Fire services consolidation alternatives: a cost …...Cost-Benefit Analysis of Fire and EMS...

Cost-Benefit Analysis of

Fire and EMS Services Consolidation

Prepared for the

City of Fitchburg, City of Verona, Village of Oregon, and the Town of Madison, Wisconsin

Katie Biddick Jimmy Galindo Andrew Kleps Bryan Mette Phil Sletten

Angela Waltz

Masters Candidates La Follette School of Public Affairs University of Wisconsin – Madison

December 21, 2012

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Table of Contents

Table of Contents ........................................................................................................................................... i

List of Tables and Figures .............................................................................................................................. ii

Acknowledgements ...................................................................................................................................... vi

Executive Summary ..................................................................................................................................... vii

Introduction .................................................................................................................................................. 1

Study Rationale ............................................................................................................................................. 3

Models of Consolidation ............................................................................................................................... 4

Anticipated Costs and Benefits ..................................................................................................................... 7

Costs .............................................................................................................................................................. 8

Benefits ......................................................................................................................................................... 9

Non-Monetized Costs and Benefits ............................................................................................................ 15

Assessment of Net Benefits ........................................................................................................................ 17

Results ......................................................................................................................................................... 19

Recommendation ........................................................................................................................................ 22

Limitations .................................................................................................................................................. 23

Appendix A: Service Area and Emergency Department Profile .................................................................. 25

Appendix B: Personnel under Current Policy .............................................................................................. 26

Appendix C: Full Consolidation Model Personnel Structure and Costs ...................................................... 40

Appendix D: Service Consolidation Model Personnel Structure and Costs ................................................ 45

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Appendix E: Economic Rents for Personnel ................................................................................................ 55

Appendix F: Improvements in ISO Ratings .................................................................................................. 58

Appendix G: ISO FSRS Summaries ............................................................................................................... 64

Appendix H: Changes in Absolute Response Times .................................................................................... 70

Appendix I: Social Benefits from Improvements in EMS Response Times ................................................. 78

Appendix J: Social Benefits from Improvements in Fire Response Times .................................................. 88

Appendix K: Consolidated Apparatus Purchase .......................................................................................... 91

Appendix L: Apparatus Maintenance Savings ............................................................................................. 94

Appendix M: Rebranding Costs: Repainting ............................................................................................... 98

Appendix N: Cost of Rebranding Uniforms and Gear ................................................................................. 99

Appendix O: Risks Associated with Cross-Training ................................................................................... 100

Appendix P: Relocating the Fitchburg Fire Stations .................................................................................. 101

Appendix Q: Monte Carlo Simulation Method ......................................................................................... 103

Appendix R: Monte Carlo Simulation Histograms of Full Consolidation .................................................. 104

List of Tables

Table 1: Net Social Benefits and Fiscal Costs of Consolidation ................................................................... 21

Table 2: Social Benefits and Costs of Consolidation ................................................................................... 22

Table 3: Fiscal Benefits and Costs of Consolidation .................................................................................... 22

Table 4: Service Area and Emergency Department Profile ......................................................................... 25

Table 5: Estimated 2013 Fitchburg Fire Department Career Personnel Costs ........................................... 26

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Table 6: Estimated 2013 Fitchburg Fire Department POx Personnel Costs ................................................ 27

Table 7: Estimated 2013 Fitchburg POx Station Personnel Staffing Costs.................................................. 28

Table 8: Estimated Cost of Fitchburg Career Positions Added in 2015 ...................................................... 29

Table 9: Estimated 2013 Oregon Area Fire and EMS Career Personnel Costs ............................................ 29

Table 10: Estimated 2013 Oregon Area Fire and EMS POx Personnel Costs .............................................. 30

Table 11: Estimated 2013 Oregon Area Fire and EMS POx Station Personnel Staffing Costs .................... 31

Table 12: Estimated 2013 Town of Madison Fire Department Career Personnel Costs ............................ 32

Table 13: Estimated 2013 Town of Madison Fire Department POx Personnel Costs ................................. 33

Table 14: Estimated 2013 Town of Madison Fire Department Volunteer Staffing Costs ........................... 34

Table 15: Estimated 2013 Verona Fire Department Career Personnel Costs ............................................. 35

Table 16: Verona POx Station Personnel Staffing Costs ............................................................................. 36

Table 17: Estimated Cost of Additional Staffing in Verona Through 2017 ................................................. 36

Table 18: Estimated 2013 Fitch-Rona EMS Career Personnel Costs ........................................................... 37

Table 19: Estimated 2013 Personnel Costs Under Current Policy .............................................................. 38

Table 20: Career Administrative Personnel ................................................................................................ 41

Table 21: Career Operational Personnel ..................................................................................................... 42

Table 22: POx Operational Personnel ......................................................................................................... 43

Table 23: Estimated Cost of Career Administrative Personnel for Fire Consolidation in 2021 .................. 46

Table 24: Estimated Cost of Career Operational Personnel for Fire Consolidation in 2021....................... 47

Table 25: Estimated Cost of POx Operational Personnel in 2021 ............................................................... 48

Table 26: Estimated Cost of Career Administrative Personnel for Fire Consolidation in 2022 .................. 49

Table 27: Estimated Cost of Career Operational Personnel for Fire Consolidation in 2022....................... 50

Table 28: Estimated Cost of POx Operational Personnel in 2022 ............................................................... 50

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Table 29: Personnel Costs at the Beginning of EMS Consolidation, year-end 2016 ................................... 52

Table 30: Personnel Costs at Full Build Out of EMS Services Consolidation Model in 2024 ...................... 52

Table 31: Personnel Rents .......................................................................................................................... 57

Table 32: Annual Economic Rents for Personnel ........................................................................................ 57

Table 33: 2012 Commercial Property Values; Client Communities ............................................................ 59

Table 34: Commercial Growth Rates .......................................................................................................... 60

Table 35: Projected Net Present Value of Commercial Property by Municipality ..................................... 61

Table 36: Representative Commercial Insurance Premium Based On ISO Rating ...................................... 62

Table 37: Verona Fire District: ISO Rating of 4 ............................................................................................ 64

Table 38: Fitchburg Fire Department: ISO Rating of 3 ................................................................................ 65

Table 39: Oregon Fire District: ISO rating of 4 ............................................................................................ 66

Table 40: Consolidated Fire District: ISO rating of 3 ................................................................................... 67

Table 41: Weighted Average of Client Fire Districts ................................................................................... 68

Table 42: Rationale for FSRS Credit Predictions ......................................................................................... 68

Table 43: Response Time Benefits Survey of Academic Literature ............................................................ 82

Table 44: Mortality Percentage Point Reduction Model ............................................................................ 83

Table 45: Estimated Apparatus Costs ......................................................................................................... 92

Table 46: Opportunities for Coordinated Purchasing ................................................................................. 93

Table 47: Estimated Apparatus Maintenance Costs Under Consolidation ................................................. 95

Table 48: Estimated Apparatus Maintenance Costs Under Consolidation (Verona Fire Department) ...... 96

Table 49: Estimated Apparatus Maintenance Costs Under Consolidation (Fitchburg Fire Department) .. 96

Table 50: Estimated Apparatus Maintenance Costs Under Consolidation (Fitch-Rona EMS) .................... 97

Table 51: Total cost of repainting Vehicles and Apparatus ........................................................................ 98

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List of Figures

Figure 1: Study Period Timeline under Current Policy ................................................................................ 39

Figure 2: Fully Consolidated Organizational Structure ............................................................................... 40

Figure 3: Study Period Timeline under the Full Consolidation Model ........................................................ 44

Figure 4: Fire Services Consolidation Organizational Chart ........................................................................ 45

Figure 5: EMS Services Consolidation Organizational Chart ....................................................................... 51

Figure 6: Study Period Timeline under the Service Consolidation Model .................................................. 53

Figure 7: Fitch-Rona EMS Call and Response Times by Zone ...................................................................... 74

Figure 8: Fitch-Rona EMS Zones.................................................................................................................. 75

Figure 9: Monte Carlo Histogram of Net Present Value Using Social Discount Rate of 3.5%................... 104

Figure 10: Monte Carlo Histogram of Net Present Value Using Social Discount Rate of 2.0%................. 105

Figure 11: Monte Carlo Histogram of Net Present Value Using Social Discount Rate of 6.0%................. 105

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Acknowledgements

We extend our thanks first to Chief David Bloom (Town of Madison and Oregon Fire and EMS

Departments), Bill Burns (City Administrator, City of Verona), Chief Joseph Giver (Verona Fire

Department), Michael Gracz (Administrator, Village of Oregon), Chief Brian Myrland (Fitch-Rona EMS

Department), Chief Randall Pickering (Fitchburg Fire Department), and Tony Roach (City Administrator,

City of Fitchburg). Without their patience during long meetings and unflagging willingness to answer

questions great and small, this project could not have succeeded. We also thank Professor David

Weimer at the La Follette School of Public Affairs for his guidance and feedback. Finally, we thank our

families for their understanding during our project-related absences from home.

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Executive Summary

The municipal fire and emergency medical service (EMS) departments of the City of Fitchburg,

City of Verona, Village of Oregon, and the Town of Madison serve a combined population of

approximately 60,000 residents in an area immediately to the south of the City of Madison, Wisconsin.

These departments include two fire-only services (Fitchburg Fire Department and Verona Fire

Department), two combined fire and EMS services (Oregon Area Fire and EMS and Town of Madison Fire

Department), and one regional EMS service (Fitch-Rona EMS), all of which maintain close working

relationships. Municipal administrators, fire chiefs, and the EMS chief in these communities are

interested in exploring the costs and benefits of regional consolidation of emergency service

departments to assess the potential for improvements in the quality and efficiency of local fire and EMS

services. This cost-benefit analysis (CBA) examines the net social benefits of two separate consolidation

alternatives relative to current policy, a full consolidation model (full regional consolidation of all fire

and EMS services) and a service consolidation model (separate regional consolidation of fire and EMS

services). We recommend that the municipalities pursue full consolidation of existing fire and EMS

departments to achieve greatest net social benefit.

The full consolidation model assumes that municipalities would begin the process of

consolidation in 2013. Under this model, all individual fire and EMS departments are combined into a

regional department with personnel cross-trained in both fire and EMS services. We assume an eight-

year phase in of personnel changes necessary to provide 24-hour fire engine and ambulance staffing

across stations. The service consolidation model assumes that municipalities would follow current policy

through 2016 and begin the process of consolidation in 2017. At that time, all study area fire services are

combined into a regional department with a five year phase-in of personnel changes to provide 24-hour

fire engine and ambulance staffing across stations. Similarly, all study area EMS services are combined

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into a regional department with an eight year phase-in of personnel changes to staff four ambulances

24-hours per day with career paramedics.

For the purposes of this study, two primary costs and five primary benefits of consolidation

were analyzed for each policy alternative relative to current policy. Costs associated with consolidation

include personnel and rebranding costs. Personnel costs result from implementation of a unified wage

and benefits structure and from increased station staffing over time. Rebranding costs result from the

need to repaint equipment and replace uniforms and gear to identify a consolidated department’s new

name and logo. Benefits associated with consolidation include improved EMS response times and

services, an improved ISO rating, economic rents for personnel, coordinated purchase of apparatus, and

the ability to provide some in-house maintenance of apparatus and equipment. Improved EMS response

times are estimated to produce a social benefit resulting from a reduction in risk of mortality through

increased regional cooperation. ISO rating improvements benefit the community by reducing

commercial property insurance rates in the regional study area. Economic rents for personnel relate to

the short-run benefits received by personnel when wages increase under a consolidated model. Under

consolidation, additional benefits may be realized as a result of discounts on simultaneous purchase of

apparatus and reduced apparatus maintenance costs by reducing reliance on outside service

contractors.

CBA uses informed estimates to monetize costs and benefits under each policy alternative

relative to current policy. Calculating values out to 2032, we employ Monte Carlo simulations to

estimate that the full consolidation alternative generates net present values of approximately $9.4

million in fiscal costs, $15.2 million in prevented loss of life, and $470,000 in commercial property

insurance savings, relative to current policy. The service consolidation model generates net present

values of approximately $15.8 million in fiscal costs, $8.9 million in prevented loss of life, and $470,000

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for property insurance rates. We use a social discount rate of 3.5 percent (with sensitivity analyses at 2

percent and 6 percent). All calculations include long-term changes (including station movement and

apparatus purchase) that are projected under current policy, but whose costs have not yet been

incurred. Following the first principle of cost-benefit analysis, we recommend the alternative that is

estimated to provide the greatest net social benefits.

Analysis of the consolidation alternatives finds an estimated $7.7 million net social benefit of full

consolidation and an estimated $3.7 million net social cost of service consolidation over the twenty year

study period. Based on our projected valuations of the two alternatives, we recommend pursuing the

full consolidation model, which is estimated to offer greater net social benefits and superior emergency

services than either current policy or a service consolidation model. Although study area communities

may be unprepared to undertake full consolidation of emergency services at this time, benefits might

still be realized by taking steps toward consolidation in areas with clear net benefits and by exploring

other avenues of possible gain through consolidation. Results of this analysis suggest that, even in the

absence of full consolidation, study area communities may benefit from greater cooperation among

EMS service providers, relocating the Fitchburg fire stations eastward prior to the projected 2022 date,

or securing a third Fitch-Rona EMS station in eastern Fitchburg.

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Introduction

Fire and emergency medical services (EMS) are important public services designed to protect

the lives, safety, and property of community members. Municipalities aim to provide emergency fire and

EMS response services that maximize both effectiveness and efficiency. Provision of excellent local fire

and EMS services often requires a substantial budgetary commitment on the part of local municipalities

in terms of personnel, training, and capital costs. Local governments and their emergency services

departments operate within a context of competing constraints including perennially tight budgets,

public demand, mandatory performance standards, and the inherently unpredictable nature of

emergency response. These issues present challenges to community leaders attempting to determine

the manner in which excellent emergency fire and EMS services should be provided to their

communities. Regional fire and EMS service consolidation is a rapidly expanding policy option employed

by local municipalities to manage these competing needs. Service consolidation occurs when

municipalities agree to provide fire and EMS services in common, either as a combined service district or

through various types of cooperative service agreements among municipal emergency fire and EMS

departments. The goals of service consolidation include maximizing economies of scale, minimizing

redundancy, and providing greater depth of service. The potential to maximize emergency service

“output” given scarce “input” makes consolidation an attractive option for many communities, but

contextual variability among groups of local governments considering consolidation calls for careful

policy analysis prior to implementing a consolidated serviced plan.

This report presents a cost-benefit analysis (CBA) of consolidating the fire and EMS departments

that serve the following Wisconsin municipalities: City of Fitchburg, City of Verona, Town of Verona,

Village of Oregon, Town of Oregon, Town of Madison (ToM), and portions of the Town of Dunn, and

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Town of Rutland.1 Currently, these communities are served by five separate emergency services

departments, which include two fire departments (Fitchburg Fire Department and Verona Fire

Department), two combined fire and EMS departments (Oregon Area Fire and EMS and Town of

Madison Fire Department), and one regional EMS department (Fitch-Rona EMS). These five departments

serve 60,000 residents in almost 110 square miles south of the City of Madison (see Appendix A).

As small to mid-sized suburban and rural departments with a history of close and continuous

cooperation, local department chiefs and city administrators believe that their communities might

benefit from consolidated provision of fire and EMS services. Discussion about consolidation among fire

and EMS chiefs, municipal executives, and municipal administrators led to the need for closer

examination of costs and benefits related to specific consolidation alternatives under consideration. As a

result, local leaders from the study area municipalities commissioned this report from graduate students

at the University of Wisconsin-Madison’s La Follette School of Public Affairs. This CBA was prepared in

consultation with those officials and attempts to monetize the potential impacts of two different

consolidation models.

This report provides both a theoretical discussion of consolidation models as well as specific

results of our study. Following the introduction, we discuss the rationale for the study, including a brief

overview of econometric work on consolidation. We then describe the specific models of consolidation

or policy alternatives analyzed in this study, along with a brief discussion of alternative models that

could be considered for future analysis. Next, we discuss the specific costs and benefits included in our

analysis along with a number of potentially relevant costs and benefits that were not incorporated in the

current study. Detailed discussion of costs and benefits, including assumptions, precedent and specific

1 Dunn and Rutland contract the Oregon Fire/EMS department for services. Dunn and Rutland are not highlighted in this

analysis, as their relatively small populations and disparate geographies render projections difficult. When departments are the unit of analysis, data from these communities are included under the name of “Oregon.” One notable exception is in the analysis of ISO changes.

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calculations, is provided in the appendices. The report then describes our methodology for projecting

the net social benefits of consolidation and explains the technique of Monte Carlo simulation. Next, we

present the results of our cost-benefit and fiscal analyses. Finally, we offer our recommendation that the

municipalities of Fitchburg, Verona, Oregon, and the Town of Madison would realize net social benefits

by consolidating their fire and EMS services.

Study Rationale

Theory suggests that consolidation of municipal services may facilitate more effective, less

costly provision of government services; however, academic literature on the impacts of municipal

consolidation arrives at a variety of conclusions. Perhaps the most commonly cited benefit of

consolidation results from achieving greater economies of scale. Proponents of consolidation argue that

larger government units may reduce administrative costs and eliminate inefficiencies resulting from

issues such as service redundancy and lack of clarity regarding service responsibilities (Deller and

Rudnicki 1992; Duncombe and Yinger 1993). Other researchers are concerned that consolidation may

diminish service capacity and leave some government units unable to meet local residents’ preferences

for the consumption of municipal services, which could result in allocative inefficiencies (Jimenez and

Hendrick 2010).

The consolidation of fire and EMS departments, specifically, offers a unique set of analytical

challenges. Emergency service provision acts as a “congested good” where one person’s consumption of

emergency services (i.e. calling the fire department to extinguish a fire or paramedics to respond to an

accident) excludes others from consuming that same good simultaneously. At the same time, an

emergency service department’s full capacity for service often goes unfulfilled, because there is not

always an emergency requiring a response. These factors limit a department’s potential efficiency (as

measured by cost per emergency call) and make it difficult to calculate improvements in efficiency. One

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landmark study finds constant returns to scale in fire services, suggesting that consolidation would not

result in savings (Duncombe and Yinger 1993). Conversely, another study finds that the level of

protection provided by fire services increases with the service area’s population, implying that

consolidation would offer societal benefits (Brueckner 1981).

The fire and EMS chiefs, municipal executives, and municipal administrators who have

commissioned this report recognize the potential cost savings and service quality improvement

associated with consolidation. This cost-benefit analysis may provide greater certainty regarding

estimated impacts of fire and EMS consolidation in these municipalities.

Models of Consolidation

Consolidation of emergency services is a complex process; we draw upon the McGrath (2007)

study of fire consolidation in Idaho to consider six common categories of consolidation options.

Administrative consolidation primarily focuses on savings through combining human resources, clerical,

and other functions across several departments. Partial consolidation maintains separate departments

but creates a joint working group to identify potential efficiency gains, such as jointly operating a station

or team. Functional consolidation keeps departments legally separate, but the departments work

together to perform special functions, such as dispatch or training services. Operational consolidation

combines aspects of functional and administrative consolidation to make two legally separate

departments deliver standard and special services as if a seamless single entity. Selected geographical

consolidation takes advantage of variations in service demands across an area to keep certain functions

separate where demand is high while taking advantage of economies of scale in low-density areas.

Finally, full consolidation combines departments to make one legal and operational entity (McGrath

2007).

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At the request of the municipalities within the study area, this CBA examines two models of

consolidation in comparison to current policy and projects costs and benefits over a 20-year period

beginning in 2013 and ending in 2032. Currently, fire and EMS departments in the study area regularly

collaborate through automatic aid agreements (protocols for responding to emergency calls from a

neighboring district triggered at the county dispatch level) and mutual aid agreements (protocols for

responding to emergency calls from neighboring districts based on contractual agreements among

individual departments). Because of these existing arrangements, fire emergency response services in

the region are already collaboratively providing services: where possible and when necessary, each

entity contributes to coverage in its neighboring districts. EMS response services are more restricted,

with only the most life-threatening calls (requiring Advanced Life Support, or ALS) rising to the level of

automatic aid under an agreement administered by the county, but cooperation still occurs. Our analysis

takes this collaboration a step further by modeling the potential impacts of two alternative models of

operational consolidation within the study area. Alternative one is a full consolidation model combining

all fire and EMS services into one department with a single organizational and administrative structure.

Alternative two is a service consolidation model that separately consolidates all fire services and all EMS

services, creating two separate organizational entities. The analysis of the service consolidation model

can also be used to assess the value of EMS consolidation alone or fire consolidation alone.

Full Consolidation Model

Under the full consolidation model, all five service departments are combined into a single

regional emergency services agency that provides both fire and EMS services to the municipalities within

the study area. This model assumes a complete administrative reorganization by consolidating five

separate entities, each with its own administrative hierarchy, into one entity headed by a single fire

chief. For the purposes of our analysis, we estimate that full consolidation would be phased-in over a

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period of eight years, from 2013 to 2020, at which time the new department’s administrative and

organizational changes would be complete. We also assume that wages for personnel are based upon

the current wage and fringe benefits structure for Fitchburg Fire Department and Fitch-Rona EMS, which

are considered to be the surviving entities by study area chiefs. Finally, we assume that consolidated

departments still rely on volunteers and interns to provide a large portion of both fire and EMS services.

