Moraga-Orinda Fire District Declares Impasse with Firefighter Union

Representatives from United Professional Firefighters of Contra Costa County say the proposed pay cut needed to maintain would burden its members.

Moraga-Orinda Fire District logo
Moraga-Orinda Fire District logo
By Bay City News—

After more than three years of unsuccessful contract negotiations, the Moraga-Orinda Fire District has declared an impasse with its firefighter union.

At issue is a proposed pay cut for firefighters that fire district officials say is needed to keep the struggling fire district afloat but representatives from United Professional Firefighters of Contra Costa County maintain would burden its members.

"It is now a sad reality that there is no way to ensure the protection of our community without some adjustment to the compensation packages paid to our hardworking, professional firefighters," Kathy Famulener, director of the district's board of directors said in an email.

The board declared the impasse on Tuesday after presenting the union with its "last, best and final offer," according to fire district Chief Stephen Healy.

Healy declined to comment on what led to the deadlock but said the district is "committed to getting a deal with our firefighters and we're going to do everything we can do get a deal."

The chief said he did not know when negotiations would resume.

Union leaders say a state panel will likely be called to speak with both fire district and union representatives during a legally obligated fact-finding process.

Leaders from the union, which is not allowed to strike, say they are hopeful that a state-monitored mediation process will yield a contract they can accept.

Vince Wells, president of the firefighters union, said the district's 59 firefighters and firefighter-paramedics have gone without a cost-of-living raise for more than five years and have covered all health care cost increases over the past three years.

In a statement, Wells said the fire district board's "frivolous spending on ideas that were not well thought out" and "excessive spending on equipment and programs" were among the reasons for the fire district's current problems.

According to district officials, the district's general fund is primarily used to cover the cost of union employee contracts and is now borrowing from the district's capital fund to stay in the black.

