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Fire Station Closure Meeting Heated But Polite

Residents wanted more answers on how to keep Station 16 from closing down.

About 75 people braved the cold and attended the fire station closure meeting on Tuesday night at the Veteran’s Memorial Hall. ConFire Chief Daryl Louder fielded questions from residents about a number of topics, including how to keep the station open, and firefighter pensions.

The meeting Tuesday was the second of four meetings scheduled over the closures, which have now taken place in Lafayette, Martinez and Walnut Creek. The Clayton station will remain open on a part-time basis.

The crowd on Tuesday was polite, but not all were happy with Louder’s answers.

He explained that the Station 16 was one of four that had to close to make up $3 million of an overall $17 million deficit in the Consolidated Fire budget, due to declining property tax revenues. He cautioned that, absent new operational models or new income sources, more stations will have to close.

The failure of Measure Q, which would have imposed a $75 parcel tax on residents in the nine Con Fire cities and unincorporated county, means there is not enough money to operate all of the stations.

But the closures do not mean layoffs, Louder said, in response to a question.

“We will not be laying anybody off,” he said. “We will absorb them into the system.”

In answer to another question about the possibility of rising fire insurance rates, Louder said that it was unlikely to happen in the near future. He said fire insurance rates are usually evaluated on a home being within 5,000 feet of a fire hydrant and five miles from a station, a criteria Lafayette residents meet.

“I’d be willing to give you more revenue if you managed the cost side better,” said a resident, noting that the district had a high unfunded pension liability. “At age 52, a firefighter can retire with 90 percent of his salary.”

“I can tell you that in 2008, the district had pension liability bonds, and we not only had zero pension liability, we actually had a credit.” Louder said he did not know what the current pension figure was.

Another man wanted to know why residents couldn’t pay into a special fund that would only serve Lafayette residents and reopen Station 16.

“I was under the impression that this meeting was about how to get this station open again,” the man said. “I think anyone in this area would contribute a tax to open this station. But the stipulation would be that any money we pay into it would have to go to our station. I don’t want to support you as a whole. I want to support my neighbors.”

Louder noted that tax revenues supporting the fire district come from all the cities in the district.

“We are not a city agency,” he said. “We share resources from Antioch to San Pablo, and from Walnut Creek to Martinez. We don’t have duplicity or redundancy. The system does work. We have one administration, one training academy, one Emergency Medical Services component. We serve over 300 square miles. But the resources belong to the entire district."

He noted that, even with the closure of Station 16, Lafayette residents have the second-highest service level in the district, with one station per 12,000 population.

BabyDaddy January 17, 2013 at 04:39 AM
This fire house is not needed. Glad it's closed. Too bad there weren't any layoffs. That's what really need to start some real cost savings.
Bailey Lee January 17, 2013 at 03:48 PM
“I can tell you that in 2008, the district had pension liability bonds, and we not only had zero pension liability, we actually had a credit.” Louder said he did not know what the current pension figure was."---If you believe that, then I've got a great timeshare for you in Aleppo.
Chris Nicholson January 17, 2013 at 04:25 PM
Louder is confusing accounting projections versus truly "fully funded" pensions. When the market is chugging along at 15% returns and you assume you'll make 7-8% forever, then the future looks bright (if you ignore business cycles and risk). This should not be confused with the financially reckless actions of lavish GUARANTEED defined benefit (with COLA) pensions that are risk-free from the recipients perspective. It is "free" to IGNORE risk, but VERY expensive to insure against it. The public, of course, conceptually "insures"/backstops ordinary market risk for public pensions--- and no budget reflects the very high cost of standing in this position. The time bomb was ticking in 2008, but few we paying attention....
gavilan January 17, 2013 at 06:31 PM
I assume that what is meant by "absorb into the system" is that those personnel will be deployed to cover attrition instead of recruiting and hiring new personnel. So savings will occur (good) and at some point in the future we may have a gap of staff of a certain age/experience, or a bubble of retirements without qualified personnel to replace them (bad).
Linden Frank January 17, 2013 at 10:41 PM
Is this the firehose on Moraga way? If so, the chief was one of the rudest people I've met. Never answered emails and contacted those Clean Air clowns who continue to harrass my friend at 19 Lost Valley Drive....and have fined her 2 grand for nothing. The fire department knocked over my contained fire and then didn't have the decency to clean it up. They then turned around and harassed my friend who was doing nothing. Got a real problem there in Orinda.
Steve Cohn January 18, 2013 at 05:47 AM
@Linden Frank - You are confusing MOFD with ConFire. MOFD is in Orinda and Moraga; ConFire is in Lafayette. Re. the statement that Chief Lauder does not know what his pension liability is. The Times reports a $130 million unfunded liability plus a $130 million pension bond (in other words $260 million). I am sure he knows these numbers down to the penny but unless he has pried information out of CCCERA that MOFD can't seem to, all he knows is the discounted present value (at a 7.75% discount rate) of his liabilities and unless he is sharp, he believes that his offsetting pension assets are worth the Valuation Value CCCERA tells him to use as opposed to the Market Value which is about 7% less. Thus, the $130 million in net liabilities which CCCERA advertises is really a lot more. I don't know ConFire's particulars but MOFD's $124 million in assets actually have a market value of only $115 million thus their advertised $24 million in net liabilities is really $33 million. Thus ConFire's advertised $130 million in net liabilities could actually be $170 million. If CCCERA really thinks their assets can earn 7.75%, then the interest alone on this debt is $13 million.
Steve Cohn January 18, 2013 at 05:49 AM
In addition, the Orinda Task Force estimated that MOFD's total, undiscounted liabilities was more than $600 million. Since ConFire is five times the size of MOFD, its liabilities are probably in the $3 billion (with a B) range. Hopefully the offsetting assets will retain their value but they do not legally offset these liabilities. These are the sole responsibility of the taxpayers of Contra Costa County served by ConFire. If the asset earning dropped 1/2 percent to 7.25%, unfunded liabilities would increase 30% and if they dropped to 6% they would double. Over the past ten years the earnings have only averaged about 5%.
Informed Citizen January 18, 2013 at 05:17 PM
All these false pension liability numbers are based on imaginary rates of return for pension assets. A lot of publicity has gone to CalPERS and its pitiful 1% REAL rate of return. CCCERA is using a 7.75 expected rate of return when for 2011 it earned 2.7%, the 5 year average is only 2.4%, and the 10 year average is 6.2%. (Those lofty high-return years are a distant past!) Retaining that 7.75% rate of return that our County uses, will push more expenses to the governments in CCCERA including the County and ConFire. That will mean dollars that would go to services will be directed to pension payment. That is exactly what we are seeing with the station closings. It will only get much worse and spread to a host of other "essential services", like police, water/sewer, roads/transportation, etc. The top 30 ConFire firefighters cost taxpayers over $200,000/yr, many closer to $300,000/yr. The problem lies in the fact that about half of that is overtime and "other compensation" (unused sick leave/training hours, etc.) that get "cashed in" in their last year of employment to SPIKE their pensions for life. These guys are getting base salaries of, say, $120,000, but with spiking, they are retiring at more than TWICE that sum, in their 50's (some early 50's). Brown passed Prop 30 by pushing pension reform to cut back on the spiking, but it was a head fake to the voters. ConFire's union is suing to reverse the "reforms", and Brown will wilt, leaving taxpayers on the hook.

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