The Amalgamation of Fire Departments - Report Example

Running header: Amalgamation of fire departments Student’s name: Instructor’s name: Subject code: Date of submission: Amalgamation of fire departments With finances being crunched at all government levels in the present economic climate, there is forced stretching of resources for many things ranging from crime and drugs, health and welfare, the environment, and infrastructure all competing with fire protection for limited financial resources. Worse still, even private organizations once funded privately now seek funding from the tax base. In fire departments, there is increasing demand for services at a steady rate especially as far as emergency medical services are concerned. As the population continues increasing, the trend is expected to continue into the next century despite the fact that taxpayers are not willing to pay more and hence a strategy must be established to ensure continued existence and efficiency of the fire departments. As such, many fire departments are finding it worth to engage in a number of joint ventures to enable them provide the level of services expected by the community while conserving the scarce resources. The approaches range from informal sharing of personnel or equipment to formal amalgamation of different fire departments in an attempt to save on costs and increase on efficiency. East Shire fire department has not been left behind in similar efforts and is considering an amalgamation with fire departments from the neighboring towns. This report explores the potential benefits that the fire department will obtain from the amalgamation. The report will also explore the potential risks that might accrue from the fire department’s amalgamation with other fire departments. As such, the report will inform the fire department’s decision on whether to merge or not. Benefits The fire department management boards of the three fire departments have suggested amalgamation of the fire departments as an avenue for providing better strategies for provision of the services that the community need and deserve. As such, amalgamation is a viable option that should be found beneficial strategy for improving use of scarce resources, staff flexibility, saving on costs, strengthening internal programs as well as providing increased opportunities for expanding services and specialization. Furthermore, amalgamation goes beyond political boundaries ensuring that the closest department responds to emergencies closer to it in addition to creating more rational protection service areas and improvement on response time. The benefits of amalgamation are analyzed in detail below. a) Operating economics Operating economics here refer to the expenses associated with the fire service business and their allied activities. These are the expenses which are incurred in the day to day running of the fire service departments. The costs include both fixed and variable costs. Amalgamating the fire departments is expected to expand their operations. This expansion will help the departments use and manage economies of large scale operations. Thus, the merged fire departments will reduce many of their expenses (Stephanie, 2002). As such, budgets of normal operation expenses will be trimmed while t the same time the resulting larger fire department will enjoy greater purchasing power and hence enjoy more discounts. This will lower cost of supplies and related necessities. In addition, some posts will have to be abolished since they will become redundant implying that the staff holding them will be laid off resulting in lower wage bill. The amalgamation will also mean that the fire departments will share office space which Eastshire fire department owns in all the three towns hence eliminating the rent that the other two departments have been paying. This will be a huge cost saving for the amalgamated fire department. The amalgamation is expected to result in lowering of apparatus replacement requirements, lower the number of service equipment required while eliminating duplication of specialty equipment. This is expected to result in enormous cost savings. Additional cost savings are expected to result fro m increased volume purchasing hence resulting in huge discounts as well as equipment maintenance and planning. In fact, a similar case study from consolidation of fire departments in California suggest that we can expect the amalgamation to result to direct cost savings amounting to 10-15 million pounds annually while indirect cost savings resulting from the amalgamation as a result of increased efficiency are expected to amount to 20-30 million pounds annually. In essence, the total cost savings resulting from the amalgamation is expected to be between 30-45 million pounds annually by the third year of amalgamation. Given the one time amalgamation costs of $50 million pounds, the amalgamation idea is definitely a viable idea for fire departments that are keen on offering high quality services at reduced costs. b) Financial economics Financial economics imply the expenses which are associated with acquisition of funds with which to run the fire departments. This can be long term or long tem financial obligations. A huge percentage of our operating funds come from well wishers as well as the service fee which we charge for services offered. However, considering that we deal with emergencies most of the time, we rarely charge the community and hence most of the time we are forced to borrow money when we have a shortfall in our budget. The local authorities have also supported the fire departments financially whenever called upon to do so. As such, amalgamating the fire departments is expected to result in financial economics benefits. This can be in terms of tax benefits that our department is likely to