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Lamorindan February 01, 2014 at 12:17 PM
Well stated Steve.
Chris Nicholson February 01, 2014 at 12:52 PM
I don't "blame" Firefighters or their union for asking for more and more over the years. I think everyone should always try to get as much for their labor as the market will pay. Workers should not be faulted for dumb management. Responding to incentives isn't "wrong," IMHO. The system was/is broken. Anyway, although I personally agree with Steve's version of history, I think it is unproductive to debate morality, as the outcome of that argument will not change the current reality. I think it is sufficient to observe that: (Revenues) < (Per Fighterfighter total comp) * (current number of Firefighters). Unless the union wants to make a run at a tax hike (good luck), then math/logic/reality will force focus the core debate: should we have fewer employees, or should we pay them all a bit less (or change mix to get to same result)? When vacancies yield hundreds of qualified applicants, I think the first adjustment is pretty obvious.
Carol Penskar February 01, 2014 at 01:40 PM
Weil and Wyro were on the Board in Dec. 2003 when the Board set up this disaster by awarding 3 at 50 retirement, and a 23% raise over 4 years, backdated to 7/1/2002. The big problem is that it also gave 3 at 50 to then and soon-to-be retirees who had not paid in at this level. According to their own consultant, about 80% of current pension payments are for retirees, a level the consultant had never seen. So the retirees are basically screwing the current employees. Bankruptcy may be the only way to lighten this unsustainable burden.
Steve Cohn February 01, 2014 at 02:10 PM
Wyro's up for election in November. Anyone willing to step up who lives in east Orinda?
Steve Cohn February 01, 2014 at 08:33 PM
I wonder if Carol will state publicly why she believes that bankruptcy is MOFD's best alternative. Is it to spread out the payments it needs to make to pay off its debt (fund its liabilities); or get out of some of those liabilities (stiff its creditors)? If it is the latter, is it because the creditors deserve it (they were greedy and did not pay for the benefits they are receiving including the pension obligation bond lender) or is it to preserve our service and not "penalize" those providing it or force us, those who promised the retirees their underfunded benefits (by electing people who promised for us), to pay more for both service and debt repayment(i.e. more taxes which no one will agree to)?
Fritz 'Congodog' Stoop February 01, 2014 at 08:59 PM
After spending months looking into this District, I must say, it does not stand up well under scrutiny. It is, at its essence, and ambulance service (a very good one) that shows up a bit late to the rare structure fire. The org chart is so populated with over-stated titles (which come with similarly inflated salaries) as to be laughable. http://www.mofd.org/LiteratureRetrieve.aspx?ID=122003. A BATTALION is 300 to 1,000 soldiers and a COMPANY is 62 to 190 soldiers, both of which exceed the entire number of people involved in the MOFD including the Directors. This fast and loose habit with titles makes for an inappropriate payroll. Some of its policies have been written by people unfamiliar with the law and common sense. The near tragic injuries on Hwy 24, at the fender bender that MOFD had no business attending, is an example of such policy errors. And, of course, the financial malfeasance is inexcusable. Heads should roll, the DA should look into possible misuse of public funds and violations of the public trust. Even the tales of hanky-panky going unpunished, a sure sign of an organization in decay. We have danced lightly around this time bomb for far too long. It needs a clean sweep and a new organization. We may be past the point of no return as far as outlandish retirement commitments, but frankly, the current employees should not suffer because of the sins of their predecessors. If cuts are made, they should be across the organization, active or retired. I frankly admire the paramedics and other medical responders, that save lives on a sometimes daily basis. But feel quite differently about the supercilious, self-important administrators that got us into this fix.
Diana Stephens February 01, 2014 at 10:37 PM
While I hesitate to ask for "heads to roll" like Fritz, across the board cuts definitely seem fair.
Carol Penskar February 02, 2014 at 12:22 PM
@ Steve Cohn: my last phrase "lighten this unsustainable burden" means Detroit style: creditors and pension obligations are all discharged pro rata per normal federal bankruptcy proceedings (which protect current payroll obligations). As for the Wyro position, find a bankruptcy lawyer. There is no other way: a MOFD tax would fail. The Acalanes district is going ahead with a measure. The Orinda roads poll, on this Tues. agenda, shows 70% support for a $20 million bond. So that will likely be on the Nov. ballot. Orinda is graying. Why would our aging population, relying on social security benefits that max out in the $30,000 range and their 401ks, pay more taxes to bail out 50 something (agewise) firefighters with 6 digit indexed pensions and retirement medical?
Carol Penskar February 02, 2014 at 12:28 PM
