City of Long Beach eee Memorandum Working Together to Serve EC 1 Y Date: December 15, 2009 Col, * 2009 To: Mayor and Members of the City Council eee Sehipspe From: Patrick H. West, City Manager -P/ ses Subject: Firefighter Hiring Grants Background The Staffing for Adequate Fire and Emergency Response (SAFER) Grants provide financial assistance to help fire departments increase their cadre of frontline firefighters, or to rehire firefighters that have been laid off to expand the ‘number of POST positions to remain compliant with national operating standards. The goal is to assist local fire departments with staffing and deployment capabilities so they may have adequate protection from fire and fire-related hazards. The SAFER Grants have two activities to support this goal: (1) Hiring of Firefighters and (2) Recruitment and Retention of Volunteer Firefighters. Long Beach qualifies for the federal funding priority to hire or rehire laid-off firefighters as a result of the elimination of 13 swom Fire positions (7 Captains and 6 Firefighters) from the FY 10 budget. The City is not eligible for the program regarding volunteer firefighters. There is $210 milion nationwide for this grant. While this program is not funded directly by the Stimulus bill, the Stimulus bill made changes to the grant program making urban fire departments such as Long Beach eligible this year for these funds This memo explains the ongoing structural costs associated with these grants, and why staff will not be applying for SAFER grants. Grant Crite Hiring of New Firefighters: Grants for the hiring of new firefighters have a two- year period of performance that provides fire departments with funding to pay 100 percent of the salaries and benefits of newly-hired firefighters (exclusive of overtime). Departments awarded grants for hiring new firefighters are required to commit to retaining the SAFER-funded firefighters for one full year after the two-year period of performance. Grantees cannot layoff any firefighters during the two-year period of performance. If a SAFER grantee loses any firefighters for any reason (such as attrition or termination) during the two-year period of performance, they must fill the position(s) or lose funding for the position(s) until the vacancy or vacancies are filled, despite having increased the number of daily firefighters being deployed. Rehiring of Laid-Off Firefighters: Grants for rehiring of firefighters provide fire departments with funding to pay 100 percent of the salaries and benefits (exclusive of overtime) and have a two-year period of performance. There is no requirement for rehiring grantees to retain the SAFER-funded firefighters after the two-year period of performance, although the rehired firefighters would have become permanent, full-time employees with all Civil Service rights and privileges this status accords. Only positions that were the object of a layoffDecember 15, 2009 Page 2 action between January 1, 2008 and October 31, 2009, are eligible. Grantees must maintain their staffing at the level that existed at the time of application as well as the SAFER-funded staffing for the two-year period of performance. Grantees cannot layoff any firefighters during the two-year period of performance. The deadline for applying for grants is December 18, 2009. Projected Costs The only eligible costs under the Hiring of Firefighters Activity are the costs for salary and associated benefits (actual payroll expenses) for the new or rehired SAFER-funded firefighters incurred during the recruitment period andjor the 2- year period of performance. Training, equipment and overtime costs would not be eligible under this grant. Unbudgeted overtime costs to maintain constant staffing would increase by approximately $22,000 in FY 10 for each additional firefighter position awarded. To help illustrate the costs associated with accepting this grant, the Budget Office fan a scenario for hiring nine (8) new firefighters. As you may recall, this represents only three [3] POST positions, and it takes four [4] POST positions to staff one four-man apparatus. The analysis shows that the City's cost for the nine (9) firefighters during the initial two years of the grant would be $200,000 per year for overtime, plus a one-time cost of $640,000 for a fire academy. The grant requires that new firefighters hired be retained by the City for a minimum of one year without grant assistance (the one-year retention requirement does not apply to rehiring laid-off firefighters). Therefore, the third year would cost the City an additional $1.2 million annually, on top of the $200,000 in annual overtime cost noted above. This cost estimate assumes the minimum negotiated general salary and skill pay increase of two (2) percent per year, however it does not include the increased cost for PERS benefits expected in'FY 12. The ongoing funding for these firefighters is unbudgeted, contributing directly to the structural deficit in future years. Council Guidelines On March 24, 2009, the City Council adopted guiding principles to help direct staff on what types of federal Stimulus projects the City should be applying for. One of those guiding principles was the following: v The City should not create programs that will require an unbudgeted funding commitment after Stimulus dollars are spent, as Stimulus dollars cannot be used to fund ongoing programs in the future.December 15, 2009 Page 3 Reasons for Not Pursuing the Grants Staff will not be applying for these dollars, as the ongoing unbudgeted financial Commitment to the General Fund is significant. Adding new firefighters or using these funds to retain firefighters would add considerable structural costs to the General Fund when the grants end. During the performance period, new unbudgeted costs for a Fire Academy, ongoing training, overtime and equipment would also be incurred. Acceptance of these dollars would also severely hamper the Fire Department's ability to manage its budget, knowing that there will be projected budget deficits to overcome in both FY 11 and FY 12. The City would Not be able to reduce firefighter positions and would be required to fill every vacant firefighter position for any reason (such as attrition or termination) during the two-year period of funding under the SAFER program. Further, acceptance of these funds would add substantial structural costs to the budget deficit in Violation of the City Council's policy. Conclusion Based on the significant financial liability the City would be taking on if the SAFER grant were accepted, City staff will not be applying for these grants funds. For more information, please contact Reggie Harrison, Deputy City Manager, at 8-5850. PUERHimD Cefiregrantscomem doo cc: Suzanne Frick, Assistant City Manager Mike Garcia, Acting Fire Chief Lori Ann Farrell, Director of Financial Management ‘Tom Modica, Manager of Government Affairs Jy! Marden, Assistant to the City Manager