get from merging with the other two departments which are struggling financially. The amalgamation is expected to provide for an enlarged tax base while the planning process will identify areas for tax savings not anticipated in the onset. Based on the Californian case study, the amalgamation is expected to result in tax reductions of almost 1 percent by the third year while this is expected to increase to 3 percent from the fifth year onwards. In addition, the amalgamated larger department is in a better position to access more funds from the money market at lower interest rates (Robert, 2005). This is because the departments will be able to offer more efficient services while reducing operating costs which will result to better credit ratings by financial institutions and hence ease of accessing funds. In addition, amalgamation is expected to result in the resultant fire department placing more resources on the fire ground which is a vital interest in the fire protection environment. This will result in improved community ratings by the insurance providers hence resulting in possible lowering of insurance premiums. Hence amalgamation will help the three departments achieve financial economics by lowering financing costs while making access to finance easier. c) Managerial effectiveness In this case, managerial effectiveness refers to the departments’ ability to achieve the desired outcomes in their operations. This effectiveness will result in many ways including the replacement of ineffective fire department management teams with an efficient and effective management team given that we will have a bigger pool from which to choose. In addition, amalgamation will enable the most effective managers to share their past work experiences in the best interest of the fire departments as and when called upon to so. In other words, the amalgamated fire departments will make use of their very best minds from individual departments ‘skill sets thus resulting in greater efficiency and effectiveness. Amalgamation will reduce redundancy in apparatus, equipment and personnel. Through provision of more efficient application of the available resources, amalgamation will also enable the closure of stations as well as other duplicated facilities and services (Robert, 2005). Amalgamation of the three fire departments will also result in better utilization of resources, less emergency response times, more enhanced training schedules , improvement of joint communications as well as enhancement of foreground communications , increased/additional reserve apparatus as well as enhancement of water supply. Amalgamation will also make fire protection master planning easier given the contemporary periods of increased regional growth. Planning for future facilities placement, hiring and training is also likely to be enhanced by the amalgamation process since it will be eased by the increase in resource availability. Amalgamation of the fire departments will also enable modernization of our systems and enhance our ability to offer quality services to our clients. The resultant fire department will also be better placed to deal with problems spanning political boundaries as a branch will be expected to respond to emergencies occurring within its reach regardless of political boundaries. In addition, amalgamation will mean establishing a common set of fire codes and amendments hence making it easier to understand and apply both for the developers and the department. Internally, amalgamation will mean possibilities for more appealing career enhancement. Despite the fact that top management positions will be slashed, the resultant fire department will be larger thus creating more retirements and related turnovers and hence better opportunities for advancements for bright young officers. In addition, Amalgamation will result in standardization of labor contracts while periods of worker shortages will be adequately compensated. This will result in more motivated team who will offer better, efficient and effective services that our clients deserve. Risks Given that organizational change is a thorny matter, the proposed amalgamation should never be undertaken without careful consideration and can not be easily achieved. In tradition bound fire services such as the three departments, change can be extremely difficult and it will be a challenging task to attempt to change a process which is always seen as reducing each department’s autonomy and power. At times, emotions could be so much entangled in discussions hence resulting in deadlock before benefits can be realized. In addition, amalgamating a larger and more sophisticated fire department such as Eastshire with the other two smaller departments could bring the level of services by the bigger department to lower quality while still increasing costs. The following are some of the potential risks that the proposed amalgamation might expose the three departments to. a) Increased costs Amalgamation can be a very costly approach to increasing efficiency and reducing costs. As stated above, the one time cost of the amalgamation is expected to be 50 million pounds. Then there are other hidden costs that might result from the process thus making it not to realize its intended goals hence leaving the fire departments worse off. Such costs will be reflected in the financial statements as increased wages, costs related to cross training as well as increased pension costs. Incase the proposal experiences rebellion from the workers, the managements will have to offer pay incentives to the personnel to induce them into accepting the proposed amalgamation. The increase in salaries will put strain on our operating budgets in addition to other costs related to these salary related benefits including overtime and pension contributions (Jade, 