One more comment: as pension obligations across the nation are severely curtailed in bankruptcies consider who is in the better position. The City of Orinda has a defined contribution plan. The City pays 10% of salary and will match up to another 3% if the employee also contributes. The employees *own every dollar.* This certainly beats social security and is going to beat a worthless/near worthless pension.
Chris Nicholson February 02, 2014 at 12:43 PM
A rational "clean slate" would require a change in law regarding funding of fire districts in the first place. The cost of providing ambulance services to a community does not vary linearly with the property tax base (the correlation may, in fact, be NEGATIVE). Why should Orinda/Moraga be paying such HUGE sums of money into MOFD in the first place? As with all bureaucracies, they found a way to spend the surplus (and then some). Which leads to the second point: the revenues are so high that there IS enough money to fully satisfy obligations (including pensions at 100%) via service level reductions alone. This is unlike Detroit, for instance. The question for the BK lawyers is: can we claim insolvency based on a desire to maintain reasonable service levels (versus minimum or no services)? If so, then, ironically, that credible threat of BK should enable the MOFD to negotiate a "shared pain" solution outside of BK that gives current workers and pensioners a modest haircut, while maintaining (or improving) service levels. This strikes me as a good outcome. OTOH, if we DON'T have a credible threat of BK, then why would any individual pensioner agree to a hair cut? He/she did all that was required under the contract he has with a solvent counter-party...... I don't think I would willingly reduce my benefits if I were in their shoes....
Chris Nicholson February 02, 2014 at 12:48 PM
@Carol: To amplify your point further, cities with defined benefit plans (even if seemingly well funded) are starting to face much higher borrowing costs, especially in light of Detroit's plan to subordinate notionally senior debt below pensions. This incremental cost of capital to the city should be accounted for as yet another cost/downside to defined benefits.
Steve Cohn February 02, 2014 at 02:42 PM
Next year MOFD will have to pay approximately $3.3 million to its pension plan to start paying down its $45 million in pension debt. On top of this it will have to pay about $2.7 million for its Pension Obligation bond. If this $6 million total payment is increased at about 4.7 percent for the next 18 years, all of MOFD’s $90 million dollars in unfunded employee benefits will be paid down. If this funding can only grow at 4 percent, it will take an additional two years. This year MOFD is paying $3.8 million towards this debt. This means they need to find another $2.2 million next year to start paying down their debts plus $500,000 to balance the budget. It is very likely that their property tax revenue could increase $1 million next year with increased home sales and property value increases. That leaves a $1.7 million shortfall. An across the board salary cut of 10% would save $900,000. Discontinuing the dedicated ambulance in Moraga as they did in Orinda would save $800,000. There you go; $1.7 million. So what’s the case for bankruptcy? They still would have 15 firefighters serving 34,000 residents, 4.4 firefighters per 10,000 residents, which is three times the staffing ConFire provided before they started closing stations. We have an embarrassment of riches here. A bankruptcy court would not rule in our favor. But while we can pay down our debt with a little belt tightening, we should plan on not getting into this mess again by transferring some of our Defined Benefit plan funding to a Defined Contribution plan (with no long term liabilities) and make even more cuts (sharing Station 46 with Lafayette or turning a couple of underutilzed stations to 2-person stations) so we can overfund our long term liabilities.
LamorindaMan February 02, 2014 at 07:14 PM
What a mess.
Carol Penskar February 02, 2014 at 11:14 PM
Steve's analysis assumes the CCERA rate will continue at 7.25%, which is still too high. How much will this rate go closer to a realistic rate and when? ? What effect will this have on current and future payments? What about the off balance sheet and unfunded retirement medical obligation north of $25m million? How fast will that grow? (e.g, what is the medical inflation rate?) What payments are needed each year to cover growth in the pension obligation? It is not just a matter of paying down current debt; each year new obligations are added as earned. Also, existing pension obligations are indexed and therefore grow. What about capital equipment needs - are they zero? What if Con Fire goes bankrupt and never contributes to Station 26 - does Lafayette get a free ride? And finally, What about the $2 million annually you claim that Moraga owes Orinda? Your analysis leaves out an awful lot.
Steve Cohn February 03, 2014 at 11:40 AM
