Economic Issues Challenge Effective Fire Protection

Since their inception in the days of Ben Franklin, our nation’s fire departments have bravely risen to the challenge of the dangerous task of firefighting. Yet, the profound impact of the current and historic economic recession, in addition to existing financial strains on community resources, have thrust tough choices into the hands of modern-day fire department leaders.

While fire departments are led by skilled problem-solvers, these issues cross-cut all department types – volunteer, combination and career, as well as rural, suburban and city-based. What’s more, financial experts have indicated the problem shows no signs of abating in the near future.

For example, a September 2009 survey by the National League of Cities (NLC) indicated that nearly nine in 10 city finance officers are less able to meet their fiscal needs than in 2008. Additionally, the NLC noted that the fiscal condition of the nation’s cities continues to weaken and will most likely extend for 18 months to several years due to the lag-effect between economic and city fiscal condition related to property tax collection.

The NLC study also pointed out that a vast majority of cities are instituting hiring freezes, laying off personnel as well as delaying or cancelling planned infrastructure projects to close funding shortages. The effects of such decisions may well extend months and years down the road.

To illustrate the problem, according to the Fire Apparatus Manufacturers Association, half the 76,000 fire trucks in use across the country are at least 15 years old, but half of the industry’s 2009 sales have been cut by cash-strapped municipalities. This postponement of apparatus replacement will undoubtedly surface in the form of future breakdowns and related specialized equipment reliability issues.

In addition, some fire departments faced with funding issues have chosen to shut down fire stations entirely; reduce firefighter on-duty strength; or institute temporary “brown-outs” whereby stations or fire companies are shuttered on a rolling basis.

In many cases the financial woes are cascading down from state deficits. For example, The Wall Street Journal reported that state revenues are down 17 percent compared to 2008 – the steepest decline since the 1960s. Even federal aid available through the Federal Emergency Management Agency (FEMA) Assistance to Firefighter Grant (AFG) and Staffing for Adequate Firefighter and Emergency Response (SAFER) programs are in danger. FEMA officials have noted that the number of canceled SAFER grants due to the inability of the grantee community to match the financial commitment has risen to a level that the resultant loss of responding firefighters will likely have an undeniable impact within those communities.

Fire is the leading cause of property loss in the United States, although devastating events like earthquakes, hurricanes, floods and other natural disasters sometimes occur with more dramatic outcomes. Despite advances in technology, fires can happen anywhere, at any time.

According to the National Fire Protection Association, within the United States, fire departments respond to fires once every 22 seconds and structure fires every 61 seconds. That means that every day, residential and commercial buildings and their occupants are subjected to potential losses of property and life on a regular basis.

In fact, the challenges for fire departments continue to mount. Homeowners fire losses account for 58 percent of total insured fire losses, while commercial multi-peril and fire each accounted for 21 percent of total insured fire losses. In each of the past two years, wildfires burned 7 million acres across several states – twice the average experienced in the 1990s. Moreover, according to the National Crime Information Bureau, suspicious car fires spiked up 20 percent from 2008 to 2009, while arsonists destroyed nearly $900 million in insured property and killed 295 civilians nationwide in 2007.

ISO’s Fire Suppression Rating Schedule (FSRS) is a methodology containing the criteria the company uses in reviewing a community’s structural fire-suppression capabilities. The country-wide schedule helps insurance companies evaluate the major elements of a community’s fire-suppression system using Public Protection Classifications (PPCs), which measures the relative differences in levels of structural fire protection in more than 46,000 communities across the United States.

Because the state of fire protection across the country is a dynamic environment, insurers use the PPC program as it reflects changing levels of protection for marketing, underwriting, and pricing homeowners and commercial property insurance.

A Fireman’s Fund Insurance Co. survey of fire service leaders indicated that the three top concerns of fire departments are: lack of budget; old or outdated equipment; and staffing, recruiting, and retaining members. More than half of the departments surveyed said fundraising/grant writing had to increase, 55 percent stated if economic issues continue for another 12 months, it will result in negative effects on their ability to serve the community, and 57 percent of volunteer departments are losing members to a search for paid positions – compounding an existing crunch for personnel.

Additionally, an ISO survey of fire service leaders indicated that 93 percent of volunteer and combination volunteer/career departments are having difficulties attracting and training a sufficient number of responders due to the time commitment for volunteers, a small volunteer pool and the requisite education and training requirements. Subsequently, among the chiefs who call on neighboring departments for help on the first alarm, 74 percent said a very significant reason for doing so is the need for more responders and 29 percent said a need for specialized apparatus or equipment is very significant.

It is misleading to presume by only looking at the exterior of a fire station that it has the capability to provide adequate response. What matters is what is inside. The ISO evaluation of fire departments identified cases where departments are found to lack adequate personnel, apparatus, equipment or training to initiate an attack on a struc-
ture fire. These departments are classified a “10” – no insurance recognition. Currently, more than 800 such stations exist across the country.

Without changes in recruiting and retention policies, communities can fall below even minimum standards governing the number of trained firefighters required to mount an effective first response to a building fire. That can have an adverse effect on efforts to save lives and property and reduce insurance losses.

During 2009, the number of PPC retrogression cases in progress rose by more than 20 percent compared to previous years, generally due a reduction in firefighting personnel available for response, a reduction in the number and type of fire responding apparatus, gaps in optimal deployment of apparatus or deficiencies in training programs.

In cases where the number of available fire responders drops below recognized national standards, ISO must withdraw protection credit entirely for stations and/or departments, offering those communities up to six months to implement the required staffing improvements to regain protection credit.

In many cases, communities can help resolve some of the personnel and equipment issues and even enhance response coverage with little financial outlay. For example, some communities have instituted resource-sharing programs that include use of full-time automatic mutual aid response to structure fires from neighboring communities, enhanced water hydrant and apparatus testing programs, and sharing of multi-jurisdictional training facilities that are within reasonable travel distances to each locale.

Many communities of varying population sizes across the nation are grappling with significant economic issues that can affect the quality of fire protection, demanding officials offer new and innovative methods to stretch limited resources in an effort to reduce the potential for fire-related property and life losses. Similarly, it will be important for insurers to keep up with the changes in communities’ structural fire-suppression capabilities to more accurately price and underwrite policies commensurate with the potential risk.

Topics USA Property Training Development