By John K. Murphy
Fire department mergers, consolidation, and annexations can be described in one word: complicated. Complicated, yes, but not impossible.
We see businesses merge or consolidate almost on a daily basis, sometimes with a peaceful integration of goods, services, and staff. Other times we see hostile takeovers, with people, products, and product lines being eliminated. The fire service is a bit different than big business, but it’s not much different when it comes to money, people, products, and other services provided by fire departments. In a technical sense, we are a service business providing a service.
There are several items to remember when contemplating joining two or more fire departments, or if you are a municipality annexing unincorporated area that is served by a fire department. There are five important elements to consider during a merger, consolidation, or annexation. These are:
- People
- Culture
- Money
- Politics
- and the law.
The devil is in the numerous details leading to success, but ignore these five issues and you will find certain failure. I am sure there are many more, but in my experience as a veteran of these mergers, consolidations, and annexations, these are the big ones.
People
People are your most important resource. You may be combining a volunteer organization with a career or combination organization, causing everyone some anxiety. There seems to be some animus towards volunteer firefighters by career firefighters. In an attempt to poison the well in long-established organizations reluctant to merge, we sometimes hear comments like “They are not as well-trained as I am” or “They are not as good as we are.” It may also be the other way around, where you have a finely operating volunteer fire department not wanting “career” firefighters in their midst. Remember that many of our current career firefighters used to be volunteer firefighters; I cannot understand such negativity, but we must equalize the playing field by increased training, respect, and a mutual understanding towards each other and realizing change is inevitable. There is no advantage to isolating a particular group or person as we are stronger together than divided (and fighting) during the efforts to merge, consolidate, or annex your organizations Infighting will tank any successful merger. Firefighters serve the public, regardless if they are career or volunteer. It is up to each of us and the leadership to accept everyone as equals and provide equal opportunity for everyone in the new organization. Everyone has a part to play in a successful merger.
Money
Chiefs and politicians, please do not promise there will be major cost savings with these mergers, as there is generally none or very little money saving that occurs. Many times smaller organizations seek to merge with larger organizations to “save money,” but that is not the reality. Sometimes, small towns or cities will annex unincorporated areas to take advantage of a well-developed tax base and increase fire department revenue. I have seen a small or modest increase in revenue and a modest increase in budgets in these mergers. Remember, the objective is to create efficiencies in the delivery of emergency services. A simple way to look at the finances is like this: each department has a budget and revenue stream. Those dollars are allocated to services provided by the new department with about 75 percent or more related to personnel costs (if you have paid firefighters; less if they are volunteer firefighters) and the rest is allocated to other aspects of the new entity. There may be some cost savings, but more importantly there are improvements in the efficiencies of the merged departments. You can reduce your overhead, merge certain administrative and operational functions, relocate stations, or build only fire stations needed in the response area; you can purchase fewer apparatus and actually hire more firefighters. It takes a sharp, budget-minded individual and a lot of discussion to make this happen.
Culture
Many planners of mergers forget about the individual cultures of the affected organizations. Some planners want to eliminate those cultures in order to start a new organizational “culture,” which can be disastrous for future success. Those new cultures will be created naturally as your firefighters and staff merge their former cultures into a new culture. Yes–new patches, new department name, new department name on the apparatus, and even new uniforms. It is imperative the patches, traditions, logos, apparatus paint schemes, station locations, flags, and other organizational identifiers are not lost in the transition. If these are not recognized and honored, your merger will likely fall apart or it may be very difficult to ensure a smooth transition to a new culture.
Politics
Politics, funding, and applicable laws or bylaws is the wormhole of successful mergers. In many states the legislatures have already created the necessary legislation for mergers, annexations, and consolidations, and have even gone so far as to create a funding method for this new entity. Washington state modified existing law to create Regional Fire Authorities (RCW 52.26) [1], and included in this legislation is the creation of new taxing entities. The laws are relatively easy to research. See if your respective political organization can merge, consolidate, or annex with another political organization. There may be some funding law restrictions or other restrictions that may prohibit those mergers. If you are a private fire company, your bylaws and Articles of Incorporation may preclude a merger unless there are modifications to those charter documents.
The politics of change may be a major obstacle. Such issues include:
- Who will lead the new organization?
- Will there be a joint board?
- Will we have to go for a vote of the taxpayers?
- Who will be the fire chief?
- Why is my jurisdiction paying more than the partner agency?
and many more questions.
To ensure success, you have to get these questions asked and answered prior to moving forward. The interesting factor is the political winds of change–and change they do. With each new election there are several new people sitting in the political chairs asking the same or similar questions that were answered at the beginning of the process.
The Law
A local consolidation of my former fire department found itself almost splitting up for many reasons, but mostly was focused on funding and leadership. Yes, you and your prospective partners will need an attorney to work out the legal details and possible ballot measures. Some agencies have hired outside firms to assist them in creating the new consolidated, merged, or annexed fire department.
When you can clear these hurdles, then you are ready to merge your operations. It may take two to three years of discussions and sometimes several false starts to begin a new entity.
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Next comes the hard work in merging polices, operational directives, training, the qualifications of the firefighters and officers, and hundreds of other details related to a successful merger.
Many departments may start with a functional consolidation of operations or leadership to see if there are immediate advantages (much like going on a date), with the real possibility that you may terminate the arrangement or find success and an increase in operational efficiencies. Many of these functional consolidations lead to full consolidations when all of the bugs are ironed out.
The efficiencies are found in leaner and less top-heavy leadership, consolidation of stations, increased purchasing power, a larger revenue source, and the ability to successfully pass bonds and levies.
Consolidations and mergers are hard work and not all will be successful, but if you are contemplating such a venture, do your research first and you will be successful.
John K. Murphy JD, MS. PA-C, EFO, Deputy Fire Chief (Ret), has been a member of the career fire service since 1974, beginning his career as a firefighter & paramedic and retiring in 2007 as a deputy fire chief and chief training officer. He is a licensed attorney in Washington State since 2002 and in New York since 2012. Mr. Murphy consults with fire departments and other public and private entities on operational risk management, response litigation, employment policy, and practices liability, personal management, labor contracts, internal investigations and discipline, and personal injury litigation. He serves as an expert witness involving fire department litigation and has been involved in numerous cases across the country. He is a frequent legal contributor to Fire Engineering Magazine, participant in Fire Service Court Blog Radio, Fire Engineering‘s Fire Service Legal Minute, and a national speaker on fire and EMS legal issues.
For more information please contact 206-940-6502 or at john@murphylawgroup.org
END NOTE
1. http://www.mrsc.org/subjects/governance/spd/rfpsa.aspx