The wage structure and organizational chart for the full consolidation model used to conduct this

analysis are detailed in Appendix C.

Service Consolidation Model

Under the service consolidation model, all fire services in the study area are consolidated into

one department while study area EMS services are consolidated into a separate department. To

implement this model, the fire and EMS functions of Oregon and ToM must be separated. Oregon and

ToM fire services are merged with the fire departments of Verona and Fitchburg into a single fire

department. Similarly, the EMS functions of Oregon and ToM are merged with Fitch-Rona EMS into a

single EMS department. For the purposes of our analysis, we estimate that current departments would

be split and consolidated under the two service areas in 2017. Costs associated with the consolidated

fire department are phased-in over a period of five years (2017 through 2021) and costs associated with

the consolidated EMS department are phased-in over a period of eight years (2017 through 2024). The

wage structure and organizational charts for fire and EMS service departments under the service

consolidation model are detailed in Appendix D.

We assume that consolidated departments inherit the personnel, property, apparatus, and

funds of their component departments. Similar to the full consolidation model, we also assume that

wages for personnel are based upon the current wage and fringe benefits structure for Fitchburg Fire

Department and Fitch-Rona EMS. Finally, we assume that the consolidated fire department continues

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rely on volunteers for the provision of a large portion its services. The use of volunteers to provide EMS

services will be phased-out over the eight year implementation period.

Under current policy, the Town of Madison is scheduled for annexation by the City of Fitchburg

and City of Madison in 2022. At this time, the ToM fire station is scheduled to be closed, its apparatus

transferred to the Fitchburg Fire Department, and its ambulance service relocated to a Fitchburg area

fire station (Cooperative Plan 2007). This means that the impact of ToM consolidation on costs and

benefits are included under current policy and both consolidation alternatives beginning in 2022.

Anticipated Costs and Benefits

Costs and benefits of fire and EMS services consolidation fall into two broad categories: fiscal

and social. Fiscal costs and benefits refer to department outlay, financed by municipal funding and

applicable service fees. Social costs and benefits are seldom expressed in dollar terms, so we estimate

shadow prices for the values community members would likely be willing to pay for a given level of

service. Our methodology for calculating shadow prices for various cost and benefits is detailed in the

appendices of this report. For the purposes of this analysis, to calculate a net present value of each

policy alternative, costs and benefits are discounted at a social discount rate of 3.5 percent (with

sensitivity analyses at 2 and 6 percent) starting in 2013 and projecting forward 20 years.

In cost-benefit analysis, each individual analysis must specify who experiences the impacts of a

policy. In the case of emergency services, impacts of a policy change such as consolidation extend to

people within a given service area but are unlikely to be felt outside those borders. We therefore

assume that all residents and property within the boundaries of the study area have “standing” for this

analysis. It is also notable that local taxes do not enter into this CBA. For the purposes of this analysis,

we are concerned only with how much money a policy costs or saves relative to current policy; we do

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not address the manner in which municipalities could raise money or spend savings. This CBA is

intended to inform future analysts and policymakers who may make such decisions.

Costs

The primary costs associated with fire and EMS services consolidation are: 1) personnel costs,

specifically those associated with increased career staffing and the impact of raising compensation for

existing personnel to the highest levels among existing units and 2) the cost of rebranding equipment

and apparatus for a consolidated district.

Personnel Compensation

Under current policy, all four service departments offer different wage and benefit schedules,

and we assume compensation inequality and pay cuts to be infeasible in a consolidated department. We

therefore assume that under a consolidated model, career personnel are paid wages and benefits based

upon the current wage and benefits structure of the Fitchburg Fire Department for fire services

personnel and Fitch-Rona EMS for paramedics and EMT-Is. This change is anticipated to result in

significant cost increase for departments currently compensating below the highest rate among existing

units. Any total compensation packages that would be lowered by this policy change are adjusted to

ensure compensation commensurate with that under current policy (see Appendix C and D for details).

In our analysis, the increase in pay personnel received is treated as an economic rent, which is a

benefit for personnel whose pay is increased. In our social analysis, these rents serve as an offset to the

fiscal costs to departments of paying higher wages. Over time, as employees leave service, the benefits

associated with these rents are slowly phased out as new employees require the higher wages as

compensation for forgoing alternative employment. In comparing policy options, we account for staffing

changes planned under the current policy. Our analysis finds that personnel changes associated with full

consolidation of fire and EMS services are estimated to cost $9.8 million more than the current policy

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over the 20 year study period, or an average of $490,000 per year for the entire consolidated district

over the life of the project. These figures are discounted and in 2012 dollars; the budgetary impact each

year would likely appear greater when accounting for inflation. Estimated personnel costs under current

policy and under both consolidation alternatives are detailed in Appendices B, C, and D.

Rebranding

We anticipate that departments would “rebrand” their apparatus, equipment, uniforms, and

gear to reflect the new service entity. Based on current budgets, we estimate that departments would

incur a one-time cost of approximately $91,000 for new clothing. We estimate the repainting the 40

vehicles and 21 large apparatus would cost approximately $209,000. Overall, we expect rebranding to

cost about $300,000. Appendix M provides a full discussion of rebranding costs.

Benefits

The primary benefits of fire and EMS consolidation include: 1) fewer deaths due to decreased

response times, 2) lower insurance premiums on commercial property resulting from better Insurance

Services Office (ISO) ratings, 3) savings from joint apparatus purchasing, 4) reduced costs from in-house

apparatus maintenance, and 5) economic rents for employee wage increases. Fire and EMS

consolidation also may result in additional fiscal and social benefits beyond these five categories. These

benefits should be considered, but their relatively small magnitude and limited data availability from

relevant measures prompted us to leave these benefits outside of the calculations for this study. Some

of these potential benefits are discussed in the appendices.

Response Times

One benefit associated with consolidation of fire and EMS services is the potential for decreased

response times as fire apparatus and EMS units gain capacity to respond more rapidly to emergency

calls. We anticipate that response times would decrease under consolidation as a result of

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improvements in three areas: more staffing at fire stations, changes to EMS district borders, and the

benefits of increased cross-training (for a complete description of response time calculations, see

Appendix H). Drawing upon past studies of cardiac arrests and the benefits of shortened response times

(Sund 2012; Wilde 2012; International Association of Firefighters 2012; Nichol et al. 1999), we estimate

the average percent reduction in mortality of a patient per minute of reduced response time by

responder type (firefighter/EMT-Basic, EMT-IV Technician, and paramedic with ALS).

The benefits of expanded cross-training and the changes in EMS district borders suggest that

highly-trained medical personnel would arrive at certain locations in the project area sooner, potentially

improving survival rates. To estimate the benefits of improved EMS response times, we reviewed recent

literature for theoretical estimates. We determined an appropriate range of percentage point

reductions in mortality risk per minute of reduced response time for each category of responder (EMT-

Basic, EMT-IV Technician, and paramedic) There is likely significant variation in this measure, as each

patient and potential first responder interact within certain contexts and future technological

advancements may make first responders more effective. To account for some of this uncertainty, we

performed a Monte Carlo simulation (explained in a subsequent section) on each of the estimated

percentage reductions in mortality associated with different levels of service delivery. Then, we used the

difference between these two measures, adjusting for negative results where necessary, to determine

the additional benefits of some improvement in service levels. We used $5 million for the value of a

statistical life, and used literature-recommended sensitivity thresholds at $2.4 million and $7.2 million as

guidance for our analysis (see Appendix I). Using recent data from the service area, we calculate benefits

to society from the expected reduction in deaths, given projections in population growth, demand for

EMS services, and estimated drive times. Our analysis of EMS response times using 3.5 percent as a

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social discount rate estimates benefits of approximately $15 million from lower response times under

full consolidation between 2013 and 2032 (for an explanation of this calculation, see Appendix I).

Shorter response times may also result in less property damage from fire (calculated using

changes in the ISO ratings for fire insurance as a proxy for commercial property) and lower likelihood of

death. Changes in ratings for property insurance do not directly change with response times, but rather

seek to reflect the quality of the fire department and the overall capability of local services to protect

fire from damage. However, efforts to find a suitable measure of property damage losses per fire due to

change in response time were unsuccessful, and are discussed in Appendix J. Thus property insurance

ratings are used as a proxy measure for decreased fire damage to commercial property from improved

fire services, as discussed in the following section. We were also unable to find any reliable theoretical

models for reduced response times to fires and decreased mortality or injury risk. The importance of

this potential benefit may also be minimized by existing automatic aid agreements between fire

departments.

Insurance Services Office (ISO) Ratings

The Insurance Services Office (ISO) is a private company that evaluates the efficacy of fire service

delivery in individual municipalities using a manual known as the Fire Suppression Rating Schedule

(FSRS).2 Based on numerous criteria, the ISO assigns credits based upon FSRS formulas that assess fire

departments in the areas of receiving and handling fire alarms, engine companies, and water supply. It

then aggregates these credits to assign a total score, known as the Public Protection Classification (PPC),

3 to these municipalities. In turn, insurance companies use these ISO ratings to determine insurance

2 Fire Suppression Rating Schedule (2012). Insurance Service Office.

http://www.isomitigation.com/ppc/2000/ppc2001.html#.ULlcb-R1GuJ date retrieved 11/30/12 3 Ibid.

http://www.isomitigation.com/ppc/2000/ppc2001.html#.ULlcb-R1GuJ

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premiums for residential and commercial properties. For a sample of an ISO evaluation summarizing the

various credits, see Appendix G.

During the course of our analysis, we determined that improving our clients’ ISO rating had the

potential to create social benefits in the form of lower insurance premiums for property owners. This

realization motivated further research which yielded positive and negative results. We discovered that

improving the ISO ratings would do nothing to reduce residential insurance premiums because these are

based upon water capacity which remains unchanged under consolidation. However, we did find that it

would reduce insurance premiums for commercial properties. Therefore, we built models to quantify

the possible social benefits enjoyed from lower premiums for the commercial class of properties (see

Appendix F).

If our clients consolidated into a new department, then this would trigger another review by the ISO.

In effect, it would be calculating a new PPC for a consolidated fire district. Before determining if there

would indeed be benefits from improved ISO ratings, we first had to make predictions for FSRS credits

under a fire consolidation.

Due to external constraints4 and previously implemented measures,5 our cost-benefit analysis found

that any consolidation of fire services would only affect certain credits of the three sections of the ISO

ratings. Therefore, we made predictions about changes on a credit-by-credit basis for the receiving and

handling of fire alarms, fire department, and water supply sections of the FSRS (see Appendix F). We

predict that a consolidated fire district would have an ISO rating of 3. This resulted in total NPV benefits

4 Out of the three credit subjects that provide the basis for calculating an ISO rating, one of them would remain unchanged if

consolidation were to occur. In discussions with the municipal fire chiefs and village administrators of Fitchburg, Verona, and Oregon we discovered that water supply capacity is outside the jurisdiction of the fire departments. 5 With regards to fire alarms, reforms in receiving and handling alarms resulting from a countywide shift to the DaneCom

emergency communications network are considered part of the status quo. Accordingly, changes in the ISO ratings due to this credit subject are outside the purview of this cost-benefit analysis.

13

of approximately $460,000 over the 20-year span of our analysis specifically attributable to lower

commercial insurance premiums.

Apparatus Purchase

Each organization has already scheduled apparatus purchases for years into the future to

maximize apparatus lifespans. These schedules carefully weigh the high costs of purchasing apparatuses

against the rising maintenance costs and the danger from the reduced reliability associated with older

apparatuses. For these reasons, we do not recommend delaying purchases any longer than permitted

on the provided schedules. However, when manufacturers build more than one apparatus at a time,

they gain economies of scale on the many specialized parts, which results in 4 to 5 percent overall

savings on simultaneous purchases.6 This suggests that a consolidated department may purchase an

apparatus earlier than under current policy to gain savings from the joint purchasing of multiple

apparatuses. Benefits only result when the savings from joint purchasing outweigh the loss of

discounting on otherwise-delayed purchases.

By our estimates, there is opportunity to advance the purchase of an ambulance by one year for

a savings of $10,000 in 2018. Ambulance purchases can also be shifted by two years in 2015, 2021,

2025, and 2031 for a savings of $4,000 per year. In 2015 an engine can be shifted up by two years, for a

savings of $13,000. In 2016 three ladders can be purchased at once, one advanced by a year and the

other by two years, for a savings of $19,000. Finally, in 2020 there are two squad vehicles scheduled to

be purchased, for a savings of $47,000. The overall NPV of these benefits over the 20 year span of the

study period is $84,000. A detailed discussion of the impact of consolidation on apparatus purchasing

can be found in Appendix K.

6 The 4 to 5 percent savings on simultaneous purchases is based on an estimate provided by the fire chiefs from the study area.

14

Apparatus Maintenance

Consolidation would provide an economy of scale for fire apparatus (vehicle) maintenance.

Certain apparatuses require specialized services, which require high training costs to maintain, but the

fire chiefs anticipate employing a captain-level position qualified to perform non-specialized

maintenance on vehicles. We estimate non-specialized maintenance as 30 percent of current

maintenance costs based on conversations with the fire chiefs. There would be no savings on parts, but

labor costs account for approximately 60 percent of non-specialized maintenance. These yield savings of

approximately $32,000 per year. The estimated NPV for in-house maintenance of apparatus is $450,000

over 20 years. A detailed discussion of the impact of consolidation on apparatus maintenance is found in

Appendix L.

Economic Rents for Personnel

Increasing pay for personnel creates economic rent benefits as employees experience wage

increases above the minimum amount they are willing to accept. In our social analysis, these rents serve

as an offset to the fiscal personnel costs to departments of paying higher wages. Over time, as

employees leave service, the benefits associated with these rents are slowly phased out as new

employees require the higher wages as compensation for forgoing alternative employment. However,

the pay increases for higher-level employees who assume greater responsibilities under consolidation

do not receive rent benefits. Our analysis finds that economic rents associated with full consolidation of

fire and EMS are estimated to offset incurred personnel costs by approximately $1.5 million over the 20

year study period. Those associated with the service consolidation model are estimated to offset

incurred personnel costs by approximately $2.5 million over the 20 year study period. Appendix E details

estimated economic rents for personnel under the full consolidation and service consolidation models.

15

Non-Monetized Costs and Benefits

Fire-EMS Cross-training

In our analysis, we assume that under a full consolidation model departments would “cross-

train” some career personnel to provide both fire and EMS services (currently, only Oregon and ToM

cross-train their full time personnel beyond EMT-Basic levels). Although this would require more cross-

trained personnel than under current policy, we do not include cross-training as a fiscal or social cost for

four reasons: 1) the Fitchburg fire department, which is the only department that has a fire station

without specific EMS services at a considerable distance from an EMS station, currently hires only full

time personnel who already possess EMT-Basic certifications. We assume that full time personnel cross-

trained at higher levels would be phased in throughout the study period at the natural attrition rate of

existing personnel; 2) the chiefs do not anticipate significantly different costs under consolidation for

ongoing training from either marginal costs or economies of scale; 3) the academic literature (though

scant) finds no practically significant difference in worker commitment levels between fire-based and

other EMS services, suggesting no substantial difference in attrition rates following consolidation

(Alexander et al 2010); and 4) Oregon and ToM already incur some of the costs of cross-training EMT-IV

Technicians, and under a consolidated department, cross-trained EMT-IV Technicians could be

strategically located at Fitchburg Station #1 (which does not currently provide EMS-specific services

beyond EMT-Basic training levels) when they are not needed to staff the ToM or Oregon stations. For

further discussion of potential costs associated with fully-integrated, cross-trained EMS departments,

please see Appendix O.

16

Training Economies of Scale

The department chiefs do not anticipate significantly different costs under consolidation for

ongoing training from either marginal costs or economies of scale. This applies to both the full

consolidation and service consolidation alternatives.

Code Enforcement, Plan Review and Community Education

Code enforcement, plan review, and community education are three important areas of fire

protection and EMS services in which we might expect to see benefits from consolidation. Under a

consolidated model, firefighters performing inspections would be able to specialize in this area, as other

personnel take on different responsibilities. This ability to specialize may result in greater frequency,

consistency, and higher quality inspections, as these individuals gain experience in this fire prevention

technique. Although the fire chiefs believe there might be savings in the area of fire inspections and plan

review, we were unable to monetize these potential benefits for this analysis. Furthermore, we do not

expect consolidation to result in measurable costs or benefits in the area of community education. A

survey of studies (Ta et al. 2006) suggests that returns to community fire education programs are

ambiguous and finds few studies that look beyond fire alarm promotion. Furthermore, we do not expect

that consolidation would generate changes to existing outreach and education activities.

Standardization of Operating Procedures and Municipal Codes

As a result of consultation with the department chiefs, we do not anticipate significant costs

from the process of standardizing operating procedures and municipal codes. County- and state-level

standards already govern most operations, and differences in municipal building codes are unlikely to be

problematic for fire inspectors.

17

Administrative Costs of Transition to Consolidation

We assume the administrative costs of transition to consolidation to be negligible, in accordance

with the advice of department chiefs and town administrators.

Assessment of Net Benefits

CBA seeks to monetize all relevant impacts of a particular policy relative to the current policy.

This presents a number of fundamental challenges for any CBA: first, the analysis must specify who

experiences the impacts of a policy. In the case of emergency services, impacts extend to people within

a given service area but are unlikely to be felt outside those borders. We therefore assume that all

residents and property within the boundaries of Fitchburg, Verona, Oregon, and ToM have “standing”

for this CBA. Second, we attempt to monetize even those costs and benefits that are not typically

expressed in dollar terms, such as the gains from more rapid emergency response. We specify our

estimates of these “shadow prices,” as they are called, in the appendices. Third, we worked with the

department chiefs to narrow a spectrum of possible consolidation models into two models of

consolidation, full consolidation and service consolidation, as previously discussed.

Monte Carlo Simulation

The complexity of CBA makes it difficult to calculate reliably a point estimate for a policy’s net

benefits. The values of crucial variables are often uncertain and require simplifying consumptions. When

these variables are used in calculations, inaccurate values can significantly affect the outcome; multiple

uncertain or inaccurate variables compound this problem. Rather than ignore the questionable accuracy

of particular variables, CBA often estimates a range of net benefits through repeated randomized

sampling from a distribution of the uncertain variables. We use this method, known as Monte Carlo

simulation, to estimate the net social benefits of fire and EMS consolidation. A Monte Carlo follows two

basic steps: First, variables with uncertain values are assigned a specified distribution of values. Second,

18

the Monte Carlo simulation draws randomly from the variables’ specified distributions when performing

calculations. These calculations are performed many times to provide a statistically significant sample.

Fixed Values

We include several fixed values in our calculations. These figures are assumed not to vary. First,

we build detailed personnel inventories using budgets and information provided by each department.

These inventories incorporate future staffing changes planned under current policy and are projected

out to 2032. Each policy alternative uses a separate inventory to calculate personnel costs, but those

inventories are fixed within a policy option and are not subject to the same uncertainty as other events,

such as the percentage point reduction in mortality risk associated with improved response time.

Second, we calculate ISO ratings under each policy alternative and do not anticipate variation within

that policy, although we expect growth rates to be uncertain and account for that uncertainty with a

Monte Carlo simulation (see Appendices F and G). Third, apparatus to be purchased is also assumed

fixed. We vary the purchase timing by one year where appropriate, but the type of apparatus remains

fixed (see Appendix K). Finally, we do not vary population projections from state- or municipality-

generated values. Population projections are identical across all policy options.

Sensitivity Analysis

Some variables can have uncertain values but must remain constant across all calculations in a

model to be useful. “Sensitivity analysis” allows a model to control this uncertainly. For certain variables,

we perform a Monte Carlo simulation with specified mean values, as well as maximum and minimum

values or extreme points on the probability distributions, to generate unlikely but plausible scenario

outcomes. We perform sensitivity analyses on the social discount rate, performing our full Monte Carlo

simulations at three different social discount rates (midpoint of 3.5 percent, sensitivity at 2 percent and

6 percent). We also employ sensitivity analysis when estimating future emergency call volume, the

19

reduction in mortality resulting from a minute reduction in response time for different levels of service,

commercial property growth rates, and apparatus, maintenance, and rebranding costs.

Final Analysis

Our final analysis follows five steps. First, we construct Monte Carlo simulations to include six

generators of costs and benefits: personnel, effect of ISO ratings on insurance premiums, deaths

avoided due to shorter response times and changes in service, rebranding, joint apparatus purchase,

and in-house apparatus maintenance. We construct three full Monte Carlo analyses, discounting for

every year from 2013 to 2032. We estimate the total net present value (NPV) of fire and EMS services

under full consolidation, under fire service consolidation, and under EMS service consolidation. Second,

we apply sensitivity analysis to the social discount rate for both service and full consolidation model.

Third, we sum the NPVs of the fire service and EMS service analyses to generate the overall service

consolidation NPV. Fourth, we sum each model’s estimated costs and benefits to generate the net social

benefit (NSB). Finally, we separate fiscal from other social costs and benefits. From the total NPV in each

analysis we subtract the effect of ISO ratings and costs avoided due to shortened response times. These

are purely social benefits; the remaining personnel, rebranding, joint apparatus purchase, and in-house

apparatus maintenance values are fiscal costs and benefits. Our CBA makes recommendations based

upon the NSB, but we also offer fiscal estimates as a reference point for municipal policy-makers.

