Report Prepared by: Derek Parker, Fire Chief, Fire Department
Title
SUBJECT: Public Hearing - Merced Fire Department Master Fee Schedule
REPORT IN BRIEF
Public Hearing to hear comments and adopt a resolution updating the Merced Fire Department’s Master Fee Schedule.
RECOMMENDATION
City Council - Adopt Resolution 2023-64, A Resolution of the City Council of the City of Merced, California, Adopting the Fire Department’s Master Fee Schedule to Adjust Existing Fees for Inflation and to Include Fees for Emergency Medical Services.
Body
ALTERNATIVES
1. Approve as recommended; or,
2. Approve, subject to other than recommended by staff; or,
3. Refer to staff for reconsideration of specific items; or,
4. Continue item to a Future Council meeting; or,
5. Deny the request.
AUTHORITY
Charter of the City of Merced, Section 412. Adoption of ordinances and resolutions.
California Government Code Sections 66014, 66016
California Health and Safety Code Section 19132-19132.3
CITY COUNCIL PRIORITIES
Public Safety, as provided for in the 2023/24 Adopted Budget.
DISCUSSION
History
The California Constitution grants cities the authority to establish fees to recover the cost of providing services. Previous City Council’s (1998) direction was to ensure that existing fees were calibrated to the cost of providing services. On December 16, 2013, City Council approved Resolution No. 2013-52, which continued the current fire prevention fees until a Fee Study Analysis could be conducted and a subsequent resolution could be adopted modifying those fees. In 2013, the Fire Department contracted with a third party, NBS, to conduct a Comprehensive User Fee Study to evaluate and identify the actual cost of providing fee-related services and to recommend recovery levels for each fee. NBS developed a defensible methodology for calculating fees for service and considered the extent to which the City properly recognizes fees for service revenue in accordance with various state laws such as California Government Code §66014, Proposition 26 and 218.
The collection of data validating the reasonable cost of providing services was based on a fee study using FY 13/14 budgetary expenses and well as FY 13/14 volume data and revenues. Staffing levels necessary to conduct all required Fire Life Safety Inspection and fee related activities were also considered. NBS utilized staffing, budget data, and labor resource inputs for each task related to the fees, as well as indirect costs, to determine the full cost rate for the services. NBS provided the formulary for the Fire Department staff to utilize in future years to determine the appropriate cost for providing services for Permit to Operate under the California Fire Code; Mandated and Required Annual Occupancy Inspections; Development Plan Check and Construction Inspections; and Miscellaneous Charges for services. Key consulting tasks included development of a deliverable cost of a service model justifying full-burdened hourly rates and activity/service unit costs, a master fee schedule identifying the maximum fee amount justified, documentation of cost recovery and pricing objectives. Study sessions were held with the Greater Merced Chamber of Commerce and City Council.
Public Hearings were held to receive and consider public comments on updates to the Fire Department’s fees which were based on the User Fee Study prepared by NBS. Based on the feedback, MFD staff-re-evaluated various components utilized in deriving costs for fees and inspection times and adjusted them based upon input from Fire Prevention Bureau staff, resulting in the new user fees which were adopted through Resolution No. 2016-48. NBS recommended the best practice of including an annual escalator in the fee schedule and every 3-5 years to factor in an annual automatic inflator (CPI or Labor Cost increase). Therefore, we are utilizing the existing formula plus the recommended CPI increases. On 09/06/22, City Council approved the First Responder Fee Feasibility Study written by the third-party consultant, AP Triton; provided general support for MFD to return with a proposed resolution for the first responder fee; and to provide direction to establish a policy to defer billing all Medi-Cal and Medicare recipients and Private Party Merced City residents and provide direction to establish a Compassion Waiver Policy.
Following council direction, we have prepared an updated Master Fee Schedule for the Fire Department.
Problem Statement - Fire Prevention
Since the City Council approved Resolution No. 2016-48 no adjustments have been made to the MFD Master Fee schedule. The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. According to the United States Bureau of Labor the cumulative CPI-U for San Francisco/Oakland/Hayward Area increase for the period 2017 through today is approximately 20%. While the formulas utilized to generate the approved Master Fee Schedule are generally adequate the fees need to represent current expenses.
The CPI has increased nearly 20% the cost of living, number of inspections to be conducted, call volume for MFD have all increased as well. In 2014 the MFD call volume was recorded as 6,362 and in 2016 the call volume increased to 10,086. During this same period of time the number of buildings and businesses within the City of Merced continued to increase. At the conclusion of this extreme growth period MFD utilized NBS as the consultant for the Master Fee Schedule. 2022 call volume concluded with greater than 12,000 requests for service. The requests for service will only increase due to the concerns for EMS response. While there has been great increase in demand MFD has been unable to increase Fire Prevention staffing. Rightsizing the workload between suppression and Fire Prevention is necessary.
