Fire Department Mergers, Annexations and Consolidations
By M2 Resource Group, Inc
Expert Website: http://www.murphylawgroup.org/index.htm
Call (206) 940-6502
Expert Website: http://www.murphylawgroup.org/index.htm
Call (206) 940-6502
Fire department mergers, consolidation and annexations can be described in one word: complicated. But it's 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 and generally people, products and product lines are eliminated. The fire service is a bit different than big business, but not much when it comes to money, people, products and other services provided by the Departments. In a technical sense, we are a service business providing a service.
As a veteran of such mergers, consolidations and annexations there are several items to remember when contemplating joining two or more fire departments; or if you are a municipality annexing the unincorporated area that is served by a fire department. There are five important elements of a merger that are important to consider during a merger, consolidation or annexation. Those are: people, culture, money, politics and the law. The devil is in the numerous details leading to success, but ignoring these five issues and you will find certain failure and not success. I am sure there are many more, but in my experience these are the big ones.
People – People are your most important resource and we have to remember we may be combining a volunteer organization with a career or combination organization and everyone has some level of anxiety. There seems to be some animus towards volunteer firefighters by career firefighter’s characterized by such statements as, “they are not as good as we are” or “there are not as well trained as I am” and other such negative connotations. We hear these comments in well established organizations reluctant to merge in an attempt to poison the well. It may also be the other way around where you have a finely operating volunteer fire department not wanting “’career” firefighters in their midst.
Remembering that many of our current career firefighters used to be volunteer firefighters; I cannot understand such negativity, but realize that 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 separated (and fighting) during the efforts to merge, consolidate or annex your organizations and 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 – Chief’s and politicians - Please do not promise there will be a major cost savings with these mergers as there is generally none or very little savings of money in these efforts. Many times smaller organizations seek to merge with larger organizations to “save money” and 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% 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, 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 – defined as the beliefs, customs, arts, etc., of a particular society, group, place, or time or a way of thinking, behaving, or working that exists in a place or organization such as a fire department. 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 “culture” of the organization which can be disastrous for future success. Those new cultures will be created naturally as your firefighters and staff will merge those 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 be very difficult to ensure a smooth transition to a new culture.
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) and included in this legislation is the creation of new taxing entities. The laws are relatively easy to research to 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 – 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; questions as to why is my jurisdiction paying more than the partner agency and many more questions. In order 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. 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 will and your prospective partners will need an attorney to work out the legal details and possible ballot measures and 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.
Now comes the hard work in merging polices, operational directives, training and 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, 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.
ABOUT THE AUTHOR: John K. Murphy JD, MS. PA-C, EFO, Deputy Fire Chief (Ret)
Mr. Murphy 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.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.