Following the first principle of cost-benefit analysis, we recommend the alternative that we find offers

the greatest net social benefits

Results

Full Consolidation

Our Monte Carlo simulation of the social costs and benefits of full consolidation suggests that

consolidation would yield positive net social benefits in most scenarios, but at significant fiscal cost (see

20

Table 1 and Appendix R). We perform a Monte Carlo simulation of 1,000 trials at three different social

discount rates. At the midpoint estimate of a 3.5 percent discount rate, we calculate $7.7 million in net

present social benefits of consolidation (relative to current policy) between 2013 and 2032. Assuming a

discount rate of 2.0 percent, we estimate $8.0 million in NSB. Finally, assuming a discount rate of 6.0

percent, we estimate a total of $7.3 million in NSB. At the midpoint discount rate, approximately 85

percent of trials for each discount rate yielded positive net social benefits, with 90 percent of trials

falling between approximately -$2 million and $22 million in net social benefits. All values are expressed

in 2012 U.S. dollars.

The fiscal analysis of the full consolidation model does not consider the social costs or benefits.

Thus, the fiscal analysis does not include economic rents associated with higher wages, the benefits to

society of the ISO changes, and the value of the decreased mortality risk from lower response times. Full

consolidation yields a total net present value of a fiscal cost of $9.6 million (relative to current policy)

between 2013 and 2032 at a social discount rate of 3.5 percent. With a 6.0 percent social discount rate,

consolidation yields fiscal costs of $7.2 million; with a 2.0 percent discount rate, consolidation yields a

fiscal cost of $11.1 million over the 20-year period.

Service Consolidation

A sensitivity test and Monte Carlo simulation of the service consolidation models suggest

negative net social benefits in most scenarios, primarily due to significant fiscal costs under the model

we used in our analysis (see Table 1). At a midpoint estimate of a 3.5 percent discount rate, we estimate

a net present value of -$3.7 million between 2013 and 2032, relative to current policy. Assuming a

discount rate of 2.0 percent, we estimate a net present value of -$4.9 million. Assuming a discount rate

of 6.0, we calculate a total net present value of -$2.3 million. At the midpoint discount rate,

21

approximately 85 percent of trials for each discount rate yielded positive net social benefits, with 90

percent of trials falling between approximately -$8.5 million and $2 million in net social benefits.

As with analysis of full consolidation, the fiscal analysis of service consolidation does not

consider the social costs or benefits. At the midpoint estimates of a 3.5 percent discount rate, we

calculate a total of -$16.0 million in fiscal costs relative to current policy between 2013 and 2032.

Assuming a discount rate of 2.0 percent, we calculate a total of $21.4 million in fiscal costs. Assuming a

discount rate of 6.0 percent, we calculate a total of $9.9 million in fiscal costs. Discussions of several

specific cost breakdowns for components of service consolidation may be found in the appendices of

this report.

Table 1: Net Social Benefits and Fiscal Costs of Consolidation (millions of dollars)

Model (Note: The present value of the fiscal impacts, which are the discounted budgetary impacts of these options, are included in the present value of social benefits calculations)

Midpoint Social Discount Rate (SDR of 3.5%)

High Social Discount Rate (SDR of 6.0%)

Low Social Discount Rate (SDR of 2.0%)

Full Consolidation Present Value of Social Benefits 7.7 7.3 8.0

Present Value of Fiscal Impact -9.6 -7.2 -11.1

Service Consolidation

Present Value of Social Benefits -3.7 -2.3 -4.9

Present Value of Fiscal Impact -16.0 -9.9 -21.4

Source: Authors

Costs and benefits of full consolidation may also be considered by category. These categories

may be helpful for guiding policymakers, should they decide to make incremental steps toward

consolidation or seek joint agreements to realize some of these benefits. The breakdown of costs and

benefits displayed in Table 2 and Table 3 show the changes from current policy resulting from full

consolidation and at a 3.5 percent social discount rate.

22

Table 2: Social Benefits and Costs of Full Consolidation

Personnel with Rents (NPV) -$8,240,000

ISO Rating (NPV) $470,000

Response Time (NPV) $15,200,000

Rebranding (NPV) -$300,000

Apparatus Purchase (NPV) $85,000

Apparatus Maintenance (NPV) $450,000

Total Net Present Value $7,700,000

Source: Authors

Table 3: Fiscal Benefits and Costs of Full Consolidation

Personnel (NPV) -$9,780,000

Rebranding (NPV) -$300,000

Apparatus Purchase (NPV) $85,000

Apparatus Maintenance (NPV) $450,000

Total Net Present Value -$9,550,000

Source: Authors

Recommendations

We recommend that the fire and EMS departments serving Fitchburg, Verona, Oregon, and the

Town of Madison pursue, in cooperation with the chiefs and the municipal administrators, consolidation

options within the framework that we have set forward. We believe that full consolidation would

generate greater benefits for these communities than either service consolidation or current policy. The

majority of social benefits under full consolidation come from shortened EMS response times, as the

service of Oregon’s ambulance in southeastern Fitchburg and the presence of trained intermediate level

EMT firefighters at Fitchburg Station #1 would likely save lives.

These benefits could also be realized through other options, however, including moving the

Fitchburg stations eastward earlier than 2022, which was the baseline date assumed in our analysis.

Moving these stations earlier than 2022, or creating a staging location for Fitch-Rona EMS services in

eastern Fitchburg through other means, would likely realize a significant portion of the benefits

estimated by full consolidation. However, other savings can only be realized through consolidation at

23

some level, including: strategic placement of ALS ambulances at existing stations; redistribution of fire

and EMS staff throughout the municipalities for optimal service provision; maintenance savings;

apparatus purchase savings; and insurance premium reductions from improved ISO ratings. If policy-

makers find the cost of full consolidation to be unfeasibly high, the fire and EMS departments should

pursue other cooperative measures, including joint purchasing of apparatus and the expansion of

Oregon EMS ambulance service area into the area currently served by Fitch-Rona EMS through a

cooperative agreement or partial consolidation.

Limitations

We perform this CBA under five principle limitations that could affect policy decisions. First, we

project personnel models for the next twenty years on the basis of “best case” staffing structures of the

next three to five years. We cannot predict exogenous budgetary constraints and mission needs beyond

this short time horizon, so our projected personnel costs after 2017 increase only at the rate of inflation.

Staffing structures under consolidation might differ considerably from our assumptions, possibly

affecting future costs and benefits.

Second, this CBA is limited to options of consolidation, according to our commission and the

department chiefs’ guidance. We do not consider options of expanded cooperation which maintain

departments’ legal and administrative independence. Since the majority of net social benefits under

consolidation arise from increased EMS cooperation, it is possible that many of these benefits could be

realized without the costs of consolidation. This study also did not examine the costs and benefits of

moving the Fitchburg stations eastward earlier than the planned dates, which could provide the benefits

of shorter EMS response times without consolidating departments or new cooperative agreements if

space for Fitch-Rona EMS ambulances was provided at the new stations. Similarly, full consolidation of

24

departments might not be necessary to realize benefits from in-house maintenance or coordinated

apparatus purchase.

Third, we do not examine funding sources for a consolidated department or departments.

Questions of budgetary allocation, revenue generation, and taxing authority may be critical should

consolidation move forward, but such policy decisions are beyond the scope of this study.

Fourth, we project population growth at constant rates specified in each municipality’s

comprehensive plan (see Appendix F). Slower or faster growth is likely to affect the assessed value of

property and thus the insurance premiums used to calculate savings from ISO rating improvements. Our

calculations of future demand for EMS services include a range of growth rates (derived from previous

studies of the Fitchburg, Verona, and Oregon emergency services departments) and so would be less

prone to variation in population growth.

Fifth, we do not consider costs or benefits from changes in fire response times. Relative to

current policy, we anticipate that response times may only decrease for overnight responses in Verona

before 2017, and that these benefits may not be realized under likely variations on our consolidation

model (see Appendix J). Verona is already expanding its overnight staffing under current policy, so we

assume that consolidation would likely yield negligible benefits. Furthermore, we have found no

consistent, reliable measures for avoided damage per minute of response time either in reported data

or in the literature. We therefore exclude decreased fire response time from our CBA.

25

Appendix A: Service Area and Emergency Department Profile

Table 4: Service Area and Emergency Department Profile

Population Served

Area (mi2)

Municipalities Served Average Response Time

Number of Stations

Verona Fire Department

12,567 32 Town of Verona, City of Verona

6 min 1

Fitchburg Fire Department

25,260 32.5 City of Fitchburg 5 min, 13 sec 2

Oregon Area Fire and EMS

14,296 44 Village of Oregon, Town of Dunn, Town of Rutland, Town of Oregon

8 min 1

Town of Madison Fire Department

5,923 <1 Town of Madison 7 min 1

Fitch-Rona EMS 37,827 64.5 City of Verona, Town of Verona, City of Fitchburg

5.5 – 13.8 min (zone mean range)

2

TOTAL 58,046 64.5 N/A N/A 5 fire, 4 EMS

Source: Authors based on information provided by clients and own research.

26

Appendix B: Personnel under Current Policy

Under current policy, the consolidation study area consists of five separate organizations, which

provide fire services, EMS services, or a combination of Fire and EMS services. Personnel from the

organizations within the study area collaborate regularly in use of shared facilities and while providing

automatic and mutual aid to neighboring communities. Personnel costs under the current policy,

however, are calculated separately for each service organization and then summed together to obtain a

total cost.

Fitchburg Fire Department

The Fitchburg Fire Department has 13 career personnel, 11 Paid-on-call/Paid-on-Premise (POx)

officers, six Interns, and 61 volunteer firefighters. Under current policy, 2013 career personnel costs for

Fitchburg Fire Department are estimated in Table 5.7

Table 5: Estimated 2013 Fitchburg Fire Department Career Personnel Costs

CAREER PERSONNEL Number

Employees Hours/Year

Wage

Rate

Annual

Wages O/T

Total

Comp Fringe Dept. Cost

Deputy Chief 1 2,080 $40.0975 $83,403 ---- $83,403 $43,887 $127,289

Division Chief 1 2,080 $32.2135 $67,004 ---- $67,004 $35,258 $102,262

Lieutenant 3 2,712 $20.9961 $170,824 ---- $170,824 $89,888 $260,712

Firefighter 7 2,712 $20.1886 $383,260 $25,044 $408,304 $201,672 $609,976

Administrator 1 2,080 $23.5360 $48,955 ---- $48,955 $25,760.06 $74,715

TOTAL 13 11,664 $753,446 $25,044 $778,490 $396,464 $1,174,954

Source: Authors based on information provided by clients

7 Estimates for 2013 are based on the City of Fitchburg 2012 fire services budget and on personnel information provided in

Version 11 of the Fitchburg/Oregon/Verona Enhanced Cooperation Discussions 2012 draft document.

27

The deputy and division chief and department administrator of the Fitchburg Fire Department

work a 40-hour week (2,080 hours per year), while lieutenants and firefighters work shifts of 52 hours

per week (2,712 hours per year). Although both career lieutenants and firefighters are eligible for

overtime hours, these hours are primarily taken by career firefighters. Total 2013 overtime hours are

estimated at 827, and are based on 2012 budgeted overtime. Fringe benefits for Fitchburg career

personnel are calculated at 52.5 percent8 of wages. Total personnel costs for 2013 are estimated at

$1,175,000.9

The Fitchburg Fire Department has 11 POx officers including a chief, deputy chief, division chief,

two captains, and six lieutenants. The department also has six interns. Fitchburg Fire Department 2013

personnel costs are estimated under current policy as shown in Table 6.10

Table 6: Estimated 2013 Fitchburg Fire Department POx Personnel Costs

POC/POP OFFICERS Number

Employees Stipend/Year

Total

Tuition Total Comp

Total

Fringe

Dept.

Cost

Chief 1 $24,000 ---- $24,000 $4,728 $28,728

Deputy Chief 1 $3,600 ---- $3,600 $709 $4,309

Division Chief 1 $2,700 ---- $2,700 $532 $3,232

Captain 2 $1,800 ---- $3,600 $709 $4,309

Lieutenant 6 $1,200 ---- $7,200 $1,418 $8,618

Intern 6 $3,900 $18,000 $41,400 $8,156 $49,556

TOTAL $82,500 $16,253 $98,753

Source: Authors based on information provided by clients

8 Estimate provided by Fitchburg Fire Department administrator.

9 All dollar value estimates in this appendix are based on 2012 dollars.



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The Fitchburg Fire Department chief is a part-time paid-on-call volunteer who receives as

compensation a yearly stipend of $24,000. As shown in Table 7, the remaining POx officers receive a

stipend in addition to an hourly rate of $8.50 for POx certified firefighter or $10.00 for POx

driver/operator. Interns receive a yearly stipend of $3,900, which is estimated to total $23,400 for six

interns in 2013. Interns are also reimbursed up to $1,500 per semester (2 semesters per year) for tuition

costs, which is estimated to total $18,000 for six interns in 2013. Costs for POx fringe benefits (FICA and

Medicare) are estimated at 19.7 percent of employee compensation. POx officer and intern personnel

costs for 2013 are estimated at $99,000.

POx personnel comprise a significant portion of Fitchburg Fire Department’s 24-hour station

staffing schedule. Fitchburg Fire Department 2013 personnel costs under current policy are estimated in

Table 5.11 As before, costs for POx fringe benefits (FICA and Medicare) are estimated at 19.7 percent of

employee compensation. POx station staffing costs for 2013 are estimated at $341,000. Based on

personnel projections in Tables 5 through 7, 2013 total projected personnel costs for Fitchburg Fire

Department are estimated at $1,615,000.

Table 7: Estimated 2013 Fitchburg POx Station Personnel Staffing Costs

POx Station Staffing Hours/Year Wage Total Fringe Dept. Cost

OIC Coverage 873 $10.00 $8,730 $1,719.81 $10,450

Station 1 18040

Firefighter 9020 $8.50 $76,670 $15,103.99 $91,774

Driver/POx Officer 9020 $10.00 $90,200 $17,769.40 $107,969

Station 2 11360

Firefighter 5680 $8.50 $48,280 $9,511 $57,791

Driver/POx Officer 5680 $10.00 $56,800 $11,190 $67,990

Emergency Response 475

Firefighter 156 $8.50 $1,326 $261.22 $1,587

Driver/POx Officer 103 $10.00 $1,030 $202.91 $1,233

Intern 216 $8.50 $1,836 $361.69 $2,198

Training

Firefighter 52 $8.50 $442 $87.07 $529

Driver/POx Officer 50.5 $10.00 $505 $99.49 $604

TOTAL $166,870 $32,873 $340,992

Source: Authors, based on information provided by clients



29

Under current policy, Fitchburg Fire Department anticipates adding three shift career captains

(2,712 hours per year). As shown in Table 8, for this career position, which would be new to Fitchburg

Fire, we estimated the wage rate as the average of the two nearest existing career positions in the

department (deputy chief and shift lieutenant), resulting in an hourly wage rate of $30.21. Fringe

benefits are calculated at 52.6 percent of compensation. The total cost to Fitchburg Fire Department for

adding these three positions is estimated to be $375,000 per year. This change brings the total projected

personnel costs for Fitchburg Fire Department to an estimated $1,940,000 for 2015. There are no

further changes anticipated in the Fitchburg Fire Department personnel budget through the end of the

study period in 2032.

Table 8: Estimated Cost of Fitchburg Career Positions Added in 2015


Employees Hours/

Year Wage Rate

Annual Wages

Total Comp

Fringe Dept. Cost

Captain 3 2,712 $30.21 $245,748 $245,748 $129,313 $375,060


Oregon Area Fire and EMS

Under current policy, Oregon Area Fire and EMS has five full and one half-time career personnel,

three POx officers, nine interns, and 42 volunteer firefighters and EMT/Paramedics. Career personnel

costs for Oregon Area Fire and EMS in 2013 are estimated in Table 9.12

Table 9: Estimated 2013 Oregon Area Fire and EMS Career Personnel Costs

CAREER PERSONNEL

Number Personnel

Hours/ Year

Salary Wage Rate

Annual Wages

Total Comp

Fringe Total Cost

Chief 0.5 1,090 $ 31,230 ---- $31,230 $31,230 $14,054 $45,284

Captain 3 2,496 ----- $18.35 $137,415 $137,415 $61,837 $199,252

Firefighter/EMT 2 2,496 ----- $16.29 $81,320 $81,320 $36,594 $117,914

TOTAL 5.5 4992 $31,230 $249,965 $249,965 $112,484 $317,166


12 Estimates for 2013 are based on the Oregon Area Fire and EMS 2012 budget and on personnel information provided in


30

The Oregon Area Fire and EMS chief receives a salary of $31,230 and works a part-time

schedule. Career captains and firefighters work shift at 48 hours per week (2,496 hours per year). Fringe

benefits for Oregon career personnel are calculated at 45 percent of wages.13 Total career personnel


Oregon Area Fire and EMS has three POx officers including a captain and two lieutenants. The

department also has nine interns. Oregon’s 2013 personnel costs are estimated under current policy in

Table 10.

Table 10: Estimated 2013 Oregon Area Fire and EMS POx Personnel Costs

POx OFFICERS Number of

Personnel Stipend Tuition Total Comp Fringe Total Cost

Captain 1 $780 $780 $153.66 $934

Lieutenant 2 $540 $1,080 $212.76 $1,293

Intern 9 $2,100 $13,500 $18,900 $3,723 $22,623

TOTAL $20,760 $4,090 $24,850


As shown in Table 11, POx officers receive a stipend in addition to the regular department

hourly rate of $8.50. Interns receive a yearly stipend of $2,100, which is estimated to total $18,900 for

nine interns in 2013. Interns are also reimbursed up to $750 per semester (2 semesters per year) for

tuition costs, which is estimated to total $13,500 for nine interns in 2013. Costs for POx fringe benefits

(FICA and Medicare) are estimated at 19.7 percent14 of employee compensation. POx officer and intern

personnel costs for 2013 are estimated at $25,000.

POx personnel comprise a large portion of Oregon’s 24-hour station staffing schedule. The

department’s 2013 personnel costs under current policy are estimated as shown in Table 9. The

13 Estimate provided by Chief David Bloom of Oregon Area Fire and EMS.

14 For Oregon, we used the Medicare/FICA fringe percentage estimate provided by Fitchburg Fire Department administrator.

31

department staffs two paid-on-premises EMS shifts 24-hours daily and also staffs 120 hours per week

using paid-on-premises personnel at an hourly rate of $8.50. Additionally, the department budgets for

three personnel on pager for 20,040 hours per year, each at $2.00 per hour. As before, costs for POx

fringe benefits (FICA and Medicare) are estimated at 19.7 percent of employee compensation. POx

station staffing costs for 2013 are estimated at $330,000. Based on personnel projections in Tables 7

through 9, 2013 total projected personnel costs for Oregon Area Fire and EMS are estimated at

$672,000.

Table 11: Estimated 2013 Oregon Area Fire and EMS POx Station Personnel Staffing Costs

POC/POP CREWS Hourly Wage

Hours Total Comp Fringe Total Cost

POC Hours $8.50 23,760 $201,960.00 $39,786 $241,746

POC Pager $2.00 20,040 $40,080.00 $7,896 $47,976

POC All Call $8.50 4000 $34,000.00 $6,698.00 $40,698

POx Training $8.50 1535 $13,047.50 $2,570.36 $15,618

TOTAL $276,040.00 $54,380 $330,420


Under current policy, Oregon Area Fire and EMS plans to add another 3120 paid-on-premise

hours at $8.50 per hour in 2014. This increase would be accompanied by a concurrent decrease in the

same number of budgeted pager hours at $2.00 per hour. This change would increase Oregon’s budget

in 2014 by a total of $24,000, which includes Medicare and FICA fringe benefits. As a result of this

increase, the total projected personnel costs for Oregon Area Fire and EMS would be an estimated

$697,000 for 2014. There are no further changes anticipated in the department personnel budget

through the end of the study period in 2032.

Town of Madison Fire Department

Under current policy, the Town of Madison Fire Department has eight full-time career

personnel, including a chief, three assistant chiefs, and four shift firefighter/paramedics. The

32

department also has three POx officers, six interns, and 36 volunteer firefighters and EMT/Paramedics.

Career personnel costs for Town of Madison Fire Department in 2013 are estimated in Table 12.15

Table 12: Estimated 2013 Town of Madison Fire Department Career Personnel Costs

CAREER PERSONNEL

Number Personnel

Hours/ Year

Salary Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Chief 1

$101,809

$101,809

$101,809 $43,778 $145,587

Deputy Chief 3 2756

$27.09 $223,980

$223,980 $96,311 $320,292

Firefighter/ Paramedic

1 2756

$16.79 $46,279 144 $3,627 $49,906 $19,900 $69,806

Firefighter/ Building Inspector

3 2756

$22.69 $187,601 349 $11,878.22 $199,479 $80,668 $280,148

TOTAL

$559,669 493 $15,505 $575,174 $240,658 $815,832


The Town of Madison Fire Department chief receives a salary of $102,000 and works a full-time

schedule. Career officers work shifts of 53 hours per week (2,756 hours per year). Fringe benefits for

Town of Madison career personnel are calculated at 45 percent of wages.16 Total career personnel costs

for 2013 are estimated at $816,000.

