services with less, but agencies can rarely actually improve services with less service capacity. However, at the heart of this slogan is the understanding that service expectations continue to expand along with fiscal constraints.
Several factors contribute to the competing positions of fiscal stewardship and expanding expectations:
- Understanding of public safety service budgeting and the proportion of discretionary spending capacity.
- The fiscal constraints placed on revenue generation by many states and local governing bodies.
- The accurate understanding of how expectations for service may be derived.
Fire service public budgeting
The first step in a discussion on fiscal constraints is to understand the modern public fire safety department’s budget. As public safety is a labor-intensive service model; typically, more than 90% of the budget is accounted for by personnel costs. An additional 5-7% is usually assigned to fixed costs for items such as apparatus parts and repairs, fuel, hose, equipment, station supplies and station maintenance. Ultimately, there is typically less than 5% discretionary spending capacity that frequently covers unexpected expenses.
Therefore, incremental cuts of only a percent or two can have a significant impact on a department’s ability to maintain services, because discretionary spending is so limited. In other words, there may not be sufficient cushion to insulate adjustments without impacting personnel and/or service delivery.
Fire department revenue constraints
Fiscal stewardship is the norm in most communities as elected officials and administrators seek to be good stewards of the public dollar. Additionally, in many states, after the last recession, revenue recovery was capped. For example, the state may have legislated a 1-3% cap on revenue growth as the appraised values increase, as well as establishing ceilings for the “ad valorem” rate mechanism. These two elements combined may limit revenue growth and the ability to adjust rates to maintain constant actual value in dollars.
Finally, for those agencies that have additional revenue streams or cost recovery mechanisms, such as ambulance fees, permit fees or inspection fees, often, the municipal budget does not associate revenues and expenditures. In other words, the process is not like a house budget where all revenues and expenses are realized. Revenue may go directly to the general fund without an association or consideration to the expenditure budget. This is where fire districts may have a distinct advantage over municipal budgeting as there is less mission creep or competing demands, and all revenue and expenses are contemplated.
Therefore, diversified funding streams have considerable merit in this environment. Many agencies have found an insulating and stabilizing effect by having a blend of “ad valorem” taxes and more constant fire assessment fees calculated as a flat rate on square footage rather than as a variable rate of market or assessed value. This strategy serves to insulate agencies in economic downturns.
Expanding fire service expectations
The expectations from our customers and elected bodies have never been higher. However, the lenses are often incongruent. Through the customers’ lenses, our industry has not been as effective as we could have been in educating consumers on the totality of our services, costs and anticipated outcomes.
Often, we prescribe the level of service to be provided and then request customer satisfaction on those services. While this still has merit and is informative, I have never seen a fire department that isn’t the most valued service in a community, usually with a greater than 95% approval rating on customer satisfaction. What is interesting though, is that the customer satisfaction is not correlated, or is disassociated, with the actual service delivery. The approval ratings remain strong in both all-volunteer departments, as well as large municipal services with a wide variation in response times and staffing strategies.
Finally, as communities are largely uninformed of the technical details of our services, costs, and outcomes, when asked if they would like additional or faster services, the answer is generally a resounding yes, without any context of how to pay for it.
Through the elected officials’ lenses, the pressures of fiscal stewardship, capped revenue and recovery options, and increases personnel costs increase expectations on the chief and department to do more with less.
Finally, in the age of accountability and transparency, the public scrutiny of our operations has never been higher – both in the planning efforts and justification, as well as in response. We only have to look to recent school shootings to watch the political fallout and customer expectations for zero tolerance, poor performance or perceived poor performance of law enforcement. Often, the incident itself will influence the public response, regardless of our performance. This level of expectation on the outcomes without the appropriate public transparency on the budgeting and staffing decisions creates an untenable balance between service realities and expectations.
Managing public expectations of the fire department
One very effective strategy to help manage expectations is to have public discourse including with a highly transparent and candid assessment of all services, costs and projected outcomes. Adopting and codifying service standards, such as those found in a Standards of Cover, would be very valuable in justifying allocated resources, return on investment, and the balance between a community’s assumption of risk and the protection it is willing to pay for.
Our law enforcement partners have had a much better strategy for identifying the impacts to fiscal constraints by no longer providing certain services when the funding isn’t sufficient to sustain them. The fire service has had more of a “can-do” approach, but we have largely absorbed most constraints while attempting to provide existing services.
By adopting and communicating sustainable service objectives and outcome measures, a balance can be found between fiscal constraints and community expectations.
About the author
Steven Knight, Ph.D., is the fire service practice lead and partner at the public safety consulting firm, Fitch & Associates. Contact him at sknight@fitchassoc.com.
This article, originally published in August 2018, has been updated.