Carol: Sure a lot more can go wrong but you have to start somewhere. And as they say, when you find yourself in a hole the first thing you do is stop digging. But I can give you some answers to your questions. (1) MOFD is currently getting $17.5 million per year in ad valorem property taxes. Assuming inflation continues, these will increase a statutory 2% per year. But, at least in Orinda, the average home is assessed at a little over 50% of its market value. Therefore, each home that is sold doubles in assessed value. If 4% of homes sell each year (4% sold in FY 2012/13), and they double in assessed value while the remaining 96% increase 2%, the total tax base increases 6%. Moraga historically has increased 1% less than Orinda but only provides 1/3 of the income. So if, in aggregate, the $17.5 million increases 5.67%, this is a $1 million increase in tax revenue. Not just this year but year after year as the difference in market value over assessed value is realized. This is very possible. (2) So what would a re-valuation of pension liabilities cost? I calculate that if CCCERA dropped their assumed earning rate to 6.5% MOFD’s payment would increase $1.2 million. This could almost be accounted for with a second consecutive year of million dollar revenue increases assuming they don’t increase salaries. (3) As for medical insurance liabilities: (a) they are not obligated to pre-fund these (although I think they should). (b) This year, for current and retired employees, $1.6 million is budgeted. If this increases at 6% (2.5 times inflation) that is a $100,000 per year increase. Out of a $20 million budget they should be able to accommodate that. (c) Or cap the benefit if they cannot afford it; they have the power to do this. (4) As for Station 46, this would replace Station 43. If MOFD had to pay the entire cost of operating it, they are no worse off than they are today. If ConFire/Lafayette reneged on the agreement, MOFD could cut the staffing to two and still see significant savings. Yes, a lot more can go wrong. And MOFD should plan on it by incorporating saving provisions greater than those required to just get by. But until more goes wrong I don’t think we have a case for declaring bankruptcy.
Steve Cohn February 03, 2014 at 11:47 AM
Ah, I left out the part where Moraga taxpayers are not holding up their end of the bargain by paying their fair share of MOFD expenses, currently 47% of the total (for 8 of MOFD's 17 firefighters). They are currently only paying 36% pf the property tax revenues received by MOFD. This would have to increase by $2 million and Orinda would need to receive an additional $2 million in services (there are many needs in Orinda which are being neglected) to make the partnership even. Where would this come from? From the parcel tax Moraga voters adopted before MOFD was even formed which has never been imposed since Orinda stepped in and took up the slack. A zero net impact on MOFD which Orinda's elected officials are not demanding on behalf of their residents' pocketbook and safety.
Lamorindan February 03, 2014 at 03:33 PM
Somewhere along the line I need an explanation. MOFD is a unified service no matter where you live. So one could pick any part of the geographical area (e.g. the Moraga Country Club or Orinda Woods) and declare that they pick up a larger/smaller % of the area that is served. Now what does that mean? One could go to the "reductio ad absurdum" and state that a home does not pick up their "fair share" vs. the next door neighbor who has a higher valuation.
Steve Cohn February 03, 2014 at 04:16 PM
Generally that is true. However, every incorporated city has the right to provide its own emergency services (AKA Fire Department). Up until about 1995 Orinda and Moraga had their own fire departments which were funded by property taxes defined by Prop 13. I am not sure exactly what happened in Orinda but the County Supervisors took over and made ConFire Orinda’s provider, giving ConFire the tax revenue that had been going to the Orinda Fire District. In 1997 Orinda Voters voted to form MOFD with Moraga and all of the property tax funds that had been going to ConFire were applied to MOFD. The reason that Orinda voted to do this was (1) they were not getting good ambulance service from ConFire which used AMR coming out of Walnut while Moraga had their own “in house” ambulance (which would become the MOFD ambulance), (2) Moraga also had paramedics on their engines which ConFire did not yet have and this extra service would apply to all MOFD fire engines, and (3), the taxes Orinda was paying, almost 23% of their property taxes, was far in excess of what the service provided by ConFire was costing. The residents were told that the partnership with Moraga corrected this funding inequity and everyone believed what they were told. If you want to look at the voter’s pamphlet that Orinda voters relied on when deciding to partner with Moraga you can see it at http://g.virbcdn.com/_f/files/0d/FileItem-265329-ExhibitI1MOFD_formation_voters_pamphlet.pdf In it you will see statements such as “we must never again spend $2.8 million of Orinda’s money elsewhere in the County, ignoring Orinda’s needs” (the Mayor), and “the County has neglected our fire protection needs, while squandering millions of Orinda’s taxes on fire services in other cities.” (the entire Yes on A group, including two council members, a former mayor, and the president of the chamber of commerce.) 80 percent of Orinda’s voters bought into this. It is apparent that while Orinda was forming a joint service with Moraga, each city/town was be responsible for their own expenses, and no more. While for many other services, schools for instance, we all throw 50% of our property tax dollars into the pot and the state doles it back out by some other formula, with MOFD, Orinda was supposed to pay for what Orinda received and the same with Moraga. That was the concept. It is not what is happening.