The Town of Madison Fire Department has three POx officers including an assistant chief, a

captain, and a lieutenant. The department also has six interns. The department’s 2013 personnel costs

are estimated under current policy in Table 13.

15 Estimates for 2013 are based on the Town of Madison 2013 budget and on personnel information provided in Version 11 of

the Fitchburg/Oregon/Verona Enhanced Cooperation Discussions 2012 draft document. 16

Estimate provided by Chief David Bloom of Town of Madison Fire Department.

33

Table 13: Estimated 2013 Town of Madison Fire Department POx Personnel Costs

POx OFFICERS Number

of Personnel

Stipend Tuition/

Year Hours/

Year Wage Rate

Total Comp

Total Tuition

Fringe Dept. Cost

Deputy Chief 1 1248 $8.50 $10,608 $2,090 $12,698

Captain 1 1676 $8.50 $14,246 $2,806 $17,052

Lieutenant 1 1676 $8.50 $14,246 $2,806 $17,052

Intern Y1 1 $2,400 $2,000 $2,400 $2,000 $473 $4,873

Intern Y2/Y3 5 $3,600.00 $2,000.00 $18,000 $10,000 $3,546 $31,546

TOTAL $59,500 $12,000.00 $11,722 $83,222


As shown in Table 13, the Town of Madison POx deputy chief works a part-time schedule of

approximately 24 hours per week at an hourly rate of $8.50. Based on 2013 budgeted numbers for part-

time POx personnel, it is estimated that the POx captain and lieutenant each work a total of 1676 hours

per year. Interns in their first year of service receive a yearly stipend of $2,400, and for 2013 there is one

intern in this category. Paramedic interns in their second and third years of service receive a yearly

stipend of $3,600, and there are five interns in this category for 2013. All interns receive tuition

reimbursement of $1,000 per semester (2 semesters per year). Costs for POx fringe benefits (FICA and

Medicare) are estimated at 19.7 percent of employee compensation.17 POx officer and intern personnel


Volunteer personnel are an important part of the Town of Madison’s staffing schedule. The

department’s 2013 volunteer personnel costs under current policy are estimated as shown in Table 14.

Volunteer firefighter and EMS staffing costs for 2013 are estimated at $44,000.

17 For Town of Madison, we used the Medicare/FICA fringe percentage estimate provided by Fitchburg Fire Department

administrator.

34

Table 14: Estimated 2013 Town of Madison Fire Department Volunteer Staffing Costs

Volunteer Merit Points Annual Total Cost

Firefighter $26,100

EMS $18,250

TOTAL $44,350


Based on personnel projections in Tables 12 through 14, 2013 total projected personnel costs

for the Town of Madison Fire Department are estimated at $943,000. Under current policy, the Town of

Madison will be annexed into the cities of Madison and Fitchburg. At that time, the Town of Madison

Fire Department is scheduled to become the property of the City of Fitchburg, which plans to close the

station in in 2022. At that time, this study assumes that all costs associated with fire services personnel

at the Town of Madison station are eliminated. On the other hand, personnel costs associated with EMS

will be taken over by the Fitchburg Fire Department. Based on the 2012 Town of Madison budget, we

estimated that 18.4 percent of total personnel costs are attributable to EMS personnel and 81.6 percent

are attributable to fire services personnel. Thus, to estimate the remaining personnel costs after the

ToM station closes in 2022, we subtracted 81 percent of from the total ToM personnel costs, which

leaves an estimated yearly personnel cost of $174,000 from 2022 through the remainder of the study

period.

Verona Fire Department

The Verona Fire Department has 6 career personnel, 6 Paid-on-call/Paid-on-Premise (POx)

officers, and 26 POx volunteer firefighters. Career personnel costs under current policy for Verona Fire

Department for 2013 are estimated in Table 15.18



35

Table 15: Estimated 2013 Verona Fire Department Career Personnel Costs

CAREER PERSONNEL

Number Personnel

Hours/Yr Salary Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Chief 1

$72,100 $72,100 $72,100 $24,514 $96,614

Assistant Chief 1 2,184 $26.78 $58,488 385.5 $15,486 $74,359 $19,886 $94,245

Captain 1 2,184 $22.17 $48,410 656.5 $21,828 $70,894 $16,459 $87,354

Lieutenant 1 2,184 $19.48 $42,538 179.25 $5,237 $47,954 $14,463 $62,417

Firefighter 2 2,184 $18.05 $78,824 165.25 $4,473 $83,462 $26,800 $110,263

TOTAL 6 10,920 $300,360 1386.5 $47,023 $348,770 $102,122 $450,892


The Verona fire chief is full-time career personnel and receives a salary of $72,100 per year, and

works a full-time schedule. The career assistant chief, captain, lieutenant, and firefighters work shifts

that comprise a 42-hour week (2,184 hours per year). All career personnel with the exception of the

chief are eligible for overtime hours. We estimate total 2013 overtime hours at 1386.5, which is based

on 2012 overtime hours worked by career personnel.19 Fringe benefits for Verona career personnel are

calculated at 34 percent of wages. 20 Total career personnel costs for 2013 are estimated at $451,000.21

The Verona Fire Department has six POx officers including two division chiefs, two captains, and

two lieutenants. As shown in Table 16, we estimate that the POx captains and lieutenants work

approximately 2,600 hours per year at $10.00 per hour.22 The station is also staffed for an estimated

5,116 hours by POx firefighters at $10.00 per hour. The Verona Fire Department also estimates

approximately 1,429 hours of all-call time in 2013 which would be reimbursed at the rate of $10.50 per

hour. The department currently has no interns. Costs for POx fringe benefits (FICA and Medicare) are

19 Estimate of overtime hours for each career personnel category provided by Chief Joseph Giver of Verona Fire Department.

20 Estimate provided by Chief Joseph Giver of the Verona Fire Department.

21 All dollar value estimates in this appendix are based on 2012 dollars.



36

estimated at 19.7 percent of employee compensation23. Total POx station staffing costs for 2013 are

estimated at $110,000.

Table 16: Verona POx Station Personnel Staffing Costs

POC/POP CREWS Hours Wage Total Fringe Dept. Cost

Station Staffing 5,116 $10.00 $51,160 $10,079 $61,239

POP Captain/Lieutenant Hrs 2,600 $10.00 $26,000 $5,122 $31,122

POC All Call Hours 1429 $10.50 $15,005 $2,955.89 $17,960

TOTAL $92,165 $18,156 $110,321


Based on personnel projections in Tables 15 and 16, 2013 total projected personnel costs for

Verona Fire Department are estimated at $561,000. As shown in Table 17, under current policy the

Verona Fire Department plans to add night shift driver hours (12 hours M-Su) in 2014 at an estimated

cost of $55,000, a second night shift in 2015 at an estimated cost of $55,000, and a third night shift in

2016 at an estimated cost of $52,000.

Table 17: Estimated Cost of Additional Staffing in Verona Through 2017

2014 Add night shift driver (12 hrs) Driver Wage Hours/Yr Total Comp Fringe Dept. Cost

$10.50 4380 $45,990 $9,060 $55,050

2015 Add night shift driver (12 hrs) Driver Wage Hours/Yr Total Comp Fringe Dept. Cost

$10.50 4380 $45,990 $9,060 $55,050

2016 Add night POP firefighter (12 hrs) Firefighter Wage Hours/Yr Total Comp Fringe Dept. Cost

$10.00 4380 $43,800 $8,629 $52,429

2017 Add 2 FT Staff and transition to 24hr shifts Firefighter Wage Hours/Yr Total Comp Fringe Dept. Cost

$10.00 4368 $43,680 $14,851 $58,531


23 For Verona Fire Department, we used the Medicare/FICA fringe percentage estimate provided by Fitchburg Fire Department

administrator.

37

In 2017, Verona Fire Department plans to add two full-time firefighters and transition to 24-

hour shifts at an estimated cost of $59,000. These changes bring the total projected personnel costs for

Verona Fire Department to an estimated $728,000 by 2017. There are no further changes anticipated in

the Verona Fire Department personnel budget through the end of the study period in 2032.

Fitch-Rona EMS

Fitch-Rona EMS has two career officers and 14 career EMTs, staffing two paramedic ambulances

24-hours per day. Career personnel costs for 2013 under current policy are estimated in Table 18.24

Table 18: Estimated 2013 Fitch-Rona EMS Career Personnel Costs

Career Operational Personnel

CAREER PERSONNEL

Number Employees

Hours/Yr Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Chief 1 2,080 $36.0700 $75,026 $75,026 $48,467 $123,492

Deputy Chief 1 2,080 $23.4900 $48,859 $48,859 $31,563 $80,422

Paramedics 14 2,080 $20.6300 $600,746 5,824 $180,224 $780,969 $504,506 $1,285,475

TOTAL 16 $724,630 $180,224 $904,854 $584,536 $1,489,390


The Fitch-Rona EMS chief works 2,080 hours per year at an hourly rate of $36.07, which equals

an annual salary of $75,000 per year. The department has a second officer, the deputy chief, who works

2,080 hours per year at an hourly rate of $23.49, which equals an annual salary of $49,000 per year.

Under current policy, the average Fitch-Rona career EMT hourly rate is $20.63 per hour. Career EMTs

work 2,080 regular hours per year and an additional eight hours of overtime per week (total 48 hours

per week). Combined overtime hours for all EMTs equal a total of 5,824 hours per year at a total time-

and-a-half ($30.95 per hour) cost of $781,000 per year. Fringe benefits are calculated at 64.6 percent of

24 Estimates for 2013 are based on the information provided by Chief Brian Myrland of Fitch-Rona EMS.

38

wages.25 Total career personnel costs for 2013 are estimated at approximately $1,490,000.26 There are

no anticipated personnel changes under current policy through the end of the study period in 2032.

Summary

A summary of the estimated 2013 personnel costs under current policy for the five departments

under consideration in this study is shown in Table 19. Personnel costs associated with career personnel

are estimated at $4,248,000 for 2013. Personnel costs associated with POx officers are estimated at

$207,000, while POx crew costs are estimated at $826,000. Total 2013 personnel costs for all five

departments combined are estimated at approximately $5,281,000.

Table 19: Estimated 2013 Personnel Costs Under Current Policy

Department Costs Under Current Policy 2013

Career POx Officers POx Crews TOTAL

Fitchburg Fire Department $1,174,954 $98,753 $340,992 $1,614,698

Verona Fire Department $450,892 - $110,321 $561,213

Oregon Area Fire and EMS $317,166 $24,850 $330,420 $672,435

Town of Madison Fire Department $815,832 $83,222 $44,350 $943,403

Fitch-Rona EMS $1,489,390 $1,489,390

TOTAL $4,248,234 $206,824 $826,083 $5,281,140

As shown in Figure 1, personnel costs under current policy were estimated over the 20 year

period from 2013-2032. In 2014, we estimate a current-dollar cost increase of approximately $79,000

due to increased personnel costs in Oregon and Verona. In 2014, Oregon anticipates increasing paid-on-

premise staffing by 120 hours per week while decreasing pager hours by the same amount. During this

same year, Verona plans to add a night shift driver for the 6 p.m. to 6 a.m. shift (12 hours per day, seven

days per week). In 2015, we estimate an additional $430,000 per year in personnel costs resulting from

the addition of three career captain positions at Fitchburg Fire Department and a second night shift

25 Estimate provided by Chief Bryan Myrland of Fitch-Rona EMS. The costs of fringe benefits for Fitch-Rona EMS personnel are

substantially higher than for other departments in the study area. It remains unclear what drives these high costs; however, these costs contribute notably to costs associated with this department in general. 26

All dollar value estimates in this appendix are based on 2012 dollars.

39

firefighter in Verona (12 hours per day, seven days per week). In 2016, we estimate an additional

$52,000 in personnel costs resulting from the addition of a third overnight shift (12 hours per day, seven

days per week).

Figure 1: Study Period Timeline under Current Policy

In 2017, we estimate a yearly personnel cost increase of $59,000 when Verona adds two additional full-

time career personnel and makes the transition to 24-hour shifts. In 2022, however, we estimate a

reduction in personnel costs of about $770,000 per year resulting from the closing of Town of Madison

fire station. Based on current dollars, the total yearly personnel costs at the end of the study period are

estimated at approximately $5,132,000.

40

Appendix C: Full Consolidation Model Personnel Structure and Costs

Under the full consolidation model, all fire and EMS services are provided by one overarching

organization. Figure 2 shows a preliminary organizational structure for the full consolidation model,

which we used to estimate personnel costs for this model. The new organizational chart was drafted by

the department chiefs from the five study area fire and EMS departments. This fully consolidated

department includes 18 career administrative personnel, 44 career operational personnel, and 417 POx

operational personnel. According to the chiefs, several of the specialized staff positions such as the Fire

Investigators, Fire and EMS Instructors, and IT Specialist may be filled by personnel (captains or

firefighters) who can take on multiple roles.

Figure 2: Fully Consolidated Organizational Structure

Source: Study Community Fire and EMS Services Consolidation Work Group

41

Table 20 shows the estimated costs associated with career administrative personnel under the

full consolidation model. All career employees are estimated to work 40 hours per week (2,080 per

year). As requested by our clients, under the full consolidation model we estimate career personnel

costs based on the assumption that all career personnel wages will equal the current salary and wage

rates of career personnel at Fitchburg Fire Department. Under the consolidated model, there are a

number of new career positions that do not parallel a current position at the Fitchburg Fire Department.

We estimate personnel costs for each of these positions separately.

The consolidated department chief is one such position. For this new position, we estimate a

yearly salary equal to the combined salary of the current Oregon and Town of Madison fire chief (who

now holds a half-time position at Oregon Area Fire and EMS and a full-time position at the Town of

Madison Fire Department). The estimated hourly wage for the full consolidation model assistant chief is

that of the current assistant chief at the Fitchburg Fire Department. We estimate that the administrative

assistant, finance director, personnel director, and public educator receive wages equal to the wages of

the current Fitchburg Fire Department administrative assistant. Fringe benefits for all employees are

calculated based on the current 52.6 percent rate for fringe at Fitchburg Fire Department. There are no

reductions in total compensation packages for career personnel by using these estimates.

Table 20: Career Administrative Personnel


Employees Hours/Yr

Wage Rate

Annual Wages

Total Comp Fringe Dept. Cost

Chief 1 2,080 $60.0961 $125,000 $125,000 $65,775 $190,775

Administrative Asst. 1 2,080 $23.5360 $48,955 $48,955 $25,760 $74,715

Assistant Chief 1 2,080 $40.0976 $83,403 $83,403 $43,887 $127,290

Finance Director 1 2,080 $23.5360 $48,955 $48,955 $25,760 $74,715

Billing Specialist 1 2,080 $16.8269 $35,000 $35,000 $18,417 $53,417

Personnel Director 1 2,080 $23.5360 $48,955 $48,955 $25,760 $74,715

Dept. Secretary 1 2,080 $16.8269 $35,000 $35,000 $18,417 $53,417

Division Chief 4 2,080 $32.2135 $268,016 $268,016 $141,030 $409,047

Public Educator 1 2,080 $23.5360 $48,955 $48,955 $25,760 $74,715

Captain 6 2,080 $30.2050 $376,958 $376,958 $198,356 $575,314

TOTAL 18 $1,119,197 $1,119,197 $588,921 $1,708,119


42

The current Fitchburg Fire Department does not have an equivalent to the captain position in the full

consolidation model, so in this case we estimate the wage rate by averaging the annual wages of the

positions directly above (the Assistant Chief) and below (the Shift Lieutenant) the Captain currently used

by the Fitchburg fire department. The resulting annual wage divided by 2,080 corresponds with a wage

rate of $30.21. Finally, we estimate a wage rate for the Billing Specialist and Department Secretary at

$16.83 per hour.

Annual wages for the career operational personnel are shown in Table 21. Wages for career

lieutenants and firefighter/driver operators are estimated as equal the current annual wages of the

Fitchburg Fire Department career shift lieutenants and firefighter/EMTs, respectively. Full-consolidation

model wages for career Paramedic/EMTs are based on the current career EMT hourly wages at Fitch-

Rona EMS, but because of differences in fringe benefits between departments (Fitch-Rona with a higher

fringe rate of 64.6 percent), we adjusted the full consolidation model hourly rate for this personnel

category so that the total compensation package under full consolidation is equal to the current

compensation package of Fitch-Rona EMS. This resulted in an adjustment of the Paramedic/EMT wage

rate from $20.63 under current policy to $22.25 for the full consolidation model.

Table 21: Career Operational Personnel

Career Operational Personnel

CAREER PERSONNEL

Number Personnel

Hours/Yr Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Career Lieutenants 15 2,712 $21.63 $879,733 --- $0 $879,733 $462,916 $1,342,649

Career Firefighter/DO 15 2,712 $20.79 $845,908 4,510 $140,673 $986,581 $445,117 $1,431,698

Career Paramedics/EMT 14 2,080 $22.25 $647,920 5,824 $194,376 $842,296 $340,935.50 $1,183,232

TOTAL 44 $2,373,562 $194,376 $2,708,610 $1,248,968 $3,957,578


43

As directed by our clients, we assume all POx operational personnel to have stipends and wage

rates equivalent to their counterparts in the current Verona Fire Department (which currently offers the

highest hourly wage), with the exception of the POx EMT/IT category, for which we assume a wage rate

equivalent to the current $10.00 hourly rate for Oregon Area Fire and EMS POx EMT-Its (see Table 22).

We estimated the number of POx hours for each employment level by calculating the total yearly person

hours needed to staff crews at all five stations (see Figure 1 above) and then subtracting the total hours

worked by career personnel. This left the total number of POx hours needed to staff the station crews

under the full consolidation model at full build out.

Table 22: POx Operational Personnel

POx OFFICERS Number

Employees Stipend Hours/Yr

Wage Rate

Tuition Total Comp

Fringe Dept. Cost

Captain 5 $1,800 1560 $10.00 $24,600 $4,846 $29,446

Lieutenant 10 $1,200 1560 $10.00 $27,600 $5,437 $33,037

POC Firefighter/DO 125 6430.5 $10.50 $67,520 $13,301 $80,822

POP Firefighter/DO 25 40680 $10.00 $406,800 $80,140 $486,940

POx EMT/IT 37 34944 $10.00 $349,440 $68,840 $418,280

Intern/DO 15 $3,900 $45,000 $103,500 $20,390 $123,890

TOTAL 217 $979,460 $192,954 $1,172,414


As shown in Figure 3, costs of the full consolidation model are linearly phased in over an eight

year period from 2013 to 2021, with costs increasing approximately $170,000 per year until full build

out in 2021. In 2013, estimated yearly personnel costs including the first year cost increase is

$5,476,000. In 2021, at full build out, personnel costs are estimated at $6,838,000. In 2022, costs

associated with the Town of Madison fire services are removed from the full consolidation model. For

the purposes of this study, we assume that the hours associated with one captain, three career

lieutenants, three firefighter/driver operators and one-fifth of all POx firefighter hours are eliminated.

POx EMT/IT hours remain unchanged, as the ambulance is expected to be moved to Fitchburg. This

44

results in an estimated cost reduction of $750,000 per year. Relative to projected personnel costs under

current policy, full consolidation would increase personnel costs by approximately $9.8 million dollars in

net present value terms over the course of the 20-year study period.

Figure 3: Study Period Timeline under the Full Consolidation Model

45

Appendix D: Service Consolidation Model Personnel Structure and Costs

Another alternative considered for this analysis included separate consolidations of EMS

services and fire services in the study area. This appendix details estimated personnel costs associated

this consolidation model. For both the fire services and the EMS services components of the model, we

estimated that personnel changes would proceed as per current policy until 2017. We then estimated

that, in 2017, all four fire service departments in the study area would be consolidated into one

department and all EMS service departments would be consolidated into a separate department.

Fire Services Consolidation

Figure 4: Fire Services Consolidation Organizational Chart

Source: Adapted from Full Organizatinal Chart by Study Community Fire and EMS Services Consolidation Work Group

46

Figure 4 details the proposed organizational chart for the consolidated fire services district that

was used to estimated personnel costs for the purposes of this study. For the consolidated fire services

department, we adapted the new organizational chart from the full consolidation model (see Appendix

B). It was adapted for a fire services consolidation model by excluding all personnel specifically

associated with provision of EMS services. The total personnel costs associated with the fire services

consolidation model are phased-in over a five-year period from 2017 to 2021, at which time personnel

costs are estimated to reach their highest level. Costs in year 2021 are considered full build out by the

chiefs, so the following tables detail estimated personnel costs in this year.

Estimated costs associated with career administrative personnel under a fire services

consolidation model for 2021 are detailed in Table 23.

