Written by: Chief Kris Kazian

(1) The Governing Board has NOT approved any spending. They have asked that the $18M Bond be placed before the voters to decide if funding should be provided via that route for the $18M worth of projects identified. The remaining $8M are on our tentative (not formally approved) 10 Year Capital Improvement Plan- which acts like a road map. Taking an accurate snapshot of exactly what will be needed over 10 years is a little tough and things change. To be clear — the voters do not vote on any of our capital improvement plans — they elect officials to the Governing Board to approve budgets annually. If the funding is within the mil rate capacity, there is not an opportunity for voters to vote on capital items.

(2) The projects are estimated as follows- Station 4 (Uptown) is $5,686,860 and Station 5 (Oak Creek Canyon) $3,012,843 for a total of $8,699,703. This is inclusive of the higher end of our estimation and 15% soft cost to handle things such as permits, temporary housing, architectural and engineering fees etc. Projecting future construction costs and without solid plans, it is difficult to get an exact cost. We also do not want to come up short. As you may be aware, construction costs are fairly constant and only going up- material and labor so we have to be conservative.

(3) That $5M is likely in the ballpark (less Station 6). Station 6 actually handles basically 2 calls a day (they are claiming less than 1). They responded to 712 incidents from station 6 in FY17. Claiming the Board approved more than $78M going forward to FY18. FY2011-12 to FY2016-17 was $58.9M (wages and benefits spent) and if you add FY18 which we are 19 days into- the total is $71.6M (considerably less than the $78M claimed)

(4) This is a matter of opinion. We are a service industry and we provide that service with people. It is very typical for a government sector business- especially fire departments to be at 80% wages and benefits. To a person who comes from a different business market, that may be a way foreign ratio.

To say we have sacrificed anything in favor of higher employee¹s salaries is not founded in truth and is a matter of opinion not based in fact. We have been working diligently to restart our capital plan and much of the funding was spent in the recession years (and coming out of those years) when previous board cut the Mil Rate when we had an assessed value (AV) that lost over 43% of value. It acted as a double whammy and has a lot to do with where we are finding ourselves now.

(5) While not splitting hairs, the Board did approve a $16,994M budget. It is an increase of $1,139,305 from the previous year¹s budget. Important to note is the fact we had an increase of $700,000 to our budget for PSPRS Employer contributions. This was a result of the AZ Voter Approved Initiative Penion Reform in Proposition 124 that took effect. Staff worked incredibly hard to make the increase as minimal as possible and also work to set a course of long term success.

(6) The FY2011-12 was $ $13,280,171. The math of taking the total budget and dividing by 365 days is mathematically correct however, at a minimum you typically would take the Maintenance and Operating (M&O) budget (which does not include things like capital) and you would get $42,571.35 (FY18). While this may be interesting for some, I am not aware of what reference they are making to consider this number to be out of line with what SFD needs to provide emergency services. I like to break it down even further if that is the way we are going to look at it- If you have 19,000 residents and we have 2.8M visitors a year (7,671), SFD is responsible to protect 26,671 people daily. That equates to costing $1.59 per person each day- that includes all of the personnel to provide the fire, EMS and Rescue needs with all of the trained personnel, in the properly equipped apparatus, the insurance and utility costs as well as administrative functions to make that emergency service happen (or be ready to respond if needed).

(7) I am working with staff to determine the FTE claim of 13% more staffing. I cannot recreate that number. We were down 3 people on shift when I was hired. If you are going to count those against me, filling our staffing levels to what it was supposed to be (and was on the books) than that pushes towards 11% (not official number yet). We have cut administrative positions, we have removed what was a 20 person dispatch operation (about 14 people on my arrival) to 0, and we have had to add a few positions to handle some inefficiencies that were realized as being critical to our mission.

If the operations staff numbers are up, we should look at the fact we added a new fire station so one might assume there would need to be some adjustment to staffing- we did it with minimal impact and adding minimal people. As to the 47% higher expenses-63% higher property taxes- Since I was hired, the Mil Rate has gone from $1.40 at our lowest AV to $2.54 with a climbing AV. Because the Mil Rate was reduced in the declining AV era, EVERY budget meeting process I have been part of has discussed the fact the only place to go is up on the levy. The only option would be to reduce emergency services and the Board was not interested. I can tell you, the cuts that have been made to benefits, policies and the way SFD does business has created essentially a $1M reduction in what our budget would look like if changes had not been made. I share that in contrast to my fiscal mismanagement allegation. We have worked diligently to find sustainable solutions to what we have seen as financial challenges.

(8) This new Pumper allows a 12-year old KME Pumper, which averaged less than 6,000 miles per year, to remain in the District vehicle fleet as a reserve unit. SFD did not have a reserve apparatus until we purchased this latest engine. I am not sure the reference to the 6,000 miles. Fire apparatus are not like personal cars where 6,000 miles is 4 months worth of travel. Furthermore, it was our intent to have a reserve apparatus that was reliable in nature and able to serve SFD for years to come in that capacity. We paid cash for the apparatus and saved nearly $40,000 as I recall (I can get the exact number if you would need it) by exercising a cash pay option.

(9) The classification of fire calls is always low. To me that is a sign of good fire prevention and community awareness. Would it be fair to say they would be happier with a higher percentage? I am sure you can recall many fires in the VOC recently- so fires occur and we need fire engines to extinguish them.

(10) The reality is comparing a home worth $500K in FY2011-12, that same house is not worth $500K in FY2017-18. It would make more sense to have a long term look at the median home value within SFD. Going back FY2007-08 to FY2017-18, you see that the median home owner is paying 10.8% not 80%.

(11) The Board and I have been very clear about our projections. There is NOT a reasonable expectation that we will be at the $3.25 cap in FY2021. We do not illustrate a likelihood of reaching $3.25 through our 10 year project if the bond is successful. I am not privy to the example home specifics so it is hard to speculate on the numbers. They do not seem to be reflective of what makes sense or logical to me at this time. Considering the explanation of the artificially low years when the mil rate was acute and the AV was declined 43+%, there is some skewing of reality. Those years were an anomaly given the past Board Decision and the post-recession recovery period.

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