While the Master Fee Schedule generally meets the needs for the community there are recommended changes which will make the fees more business friendly. High Hazard (H), Factory (F), and Mercantile (M) occupancies have a standard fee for inspection regardless of the business size. For example, a small 300 sq. ft. tire shop pays the same occupancy fee as a large 100,000 sq. ft. big box store. To ensure equity of fees for business owners across the city MFD will separate these fees by building size. 0 sq. ft. to 5,000 sq. ft., 5,001 sq. ft. to 15,000 sq. ft., and 15,001 sq. ft. and greater create an equitable structure. These fees will be set below 100% cost recovery.
The existing Master Fee Schedule does not include an inspection fee for existing Business “B” occupancies. An example of a “B” occupancies are insurance offices, real estate offices, and counseling offices. MFD does not visit these offices unless there is an operational permit or if MFD is requested by the business and does not currently charge a fee. Fire administration has determined that it is necessary to inspect these businesses once every three (3) years to ensure members can exit a building safely, have updated fire extinguishers, appropriate extension cord use, and most importantly, have their fire safety questions answered. The business inspection fee has been set within the cost recovery required for inspections on a three-year cycle.
Problem Statement - EMS
Merced County EMS Agency (MCEMSA) administers a countywide contract for Advanced Life Support (ALS) transport services within Merced County. SEMSA/RIGGS is the awarded provider for MCEMSA. MCEMSA monitors compliance standards set forth in the Request for Proposal and agreed upon within the contract. The contractor has been consistently significantly out of compliance with their response times. There are many notable concerns however MFD is poised to support the EMS system by adding ALS personnel to the EMS system and adding transport capable apparatus to the MCEMSA’s rolling stock.
The City of Merced is one of six cities within Merced County which are in “High Call Density.” The High-Call Density response requirement is to have an ALS ambulance on scene within 10:59 seconds 90% of the time. This means that the ALS services have nearly 11 minutes to arrive and provide a recognized link within the American Heart Association’s “Chain of Survival.” In February the compliance for High-Call Density for the most acute EMS calls was 63.6%. That means 36.4% of the calls for the most acute medical requests receive an ambulance on scene more than 11 minutes with the advanced providers for the community. MFD has had multiple wait times in excess of 60 minutes and have even had wait times of greater than 120 minutes. This is an unacceptable reality within our community.
Another unacceptable reality is that for lower acuity calls the ambulance contractor is permitted to not send an ambulance per the contract. The contractor may “pend” a request for service until there is sufficient staff to respond. Wait times for a “pending” ambulance request may be up to 180 to 240 minutes.
The MFD proposes to offer transport services with basic life support (BLS) ambulances. When available, the ambulance will respond to the previously mentioned low acuity requests as a first responder to evaluate patients.
MFD is at the ready to provide transportation of the ill and injured once approved by MCEMSA. In the meantime, an ambulance transport system needs to be developed. The establishment of a fee structure within the Master Fee Schedule is necessary for recovery of costs.
Outreach
MFD has been active in gathering data to share with the community regarding the need for increased fire service and fire prevention. Most notably, the outreach efforts to share both the need for expanded EMS delivery as well as engaging a robust Fire Prevention Bureau. The safety of the community is at the core of every message.
In April 2023 the MFD established a Strategic Plan Committee (SPC) with over 40 members. Half of the team is made up of MFD firefighters and the remaining half is represented by members of the community. Community groups (NAACP, Boosters, Lao Family, etc.), educators (MUHSD, MCSD, MC, UC Merced), public safety (CHP, Fresno Fire, MPD, UC PD), real estate (realtors, insurance, etc.), medical community, and public partners (Merced County) are all represented within the group. A total of 7 meetings are planned and 4 have been completed. Two meetings were specifically held, and the findings of those meetings are relayed within this item. Those two meetings were on EMS Delivery and Fire Prevention.
The SPC was provided factual data regarding the service gaps within our community for EMS delivery. The SPC developed objectives and strategies to be presented for both EMS delivery and Fire Prevention. Below are the Objectives and Strategies as represented by our community group which pertain to the Master Fee Schedule:
EMS Objective 1. Explore expanded emergency medical services in the community which include injury/illness prevention
Strategy 1. Development of a fee schedule
EMS Objective 2. Improve the quality of EMS care in the City of Merced and support the services within the County of Merced.
Strategy 2. Expand emergency medical services in the community to include ALS first responders and ALS and BLS ambulance transport.
Strategy 3. Establish an MOU with Mercy Merced Medical Center to ensure all Critical Care Transport patients are aided in transportation to a higher level of care when resources are not available or able to respond.