Table 23: Estimated Cost of Career Administrative Personnel for Fire Consolidation in 2021

Career Administrative Personnel 2021


Employees Hours/Yr

Wage Rate

Annual Wages

O/T Total Comp

Fringe Dept. Cost

Chief 1 2,080 $60.0961 $125,000 $0 $125,000 $65,775 $190,775

Administrative Asst. 1 2,080 $23.5360 $48,955 $0 $48,955 $25,760 $74,715

Assistant Chief 1 2,080 $40.0976 $83,403 $0 $83,403 $43,887 $127,290

Finance Director 1 2,080 $23.5360 $48,955 $0 $48,955 $25,760 $74,715

Billing Specialist 1 2,080 $16.8269 $35,000 $0 $35,000 $18,417 $53,417

Personnel Director 1 2,080 $23.5360 $48,955 $0 $48,955 $25,760 $74,715

Dept. Secretary 1 2,080 $16.8269 $35,000 $0 $35,000 $18,417 $53,417

Division Chief 3 2,080 $32.2135 $201,012 $0 $201,012 $105,773 $306,785

Public Educator 1 2,080 $23.1369 $48,125 $0 $48,125 $25,323 $73,448

Captain 5 2,080 $30.2050 $314,132 $0 $314,132 $165,296 $479,428

TOTAL 16 $988,536 $0 $988,536 $520,168 $1,508,704


As compared to the full consolidation model, the fire services model eliminates one division

chief and one career captain position associated with EMS services. The remaining career positions,

associated wage rates, and hours worked remain the same as under the full consolidation model. Career

47

fringe benefits are calculated using the 52.5 percent fringe amount for the Fitchburg Fire Department in

2012.27 The total career administrative personnel cost for fire consolidation is estimated at

approximately $1,509,000 in 2021.

Costs associated with career operational personnel under a fire services consolidation model for

2021 are detailed in Table 24. This model eliminates the 14 career paramedic/EMT positions associated

with the full consolidation model (these positions are transferred to the new EMS department). The

remaining positions, associated wage rates, and hours worked remain the same as under the full

consolidation model. Again, career fringe benefits are calculated using the 52.5 percent fringe amount

for the Fitchburg Fire Department in 2012.28 The total career operational personnel cost for fire services

consolidation is estimated at approximately $2,774,000 in 2021.

Table 24: Estimated Cost of Career Operational Personnel for Fire Consolidation in 2021

Career Operational Personnel 2021

CAREER PERSONNEL

Number Employees

Hours/Yr Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Career Lieutenants 15 2,712 $21.6257 $879,733 $0 $879,733 $462,916 $1,342,649


Career Paramedics/EMT 0 2,712 $20.5737 $0 $0 $0 $0.00 $0

TOTAL 30 $1,725,642 $0 $1,866,314 $908,033 $2,774,347


Costs associated with POx operational personnel under a fire services consolidation model for

2021 are detailed in Table 25. This model eliminates the 37 POx EMT/IT volunteers associated with the

full consolidation model (again, they are shifted to the consolidated EMS department). The remaining

positions, associated wage rates, and hours worked remain the same as under the full consolidation

model. Also, the number of interns is remains the same as under the fire services consolidation model.



48

Costs for POx fringe benefits (FICA and Medicare) are estimated at 19.7 percent of employee

compensation.29 The total POx operational personnel cost for fire services consolidation is estimated at

approximately $754,000 in 2021.

Table 25: Estimated Cost of POx Operational Personnel in 2021

POx Operational Personnel 2021

POx OFFICERS Number


Wage Rate

Tuition Total Comp

Fringe Dept. Cost

Captain 5 $1,800 1560 $10.00 $24,600 $4,846 $29,446

Lieutenant 10 $1,200 1560 $10.00 $27,600 $5,437 $33,037



Intern/DO 15 $3,900 $45,000 $103,500 $20,390 $123,890

TOTAL $630,020 $124,114 $754,134


Based on the personnel cost estimates in Tables 23 through 25, the total personnel cost

associated with a fire services consolidation model are estimated at approximately $5,037,000 at full

build out in 2021. We estimate these personnel costs to remain the same until the year 2022 when the

Town of Madison fire station is closed.

Estimated costs associated with career administrative personnel under a fire services

consolidation model for 2022 are detailed in Table 26. The highlighted changes include a reduction of

one career division chief and one career captain. Career fringe benefits are calculated using the 52.5

percent fringe amount for the Fitchburg Fire Department in 2012.30 The total career administrative

personnel cost for fire consolidation only is estimated at approximately $1,413,000 in 2022.

Costs associated with career operational personnel under a fire services consolidation model for

2022 are detailed in Table 27. The highlighted changes include a reduction of three career lieutenants



49

and three career firefighter/driver operators, which includes an associated reduction in overtime hours.

Career fringe benefits are calculated using the 52.5 percent fringe amount for the Fitchburg Fire

Department in 2012.31 The total career operational personnel cost for fire services consolidation is

estimated at approximately $2,219,000 in 2022.

Table 26: Estimated Cost of Career Administrative Personnel for Fire Consolidation in 2022

Career Administrative Personnel 2022


Employees Hours/Yr

Wage Rate

Annual Wages

O/T Total Comp

Fringe Dept. Cost

Chief 1 2,080 $60.0961 $125,000 $0 $125,000 $65,775 $190,775

Administrative Asst. 1 2,080 $23.5360 $48,955 $0 $48,955 $25,760 $74,715

Assistant Chief 1 2,080 $40.0976 $83,403 $0 $83,403 $43,887 $127,290

Finance Director 1 2,080 $23.5360 $48,955 $0 $48,955 $25,760 $74,715

Billing Specialist 1 2,080 $16.8269 $35,000 $0 $35,000 $18,417 $53,417

Personnel Director 1 2,080 $23.5360 $48,955 $0 $48,955 $25,760 $74,715

Dept. Secretary 1 2,080 $16.8269 $35,000 $0 $35,000 $18,417 $53,417

Division Chief 3 2,080 $32.2135 $201,012 $0 $201,012 $105,773 $306,785

Public Educator 1 2,080 $23.1369 $48,125 $0 $48,125 $25,323 $73,448

Captain 4 2,080 $30.2050 $251,306 $0 $251,306 $132,237 $383,543

TOTAL 15 $925,710 $0 $925,710 $487,109 $1,412,819


Costs associated with POx operational personnel under a fire services consolidation model for

2022 are detailed in Table 28. Highlighted changes include a 20 percent reduction in hours for POx

captains, lieutenants, and POx firefighters.32 Costs for POx fringe benefits (FICA and Medicare) are

estimated at 19.7 percent of employee compensation.33 The total POx operational personnel cost for

fire services consolidation is estimated at approximately $608,000 in 2022.


32 Closing of Town of Madison station is anticipated to eliminate the need for 20 percent of total hours associated with POx

positions (one in five stations eliminated). 33

Estimate provided by Fitchburg Fire Department administrator.

50

Table 27: Estimated Cost of Career Operational Personnel for Fire Consolidation in 2022

Career Operational Personnel 2022

CAREER PERSONNEL

Number Employees

Hours/Yr Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Career Lieutenants 12

2,712 $21.6257 $703,787 $0 $703,787 $370,333 $1,074,119


TOTAL 24 8,136 $1,380,513 3,608 $112,538 $1,493,051 $726,426 $2,219,477


Table 28: Estimated Cost of POx Operational Personnel in 2022

POx Operational Personnel 2022

POx OFFICERS Number


Wage Rate

Tuition Total Comp

Fringe Dept. Cost

Captain 5 $1,800 1248 $10.00 $21,480 $4,232 $25,712

Lieutenant 10 $1,200 1248 $10.00 $24,480 $4,823 $29,303



Intern/DO 12 $3,900 $36,000 $82,800 $16,312 $99,112

TOTAL $3,900 $40,184 $36,000 $508,216 $100,119 $608,335


Based on the personnel cost estimates in Tables 26 through 28, the total personnel cost

associated with a fire services only consolidation model are estimated at approximately $4,241,000 for

2022. We estimate that personnel costs remain the same until the study period ends in 2032.

EMS Services Consolidation

As shown in Figure 5, for the consolidated EMS service department, we based our new

organizational chart on the existing structure of Fitch-Rona EMS and incorporated two additional

paramedic ambulances, one in Town of Madison and one in the Village of Oregon. The total personnel

51

costs associated with the EMS services consolidation model are phased-in over an eight-year period

from 2017 to 2024, at which time personnel costs are estimated to reach their highest level. Costs in

year 2024 are considered full build out by the chiefs, so the following tables detail estimated personnel

costs in this year.

Figure 5: EMS Services Consolidation Organizational Chart

Source: Adapted from Organizational Chart in Fitch-Rona EMS District Annual Report 2011

For this consolidated EMS model, we estimate the personnel cost associated with full-time

staffing of four paramedic ambulances at full build out. This requires a shift from two ambulances

staffed full-time using POx EMT/IT hours to four ambulances staffed with career paramedics (a total of

28 paramedics) 2024. Personnel costs as of the end of 2016 are shown in Table 29. At the time the EMS

department is formed, career personnel will include the chief, deputy chief, and 14 paramedics. For

these employees, fringe benefits are calculated at 64.6 percent of wages.34 Career paramedic overtime

hours remain the same as under the full consolidation model, with each paramedic working 40 regular

hours plus 8 overtime hours per week for a total of 48 hours per week. In 2016, POx EMTs are assumed

to be staffing 50 percent of the total ambulance hours in the new department, which equals a total of


52

34,944 hours per year.35 Fringe benefits for his group are calculated at 19.7 percent. The estimated cost

for EMS personnel at the beginning of consolidation is approximately $1,908,000.

Table 29: Personnel Costs at the Beginning of EMS Consolidation, year-end 2016

2016 Career Operational Personnel -- Current Policy

CAREER PERSONNEL

Number Employees

Hours/Yr Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Chief 1 2,080 $36.0700 $75,026 $75,026 $48,467 $123,492

Deputy Chief 1 2,080 $23.4900 $48,859 $48,859 $31,563 $80,422

Paramedics 14 2,080 $20.6300 $600,746 5,824 $180,224 $780,969 $504,506 $1,285,475

POx EMT/IT 37 34,944 $10.00 $349,440 $349,440 $68,840 $418,280

TOTAL 53 $724,630 $180,224 $904,854 $653,375 $1,907,669


As shown in Table 30, under the EMS service consolidation model, personnel costs increase to

an estimated $2.77 million at full build out with the four career paramedic ambulances in 2024. Fringe

benefits are once again calculated at 64.6 percent of wages.36 We anticipate that paramedic personnel

staffing would remain unchanged between 2024 and the end of the study period.

Table 30: Personnel Costs at Full Build Out of EMS Services Consolidation Model in 2024

2024 Career Operational Personnel -- At Full Build Out of 4 Career-Staffed Paramedic Ambulances 24/7-365 days/yr

CAREER PERSONNEL

Number Personnel

Hours/Yr Wage Rate

Annual Wages

O/T Hours

O/T Total Comp

Fringe Dept. Cost

Chief 1 2,080 $36.0700 $75,026 $75,026 $48,467 $123,492

Deputy Chief 1 2,080 $23.4900 $48,859 $48,859 $31,563 $80,422

Paramedics 28 2,080 $20.6300 $1,201,491 11,648 $360,447 $1,561,939 $1,009,012 $2,570,951

TOTAL 30 $1,325,376 $360,447 $1,685,823 $1,089,042 $2,774,865


35 It takes 17,472 person hours to staff an ambulance 27 hours, seven days a week, 365 days per year. The total

number of person hours required to operate four ambulances is 69,888 per year. The 14 career EMS personnel will cover half, or 34,944 of these hours. When consolidation begins, the other half of these hours are provided by volunteers. 36

Estimate provided by Fitchburg Fire Department administrator.

53

As shown in Figure 6, costs of the service consolidation model are linearly phased in over an

eight-year period for EMS services (2017 to 2024) and over a five-year period for fire services (2017-

2021). For EMS, over the eight-year phase-in, personnel costs increase by approximately $867,000 per

year until full build out in 2024. The greatly increased personnel costs associated with the EMS

consolidation model are associated with the transition to a department fully staffed by career

paramedics.

Figure 6: Study Period Timeline under the Service Consolidation Model

For fire services, over the five-year phase-in, personnel costs increase by approximately

$138,000 per year. In 2022, costs associated with the Town of Madison fire services are removed from

the fire services consolidation model. For the purposes of this study, we assume that the hours

associated with one captain, three career lieutenants, three firefighter/driver operators and one-fifth of

all POx firefighter hours are eliminated. This results in an estimated cost reduction of $796,000 per year.

54

Relative to projected personnel costs under current policy, the service consolidation model would

increase personnel costs by just less than 16 million dollars in net present value terms over the course of

the 20-year study period.

55

Appendix E: Economic Rents for Personnel

Increases in annual wages and benefits for personnel resulting from a change in the

consolidated wage and benefits structure (based on Fitchburg Fire Department and Fitch-Rona EMS)

creates economic rent benefits as personnel experience wage increases above the minimum amount

they are willing to accept. As shown in Table 31, we calculate the economic rents for personnel by

estimating the total work hours under the consolidated department that occur at an increased wage

rate for each personnel category in each community. We multiply that number by the amount of the

wage increase for that particular community and personnel category. Next, since taxes will likely fund

the higher wages, we deduct the marginal excess tax burden from the economic rents to account for the

administrative costs of raising revenue through taxation. We assumed a marginal excess tax burden of

10 percent.

As shown in Table 32, economic rents in the full consolidation model are linearly phased in over

an eight year period from 2013 to 2021. In 2013, the estimated yearly rents are approximately $42,000,

and at full build out the estimated yearly rents are roughly $249,000. The economic rents for fire and

EMS in the service consolidation model are linearly phased in over a five year period from 2013 to 2018.

In 2013, the estimated yearly rents for fire are approximately $49,000 and for EMS are roughly $19,000.

At full build out, the estimated yearly rents for fire are approximately $187,000 and for EMS are nearly

$71,000. The economic rents associated with the Town of Madison are removed from both models in

2022. Over time, the consolidated department should attract workers whose skills match the new wage

rate; therefore, the rents are phased out by 8.82 percent each year based on the average turnover rate

for volunteer/POC firefighters.37 Between 2022 and 2032, the rents only change by the 8.82 percent

37 Gudie, Troy (2012). Recruitment and Retention Strategies for Paid On-Call Firefighters. Onalaska Fire

Department, Onalaska, WI. http://www.usfa.fema.gov/pdf/efop/efo46599.pdf

http://www.usfa.fema.gov/pdf/efop/efo46599.pdf

56

annual decrease. We include this turnover rate in the Monte Carlo analysis as a uniform distribution

with a range of .882 percent around the point estimate.

57

Table 31: Personnel Rents

Fitchburg

Fitch. Rent

Oregon

Oregon Rent

Town of Madison

ToM Rent

Verona

Verona Rent

Fitch-Rona

TOTAL RENT

Hrs Wage

# Wkr or Hrs

Stipend/

Tuition Wage

# Wrkr or Hrs

Stipend/

Tuition Wage

# Wkr or Hrs

Wage #

Wkr Wage

Captain

Source of Consolidated Wage

($1800 stipend, $10/hr)

1 wkr (at

1560 hrs/yr)

$780 $8.50 $3,360

1wkr (at

1560 hrs/ yr)

$8.50 $4,140

3 wkrs (at

1560 hrs/yr)

$10 $5,400 N/A $12,900

Lieutenant

Source of Consolidated Wage

($1,200 stipend, $10/hr)

2 wkrs

(at 1560 hrs/yr)

$540 $8.50 $6,000

1wkr (at

1560 hrs/yr)

$8.50 $3,540

2 wkrs (at

1560 hrs/yr)

$10 $2,400 N/A $11,940

POC Firefighter/DO 1608 $10.00 $804 1608 hrs $8.50 $3,215 1608 $2.30 $13,183

Source of Consolidated

Wage ($10.50/hr)

N/A $17,202

POP Firefighter/DO Source of

Consolidated Wage ($10/hr)

13560

hrs $8.50 $20,340 10170 $2.30 $78,309 10170 $10 $0 N/A $98,649

POx EMT/IT N/A 8028 hrs $8.50 $13,104 11648 $2.30 $89,690 N/A Source of

Consolidated Wage ($10/hr)

$102,794

Intern/DO Source of

Consolidated Wage ($3,900 stipend)

5wkrs $2,100 $9,000 5 wkrs $3,100 $4,000 N/A N/A $13,000


Table 32: Annual Economic Rents for Personnel

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 … 2032

Full $42,125 $80,534 $115,556 $147,489 $176,605 $203,153 $227,360 $249,432 $227,432 $76,506 $69,759 … $30,387

Service

Fire $48,897 $93,481 $134,133 $171,199 $204,996 $186,916 $170,430 $155,398 $141,692 $59,468 $54,223 … $23,620

EMS $18,503 $35,374 $50,757 $64,783 $77,572 $70,730 $64,492 $58,803 $53,617 $6,232 $5,682 … $2,475

58

Appendix F: Improvements in ISO Ratings

One of the benefits we identified early in our research was an improvement in ISO ratings vis-à-

vis consolidation of our clients’ fire districts. Academic literature and previous studies noted that

communities can improve fiscal outcomes for property owners within their fire districts by undertaking

actions that improve these ratings.38 Specifically, an improvement in a community’s ISO rating can lead

to lower insurance premiums. However, these changes in premiums are dependent on the current ISO

rating and the magnitude of improvement.39 Furthermore, we discovered through discussions with the

municipal administrators and fire chiefs that any improvement in the ISO ratings for their communities

would only affect premiums for commercial property owners. A study by the League of Minnesota

Cities40 supported this claim by breaking down the average insurance premium for a $150,000

residential property and $1,000,000 commercial property. For these representative properties, the

effects of an ISO rating improvement differed. With residential properties, any ISO rating of 7 or lower

translated to the same average insurance premium; whereas with commercial properties, each tier of

ISO rating from 1-10 corresponded to a different average insurance premium.

To conduct our analysis, we focused on the insurance premiums of commercial properties in

relation to the projected ISO rating of a consolidated fire district. Accordingly, this section of our cost-

benefit analysis had two components: projecting the ISO rating of the new consolidated fire district and

finding the net present value of commercial property in each municipality. Bringing these two categories

together allows us to calculate the amount, if any, of net benefits.

38 Berger, Anna, Bill Tomes, and Mark Bondo (2007). The Impact of Improved Public Protection Classification

Ratings on Homeowners’ Insurance Rates in Richland County. University of South Carolina Institute for Public Service and Policy Research. <http://www.ipspr.sc.edu/publication/Final%20Report2.pdf> date retrieved: 12/2/12 39

It is important to note that an improvement in ISO ratings would actually mean a community’s score is lowered. For example, under the status quo, Fitchburg has an ISO rating of 3 while Verona has a 4. Based on ISO’s FSRS credits, Fitchburg’s fire department services are rated as relatively more effective. 40

The ISO Fire Protection Rating System (2010). League of Minnesota Cities.

59

The rationale for the projected ISO rating is reviewed in Appendix G and we use this ISO rating

of 3 to calculate changes in the representative insurance premiums. To find the net present value of

commercial property in each municipality, we used the recently released 2012 Dane County Statement

of Assessment to calculate the current assessed value of this class of properties.41 For each city, village,

and town currently in the Fitchburg, Verona, Oregon, and (Town) of Madison fire districts, the aggregate

assessed value equaled:

The values for each community are listed in the table below:

Table 33: 2012 Commercial Property Values; Client Communities


Next, we used population growth projections as a proxy for growth rates. Using municipal

populations in 201042 and population projections for 2030,43 we calculated these rates. These

projections came from the comprehensive plans and studies commissioned by the City of Fitchburg,44

41 Dane County Statement of Assessment (2012). Wisconsin Department of Revenue.

<http://www.revenue.wi.gov/equ/2012/soadan.pdf> date retrieved: 11/26/12 42

City of Fitchburg Fire Department, Oregon Area Fire and EMS District, Verona Fire Protection District (2012). Enhances Cooperation Discussions. Version 11. September 26, 2012. 43

This year was close to the 20 year horizon of our cost-benefit analysis. 44

City of Fitchburg Fire Station and EMS Unit Location Study (2009). Short Elliot Hendrickson Inc. <http://www.city.fitchburg.wi.us/government/documents/stationstudy.pdf> date retrieved: 11/29/12

Municipality 2012 Assessed Value of Commercial Property

City of Fitchburg $805,277,900

City of Verona $693,877,756

Town of Verona $11,742,100

Town of Madison $238,240,300

Village of Oregon $145,859,300

Town of Oregon $7,617,400

Town of Dunn $13,757,500

Town of Rutland $22,230,900

60

City of Verona,45 and the Village of Oregon.46 For cities for which we could not find population

projections i.e. Town of Verona, Town of Dunn, Town of Rutland, Town of Oregon, and Town of Madison

we used the growth rate for the corresponding fire district that they are a member of. For instance, for

the growth rate of Town of Oregon, we substituted in the growth rate of the Village of Oregon.

However, the Town of Madison is an exception to this method because it is the sole constituent of its

own fire district. Thus, we assigned it the growth rate for Fitchburg because of the impending

annexation in 2022.