2006). In addition, the new compensation plan may not be equitable and may contribute to dissatisfaction and increased turnover amongst [personnel in the departments. This will in turn increase our public safety costs related to hiring and training new officers. Other costs that may result if the amalgamation is not carefully planned and effectively implemented include higher fire injuries and deaths and hire fire losses. b) Loss of morale Failure to deal effectively with employee consolidation can lead to serious morale problems among the workers in the amalgamating departments. Lo personnel morale will in turn contribute to increasing turnover rates. For example, amalgamation of fire departments in Eldorado and Kansas is said to have resulted to turnover rates of about 30% following amalgamation. In California, a survey conducted after amalgamation revealed that 80% of firefighters blamed their loss of morale on amalgamation mainly to fear of unknown consequences of amalgamating. This loss of morale could be too costly for the departments. For instance, turnover in consolidated fire departments amount to 9% annually according to a survey conducted by Ryland (Jade, 2006). Costs related to the turnover include costs of hiring and training new officers. Loss of morale could also result in the departments offering low quality services to the community and delays in emergency response. As such, not unless the fire departments adequately prepare their officers and assure them of their job security and the need to amalgamate, the process may not achieve its intended results. c) Culture conflict Amalgamation of the fire departments is not as simple as it appears; it is more than just combining two brands or names. In other words, it is an amalgamation of different personnel who will bring along with them their specific departments cultures. In case the three departments’ cultures are fundamentally different, conflicts will most likely arise. For instance, the departments have totally different organization structures and hence the personnel in the resulting fire department will most likely have difficulties working together and adopting to the new system. This kind of confusion is likely to result in inefficiency and delays in response hence watering down the purpose of amalgamation. Fire fighting is an exercise that has traditionally been undertaken by officers working as a team. Such teamwork approach is vital for emergency situations where poor judgment or loss of time could result in loss of lives and property (Bart and Bill, 2008). On the other hand, team work will enable the personnel to perform specialized functions while closely cooperating in a coordinated attack on the fire. This culture conflict however does not create an environment for team work and may hence reduce the new department’s efficiency in rescue tasks and fire suppression. d) Inability to meet demand for service/ lowered service quality Amalgamation is an idea that has been floated with an aim of reducing costs while increasing efficiency. Some of the cost cutting measures include slashing some of the top managerial positions since the management of the entire department will now be centralized. In addition, some offices are likely to be closed and some workers found redundant and hence laid off. It is obvious that the workers are aware of this and hence are likely to work against the new amalgamated department hence resulting in inefficiency and delays in emergency response. In addition, the top management officers are also aware that some managerial positions will be done away with. This means that they will loose their power and autonomy within the department while some will be retired. There might also be role conflict with some senior management officials conflicting in their attempt to assert their authority over others (Gare, 2010). In essence, organizational political forces arising from resistance to change and fear of unknown are likely to work against the process hence resulting to inefficiencies and loss of lives and property. In other words, the amalgamation process must not be done hurriedly. Deliberate efforts must be made to ensure that everyone understands the need to amalgamate and how he or she will be affected by the amalgamation. Those likely to be laid off or retired must be assured that they will be adequately compensated so as to prevent internal resistance and sabotage. Conclusion With increasing demand for quality service from the community and given the need to save on costs of operation, fire departments must come up with strategies to meet these goals. Amalgamation will help the fire departments enhance their effectiveness and efficiency while saving on unnecessary costs. This is based on the fact that when people work together cooperatively and share the resources they each have, they can accomplish more. Amalgamation will result in better management and will lead to enormous cost savings. As such, we will be able to give our customers the services they deserve. However, there is need to involve everyone in the amalgamation process to ensure that internal political forces do not work to resist change. All efforts must also be made to ensure that amalgamation does not result in increased costs but that effectiveness and efficiency is improved. References: Stephanie, T2002, Spotting a trend: Fire department amalgamation, British city and county. Robert, W 2005, Combining two into one makes sense, American Fire Journal, vol.25, no.3, pp95-103. Jade, M2006, multijurisdictional fire protection master planning, London, Rutledge. Bart, S& Bill, S2008, Regional consolidation in the fire service: Issues and perspectives, National fire academy fire officer program. Gare, B2010, Issues in Contemporary business management, Oxford, Oxford university press. Read More