Now that Fire District 1 has given the City of Edmonds a hefty bill for two years’ worth of back pay for its union employees, what happens next?
My Edmonds News explored that question and more during a 45-minute interview with Mayor Dave Earling and City Finance Director Scott James Wednesday.
James said he has been meeting with Fire District 1 officials, as well as his counterparts in the cities of Mountlake Terrace and Brier (which also contract with the fire district and just received large increases in their respective bills) to determine if the city owes all of the $1.67 million it was invoiced for in late August.
“We are doing our due diligence to make sure the number’s real,” James said. “The city’s not questioning the services or what we are getting from the Fire District or the value that our citizens receive, because it’s a great value, great service.”
Earling and James also said they stand behind Earling’s statement – made in a Sept. 16 press release – that the $1.67 million bill for retroactive pay raises — $786,300 for 2013 and $881,392 for 2014 — was surprising to the city.
“The mayor was absolutely right on when he said it was a surprise,” James said. “No one would have anticipated an increase of this magnitude.”
When the city in 2009 signed the Fire District 1 contract to provide fire services for Edmonds, the city’s Fire Department employees became Fire District 1 employees. It was common knowledge that the union contracts for 2013 and 2014 were being discussed and had not yet been settled, and that retroactive pay was on the table, James said. But Fire District 1 had been facing financial challenges during the economic downturn and announced it was cutting staff, and union leaders “were hinting that they were going to ask for minimal increases,” James said.
In addition, James noted that when he served as finance director for the City of Mukilteo prior to coming to Edmonds earlier this year, he sat in on meetings for the Regional Fire Authority, formed to discuss the possibility of regionalizing fire service. During those meetings “the idea was floated that there might even be decreases in labor costs,” James said.
On July 29, the Fire District amended its budget following the settlement of the labor contract. James said that “a concerned citizen” – a Mukilteo resident whom James had known from his time working in that city – called him July 31 and said “did you hear your city’s fire department contract is going to go up by $1.3 million?”
James said he called Fire District 1 the next day, Aug. 1, and was referred to Fire Chief Ed Widdis, who told him, “I don’t know how that number came about. We haven’t even calculated Edmonds’ portion.”
James said he didn’t hear anything more until Aug. 11, when he received an email from Fire District 1 asking for a meeting, which was set for Aug. 21. No number was provided from the Fire District at that time, but the $1.3 million that James had heard about from the citizen was a starting point for expectations, Earling said.
“At least in my family budget, if I was expecting an increase of $1.3 million and then you get a billing of $1.67 million knowing that there’s a 300-and-some-odd- thousand-dollar gap in there, that would surprise me,” the mayor said.
James said the fire district “did not present their number to us until Aug. 21,” when officials hand-delivered to City Hall an invoice for $1.67 million. (While the invoice was dated Aug. 11, the city did not receive it until Aug. 21, James added.)
For the next few weeks, the city performed what Earling described as “due diligence – some early communication with other two cities to get together.” During this time, the finance directors from Edmonds, Mountlake Terrace and Brier met to discuss options, he said. The city’s Sept. 16 news release was issued with the goal of keeping citizens informed of the status, Earling said.
“When you get a number like that, you don’t say, ‘Oh here’s the check and pay it,'” Earling said. “You want to say, ‘OK show us what makes that number up. Since that time the three cities have been going to the district and asking them so we can maybe see if there’s room for negotiations…did they negotiate in good faith? Because the contract says there were certain criteria that they had to meet, so we asked for facts to back that up.”
James noted that his predecessor, Roger Neumaier, who left the Finance Director job in January 2014, allocated an additional $278,000, or 4 percent, in the 2014 City of Edmonds budget for the Fire District 1 contract – for a total of $6.5 million – in anticipation of an increase in fire service fees.
“When we got the bill, it equated to a 26.8 percent increase,” James said. “That’s a number that no one would expect or should expect.”
“If you are getting those kinds of bumps we have to know how they came to the conclusion,” Earling added. “Is there some administrative cost rolled in, is there some apparatus costs?”
Earling and James said that negotiations with Fire District 1 over the final bill will be approached both as a group with the cities of Mountlake Terrace and Brier, as well as separately. While the three cities have “common interests,” Edmonds has a unique service model that the other two cities do not: a dedicated paramedic unit. That was negotiated into the 2010 contract to ensure that Fire District 1’s level of service would match the service that had been provided by the City of Edmonds Fire Department, James said.
That dedicated paramedic unit costs Edmonds more, and it’s possible that Edmonds could receive the same level of service without the extra expense. So it may be an issue “that should be put on the table for the council and mayor to see if that’s what they want,” James said.
“I think in light of this huge bill, we should open up and look at all the options,” James added. “I think that’s good common business sense.”
Fire District 1 has extended the due date of the invoice to Nov. 1, and the Edmonds City Council will have a chance to ask questions of Fire District 1 Chief Ed Widdis when he attends the Oct. 14 City Council meeting. Earling said he plans to meet with each of the city councilmembers prior to the Oct. 14 meeting. “It’s important for them to have context of how and why we got where we are at,” the mayor said.
The council also has a bigger question to address, and that is whether the city wants to continue its current services with Fire District 1, modify those services or pursue other options. The city signed a 20-year agreement that prohibited any changes by either party for the first five years, and that five-year window ends Dec. 31, 2014. From that time on, through the duration of the contract, the city or the Fire District could make changes as long as they provide two years’ notice to the other party, James explained.
Among the options:
- The city could again start its own fire department, although that would be expensive and require the city to buy fire apparatus because it sold all of its equipment to Fire District 1. (The city did retain ownership of its fire station buildings and property.)
- It could contract with another entity, such as the City of Shoreline, which is now handling the Town of Woodway’s fire services. Woodway had received services from the City of Edmonds Fire Department and initially contracted with Fire District 1 after Edmonds made the shift. But according to the Town of Woodway’s November 2013 newsletter, a decision was made to switch in January 2014 to the Shoreline Fire Department after receiving a proposal from Shoreline for reduced response times at a lower cost.
- Edmonds could choose to become part of Fire District 1, which means that the district would tax citizens directly for services. That move would also mean that the City of Edmonds would gain a seat on the Fire District 1 governing board. “We have zero voice currently,” James said. However, the budget impacts of such a move are unclear. “Nobody knows what the cost would be to our citizens,” he said.
- It’s also possible that interest could be renewed in forming a Regional Fire Authority. Nine jurisdictions – including Edmonds, Mountlake Terrace, Brier, Mukilteo and Fire District 1— initially came together in March 2011 to discuss the planning for a regional fire protection authority. But Edmonds – along with Lynnwood, Woodway, Mill Creek, Mukilteo and Fire District 7 – over time declined to be active participants in the planning process, although all jurisdictions said they would continue to be interested observers.
Meanwhile, Earling and James said that they will include a placeholder for Fire District 1 costs in the 2015 budget, set to be presented to the City Council Oct. 7. ”We’ll have to guessimate what the increase might be on top of whatever the final number is we get for this year,” Earling said, noting that the city is once again in the dark about a final number since the Fire District is now negotiating its 2015 labor contract.
“We are trying to plug in a big number and hope that that’s in the ballpark,” Earling added.