We then used an annualized growth function as formula to determine the annual growth rate:

Where: = Projected Population in 2030

= Population in 2010

r = Annual growth rate per year

t= Number of years

Table 34: Commercial Growth Rates

Municipality Average Growth Rate47

City of Fitchburg 1.69%

City of Verona 3.80%

Town of Verona 3.80%

Town of Madison 1.69%

Village of Oregon 1.94%

Town of Oregon 1.94%

Town of Dunn 0.56%

Town of Rutland 0.56%


45 City of Verona Comprehensive Plan, 2010-2030 (2007). City of Verona, WI.

<http://www.ci.verona.wi.us/vertical/Sites/%7BCA6B38D7-05DE-4F5E-A746-DE748EC8613A%7D/uploads/%7B6C83F2EE-179B-4C61-9621-EEE70BD0B3F6%7D.PDF> date retrieved: 11/29/12 46

Village of Oregon Comprehensive Plan Draft (2012). Village of Oregon, WI. <http://www.vil.oregon.wi.us/vertical/sites/%7B3631401E-89E6-4B18-B72B-25DC241CC205%7D/uploads/Oregon_Comprehensive_Plan_Draft_3.12.12.pdf> date retrieved: 12/1/12 47

To address the uncertainty in growth rates, we ran Monte Carlo simulations that allowed for up to a 50 percent change in the rate. We then ran normal distributions in order to come up with a composite stream of net benefits.

61

We then brought together the assessed commercial property value and growth rate for each

municipality to project the growth in commercial property values over the course of twenty years.48 This

interaction is represented by the formula:

Finally, to determine the net present value of the stream of commercial property values for each

community we discounted each year by a discount rate of 3.5 percent. This consisted of taking the

projected commercial property value for a particular year and dividing it by one plus the discount rate

raised to the number of years the projection was from 2012.

For example, in the city of Verona, projected commercial property value was $1,007,526,552.52 in 2022.

Using the formula above, we took this number and divided it by (1+0.035)10 to get a net present value of

$714,254,528.40

After applying this process to every municipality, we were able to estimate a net present value

for each of our client communities. These values are listed in Table 35.

Table 35: Projected Net Present Value of Commercial Property by Municipality

Municipality NPV of Commercial Property (rounded to $1000s)

City of Fitchburg $14,256,716,000

City of Verona $15,001,649,000

Town of Verona $253,864,000

Town of Madison $4,217,829,000

Village of Oregon $2,642,598,000

Town of Oregon $138,008,000

Town of Dunn $219,887,000

Town of Rutland $355,318,000

Total $37,085,870,000


48 The time horizon of our cost-benefit analysis

62

To derive the net benefits from ISO ratings changes due to consolidation, we had to calculate the

difference in the representative insurance premiums. Using our projected ISO rating of 3 for the

consolidated fire district, we found that every municipality except Fitchburg would derive social benefits

from the consolidation through the ISO changes. Fitchburg was the lone exception because it already

had an ISO rating of 3 whereas every other client community had an ISO rating of 4.

According to the League of Minnesota Cities report, the representative insurance premium49 for

a commercial property was tiered as follows:

Table 36: Representative Commercial Insurance Premium Based On ISO Rating

Source: League of Minnesota Cities, 201050

51

Using these data, the difference in insurance premiums between an ISO rating of 4 and an ISO rating of 3

is:

49 These are representative values across various insurance companies; individual premiums will vary by company

50 Because this report was released in 2010, we had to convert these premiums to 2012 dollars in order to capture the current

value of these premiums. We used an inflation rate of 6.08% between 2010 and 2012 which was found at the Bureau of Labor Statistics website. 51

United States Department of Labor: Bureau of Labor Statistics (2012). Inflation Calculator. <http://www.bls.gov/data/inflation_calculator.htm> date retrieved: 11/29/12

ISO Rating Points Scored *Premium for $1,000,000 commercial building

Premium for $1,000,000 commercial building (2012

dollars)

1 90 to 100 $2,950 $3,129.40

2 80 to 89.99 $2,980 $3,161.23

3 70 to 79.99 $3,020 $3,203.66

4 60 to 69.99 $3,040 $3,224.88

5 50 to 59.99 $3,060 $3,246.09

6 40 to 49.99 $3,120 $3,309.74

7 30 to 39.99 $3,230 $3,426.43

8 20 to 29.99 $3,330 $3,532.51

9 10 to 19.99 $3,440 $3,649.20

10 0 to 9.99 $3,710 $3,935.62

http://www.bls.gov/data/inflation_calculator.htm

63

Accordingly, we calculated the net social benefits using this formula:

Our final calculation yields $484,43452 of net social benefits attributable to an improved ISO

rating under a consolidated fire district.

52This number includes savings from 2012 commercial property insurance premiums. If this year is excluded from

the calculation, then the savings drop to approximately $470,000 depending on the Monte Carlo simulation.

64

Appendix G: ISO FSRS Summaries

Current Fire Suppression Rating Schedule (FSRS) Summary Evaluation Analysis

Table 37: Verona Fire District: ISO Rating of 4

ISO Ratings Categories Credit Earned Credit Available

Receiving and Handling Fire Alarms

Credit for Telephone Service 2 2

Credit for Operators 3 3

Credit for Dispatch Circuits 3 5

Credit for Receiving and Handling Fire Alarms 8 10

Fire Department

Credit for Engine Companies 9.14 10

Credit for Reserve Pumpers 0.61 1

Credit for Pumper Capacity 5 5

Credit for Ladder Service 1.7 5

Credit for Reserve Ladder and Service Trucks 0.38 1

Credit for Distribution 2.57 4

Credit for Company Personnel 5.85 15

Credit for Training 3 9

Credit for Fire Department 28.25 50

Water Supply

Credit for Supply System 34.9 35

Credit for Hydrants 2 2

Credit for Inspection and Condition 1.95 3

Credit for Water Supply 38.85 40

Divergence Credit for Divergence -8.125 N/A

Total Credit 66.975 100

Source: Verona Fire District ISO Summary Evaluation Analysis

65


Table 38: Fitchburg Fire Department: ISO Rating of 3





Credit for Dispatch Circuits 1.5 5

Credit for Receiving and Handling Fire Alarms 6.5 10

Fire Department








Credit for Training 3.74 9


Water Supply





Divergence

Credit for Divergence -1.26 N/A


Source: City of Fitchburg Fire Department ISO Summary Evaluation Analysis

66


Table 39: Oregon Fire District: ISO rating of 4







Fire Department










Water Supply





Divergence



Source: Oregon Fire District ISO Summary Evaluation Analysis

67

Projected Fire Suppression Rating Schedule (FSRS) Summary Evaluation Analysis

Table 40: Consolidated Fire District: ISO rating of 3







Fire Department


Credit for Reserve Pumpers 1 1



Credit for Reserve Ladder and Service Trucks 1 1





Water Supply



Credit for Inspection and Condition 3 3


Divergence



Source: Authors

In order to calculate the net benefits from an improved ISO rating, we had to predict what the

aggregate FSRS score would be for a consolidated fire district. Using a mix of current FSRS credits and

predictions of credit outcomes under consolidation, we predicted an ISO rating of 3. This rating

represents an improvement of 1 for all of our clients except Fitchburg. In this case, Fitchburg maintains

68

its current ISO rating. Below, you will find a credit-by-credit synopsis of how we came to our conclusion.

Moreover, each credit review also includes the assumptions we made when assigning a score. For

credits where we were not able to confidently predict a score under consolidation, we used a weighted

average based on the population of the respective fire districts. We predicted a credit using a weighted

average of current scores for that credit from each of the three fire districts. The proportion assigned to

each district can be found in the table below:

Table 41: Weighted Average of Client Fire Districts

Fire District Population Proportion of Total Population

Fitchburg and Town of Madison53 31,183 0.5116

Verona 12,567 0.2062

Oregon 17,205 0.2823

Total 60,955 1 Source: Authors

Table 42: Rationale for FSRS Credit Predictions

Credit Type Predicted Credit Reason/Assumption


Credit for Telephone Service 2 out 2

Same score for all fire districts under current policy; remains the same under consolidation

Credit for Operators 3 out of 3


Credit for Dispatch Circuits 2.44 out of 5

Took the weighted average for this credit from the three current districts

Credit for Receiving and Handling Fire Alarms 7.44 out of 10

53 We included the Fitchburg Fire Department and the Town of Madison Fire Department together because of the impending

annexation in 2022.

69


Fire Department

Credit for Engine Companies 9.41 out of 10


Credit for Reserve Pumpers 1 out of 1

Under consolidation, each community's pumper would serve as a reserve for the other communities; full credit is attained

Credit for Pumper Capacity 5 out of 5


Credit for Ladder Service 3.98 out of 5


Credit for Reserve Ladder and Service Trucks 1 out of 1

Under consolidation, each community's ladder would serve as a reserve for the other communities; full credit is attained

Credit for Distribution 2.74 out of 4


Credit for Company Personnel 7.11 out of 15

Based on ISO formula; 16 on duty firefighters, 16 volunteer firefighters, 4 engines, 3 ladders, 1 utility truck

Credit for Training 7.16 out of 9

Increased training due to economic of scale means a higher score for the consolidated district; also joint use of Verona's training facility

Credit for Fire Department 37.4 out of 50


Water Supply

Credit for Supply System 30.34 out of 35


Credit for Hydrants 2 out of 2


Credit for Inspection and Condition 3 out of 3

Hydrant inspections would be conducted twice a year due to a more organized division of code enforcement; full credit attained

Credit for Water Supply 35.34 out of 40

Divergence -2.71

Total 77.47 out of 100

Source: Authors

70

Appendix H: Changes in Absolute Response Times

The primary sources of changes in actual station-to-site response times under consolidation

stem from two areas of improvement: staffing at fire stations and changes to EMS district borders. The

borders of the fire department districts across the Oregon, Fitchburg, Verona, and Town of Madison

departments do not substantially affect response times, as the fire departments already have automatic

aid agreements and respond to fire calls regardless of borders, as if they were one department. Notably,

the Oregon and Verona fire departments are not currently staffed at all hours of each day. Oregon relies

on paid-on-call staff for all of its fire services, but does have EMS staff on at all hours. The Verona Fire

Department does not currently have on-station staff between the hours of 6 p.m. and 6 a.m..54 This

reliance on paid-on-call staffing means that response times are increased during nighttime hours, as

firefighters have to drive from their homes (or other respective locations) to the station before they can

get necessary equipment and drive the apparatus to the location of the fire. This added transit time is

limited by the departments, as they require paid-on-call personnel to live within a certain radius of the

fire station to minimize response times. Overnight staffing, however, would likely reduce average

response times in Oregon and in Verona in the evenings.

Consolidation of the Fitch-Rona and Oregon EMS services, whether as part of a larger

consolidation or only a consolidation of EMS services, would change district borders. Currently, there

are some limited mutual aid agreements between the districts, primarily based around EMS.55 Fitch-

Rona EMS and the Town of Madison also already participate in an automatic aid agreement,

administered by Dane County, which applies to calls requiring Advanced Live Support (ALS). Oregon Fire

54 City of Fitchburg Fire Department, Oregon Area Fire and EMS District, Verona Fire Protection District (2012). Enhances

Cooperation Discussions. Version 11. September 26, 2012. 55

Fitch-Rona EMS District (2012). Fitch-Rona EMS District Annual Report 2011. http://city.fitchburg.wi.us/government/commonCouncil/documents/2010EMSreport.pdf

http://city.fitchburg.wi.us/government/commonCouncil/documents/2010EMSreport.pdf

71

and EMS does not participate in this agreement, as their ambulance does not offer ALS services.56 A

consolidated EMS district across the three current EMS departments would eliminate the remaining

boundaries between the Oregon Area Fire and EMS District and the Fitch-Rona EMS District. Eliminating

this district boundary would likely decrease response times to areas in eastern Fitchburg, which are

geographically closer to the Oregon station than to either current Fitch-Rona EMS station.

Staffing Changes and Response Times

To calculate the changes in response times due to changes in staffing at the fire stations, we

used the difference between response times in Verona for the daytime hours and Verona at night (when

staff was not at the stations, from 6 p.m. until 6 a.m.) calculated by the firm Short Elliot Hendrickson,

Inc. (SEH) in a June 2012 study. The SEH report found that Verona’s response times during the day

averaged two minutes from the dispatch’s initial page to the first apparatus at the scene, but at night

that average time increased to eight minutes.57 This suggests a six-minute response time increase due to

a lack of staffing at the station itself. Any increase in this staffing would likely produce shorter response

times. In Oregon, the average response time for the EMS crews within the district in 2006 was 3 to 5

minutes, according to a 2008 study.58 The average response times for the first half of 2012, supplied by

the Oregon district as a relative comparison to other fire department response times, was eight

minutes.59 These numbers suggest that having enough staff on station in Oregon at all times to staff a

fire truck would result in approximately a four minute reduction in fire response time. However,

according to the fire chiefs and municipality administrators, under current policy Oregon would get four

people on staff overnight (enough to launch a fire truck) by 2014, and Verona would by 2017. Thus, the

56 Zuver, Christian (2011). Dane County ALS System Medical Treatment Protocols.

http://danedocs.countyofdane.com/webdocs/PDF/ems/medical/2011_Protocols.pdf 57

Short Elliot Hendrickson, Inc. (2012). Final Report: Verona Fire Station and EMS Unit Location Study, City of Verona, Wisconsin, pp. 1-49. Prepared by SEH, Inc. for Verona Fire Commission, June 2012.

58 Virchow, Krause & Company. (2008) Final Report: Consolidated Emergency Medical System Feasibility Study.

59 City of Fitchburg Fire Department, Oregon Area Fire and EMS District, Verona Fire Protection District (2012). Enhances

Cooperation Discussions. Version 11. September 26, 2012.

http://danedocs.countyofdane.com/webdocs/PDF/ems/medical/2011_Protocols.pdf

72

benefits from consolidation, which would be phased in over 2013-2020, would only provide fire

response time benefits for a few years at most. These response time changes would help provide

coverage, and their benefits to commercial property are measured via proxy in the ISO rating changes.

Discussion of the potential for a measurement of per-minute response time improvement in fire services

can be found in Appendix J.

Eliminating Borders between EMS Districts

To calculate changes in response times resulting from border changes for EMS, we generated

estimates of ambulance drive speeds to the eastern portions of Fitchburg, which is where most of the

region’s geographically-related coverage issues are and where improvements can be made most

feasibly. The Fitch-Rona EMS department has identified key areas in its district that have slower

response times on average. These areas include eastern and southeastern Fitchburg, which are

considerable distances from the Fitchburg Fitch-Rona station and the Verona Fitch-Rona station. The

central Fitchburg fire station, Fire Station #1, is closer to the eastern portion of town, but still a

considerable distance away. Eastern Fitchburg is likely to experience considerable growth in the

upcoming decades.60

We estimated average drive speeds using the data provided by the 2011 and 2010 Fitch-Rona

EMS Annual Reports on the average response times to sites in each “zone” and mapping software

available in the ArcGIS Explorer “Drive Time Analysis” software and via the website Free Map Tools. The

“zones” are grid rectangles defined by a three-by-four grid across the Fitch-Rona service areas. Data on

the percentage of calls in each of these zones as a percentage of all calls and the average response times

60 Short Elliot Hendrickson, Inc. (2012). Final Report: Verona Fire Station and EMS Unit Location Study, City of Verona,

Wisconsin, pp. 1-49. Prepared by SEH, Inc. for Verona Fire Commission, June 2012.

73

to calls in each of the zones is recorded and reported in the annual reports.61,62 These numbers include

non-emergency responses, but lights and siren emergency responses accounted for 65 percent of all

calls.63 Using the ArcGIS Explorer “Drive Time Analysis” and the Free Map Tools “How Far Can I Travel”

software, we were able to estimate the average travel speed for ambulances responding to eastern

Fitchburg. Factoring in approximately 1 minute of “turnout time” (the time the dispatch was received at

the station to wheels rolling on the emergency vehicle),64 we estimated average ambulance speed to

eastern Fitchburg to be between 40 and 50 miles per hour, with 45 miles per hour as a midpoint

estimate. The fire chiefs considered this estimate to be high, so we reduced our midpoint estimate to

40 miles per hour, which affected our response times slightly. We applied this average speed to

ambulances originating from the Oregon Fire and EMS station, the Town of Madison Fire and EMS

station, and the two Fitch-Rona EMS stations. The improvements in response times estimated using the

ArcGIS Explorer and Free Map Tools software. These four locations were selected to compare the

coverage of ambulance services. Our estimates suggest that response times may decline by 4 minutes

on average in Zone 12, 1 minute in Zone 11, and 2 minutes in Zone 8 by consolidating EMS districts.

These improvements are estimates, and any improvements would vary considerably with road

conditions, vehicle driver, time of day, and increased congestion from growth and development in the

area. The benefits of consolidated districts would also be substantially reduced if the Fitchburg fire and

Fitch-Rona EMS stations move east. As referenced earlier, ALS calls, which are the most serious types of

emergency medical calls, are already handled through the Dane County Automatic Aid for Closest ALS

61 Fitch-Rona EMS District (2012). Fitch-Rona EMS District Annual Report 2011.

http://city.fitchburg.wi.us/government/commonCouncil/documents/2010EMSreport.pdf 62

Fitch-Rona EMS District (2011). Fitch-Rona EMS District Annual Report 2010. http://city.fitchburg.wi.us/government/commonCouncil/documents/2010EMSreport.pdf 63

Fitch-Rona EMS District (2012). Fitch-Rona EMS District Annual Report 2011. http://city.fitchburg.wi.us/government/commonCouncil/documents/2010EMSreport.pdf 64

Short Elliot Hendrickson, Inc. (2012). Final Report: Verona Fire Station and EMS Unit Location Study, City of Verona, Wisconsin, pp. 1-49. Prepared by SEH, Inc. for Verona Fire Commission, June 2012.




74

Unit agreement, which includes Fitch-Rona EMS, the Town of Madison, and the City of Madison Fire

Departments, but does not include Oregon’s EMS services.65 This service agreement renders any benefit

from improved ambulance response time in northeastern Fitchburg, nearest to the Town of Madison

station, unimportant for our analysis, as current policy already calls for the Town of Madison ALS

ambulance responding to serious cases within the district.

Figure 7: Fitch-Rona EMS Call and Response Times by Zone

Source: 2011 Fitch-Rona EMS Annual Report. With the exception of Zone 9 response times, the 2010 data yielded very similar

data both in proportions of calls from each zone and response times to each zone.

According to the consolidated model for staffing provided by the fire chiefs, Oregon would

continue to be staffed with an EMT-IV Technician ambulance service under a fully consolidated model.

Thus, the benefits of EMS ambulance service consolidation are primarily in eastern and southern

Fitchburg, near the Oregon EMS station. We assumed that this change in service could begin

immediately, as the dispatches already go to all districts within the area for automatic fire services aid.

We estimated the growth in demand in each of these zones by viewing the planned development in the

65 Zuver, Christian (2011). Dane County ALS System Medical Treatment Protocols.



75

Fitchburg Comprehensive Plan, through our discussions with the chiefs and town administrators, from

the SEH reports, and through discussions with the Fitchburg city planner.66

Figure 8: Fitch-Rona EMS Zones

Source: 2011 Fitch-Rona EMS Annual Report. These zones are the units of analysis for Fitch-Rona EMS.

Changes in Response Personnel: Fire/EMS Cross-Training

The consolidation of EMS and fire services into one large department would suggest some

improved EMS response times. The central Fitchburg station, Station #1, is currently only a fire station

with firefighters cross-trained for EMT-Basic EMS services. However, if some firefighters were cross-

trained as EMT-IV Technicians and some were even paramedics, an ambulance could potentially be

moved to Station #1, or the personnel arriving on fire apparatus could begin to deliver medical aid to

66 City of Fitchburg. (2012). City of Fitchburg Comprehensive Plan.

http://www.city.fitchburg.wi.us/departments/cityHall/planning/documents/Table_of_Contents.pdf


76

areas in eastern Fitchburg before units from the current Fitch-Rona stations are able to arrive. For this

analysis, we assume that the barriers to moving an ambulance to Fitchburg Fire Station #1 (space

limitations and equipment limitations) are not easily surmountable, given the interest that Fitchburg and

Fitch-Rona EMS have in moving their stations further east. Fire trucks travel at 25 to 30 miles per hour

on average in cities, but the trucks would likely travel faster on open stretches of road to eastern

Fitchburg.67 For our own analysis, we used an estimate of 30 miles per hour. Based on GIS mapping

from SEH’s City of Fitchburg Fire Station and EMS Unit Location Study and our own analysis using

mapping software, we estimate that fire trucks from Station #1 would improve response times on

average by 1 minute in Zone 3, 2 minutes in Zone 7, 3 minutes in Zone 8, and 3 minutes in Zone 12.

Again, any improvements would vary with road conditions, vehicle driver, time of day, and increased

congestion from growth and development in the area. These improvements are independent of the

improvements made by consolidating service with Oregon’s EMS services.

With improvements from Oregon included, the estimated average response time improvements

from having firefighters at Station #1 cross-trained with EMT-IV Technician capabilities is 1 minute on

average in Zone 3 (primarily to southern and eastern parts of this zone), 2 minutes in Zone 7, 3 minutes

in Zone 8, 1 minute in Zone 11, and 4 minutes in Zone 12. Response times are all rounded to the nearest

minute, and greater precision is not likely to be accurately projectable. These response times are the

improvements from the non-consolidation baseline scenario for the first response vehicle only; the

response times for ALS ambulances do not decrease under the proposed consolidation model. The

addition or strategic placement of an ALS ambulance in Oregon could improve ALS response times, but

that arrangement was not called for in the proposed model, and not enough data exist to accurately

project the benefits from such a move (although they would likely be substantial). The estimated


Wisconsin, pp. 1-49. Prepared by SEH, Inc. for Verona Fire Commission, June 2012.