Tim February 03, 2014 at 04:21 PM
I'm getting tired of the Steve Cohn rhetoric on Moraga not paying their fair share to MOFD. It's plastered in just about ever local publication and/or website. There are usually 3 sides to an argument. There is one thing that solves all problems and it was mentioned by Mr. Cohn. Tell me why 50% of Orinda homes are not assessed on market value? Oh yeah, it's that Prop 13 B.S. Here is a fix for MOFD and our schools. Have Prop 13 abolished and move to a market value based RE tax like the rest of the this country. Why not more angst from Steve Cohn about the inequality between new and old home owners getting the same services but at vastly different rates? Isn't that what Prop 13 creates? Since I bought my home 2 years ago and my RE is based on that value then I bet I pay more to MOFD and Contra Costa county then most folks. Therefore, I demand a fire captain in a tent outside my house during the fire danger days. I am, after all, paying more than my neighbors.
Chris Nicholson February 03, 2014 at 04:28 PM
@Steve: Ignoring history for a minute, wouldn't any higher-than-average home price enclave in any district anywhere yield the same (purported) inequity you identify? If Moraga were less per parcel or per resident than Orinda, then I think you'd have a strong argument (perhaps this is the case). As I noted above, I happen to think that it is stupid to fund services as a fixed percentage of assessed value since the cost to take me to the hospital is the same as someone with an assessed value of 2X or 0.5X my home. If we want our tax system to be regressive or progressive, then I would humbly submit that we use the income tax system for those purposes--- assessed value is a pretty blunt tool. But that's another topic that is beyond the scope of MOFD's dramatic mismanagement.
Chris Nicholson February 03, 2014 at 04:32 PM
@Tim: the only reasonable "fix" to Prop 13 would be to (over time) lower rates as you increase assessed value to be equal to FMV. In other words, a revenue neutral fix. So it actually wouldn't change anything. Unless churn is lower in Orinda versus Moraga, the MOFD funding mix would not change....
Steve Cohn February 03, 2014 at 05:02 PM
Tim, this is not rhetoric. This is the deal voters were presented. Form MOFD and your property taxes allocated to emergency services (this year $11.8mm from Orinda taxpayers and $6.7 million from Moraga taxpayers) will be used in Orinda and Moraga respectively. Just as the deal given to voters on Prop 13 said that as long as you own your home your assessed value will not go up more than 2% regardless of the market value. For communities like Orinda and Moraga where people stay in their homes, on average, 25 years that causes huge inequalities from neighbor to neighbor. It would not have taken a rocket scientist to deduce that would happen before Prop 13 was passed but the majority of voters passed it. Can we change Prop 13? Yes, all it takes is 66.7% of the voters to do so. Can what Orinda voters were promised be accomplished by MOFD? Easy, give them services which cost the $11.8 million of taxes they are paying. The MOFD Board has the power to do what the voters voted for.
Steve Cohn February 03, 2014 at 05:13 PM
Chris: " wouldn't any higher-than-average home price enclave in any district anywhere yield the same (purported) inequity you identify?" Orinda "rents" its police officers from the Contra Costa County sheriff's office. I know Lafayette does likewise and I bet there are other "lower value" communities that do likewise. Does the sheriff's office charge Orinda more for an officer than Antioch would pay? I don't think so. So why is Orinda paying $1.3 million per firefighter while Moraga is paying $833,000? The fact that our homes are worth more in Orinda is irrelevant. The fact that Orinda could detach from MOFD (if it was willing to add $50millon of unfunded liabilities to its otherwise clean books) and take its $11.8 million and the "rent" firefighters back from MOFD or ConFire proves the irrelevance.
Chris Nicholson February 03, 2014 at 06:28 PM
@Steve: My point, as is obvious, is that your logic "proves too much" with regard to "fairness/equity" since the overarching property tax funding framework will always yield similar disparities. I think your stronger argument is "we had a deal and Moraga didn't live up to its obligations." The latter, if true, would be persuasive. What's the mechanism/consent to raise the Moraga contribution to MOFD? I assume that if the Board could tap that money unilaterally that they would have done so already.
Steve Cohn February 03, 2014 at 06:57 PM
