Presentation to the City of Houston Budget and Fiscal Affairs Committee Impact of Fire Compensation Parity Tuesday, September 4, 2018 Tantri Emo, Chief Business Officer/Finance Director Chief Peña, Houston Fire Chief Table of Contents Section Page Overview 04 Assumptions & Impact 05 COH Operating Budget 06 Paying for the Referendum 07 HFD Expenditures and Revenues 08 HFD Operating Budget 09 HFD Program Improvement Needs 10 Call Volume 11 Restructuring Strategies 12 Appendix 14 • Proposed Charter Amendment 15 • Position Requirements 16 2 Disclaimer Parts of this presentation are based on assumptions about the possible operation and fiscal impact of the proposed Charter Amendment that would require pay “parity” for Houston Firefighters whose pay classifications or titles, but not job duties, are the same or like those of Houston police officers with the same or a similar pay classifications or titles. The estimated magnitude of the fiscal impact on the City’s budget and solvency may change if uncertainties about the operation of the proposed Charter Amendment are clarified. 3 Overview • In FY2014 firefighters received pay raises totaling 3% valued at $8.8 million • In FY2015 firefighters received a one time uniform allowance with a total value of $3.64 million • In June 2014 firefighters voted against a 4% across the board pay increase that would have been effective January 2015 valued at $12.4 million • In January 2018 the HPFFA walked away from a 9.5% pay increase over 3 years valued at $69 million • In May 2018, petition from Houston Professional Fire Fighters Association (HPFFA) validated by City Secretary • The City is currently under a property tax cap and facing a budget deficit of approximately close to $200 million by FY2022 4 Assumptions and Financial Impact • Assumptions on the financial impact is based on: – – – • The financial impact of the proposed Charter Amendment, the equivalent of up to a 25% average increases in both base pay and special pays in the first year – – • Base pay and special pay comparison as indicated on the petition for Charter Amendment Based on headcount as of July 16, 2018 Includes cost for pension, FICA, overtime and higher class pay 20% increase in base pay and 5% increase in special pays First year costs are estimated at $98 million o Assuming no future pay raises for Police over three years, the cumulative cost will be up to $295.8 million o With future pay raises for Police, the annual and cumulative cost will be more Other potential financial impact – – Pension Reform Cost of Service 5 COH General Fund Budget THE BREAKDOWN OF THE GENERAL FUND OPERATING BUDGET The FY2019 Adopted General Fund Budget is $2.5 Billion. Sixty-three percent of the General Fund Operating is earmarked for personnel costs, with three quarters of all personnel costs related to classified employees, meaning they are first responders and other public safety workers. FY2019 Adopted Budget = $2,479,414 $ in Thousands 6 Paying for the Fire Referendum • As of July 16, 2018 - Fire’s classified headcount is 3,958 • Addressing the $98M annual budgetary deficit will mean a reduction in workforce of up to 24% or 931 firefighters. • A reduction of this size in personnel cannot be accomplished without a major restructuring of the current operations including: – Right size the current staffing model to a 3 shift work schedule – Civilianization of dispatch and inspection divisions – Revamp the EMS service delivery model • It will also require reduction in other City departments 7 HFD Expenditures & Revenues (in Millions) Fiscal Year Expenditures $503.4 $494.6 $504.4 $504.2 $494.1 $452.1 $433.2 $420.3 $448.2 $435.8 $422.6 $388.3 $360.4 $327.3 $291.4 $281.5 Fiscal Year 8 Revenues $100.2 $108.2 $105.6 $112.1 $78.5 $69.8 $58.7 $62.9 $51.2 $46.7 $47.1 $46.1 $50.6 $42.8 $42.5 $39.2 HFD General Fund Budget THE BREAKDOWN OF THE HFD GENERAL FUND OPERATING BUDGET HFDs FY2019 Adopted General Fund Budget is $503.4 Million. Ninety percent of HFD’s budget is earmarked for personnel