Fire Prevention Objective 1. Establish a fiscally sustainable Fire Prevention Bureau to support growth within the community and future development.
Strategy 1. Update Master Fee Schedule (Resolution 2016-48) to include a Consumer Price Index Uniform (CPI-U) adjustment based on market changes. Add all state mandated inspections to the Master Fee Schedule.
Fire Prevention Objective 2. Create an equitable Fire Inspection program for businesses within the City of Merced.
Strategy 2. Tier the fire inspection occupancy types within the Master Fee Schedule based upon building size. Proposed as 0-5,000 sq. ft., 5,001-15,000 sq. ft., and 15,001 sq. ft. and greater.
Fire Prevention Objective 3. Ensure all businesses are fire safe within the City of Merced.
Strategy 3. Create and implement a triannual inspection for all businesses (B occupancies) in Merced.
Strategy 4. Establish a reasonable cost of $52/year.
Strategy 5. Expand Fire Prevention workforce to include Fire Prevention Officers to complete safety inspections.
The proposed EMS Transport fees as set forth are within the rates set for MCEMSA approved fees (4 years ago) and represent a 25% savings to what current ambulance fees represent in the community. The current county provider established these fees in 2019 within the application to MCEMSA to operate as the ALS provider. These fees have been adjusted at least annually. The local ambulance fee schedule, while on the high side, is in alignment with the private industry. As for the public sector, the fees we are proposing are in alignment with other California Fire Departments.
Financial impacts for EMS delivery are very apparent within the community. A draft Compassion Fee Waiver Policy is attached within the agenda packet. The draft policy is guided by the United States Health and Human Services poverty guidelines. It will be recommended to return to council for direction on a fee waiver policy.
The findings have been shared with multiple groups and discussion has been thorough. A meeting was held with the Merced Hotel/Motel Association and after good discussion regarding Fire Prevention Fees the statement was that it was a reasonable proposal. This was important as no “R-1” occupancy type cost recovery had occurred although the properties had been inspected as a “R-1” is mandated by the State Fire Marshal’s Office. Additionally, many other groups have meet met with and at the conclusion of the presentations and questions the proposals have been viewed as reasonable asks.
Outreach has been accomplished in the form of radio spots, utility bill inserts, and presentations to various community groups. All presentations have been met with good questions and the takeaway for the groups has been that the fire department is being “reasonable.”
Staff Recommendations
• Approve the increase in Master Fee Schedule by the cumulative total of the 2017-2022 CPI increases (approximately 20% increase)
• Establish by resolution CPI adjustments annually on July 1st for all fees within the Merced Fire Department Master Fee Schedule.
• Tier Occupancy type fees for “F”, “H”, and “M” occupancy types in the order of:
o 0 sq. ft. to 5,000 sq. ft.
o 5,001 sq. ft. to 15,000 sq. ft.
o 15,001 sq. ft. and greater
• Approve Occupancy type triannual “B” be added to the Master Fee Schedule at a rate of 1 personnel hour
• Approve Occupancy type “R-1” Occupancy (Hotel/Motel) for cost recovery and tier by 1 and 2 story at a 2-personnel hour rate and 3 and greater story at 4-personnel hour rate
• Approve EMS fee schedule for the following:
o BLS Transport
§ Emergent and Non-emergent
o ALS Transport
§ Emergent and Non-emergent
o Critical Care Transport
o Mileage
o Night Calls
o Oxygen
o First Responder Fee
o Treat/No-Transport
• Direction to return to council for adoption of Compassion Fee Waiver Policy
IMPACT ON CITY RESOURCES
Approval of the proposed update to the Fire Department’s Master Fee schedule will potentially generate additional annual revenue to the General Fund. After 12 months, staff will use the prior year as a benchmark in assessing the increased revenues. Estimated additional revenues are approximately $80,000 with the increase in fees and the addition of “B” occupancy inspections tri-annually. Staff will be increased within the Fire Prevention Bureau with an additional Fire Prevention Officer.
The establishment of EMS transport fees do not create an impact on City Resources. Prior to ambulance transport program inception, a third-party biller will be contracted to manage the billing of EMS incidents and coordinate the Intergovernmental Transfer of Public Provider Ground Emergency Medical Transport act funding. Personnel to staff the ambulances will be single function personnel and will need to be established as new labor personnel within the fire department.
ATTACHMENTS
1. Matrix of Current Master Fee Schedule vs. Proposed Master Fee Schedule
2. Master Fee Schedule - Final
3. NBS Fee Study FINAL 2016 16-211
4. Merced First Responder Fee Study FINAL
5. Fee Schedule 23-592_080723
6. Resolution 2023-64 - Fire Department Fees
7. MFD EMS Compassion Waiver Policy_DRAFT_041523