Consideration and Adoption of Ordinance No. 2018-20: A(n) ordinance amending Section 5-01-001-0001 of the Flagstaff City Code regarding fire protection services in County islands and other selected unincorporated property.

• Section 5-01-001-0001 of the City Code for fire protection services is outdated and needs revision.
   
• This amendment corrects an inequity to the City of Flagstaff taxpayers v. those residents outside the City limits who are under contract for fire/EMS protection v. those residents outside the City limits who are absent of a fire protection services contract.
   
• By maintaining an eighteen percent (18%) surcharge for all non-City residents it ensures equity for City tax payers to receive fire protection services at a lesser rate.
   
• By adding a 2% annual inflationary modifier to all outside the City contracts, it simplifies the budgetary forecasting for both the City and those under contract compared to the old Consumer Price Index (CPI) model.
   
• For those not under contract we have established a rate that will move with increased salaries, pensions, benefits, and equipment costs (as set forth in the AZ State Fire Agreement contract) plus the eighteen percent (18%) surcharge. This ensures equity for those non-City residents under contract to receive fire protection services at a lesser rate.

This ordinance change should create a more stable budgeting tool for both the City and the customer.

Amendment of previous Ordinance No. 2010-21 and Flagstaff City Code of Ordinances Section 5-01-001-0001.

Code Compliance: Review current city code to align with community expectations.

Previous Council decisions: Ord. No. 1765, Amended, 08/04/92; Ord. No. 2003-09, 05/20/03; Ord. No. 2010-08, 03/16/10;) (Amended Ord. No. 2010-21, 10/05/2010)

• Approve the proposed amendment to create a more stable and equitable budgetary tool for the fire protection service to current, and or new contract non-city residents.  This creates a more equitable and effective cost recovery tool for fire protection services provided to non-city residents who choose to not enter into a fire protection service contract.
   
• Disapprove the proposed amendment and leave the current Ordinance in place.

The model (Ord. No. 2010-21) was based on the current operating and maintenance budget divided by the number of calls.  As our call volume has risen dramatically over the past five (5) years (2010- 9382 incidents v. 2017 – 14680 incidents), this model caused the cost to non-contract individuals to drop dramatically, while salaries, pensions and equipment costs to the City of Flagstaff rose dramatically.  This also created an inequity of a cheaper rate for those without contracts than those with a contract.  The old method of non-contract pricing under (Ordinance No. 2010-21 and the Flagstaff City Code of Ordinances 5-01-001-0001 - Section1, C.)- no longer covered the actual costs for full burden rates and equipment.  Through this new method of calculating we have utilized the highest burden rate for employees and matched it up with our AZ State Fire Agreement for equipment costs, plus the 18% surcharge.  This new model eliminates the inequity between city tax payers, out of city residents with a contract, and those residents outside the city who choose to not be under contract.   

By adopting the new ordinance (No. 2018-20), it should minimize the need for future changes.

Ordinance No. 2018-20 is requesting the change for two areas; those with and or acquiring new contracts and those absent of a written contract from the previous City Code of Ordinances Section 5-01-001-0001.
 

• For those with a current contract - Section 1 B #3: maintain current model with a change from the current Consumer Price Index (CPI) to a flat 2% inflationary modifier that will be assessed annually.  This is to provide better stability for both the city and the customer on annual cost increases for budgeting purposes.
   
• For new contracts  established after the effective date of this ordinance, including fire districts, individual contracts, including county islands, the fire protection services rate shall be established using the same model as current contract holder (see bullet above).  To match current and new contract rates accordingly.
   
• For those without a City contract –  In the absence of a written contract, an implied contract shall exist between the city and the property owner which provides for reimbursement to the city at an hourly rate (rounded to the nearest whole dollar) based on the average hourly full burden rate of a three person Engine/Water Tender company (current salary for top step Captain/Paramedic, Engineer/Paramedic, Fire Firefighter/Paramedic) plus the hourly cost of the unit based upon the current cost set forth in the Arizona State Fire Agreement contract with the City of Flagstaff. For a Battalion Chief (BC) it is the hourly full burden rate (current hourly for top step) plus a flat rate for the vehicle based upon the rate in the current Arizona State Fire Agreement with the City of Flagstaff. Previous billing was based on the current operating and maintenance budget divided by the number of calls. 

Other considerations and attachments:
 

1. Fees have been posted per ARS. 9-499.15 - This notice was posted on the City of Flagstaff website homepage on Tuesday August 21, 2018 and has been distributed to other social media accounts and electronic communication tools of the city.
2. A draft of the proposed notice - This would be sent out to all non-contract, out of city residents in the Flagstaff Fire Department response footprint.

By having an 18% surcharge, this is causes those resident tax payers in the city to receive a lower rate for fire protection service than those outside the city limits.  By including a 2% inflationary modifier it will keep the document more up to date v. a flat rate and create better budgetary stability compared to the Consumer Price Index (CPI) model.
 
Non contract residents outside the city are billed for personnel at the highest full burden rate and equipment is billed as we would through the AZ State Contract for any incident needing fire protection services.  The eighteen percent (18%) surcharge is added on top for equity to ensure those under contract receive a lower rate for fire protection services than those absent a contract.

City taxpayers receive fire protection services at a lower rate than those who are not city residents.  Those under contract receive fire protection services at a lower rate than those who are without a written contract. All residents outside the city have access to fire protections services when resources are available.

Posted proposed fee changes prior to this council meeting per ARS 9-499.15