Every year the MOFD board votes on the parcel tax rates to apply to the Orinda Fire Flow Parcel Tax and the Moraga Fire Flow Parcel Tax. This year the vote was taken at the June 20th board meeting (item 7.4). The vote was 4-0 with Orinda's two representative, Wyro and Evans, and Orinda's partial representative Anderson (55% of Anderson's division is in Orinda), voting with Moraga's one representative, Weil, to tax Orinda the same rate (6 cents) as Moraga even though Moraga's rate can be raised to as high as 30 cents. These rates are set by the MOFD board and they have the sole discretion on setting them with a 6 cent cap on Orinda's rate and the 30 cents on Moraga. When Orinda taxpayers were asked to vote for this tax they were told that the tax would "remain in effect until Orinda's district achieves parity with Moraga, after which the tax would be assessed only when necessary. When the district was formed Orinda's facilities were apparently not up to Moraga's standards. MOFD's first major construction project was a new station in Moraga followed by a new station in Orinda. We met parity a long time ago. If you want to read about what was promised there is a document on the FAIRforOrinda.org web site (http://www.fairfororinda.org/sitebuildercontent/sitebuilderfiles/mofd_has_not_done_what_we_voted_for_20121003.pdf)
Chris Nicholson February 03, 2014 at 09:45 PM
Another reason why bankruptcy isn't (yet) a likely option: presumably the Board would be compelled to bring in all discretionary revenue to to remain solvent and satisfy its obligations. At some level, running a deficit and putting themselves into a liquidity crunch by NOT calling down this money seems to be yet another mis-step. How can they leave money on the table and yet not have enough to pay their bills?
LamorindaMan February 04, 2014 at 10:45 AM
Voters should be given the option to disband MOFD.
Steve Cohn February 04, 2014 at 11:13 AM
Chris - I agree. I just hope they don't decide to spend their way out of the crisis on the backs of the Moraga taxpayers as opposed to saving their way out. Despite the fact that West Lafayette may not be the safest place in the County right now, Lafayette is limping along with 6 firefighters for 24,000 residents and has yet to burst into flames. Does MOFD need 17 firefighters for 34,000 residents? Lamorindaman - unless you can talk the City/Town Councils into taking on MOFD's $90 million of debt (doesn't matter that it is their taxpayers' debt in either case) or can get several thousand signatures from either Orinda or Moraga voters, it will never happen. It's not like this is a dog park or something important.
Tim February 04, 2014 at 11:40 AM
OrindaCARES and MOFD presented how they justify the cost/funding allocation using first due maps and natural dividing lines. It's in Mr. Cohn's research. The important point is that funding equality can be sliced and diced in many ways. Mr. Cohn's report goes through an impressive amount of data to arrive at Orinda getting hosed because they pay too much per firefighter. I thought the shared service analysis was interesting in that it introduced a ton of assumptions on cost and concluded that shared services should fall within the "uncompensated mutual aid". Why is that interesting? Because Moraga provides more net service to Orinda using Moraga based firefighters.
Steve Cohn February 04, 2014 at 12:44 PM
With all due respect, Tim, you have not done your homework. The First Responder maps presented first by Chief Nowicki to the first Tri-Agency Committee and then by Chief Bradley to the second Tri-Agency Committee and finally by OrindaCares are, at best, an interesting historical artifact. To the best of my knowledge, units are no longer dispatched, and have not for some period of time including the times the MOFD Chiefs presented these maps to the representatives of Orinda and Moraga on the Tri-Agency Committees, on the basis of where incidents occur on a map. Instead, the ConFire dispatcher uses computer software in conjunction with GPS locators on MOFD and ConFire equipment to dispatch the unit which can get to an emergency quickest. The Orinda Task Force report compiled a year’s worth of actual responses and determined that while Moraga-based units did respond to 417 incidents into Orinda, they did not do so 100% of the time. In fact, it was closer to 50% in the area that they were designated first responder. In addition, Orinda-based units provided significant first responder and backup response into Moraga contrary to what the maps indicated, and the MOFD Chiefs stated never happened. The net effect was that 96% of Moraga-based engine operations into Orinda were offset by Orinda-based engine operations into Moraga and the only significant net service by Moraga-based units into Orinda were 100 ambulance operations in the year, 50 of which were first responses (one per week). This service, by the two-person Moraga-based ambulance was 1/3 the number of mutual aid responses ConFire provided to MOFD with 3-person engines for which ConFire requested no compensation. This data was from 2009 when Orinda and Moraga each had one dedicated ambulance with a third ambulance at Orinda’s station 44 on Moraga Way which was only sporadically used (less than 10% of the time; 32 times total in that year) even though 80% of all incidents are medical in nature. Now, there are three ambulances in Orinda serving Orinda’s 17,600 residents and one ambulance in Moraga servicing Moraga’s 16,000 residents. Is it possible that the single Moraga-based ambulance is also providing net service to Orinda? The fact is, regardless of what the MOFD Chiefs alleged in an attempt to pull the wool over Orinda’s eyes (for what purpose I don’t know as they should be community-neutral), Moraga-based units don’t, and never have, provided significant service into Orinda which has not been reciprocated by service from Orinda into Moraga.


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