costs. Ninety-eight percent of personnel costs are related to classified employees. FY2019 Adopted Budget = $503,459,709 Civilian $10,650,584 2% Other Services $6,961,984 14% Billing & Collections $5,147,044 11% Medical Supplies $3,100,940 6% Classified $444,131,982 98% Personnel $454,782,566 90.3% SCBA/Bunker Gear/Clothing $4,330,529 9% Other $48,677,143 9.7% Restricted Accounts $27,028,919 56% Supplies $2,107,727 4% 9 Program Improvement Needs • Health and Safety Programs • Professional Development • Apparatus Replacement Needs – 33 Engines (approx. $20M) – 17 Aerials (approx. $17M) – 50 Ambulances (approx. $10M) – Annual replacement of 8% to 10% (approx. $11M/yr) • Station Improvements – Vehicle Exhaust Systems – Female Facility Upgrades – HVAC Replacements 10 Call Volume Date Range Fire Related Inc. EMS Related Inc. Total Inc. Jan 1 - Dec 31, 2016 42,109 293,858 335,967 Jan 1 - Dec 31, 2015 43,056 289,907 332,963 Jan 1 - Dec 31, 2014 41,747 276,880 318,627 Jan 1 - Dec 31, 2013 42,064 257,107 299,171 EMS Resource Management 2017 = 12.4% Fire Resource Management 2017 = 1% 11 Restructuring Strategies • 3 shift work schedule • 46.7 hours + 9.3 overtime hours • Attrition of 720 Classified Employees • No financial savings • 46.7 hours with Kelly Days • Attrition of 300 Classified Employees • Increase of ~$25.4M 12 Restructuring Strategies • Civilianization • LSB • Attrition of 119 Classified Employees • ~$4.9M annual savings • Dispatch Division • Attrition of 78 Classified Employees • ~$3.1M annual savings • EMS Division • Attrition of 824 Classified Employees • ~$10.9M annual savings 13 I ff/?rffx? no 14 To the l'tIayor and City Council of the City of Hottstott We, the undersigned registered T.?oters ofthe City of Houston:I PETITION FOR A CITY OF HOUSTON CHARTER TO REQUIRE PARITY IN THE TO HOUSTON FIREFIGHTERS COMPARED TO THE COMPENSATION PROVIDED- TO HOUSTON POLICE OFFICERS Texas, tutder Section 9.904 ofthe Texas Local Government Code, hereby petition for an election to antend the Charter of the City of Houston to add the following as a separate section of ottr Charter, to read as follows: The City ofHouston shall contpensate City ?re?ghters in a manner and antottnt that is at least equal and contparable by ranlt and seniority 1ttith the compensation provided City police of?cers including: a. Persons employed in the follo'tting ?re?ghter classi?cations shall receive tlte same base pay as persons oflilae seniority employed in the following. sintilarlv numbered police of?cer classi?cations: l. Probationary Fire?ghter 1. Probationary Police lCl?f?cer 2. Fire?gltter 3.. Police O?ftcer .5. 3-. Senior Police Of?cer Captain. Inspector. Investigator. Comntunications Captain. Mechanic 4. Sergeant 5. Senior Captain. Senior Inspector. Senior Investigator. Communications Senior Er. Lieutenant Captain. Shop Supervisor 15. District Chief. Assistant Arson Investigator. Chief Inspector. tr. Captain Chief Communications Cl?ftcer. l'tIastJer Siechanic Deputy Chief. Arson Investigator. Assistant Fire hIarshal. Deputy Chief I. Captain Cornn'tunications O?ftcer (with an additional 15: for parity} S. Assistant Fire Chief. Fire Siarshal S. Assisrant Police Chief 9. Executive Assistant Fire Chief Executive Assistant Police Chief In the event the title of ofthe above classi?cations shall be changed.I the new classi?cation most similar in terms of quali?cations and duties to the old shall be substituted therefore. to achieve paypaiity. Fire?ghters employed in ?re suppression shall receive the same incentive pay as police o?ftcers. of lil-te seniority. employed as patrol o?ftcers. c. Fire?ghters shall receive the same training pay as police of?cers of like seniority. d. Fire?ghters employed as arson investigators shall receive the same investigative incentive pay as police of?cer investigative personnel oflil-te seniority and investigative experience. e. Fire?ghters tvho serve as Field Training Of?cers shall receive the same Field Training Of?cer as police o?icers who serve as Field Training