77

response time improvements would also decrease as compared to current policy in 2022, when the

Town of Madison station closes and Fitchburg annexes the land and apparatus. By this time, to avoid a

lack of coverage in northeastern Fitchburg, we have incorporated the two Fitchburg stations moving into

the baseline and assume that both new Fitchburg stations house ambulances as well. With these

stations, moved to the SEH’s City of Fitchburg Fire Station and EMS Unit Location Study locations in

Figure 8, the estimated response times achieved by consolidation drop substantially.68

Changes to Response Times Outside of Eastern Fitchburg

Under both current policy and the consolidation as proposed by the chiefs, response times

outside of the Fitch-Rona EMS district would not change dramatically due to consolidation. The only

potential benefits would be improved response times to the Town of Dunn, which is currently covered

by Oregon Fire and EMS but might be reached in slightly less time by Fitchburg Station #1. However,

Dunn is a small community (with fewer than 5,000 people and a falling population over the last two U.S.

Census measurements) and any response time improvements are uncertain.69

There would also be benefits to towns south of Oregon if the Oregon Fire and EMS district

acquired an ALS ambulance. This would improve the care provided by Oregon to its southern neighbors.

Moving the Town of Madison ALS ambulance to Oregon would remove some of the redundant coverage

by Town of Madison ALS and City of Madison Fire Station #6 ALS and likely also improve care. However,

this move was not in the model, and accurately estimating the benefits would be difficult with the

available information.


Wisconsin, pp. 1-49. Prepared by SEH, Inc. for Verona Fire Commission, June 2012. Figure 7, Page 70. 69

Village of Oregon (2012). Village of Oregon Comprehensive Plan 2012. Draft, March 13, 2012. http://www.vil.oregon.wi.us/index.asp?Type=B_PR&SEC=%7B90B2D503-7CB8-424C-8055-E0818B905403%7D&DE=%7B25B18CB7-1560-42BE-8F20-4242DC61444D%7D

http://www.vil.oregon.wi.us/index.asp?Type=B_PR&SEC=%7B90B2D503-7CB8-424C-8055-E0818B905403%7D&DE=%7B25B18CB7-1560-42BE-8F20-4242DC61444D%7D


78

Appendix I: Social Benefits from Improvements in EMS Response Times

Social benefits of consolidation of EMS services stem from the improved response times for EMS

services. These benefits mostly apply to time-sensitive emergencies, such as heart attacks, strokes, and

other emergencies that require Advanced Life Support (ALS). For the purposes of this study, the cases

considered relevant are only those that trigger the highest level of emergency response. Many calls to

EMS are non-life threatening, and while they may be serious injuries, the time sensitivity of these calls is

not considered as pertinent in this analysis.

Benefits from full consolidation also include reductions in response times from first responders

trained as EMT-IV Technicians. In the full consolidation model, all firefighters are trained EMT-Basics or

EMT-IV Technicians, and placement of trained EMT-IV Technicians are prioritized for Fitchburg Station

#1 (the only station without existing EMS services beyond EMT-Basic stationed there). This prioritization

could occur in three ways: increased training, the strategic placement of EMT-IV Technician-trained

personnel that formerly served either part-time in Town of Madison or Oregon and now serve full-time,

or the strategic placement of personnel that may be available from the pool of Oregon’s or Town of

Madison’s former departments. In the service consolidation model, EMS response times improve as the

borders disappear, but firefighters are not cross-trained beyond current levels, and the reduction in

response times associated with firefighters arriving at EMS calls are not measurably valuable relative to

the current policy.

Calls Included in Calculations

For this study, we focused on calls categorized as “Echo,” which is the most urgent category of

calls in the Dane County Medical Priority Dispatch System. These calls are primarily various forms of

79

choking, cardiac arrest, severe allergic reactions, or other cases of patient failure to breathe.70 These

calls accounted for approximately 2 percent of the calls in the Fitch-Rona EMS district in 2010 and

2011.71,72 This percentage matched the percentage found by Wilde in a study of Utah EMS responses

with a very large sample size.73 We projected the number of Echo calls that each EMS district would

likely have to respond to in each year, going out to 2032, using projections of EMS assist calls for fire

departments from the Short Elliot Hendrickson Inc. (SEH) studies of both the Fitchburg and Verona fire

departments.74,75 Using recent year data, we determined which level of calls were most likely getting

assists from the fire department (which we subsequently confirmed with the chiefs), and used the

percentage of calls that fit those categories as a constant proportion of all calls, across all of the districts,

to project the total number of EMS calls out to 2030. Then we determined the average growth rate in

EMS calls for Fitchburg and Verona, which were districts with available projections. We then used the

per capita rates of EMS use in Oregon and Town of Madison as starting points to project growth in EMS

load based on population. This methodology corresponds with the “low” projections from the SEH

studies. For the high end projections, we used the ratio difference between the low and high SEH

projections for Fitchburg to determine the high-end projections for Oregon and Town of Madison. These

projections yielded a yearly growth rate from the present day, with both high and low values and a

midpoint value (the average of the two). We performed a Monte Carlo simulation with the midpoint as a

mean and the pessimistic and optimistic projections as three standard deviations out from the mean.

70 Dane County Emergency Medical Services (2005). Advanced Life Support Pilot Project: Final Report.

http://www.countyofdane.com/emergency/ems/pdf/als_final_report.pdf 71


72 Fitch-Rona EMS District (2012). Fitch-Rona EMS District Annual Report 2011.

http://city.fitchburg.wi.us/government/commonCouncil/documents/2010EMSreport.pdf 73

Wilde, Elizabeth (2012). Do Emergency Medical System Response Times Matter for Health Outcomes? Health Economics. 14 June 2012. http://onlinelibrary.wiley.com/doi/10.1002/hec.2851/pdf

74 Short Elliott Hendrickson Inc. (2009). City of Fitchburg Fire Station and EMS Unit Location Study. Prepared for the City of

Fitchburg by SEH, Inc., Madison, WI. http://www.city.fitchburg.wi.us/departments/fire/documents/stationstudy.pdf 75

Short Elliot Hendrickson, Inc. (2012).Final Report: Verona Fire Station and EMS Unit Location Study, City of Verona, Wisconsin, pp. 1-49. Prepared by SEH, Inc. for Verona Fire Commission, June 2012.

http://www.countyofdane.com/emergency/ems/pdf/als_final_report.pdf



http://onlinelibrary.wiley.com/doi/10.1002/hec.2851/pdf

http://www.city.fitchburg.wi.us/departments/fire/documents/stationstudy.pdf

80

These Monte Carlo simulations yielded growth rates, and using those growth rates, we projected the

number of total EMS calls, and thus the number of Echo calls, expected in each year.

Value of Life Saved per Minute (Reduction in Mortality Risk)

We measured the value of decreased response times in EMS calls using a function based on the

decrease in percentage point mortality risk for each minute decrease in the response time. This function

is based on available literature, which is relatively thin, varies significantly, and focused primarily on

cardiac arrests. The function is a linear relationship with a y-intercept and the reduction in response

times for the first unit response (ALS, EMT-IV Technician Ambulance or Fire Engine, or Firefighter EMT-

Basic).

Some of the literature suggests that response times on the whole are not correlated with

decreased mortality, at least not significantly outside of cardiac arrests, although this assertion has been

questioned and may suffer from endogeneity problems.76 The study most-often cited by fire and EMS

departments is a 1993 analysis by M.P. Larsen, M.S. Eisenberg, et al. published in the Annals of

Emergency Medicine. This study, which sampled 1,667 cardiac arrest victims, found different percentage

improvements in mortality based on three levels of treatment: CPR, defibrillation, and Advanced Cardiac

Life Support (ACLS). The authors found that for each minute reduction in time between the cardiac

arrest’s beginning and CPR reduced mortality risk by 2.3 percentage points, defibrillation by 1.1 percent

percentage points, and ACLS by 2.1 percentage points.77 A 1999 meta-analysis comparing remote

defibrillation and ALS tiered responses to just defibrillator responses found a 2.1 percentage point

improvement in mortality between minute 7.1 and minute 6.1, and the studies cited showed wide

76 Wilde, Elizabeth (2012). Do Emergency Medical System Response Times Matter for Health Outcomes? Health Economics. 14

June 2012. http://onlinelibrary.wiley.com/doi/10.1002/hec.2851/pdf 77

International Association of Firefighters. (2012) Geographic Information System Emergency Services Response Capabilities Analysis: Bedford Park Fire Department, IL. http://www.iafflocal3571.com/images/shared/Public%20Information/Bedford%20Park%20GIS.pdf


http://www.iafflocal3571.com/images/shared/Public%20Information/Bedford%20Park%20GIS.pdf

81

variation in the value of a minute reduction in time to defibrillation. This meta-analysis also found a 1.0

percentage point decrease in mortality risk per minute between an EMT-Basic response with

defibrillator and a tiered response between an EMT-Basic or EMT-IV Technician unit with defibrillator

and an ALS unit.78 A more recent study in the British Medical Journal found that reducing the response

time in cases of cardiac arrest from 8 minutes to 5 minutes increased the likelihood of survival by 2 to 3

percentage points.79

No known literature exists specifically measuring the benefits of firefighters with defibrillators

as first responders versus trained EMT-IV Technicians with or without ambulances, so these values had

to be estimated based on the available literature. The literature examines the benefits of ACLS provision

relatively thoroughly, but as ALS unit placement did not change because of consolidation under the

organizational structure provided by the clients, we did not account for this change in our primary

calculations. One working paper using Swedish data estimated that the presence of firefighters with

defibrillators in addition to an ambulance on the scene of an accident improved cardiac arrest

survivability from 4.6 percentage points to 6.2 percentage points per minute.80

Another study looking at response times beyond cardiac arrests and including all emergency

responses, life-threatening and non-life threatening, estimated that the difference in mortality between

response times of less than five minutes to those of more than five minutes was 1.07 percentage

points.81 Finally, a 2012 paper published by Elizabeth Ty Wilde in Health Economics controls for

individual patient and mileage variables in an attempt to remove response time endogeneity problems

78 Nichol, Graham, Ian G. Stiell, Andreas Laupacis, Ba’ Pham, Valerie J. De Maio, and George A Wells(1999). A Cumulative Meta-

Analysis of the Effectiveness of Defibrillator-Capable Emergency Medical Services for Victims of Out-of-Hospital Cardiac Arrest. Annals of Emergency Medicine 34(4) 517-525.

79 Pell, Jill et al (2001). Effect of reducing ambulance response times on deaths from out of hospital cardiac arrest: cohort study.

British Medical Journal 322(7299) 1385–1388. 80

Sund, Björn (2012). Effect of response times on survival from out-of-hospital cardiac arrest: using geographic information systems. Karlstad University Working Paper in Economics #2012/4.

81 Blackwell, Thomas and Jay Kaufman (2002). Response Time Effectiveness: Comparison of Response Time and Survival in an

Urban Emergency Medical Services System. Academic Emergency Medicine 9(4) 288-294.

82

with Utah data and a very large sample of 73,706 responses. She finds that a one minute improvement

in response time can lead to a short-term reduction in mortality of between 0.13 percentage points and

1.26 percentage points for any emergency call, including those with less severe illnesses than cardiac

arrests.82

Table 43: Response Time Benefits Survey of Academic Literature

Year Author Journal/Venue Cardiac Arrests Only

First Response

CPR Defib. ALS BLS-D + ALS

Two-Tiered

FD with Defib.

1993 Larsen, Eisenberg, et al.

Annals of Emergency Medicine

Yes - 2.3% 1.1% (3.4%)

2.1% (5.5%)

- - -

1996 Nichol et al.83 (meta-analysis)


Yes 0.4% - - - - 0.7% -

1999 Nichol et al. (meta-analysis)


Yes - - 1.1% a (BLS +

D)

1.3%a 2.1% a - -

2002 Blackwell and Kaufman

Academic Emergency Medicine

All - - - 0.16%b - - -

2005 Pons et al.84 Academic Emergency Medicine

All - - - Benefits under 4

min.

2012 Wilde Health Economics (online)

All 0.13% - 1.26%c

- - - - - -

2012 Sund Working Paper, Orebro Univ.

Yes - - - 0.7%d - - 1.6% (2.3%)

Source: Authors; percentages all represent per-minute improvement, or closest approximation available in the study. Values in parentheses represent the total value of pursued first-aid steps (for example: CPR, defibrillation, and ALS, in that order, improvements in survival rates added together). All percentages represent percentage point reductions in mortality.

aStudies included in the meta-analysis had a mean response time of 6.1 minutes. The authors found this rate to be between a 7.1 minute response time and a 6.1 minute response time. The studies included had a range from 2 minute response times to 16 minute response times.

bThis study found a 1 percent decrease in mortality between minutes four and five, but other changes in mortality associated with response time were flat. The value in the table represents the 1 percent decrease in mortality divided by six, representing the six minutes from two to eight minutes. This division was completed to approximate a 1 in 6 chance that the 1% improvement is reached in the approximate average response times for the district (~5.5 minutes for the Fitchburg Fire Department).

cThis study only included EMT-trained personnel. The data set used in this study included Utah’s “Quick Response Units,” which do not necessarily have to be able to transport patients to the hospital. However, the author coded for this variable in the study, and throughout the text referred to the vehicles she was studying as “ambulances.” Wilde also did not refer to fire apparatus or fire fighters as being part of this study. “Quick Response Units” must have trained EMTs, so using this figure to measure the difference between firefighters with defibrillators and EMT-trained firefighters without an ambulance is appropriate.85,86

dAll ambulances in Sweden have registered nurses aboard as well as other personnel, including EMTs.87 We assume this approximates ALS, rather than BLS-D.

82 Wilde, Elizabeth (2012). Do Emergency Medical System Response Times Matter for Health Outcomes? Health Economics. 14 June 2012.

http://onlinelibrary.wiley.com/doi/10.1002/hec.2851/pdf 83 Nichol, Graham, Allan S. Detsky, Ian G Stiell, Keith O’Rourke, George Wells, and Andreas Laupacis (1996). Effectiveness of Emergency Medical Services for Victims of Out-of-Hospital Cardiac Arrest: A Metaanalysis. Annals of Emergency Medicine. 27(6) 700-710. 84 Pons, P.T., J.S. Haukoos, W. Bludoworth, T. Cribley, K.A. Pons, V.J. Markovchick. Paramedic response time: does it affect patient survival? Academic Emergency Medicine. 12(7) 594-600. 85 Utah Administrative Code. R426-13-400. Quick Response Unit Minimum Designation Requirements. Accessed via http://www.rules.utah.gov/publicat/code/r426/r426-013.htm#E4 86 Utah Administrative Code. R426-15. Licensed and Designated Provider Operations. Accessed via http://www.nasemso.org/legislation/Utah/utr426-15-200.html 87 Holmber, Mats and Ingegerd Fagerberg (2010). The encounter with the unknown: Nurses lived experiences of their responsibility for the care of the patient in the Swedish ambulance service. International Journal of Qualitative Studies on Health and Well-Being. 5(2).


83

Based on our review of the literature and given the uncertainty, we decided to construct three

separate Monte Carlo simulations for each of the three different levels of service provided:

Firefighter/EMT-Basic, EMT-IV Technicians, and ALS. We developed three normal distributions with

point estimates from the literature. We divided the difference between the mean of the distribution

(the midpoint estimate) and the furthest point estimate from the mean by three to find a reasonable

standard deviation for each one of our distributions, which would suggest that over 99 percent of the

scenarios modeled by the Monte Carlo simulations would fall between the two endpoints. Given that

the endpoints were at varying distances from the mean, we adjusted the results of the Monte Carlo

simulations to ensure that outliers did not influence the results; this step was taken primarily to ensure

that decreased response times were always associated with a decrease, rather than an increase, in

mortality risk (i.e., no negative numbers).

Table 44: Mortality Percentage Point Reduction Model

Type of Response

Low Estimate Midpoint Estimate High Estimate

Firefighter/EMT-Basic 0.4 (based on Nichols 1996, one

response)

1.6 (based on Sund 2012, added

benefit of firefighters w/ defib.)

3.4 (based on Larsen et al. 1993,

defibrillator)

EMT IV-Technician 1.1 (based on Nichols 1999, BLS-D)

2.1 (midpoint of extremes, with ALS

from Larsen et al. as ceiling)


defibrillator) Advanced Life Support 0.7

(based on Sund 2012)


accounts for bystander or other treatment provided earlier)

5.5 (based on Larsen et al. 1993, no

bystander or other treatment received before ALS arrival)

Source: Authors. All numbers represent percentage point reductions in mortality per minute of improved response time by level of response.

These figures are based on studies that may include a wide swath of different response types.

For example, the 1996 Nichol et al. meta-analysis suggests that a one-tier response yields a reduction in

mortality of 0.4 percentage points. Rarely, if ever, in the study area is a one-tier response the norm to an

emergency call. This 0.4 percentage points figure, however, is based on a range of studies examining

one-tier responses from non-defibrillator responses to ALS responses, which likely means it may

84

underestimate the true benefit given the advantage ALS provides in some other studies. We considered

it appropriate to measure the improved mortality from a minute earlier response time from the first tier

by using the one-tier response time figures. The response time changes we modeled do not change the

second tier response times, but focus on the change in level of service provided by the first tier. Thus,

we primarily used first tier numbers in our estimations of benefits from response times. We used

primarily estimates in mortality reduction for cardiac arrests, as more research has been completed for

heart attack survival rates, and the majority of ALS Echo calls in Dane County during the ALS automatic

aid pilot period were cardiac arrests.88

For the benefits yielded from changes in staffing at the eastern Fitchburg fire station, we had to

consider the marginal advantages of having trained EMT-IV Technician personnel over the EMT-Basic

services now provided by Fitchburg Station #1. To do this, we subtracted the benefits provided by an

improved minute of response time from EMT-Basic from the benefits provided by EMT-IV Technicians.

Given the overlap in the distributions, in some scenarios the difference function yielded a negative

number. The unlikelihood of such a scenario (where there is an increase in mortality risk associated with

an upgrade from EMT-Basic to EMT-IV Technician), we removed any negative values and did the Monte

Carlo simulation on those values twice more, and then shunted any remaining negative values to zero

(in those scenarios, there would be no difference in mortality associated with EMT-Basic or EMT-IV

Technician trained personnel). We also performed this function for the difference between ALS and

EMT-IV Technicians, so that in no instances were ALS ambulances less effective at reducing mortality

than EMT IV-Technicians. We did not differentiate between EMTs arriving via fire apparatus or by

88 Dane County Emergency Medical Services (2005). Advanced Life Support Pilot Project: Final Report.



85

ambulance, as emergency medical personnel often spend more time at the scene of an incident than

they do in transit to the scene.89

We then multiplied the number of Echo calls projected each year by the number of minutes

saved on each call on average (determined by the response time projections), the percent improvement

resulting from the Monte Carlo analysis of the benefits of response time changes, and the value of a

statistical life. We computed:

Vs = (VSL)*(CE)*(mc)*(Lr)

Where:

Vs = Social value of lives saved

VSL = Value of a Statistical Life

CE = Projected Number of Echo Calls

mc = Average Response Time Improvements from Consolidation Throughout District

Lr = Percent Reduction in Mortality Risk per Minute Improvement in Response Time Given a Certain

Level of Service

When appropriate, we found the difference between existing levels of Lr and the consolidated

levels of Lr. We also phased in the benefits provided by Fitchburg Station #1, reducing them by half over

the first two years, to account for scheduling setup lag or time spent training personnel.

We performed this calculation for relevant blocks of time surrounding transition points,

including the potential movement of Fitchburg’s stations and the closing of the Town of Madison station

in 2022. For the value of a statistical life, we did a Monte Carlo simulation with a mean of $5 million

around a normal distribution, with a standard deviation of $800,000 (derived from the literature-

89 Wilde, Elizabeth (2012). Do Emergency Medical System Response Times Matter for Health Outcomes? Health Economics. 14

June 2012. http://onlinelibrary.wiley.com/doi/10.1002/hec.2851/pdf


86

recommended sensitivity analysis points of $7.2 million and $2.4 million, the difference between which

was divided by 6 to find the standard deviation).90

Value of Health

Health care costs are difficult to anticipate, and the degrees to which certain categories of

responses generate additional costs are also difficult to anticipate. Reimbursement rates to Medicare

and Medicaid, private charges for medicine and health care equipment, and technological advances are

all potentially highly variable over the time span of the study. Also, the costs of specific health care

services are difficult to determine because of a lack of public data and vary across health care providers.

Because of to these limitations, we did not believe that calculating lower costs to health care consumers

associated with faster response times was a feasible or valuable undertaking.

Attempts to Estimate Value of Other Calls

Calls in the Delta and Charlie categories are also very serious, including overdose and seizures.91

We attempted to estimate the value of response time reductions for these calls based on the literature,

but all of our estimates yielded very high numbers. Yearly savings were well into the tens of millions of

dollars. As this level of savings is unlikely, we determined that our assumptions must be inaccurate, and

tabled that part of the analysis. If we find more information suggesting a consistent, measureable value

in reducing response times to these calls, we could re-measure their value.

