Budget: CAL FIRE - Mission creep and possible budget cuts

DC-10, AA Base and new apparatus on chopping block?

CalFire General Fund Reductions and Deferrals

Increasing Fire Protection Costs and Mission Creep. CalFire’s fire protection budget can be divided between the base budget and the Emergency Fund. The base budget pays for everyday firefighting operations of the department, including salaries, facility maintenance, and other regularly scheduled costs. The Emergency Fund is used to fund unanticipated firefighting costs usually associated with large fire events, including overtime costs for CalFire employees, costs to rent equipment from outside vendors, and costs to reimburse local fire agencies for helping to fight large wildfires. As was mentioned above, CalFire’s total General Fund expenditures for fire protection (both the base budget and Emergency Fund, but excluding capital outlay) have more than tripled in ten years—rising from $307 million in 1998–99 to $967 million in the current year. Over the same time period, the General Fund base budget alone has increased from $267 million to more than $530 million—an increase of almost 100 percent in that same decade.

Our analysis indicates that CalFire’s budget for its core mission of fighting wildland fires has increased so substantially due to the occurrence of larger fires, increased labor costs, and the development of more housing in fire–prone areas. In addition, CalFire spends considerable time and effort responding to non–wildland fire emergencies. Because the department’s accounting system does not track the costs for these non–wildland fire calls, we cannot quantify the cost of these noncore mission activities. However, in 2006, department personnel spent about 30 percent of their response time on calls not related to wildland fires. We are concerned that the costs of expanding the mission of CalFire—a phenomenon often referred to as mission creep—are significant.

Proposed General Fund Reductions to Fire Protection Budget. Due to the size of the fire protection budget and its dramatic increases in recent years, we believe it is critical to address the spiraling costs of fire protection as one strategy for balancing the 2009–10 budget. In order to do so, we recommend the Legislature reduce the department’s General Fund budget for fire protection by $55.1 million in 2009–10 (with $16.8 million in ongoing savings), as follows:

• Eliminate Funding for DC–10 Aircraft Contract—$6.8 Million Ongoing Savings. CalFire contracts with the owners of a DC–10 jet aircraft that has been converted for use in fire fighting. The department has used the DC–10 to supplement its existing air fleet, rather than to replace existing aviation assets. In 2008, the cost of this contract was $6.8 million. While the addition of this resource has added to CalFire’s fire protection capabilities, the department has not shown that the use of this asset has improved its fire protection response capability in a cost–effective manner.
• Delay Vehicle Replacements in the Budget Year—$17 Million One–Time Savings. The proposed budget includes $10.8 million from the General Fund for fire engine replacements and $6.2 million from the General Fund for replacement of other vehicles. We recommend the Legislature eliminate this funding in the budget year, and that these expenditures be delayed for one year. As vehicles age, the cost of maintaining them increases and the amount of time they are unavailable due to maintenance needs increases. Ultimately, CalFire will have to resume its vehicle replacement program. However, given the state’s very difficult budget situation, we recommend that this replacement program be delayed by one year. We think this can be done without significantly impacting the department’s emergency response capability.
• Close Low–Priority Fire Stations and Other Facilities—$10 Million Ongoing Savings. We recommend the Legislature reduce CalFire’s base General Fund fire protection budget by $10 million and direct the department to close the fire stations that are a lower priority to keep open for wildland fire protection, in order to achieve this level of savings. The department has identified a list of such lower–priority stations, based on criteria including the number of calls to those stations, the frequency of large fires in the surrounding areas, and other factors. While our recommendation would reduce the level of fire protection service provided by the department, we note that it reflects a reduction of only 2 percent to the proposed budget and would leave the department with a General Fund base budget approximately equal to the enacted 2008–09 budget.
• Capital Outlay Deferral—$21.3 Million One–Time Savings. The Governor’s budget proposes to spend $21.3 million from the General Fund in 2009–10 on a capital outlay project to replace the Hemet–Ryan Air Attack Base. This deteriorating facility ultimately will need to be replaced. However, we find that the department can continue to use this facility in the near term (albeit with increasing maintenance costs). We recommend the Legislature defer the project until a later year.

We summarize our proposed reductions in Figure 9.

Figure 9 LAO Proposed General Fund Reductions to CalFire Budget
(In Millions)
State Operations	2009‑10	2010‑11
DC-10 Aircraft contracta	$6.8	$6.8
Vehicle replacements
Fire engines	10.8	—
Other vehicles	6.2	—
Close low-priority fire stations	10.0	10.0
Subtotals	($33.8)	($16.8)
Capital outlay
Hemet-Ryan Air Attack Base replacement	$21.3	—
Totals	$55.1	$16.8
a There may be a penalty for canceling the existing contract, which could reduce savings in the budget year.

Potential Impacts to the Emergency Fund. CalFire is unusual in state government, in that the budget act allows the Director of Finance to augment CalFire’s budget during the course of the budget year, as needed, to pay for additional, unanticipated costs of fire protection. Due to the nature of wildland fire protection, it is possible that reductions such as we have proposed to the department’s base budget may increase the incidence of large fires, thus increasing Emergency Fund expenditures.

When the state needs additional resources to battle wildland fires, it calls on federal and local fire agencies for assistance. The state generally reimburses these other fire agencies for the cost of their assistance. However, we believe this is a wise budget trade–off. The cost to use those resources—only when needed—should be less than the cost to keep that capacity in place throughout the fire season. Thus, while additional Emergency Fund expenditures due to the proposed reductions are possible, we would expect that any additional costs would only partially offset the General Fund savings created by our proposal.

Source: 2009-10 Budget Analysis Series: Resources