O?icers. f. Fire?ghters shall receive mentoringpay in the same amount and on the same basis as police o?ftcers. g. Fire?ghters classi?ed as arson investigators. inspectors. conu?ruutications captain. senior inspectors. senior investigators. communications senior captain. assistant arson investigator. chief inspector or chief communications o?ftcer shall receive the same 1t'teelaend premium and shift differential pay in the same amount and on the sarrte basis as pohce o?icers quali?ed to receive such pay. h. Fire?ghters shall receive educational incentive pay in the same antotu'tt and on the same basis as police of?cers entitled to receive such pay. i. Fire?ghters shall receive college tuition reimbursement in the same amount and on the same basis as police o?cers entitled to receive such reimbursement. i. Fire?ghters shall receive the same clothing allowance tor similar bene?t} paid to police of?cers. in addition to anyprotective clothing and equipment provided the City. It. Fire?ghters shall receive the same equipment allotvance (or similar bene?t) paid to police o?ftcers. l. The City shall make the same contribution to the Houston Professional Fire?ghters Association I'tIedical Trust that it does to the Texas Police Trust. at. To the extent that the names of ofthe fon:ns of pay or bene?ts identi?ed above are changed. the requirement ofparity for ?re?ghters to police of?cers shall continue to apply. In addition. if any new form of pay or bene?t is protided to police of?cers. the saute shall also be protitled to ?re?ghters. 15 Position requirements HFD HFD REQUIREMENT HPD - Minimum age to apply is 18 and must not reach his/her 36th birthday before receiving the oath of office - Education & Certifications – Certified cadets 15 college hours with a grade of ‘C’ or higher, and active Fire and Probationary Police Officer EMT certifications - Education – Non Certified cadets 24 college hours with a grade of ‘C’ or higher, or 2 years of full time active duty military service with an honorable discharge 1 Probationary Firefighter 2 Firefighter -Automatic title after successfully completing the probationary period 3 4 HPD REQUIREMENT - At least 48 semester hours of credit from an accredited college or university with at least a 2.0 grade point average; OR - A minimum of 18 months active duty in the United States armed forces and received an honorable discharge; OR - At least five years of full-time employment as a peace officer licensed by TCOLE or an equivalent licensing entity in another state. Police Officer -Automatic title after successfully completing the probationary period Engineer/Operator - Exam - 2 years in the previous rank Senior Police Officer - No Exam - At least 12 years of service(experience) w/training or - At least 17 years of service (experience) Captain, Inspector, Investigator, Communications Captain, Mechanic - Exam - 2 years in the previous rank Sergeant -Exam -4.5 years of service 16 Position requirements HFD HFD REQUIREMENT Senior Captain, Senior Inspector, Senior investigator, - Exam 5 Communications Senior Captain, - 2 years in the previous rank Shop Supervisor HPD Lieutenant District Chief, Assistant Arson Investigator, Chief Inspector, 6 Chief Communications Officer, Master Mechanic - Exam - 2 years in the previous rank - 4 years in the department Captain Deputy Chief, Arson Investigator, Assistant Fire 7 Marshal, Deputy Chief Communications Officer -Exam -2 years in the previous rank Captain (with additional 15% for parity) -Appointed Position 8 Assistant Fire Chief, Fire Marshal - AFC – 5 years as certified firefighter Assistant Police Chief 9 Executive Assistant Fire Chief Executive Assistant Police Chief -Appointed Position HPD REQUIREMENT - Exam - 2 years in previous rank - Associate’s Degree or higher or 65 hours of coursework - Exam - 2 years in previous rank - Bachelor’s degree No Equivalent -Appointed Position -Master’s degree -At least 5 years from sworn date with HPD -Appointed Position -Master’s degree -At least 5 years from sworn date with HPD 17