Results by Policy Option

The full consolidation model provides approximately $15 million in net present value social

benefits through shorter EMS response times in eastern and southeastern Fitchburg and improved EMS

service delivery from Fitchburg Station #1. In the service consolidation model, which does not include

90 Boardman, Anthony, David Greenberg, Aidan Vining, and David Weimer. Cost-Benefit Analysis: Concepts and Practice. Fourth

ed. (New Jersey: Prentice Hall, 2011). 91

Dane County Emergency Medical Services (2005). Advanced Life Support Pilot Project: Final Report. http://www.countyofdane.com/emergency/ems/pdf/als_final_report.pdf


87

enhanced EMS services from Fitchburg Station #1, the benefits drop to approximately $10 million. All of

these benefits are from cross-border service delivery.

88

Appendix J: Social Benefits from Improvements in Fire Response Times

All fire or joint fire/EMS departments are currently staffed twenty-four hours a day except the

Verona Fire Department, which is staffed only between 6 a.m. and 6 p.m. We assume that consolidation

will offer a greater depth of personnel and will enable Verona to staff overnight. This reduces overnight

response times by eliminating the time currently required for on-call personnel to travel to the fire

station. We also assume that consolidation will not affect fire response times in Fitchburg, Oregon, and

the Town of Madison. Under current policy, however, Verona plans an approximately linear phase-in of

overnight staffing which will allow for full overnight staffing by 2017. Relative to current policy,

therefore, consolidation will only provide overnight staffing only between 2014 and 2017.

Because shorter fire department response times would avoid some amount of property

damage, overnight staffing in Verona would seem to offer social benefits. We do not include fire

response times in our calculation of net social benefits, however, for three reasons: first, we anticipate a

negligible number of fires in the short time period during which consolidation will contribute to

overnight staffing levels. Second, fire injuries and deaths are so rare as to be effectively zero in a

community of Verona’s size, thereby avoiding those social costs. Third, we are unable to estimate

reliably the costs of fire damage. We attempt a number of estimation methods, as described below, but

are unable to establish any as reliable.

Annual National Fire Protection Association reports indicate that Verona responds to less than

thirty fires per year (Verona Fire Department NFPA 2006-2012). Of these, a substantial number are

unlikely to create significant damage, such as dumpster fires, or are less likely to occur at night, such as

vehicle fires. Nationally, approximately half of fires occur between 6 pm and 6 am (Barillo and Goode

1996). This corresponds to the hours during which the Verona Fire Department currently has no on-site

personnel, so we assume that of the remaining fires, only half will occur at night. This reduces the

89

expected annual number nighttime fires to less than ten. Although it is certainly possible that these fires

will incur damage, we assume the fires are so few that reduced response times will provide only

negligible benefits.

We do not anticipate costs incurred by injury or death from fire. The academic literature (Kobes

et al 2010; Barillo and Goode 1996; Communities and Local Government 2010) shows that fire fatalities

are rare and that self-evacuation prevents injury in almost all fires. Furthermore, the number of fires

presenting an imminent danger is very low in our study area (Verona Fire Department NFPA 2006-2012).

The probability of injury or death from fire is so low that the expected value (as expressed in the value

of a statistical life and a quality-adjusted life year) of improved response times is effectively zero.

Finally, we are unable to establish a reliable measure for even those negligible benefits of faster

fire response times. We attempted two methods of calculating these benefits. First, we searched the

academic literature for a measure of property damage costs avoided per reduced minute of response

time. Only two studies provided such estimates. One study from New Zealand established a linear

relationship between response time and damages, estimating a constant of approximately $15,000 and

a marginal cost of approximately $2600 per minute (converted into 2012 U.S. dollars; Challands 2010). A

British study estimates a significantly lower cost of approximately $1400 per minute with no constant

(converted to 2012 U.S. dollars; Communities and Local Government 2010). We consider the studies’

methodologies to be equally valid, so we are unable to account for the discrepancy in estimates or

select one as being more reliable.

Our second attempt to measure avoided property damage was similarly unsuccessful. We

sought to establish the percentage of total damage incurred per minute of response time, but the

discrepancy between the New Zealand and British studies again posed an obstacle. Referring to NFPA

records, we attempted to calculate the amount of yearly fire damage in Verona and apply both studies’

90

estimates to local conditions as means of sensitivity analysis. Records show annual property damage in

Verona ranging from zero to over $600,000, though, meaning that the variance and small sample size of

Verona’s data renders it statistically nonviable.

We anticipate that overnight staffing in Verona under consolidation will provide net social

benefits, but because of the negligible number of projected nighttime fires, the extremely low

probability of injury or death from a nighttime fire, and the lack of reliable cost estimates, we exclude

reduced fire department response times from this study’s estimated costs and benefits.

91

Appendix K: Consolidated Apparatus Purchase

Consolidating purchases offers the potential for savings from joint purchasing. By purchasing at

the same time, the manufacturer can order multiples of specialized parts, providing significant savings.

Some of these savings can be passed on to the purchasing department. This scenario only applies when

identical apparatuses are purchased. Brush trucks, Engines, Ladder trucks, Ambulances, ATVs, and

Squad vehicles are the only possible candidates. Smaller, less complex vehicles are purchased through

the State of Wisconsin and have no potential for additional savings.

Purchases of apparatus will not be shifted back for several reasons. First, maintenance costs

increase with vehicle age, and the departments plan their purchases so that the cost of purchasing is

less than the cost of additional maintenance. Second, older equipment is less reliable, and even with

increased maintenance costs, emergency services have a strong preference for reliable vehicles to

provide service delivery and avoid costs associated with broken-down vehicles.

Department estimates of savings indicate that purchasing two identical apparatuses at the same

time would save 4 to 5 percent. We use the following formulas to calculate potential savings from

shifting purchasing schedules to allow for joint purchasing.

C = Cost of apparatus

D = Discount rate

T = Years that purchase is moved forward

S = Savings from simultaneous purchasing

C * ( [1 + 1/D^T] – [S * # apparatuses] )

The formula is essentially three steps expressed as one. First, we calculate the cost of apparatus

purchases under the current policy, relative to the given year. This value is the cost of the current

purchase plus the cost future relevant purchases, discounted back to the current year. Second, we

92

calculate the cost of the purchases under the consolidated model. This second value is the cost of the

two or more apparatuses multiplied by the savings from joint purchasing.

The potential cost-saving shifts are based on the discount rate. Under a 2 percent discount rate,

advancing purchases by as much as 5 years is profitable, while for 3.5 percent it is 3 years and 6 percent

it is one year. However, at the low this model sometimes suggests optimal purchases that are far too

expensive in up-front costs to be borne by the budgets. Furthermore, these purchases would result in

losses under a 3.5 percent discount rate. Due to this variability, we will only consider purchases that are

viable under a 3.5 percent discount rate. Although this limit is up to three years, we do not find any

viable shifts of more than two years.

By our estimates, in 2018 there is an opportunity to advance the purchase of an ambulance by

one year for a savings of $10,000. Ambulance purchases can also be shifted by two years in 2015, 2021,

2025, and 2031, for a savings of $4,000 per year. In 2015, an engine can be shifted up by two years, for

a savings of $13,000. In 2016 three ladders can be purchased at once, one advanced by a year and the

other by two years, for a savings of $19,000. Finally, in 2020 there are two squad vehicles scheduled to

be purchased, for a savings of $47,000. We estimate the 2012 NPV of savings is $84,000.

Table 45: Estimated Apparatus Costs

Vehicle Engine Ladder Ambulance Squad

Low 500000 905000 130000 500000

Expected 550000 1002500 180000 525000

High 750000 1100000 205000 550000

Source: Authors

93

Table 46: Opportunities for Coordinated Purchasing

Year

2015 Ambulance x2 Engine x2

2016 Ladder x3

2017

2018 Ambulance x2

2019

2020 Squad x2

2021 Ambulance x2

2022

2023

2024

2025 Ambulance x2

2026

2027

2028

2029

2030

2031 Ambulance x2

Source: Authors

94

Appendix L: Apparatus Maintenance Savings

Estimates received from the chiefs related to potential savings on apparatus maintenance do

not separate parts and labor; however, we expect the majority of costs in this area to be related to

labor. For our analyses, we use a range of potential maintenance costs that can be attributed to labor.

Based on department-specific estimates from the fire chiefs, we estimate the fraction of maintenance

that could be managed internally. Multiplying the total maintenance cost by the fraction attributable to

labor costs and then again by the fraction of maintenance that could be managed internally gives us the

dollar estimate of outside labor costs. We use the following formula to calculate the outside labor costs

that can be saved:

Cost saved =Maintenance costs * % maintenance cost due to labor * % potential in-house

The net effect is that outside labor is replaced by much less expensive internal labor. There is

some cost to employing a mechanic inside the consolidated department. This position would be filled by

a captain of support services, but since apparatus maintenance would not be his or her only job duty, we

are unable to perfectly isolate the labor costs for in-house maintenance. Since there is a large amount of

downtime in fire services, we are unable to attribute any labor costs to maintenance.

The Oregon fire department estimates that approximately $8,000 of maintenance work

provided by independent contractors in 2012 could have been handled in-house if they had the

resources for a dedicated mechanic-firefighter. To calculate total maintenance costs, we use the sum of

the Verona 2011 budget lines Repair and Maintenance and Repair Vehicle Supplies, which in 2012 sum

to $24,000, yielding an expected 33 percent potential savings due to in-house maintenance. The Verona

fire department estimates that approximately $17,000 of their maintenance could be done in-house,

which out of a total 2011 budget of $65,500 yields an expected 26 percent potential savings due to in-

95

house maintenance. We use 33 percent and 26 percent as our upper and lower bounds for calculating

potential savings from in-house maintenance.

Table 47: Estimated Apparatus Maintenance Costs Under Consolidation

Maintenance costs Low High Expected

Verona $57,375 $73,480 $65,550

Oregon $17,100 $26,400 $21,750

Fitchburg $47,989 $62,281 $54,970

Fitch-Rona $25,636 $33,271 $29,365

Town of Madison $6,984 $9,064 $8,000

Total $155083 $204496 $179,635

Fraction of Cost from Labor 40% 80% 60%

Potential In-House Maintenance 26% 33% 30%

Savings Verona $7,000 $16,000 $12,000

Oregon $2,000 $6,000 $4,000

Fitchburg $6,000 $15,000 $10,000

Fitch-Rona $3,000 $8,000 $5,000

Town $300 $2,800 $1,400

Total $19,000 $48,000 $32,000

Source: Authors

Verona estimates that in 2012 they spent approximately $18,000 on maintenance, repairs, and

testing that could have been done in-house if they had a qualified firefighter-mechanic. Approved

Verona maintenance budgets for 2009, 2010, 2011, and 2012 were all $35,000. This suggests that

approximately 50 percent of apparatus maintenance could be done internally. This sounds high, so we

use this as our upper bound. For our expected minimum and maximum maintenance costs we use the

lowest and highest costs from maintenance budgets in 2011-2012 (City of Verona 2011), with the lowest

reduced by 10 percent and the highest increased by 10 percent. We then generate a normal distribution

based on plus and minus three standard deviations bounded by our expected minimum and maximum

costs. From these distributions we conduct a Monte Carlo simulation. We estimate that $11,000 can be

96

saved annually by using in-house maintenance. Overall, we estimate that a consolidated fire/EMS

department could avoid paying an average of $32,000 per year. At a minimum, we expect avoided

outside labor costs of $19,000 and at most, $48,000. Our study estimates a total net present benefit of

$451,000 over the 20-year study period resulting from provision of a portion of vehicle and apparatus

maintenance in-house.

Table 48: Estimated Apparatus Maintenance Costs Under Consolidation (Verona Fire Department)

Low High Mean

Standard Deviation

Avoided Outside Labor

Fraction of cost from labor 30% 80% 55% 0.083333 $11,021

Potential In-house maintenance

10% 50% 30% 0.066667 $1,041 Minimum

Maintenance costs per year

$58,995 $73,106 $66,051 2351.833333 $22,933 Maximum

Source: Authors

Fitchburg does not have estimates for potential savings from maintenance, so we use the ratios

estimated for Verona. The Fitchburg 2013 budget allots $54,970 to maintenance (City of Fitchburg

2012). We use this as the mean with a standard deviation of 3,000. We generate expected maximum

and minimum values from three standard deviations above and below the mean. From these

distributions we do a Monte Carlo analysis. We estimate that $9,072 can be saved annually.

Table 49: Estimated Apparatus Maintenance Costs Under Consolidation (Fitchburg Fire Department)

Low High Mean

Standard Deviation


Fraction of cost from labor

30% 80% 55% 0.083333 $9,072


10% 50% 30% 0.066667 $3,082 Minimum


$45,970 $63,970 $54,970 3000 $20,587 Maximum

Source: Authors

The Fitch-Rona 2011 Annual Report reports $29,365 of actual expenses for Tune-up and Repair

(Fitch-Rona EMS District 2012). We use this as the mean with a standard deviation of 2000, intended to

place it between Oregon and Verona. We generate expected maximum and minimum values from three

97

standard deviations above and below the mean. From these distributions we do a Monte Carlo analysis.

We estimate that $11,021 can be saved annually.

Table 50: Estimated Apparatus Maintenance Costs Under Consolidation (Fitch-Rona EMS)

Low High Mean

Standard Deviation


Fraction of cost from labor

30% 80% 55% 0.083333 $4,892


10% 50% 30% 0.066667 $1,209 Minimum


$23,365 $35,365 $29,365 2000 $11,012 Maximum

Source: Authors

Overall, we estimate that a consolidated fire/EMS department could avoid paying $27,591. As a

minimum, we expect avoided outside labor costs of $5,952 and at most, $59,467.

98

Appendix M: Rebranding Costs: Repainting

Repainting a consolidated department’s fleet of large apparatuses and smaller vehicles will

result in significant costs. We use two broad categories for our estimates. Large apparatuses are the

engines, tenders, and ladders, of which there are 21. Small vehicles are everything else and total 40. Re-

lettering each apparatus and vehicle is estimated to cost $1,000 per vehicle. We use this as our lower

bound. For our upper bound for apparatus, we use $10,000, as this is the estimated cost of fully

repainting an engine in the Town of Madison. For small vehicles we use $3,500. Based on these bounds,

we estimate that it will cost approximately $209,000 to re-letter all apparatus and vehicles.

Table 51: Total cost of repainting Vehicles and Apparatus

High Low Expected

Small -$154,000 -$42,000 -$90,000

Large -$407,000 -$31,000 -$114,000

Total -$584,000 -$100,000 -$209,000

Source: Authors

99

Appendix N: Cost of Rebranding Uniforms and Gear

Under a consolidated department, uniforms and gear would need to be rebranded with the new

department name and logo. Firefighters currently receive a yearly stipend for purchasing department

branded clothing. Career firefighters receive more than volunteer personnel. Personnel also receive a

larger stipend when newly hired.

We estimate the costs of rebranding uniforms and gear as the cost of a new set, based on the

new-hire cost minus the yearly stipend, since that is a cost already incurred under current policy.

Estimates are based on the annual stipend received by Fitchburg Fire Department personnel. Fitchburg

currently pays $418 to newly-hired career and POx personnel for uniforms and gear. Career personnel

receive a stipend of $425, so the cost under a consolidated model is zero. PoX personnel receive $100,

so the cost under a consolidated model is $318 per person. Based on 52 career personnel and 221 PoX,

we estimate a total cost of new clothing at approximately $66,000.

A consolidated department also needs to provide new patches and badges. Patches are ordered

in lots of 400 for about $1,000. Chiefs would receive gold badges at $112 per person, for a total of $224.

Captains, lieutenants, firefighters, and paramedics receive silver badges priced at approximately $86 per

person; with 277 personnel in these categories, the price is estimated at approximately $24,000. We

estimate that the overall cost of rebranding clothing, patches, and badges is approximately $91,000.

100

Appendix O: Risks Associated with Cross-Training

Having a fully combined staff of cross-trained personnel likely provides some benefits to the

population, but also presents some considerable risks. A cross-trained staff, and hiring for cross-trained

positions, may create an implicit imbalance toward one set of tasks or another. Some staff members

may truly be interested in fighting fires, while others may be interested primarily in the medical aspects

of the job. These staff members may deliver lower quality performance in the area in which they are less

interested, providing overall lower performance than the same capacities in separate departments

might provide.

The second potential cost, similar to the costs of interest imbalance, is the higher turnover rate

that may result from cross-training. Paramedics tend to have longer careers in one location than cross-

trained firefighter/EMTs, and the relatively low turnover rate at Fitch-Rona EMS provides an example,

according to Chief Myrland of Fitch-Rona EMS. Turnover rates are lower in Fitch-Rona EMS than in the

other departments in the study area, and the full staff of paramedics suggests that these individuals are

quite committed to their career choices. Cross-trained firefighter/EMTs who are primarily interested in

fighting fires may also seek out different departments where they can be only firefighters, rather than

being required to provide medical care.

There are also costs associated with training together. Although training as a large group may provide

some economy of scale, the larger amount of training required to keep all staff members well-trained in

both EMS and fire services may require more time away from the station in the average workweek.

During this time, the stations must be staffed with paid-on-premise or other personnel, meaning that

more overtime pay must be budgeted.

These potential costs were all considered, but deemed too difficult to measure accurately or

project.

101

Appendix P: Relocating the Fitchburg Fire Stations

Fitchburg has been exploring moving its fire stations eastward in an effort to cover more of the

territory in Fitchburg with lower response times. Fitchburg Station #1 is centrally located, but Fitchburg

#2 is located significantly west. The station was originally located there because of commercial

development in the area, but residential development in eastern, northeastern, and northern Fitchburg,

as well as the potential for future growth in the south and southeast, has prompted the city to

investigate moving the stations eastward or adding another station. These options were discussed in the

2009 SEH study, which suggested some locations for future stations. In the baseline, we assumed that

the fire stations would be moved in 2022, corresponding with the closure of the Town of Madison

station, and we did not add a third Fitchburg station at any point in our analysis. We assumed that the

stations would be moved to the locations explored in the SEH study.92

This assumption is key because most of the social gains associated with consolidation stem from

the delivery of EMS services to eastern Fitchburg. If the stations were moved and Fitch-Rona EMS had an

ambulance either in, or with easier access to, eastern Fitchburg, then the social gains associated with

consolidation of EMS service improvement in eastern Fitchburg would likely be built into the baseline.

Fitch-Rona EMS is considering adding a third ambulance as early as 2015.93

As an example of the importance of EMS coverage in eastern Fitchburg to the analysis of social

benefits, we ran the same model for benefits from improved EMS response times, but assumed that the

Fitchburg stations would more eastward in 2017 instead of 2022. This analysis dropped the social

benefits of full consolidation from approximately $15 million to approximately $10 million, depending

92 Short Elliott Hendrickson Inc. (2009). City of Fitchburg Fire Station and EMS Unit Location Study. Prepared for the City of

Fitchburg by SEH, Inc., Madison, WI. http://www.city.fitchburg.wi.us/departments/fire/documents/stationstudy.pdf 93




102

on the Monte Carlo simulation results. This suggests that, regardless of the decisions concerning

consolidation, moving the Fitchburg stations eastward is of paramount importance, especially before

the Town of Madison station closes. However, even if the Fitchburg stations do move, there are

considerable benefits to “borderless” EMS services.

103

Appendix Q: Monte Carlo Simulation Method

To conduct our Monte Carlo simulation, we gave each factor that was allowed to vary a mean (if

applicable), an upper bound, and lower bound. Based on these, we constructed a series of normal

distributions. If we believed that a skewed distribution would more accurately reflect likely outcomes

then we used a specific value for the mean. Otherwise, we used the average of the upper and lower

bounds. We defined the standard deviation as the distance from the upper to the lower bound divided

by six, so that the vast majority of results would fall within the bounds (99.7 percent of all results would

be expected to be within three standard deviation of the mean in a normal distribution).

Over the thousand Monte Carlo trials, there were some values that did not make logical sense,

such as negative costs for repainting. When this occurred, we reran that particular calculation and

substituted the new value. After at least one round of recalculations, we set remaining nonsensical

values to their limit. We used this process to avoid skews and clustering toward edges of ranges.

Once the list of random values was calculated, we plugged them into their relevant formulas,

generating a similar list of one thousand results. We then combined each row of results to create our

thousand random samples of outcomes. The following variables were allowed to vary in our analysis:

Individual city growth rates

Turnover rates for personnel

Potential in-house maintenance

Labor as fraction of maintenance costs

Total cost of maintenance

Price of apparatus

Growth rates in demand for EMS services

Value of a statistical life

Percentage point decrease in mortality associated with a firefighter trained at EMT-Basic arriving one minute earlier than under current policy

Percentage point decrease in mortality associated with emergency personnel trained at EMT-IV Technician arriving one minute earlier than under current policy

Percentage point decrease in mortality associated with a paramedic in an ALS ambulance arriving one minute earlier than under current policy

104

Appendix R: Monte Carlo Simulation Histograms of Full Consolidation

The results of the Monte Carlo simulations suggest positive net social benefits for full

consolidation. Below are histograms representing Monte Carlo simulations performed at the midpoint

social discount rate of 3.5 percent and sensitivity analyses using a low rate of 2.0 percent and a high rate

of 6.0 percent. In all cases, negative values represent approximately 15 percent of trials

Figure 9: Monte Carlo Histogram of Net Present Value Using Social Discount Rate of 3.5%

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