Firemen, Inc.

Adrian Moore
The Next City
March 21, 1998


Public fire fighting hoses down the public

CONTRACTING OUT GARBAGE COLLECTION. Tolling roads. Privatizing public transit. Charging user fees at libraries. With provincial governments downloading responsibilities to local levels, municipalities are weighing their options, hoping to douse the need for tax hikes by finding savings in local government that don’t fray the social safety net.

But in their deliberations, they’re overlooking one of the very oldest of municipal services, the one that provides an actual safety net — fire fighting. Canadian municipalities need to smoke out their fire stations: Public fire fighters deliver this vital service at one of the highest costs in the Western world.

The world’s largest private fire-protection company is in Denmark, where Falck Redningskorps provides outstanding fire protection and other emergency services to over half the residents — nearly three million people. Originally a family-owned business, Falck is now owned by Denmark’s largest insurance companies.

That a private firm could grow from one station serving one community 70 years ago to 132 fire stations serving hundreds of communities today astonishes many people who view fire fighting as an inherently governmental function. But Falck’s growth was no fluke, explains Professor Ole Kristensen of the University of Denmark in describing how competition works in that Scandinavian country. Municipal fire departments themselves want to expand, as do other firms eyeing the fire-protection business, leading to competition among public and private fire fighters that has kept Denmark’s fire-fighting costs the lowest in the Western world, at 0.09 per cent of GDP, one-third that of the most expensive nations, the United Kingdom and the United States, and 40 per cent of Canada’s. Denmark’s property losses to fire, meanwhile, is exactly the median for industrial nations — 0.24 per cent of GDP — while the likelihood of dying in a fire in Denmark is 1.64 per 100,000 persons, close to Canada’s 1.52 and well below the industrial nations’ median of 1.92.

ORIGINALLY FIRE FIGHTERS IN CANADA, like in most western countries, worked on call for private fire companies or volunteer brigades, responding to fire alarms from their work or homes — the manpower that hand-pump technology required made a full-time, paid fire-fighting staff unaffordable. Volunteer fire companies raised funds for new equipment from insurance companies or wealthy businessmen and from fund-raising campaigns.

A fire in the mid-19th century combined danger with theatre. The first fire company to arrive would take charge, the chief signalling his firemen with a brass trumpet and sometimes dragooning burly bystanders. Fire companies that arrived later often formed chains to more distant hydrants, pumping water into other pumper engines, which then pumped it to the fire.

As cities became larger and more anonymous, the quality of men in the volunteer brigades, which had depended upon comradery, slipped a rung or two. Increasingly, fire companies depended on monetary rewards from rescued building owners, with the highest rewards — equivalent to two to three per cent of the building’s insurance premium — going to the first arrivals.

Since most cities, and even mid-sized towns, had several fire companies, competition could be fierce — and not just in arriving first. At one fire in Ottawa, the first fire fighters on the scene found cans placed over the hydrants, with hired goons guarding them for a competitor! When other companies arrived, a brawl broke out that lasted until the charred building collapsed, scattering the mob.

Because fire companies were obliged to respond to all fires — building materials were highly flammable and fires spread rapidly — many property owners skipped insurance, knowing they would still get fire protection. So the insurance companies, whose coffers bore the largest share of the fire-fighting burden, came to back government-funded municipal fire stations to deliver universal protection. The economics of fire fighting in cities also swung to favor a full-time professional force: New steam technology required a few skilled mechanics, rather than brute manpower to get equipment to the fire. The tradition-bound volunteer companies, whose teams were based on the old hand pumps, resisted using new steam engines, even if they were gifts, sealing their fate in urban areas.

FIRE-FIGHTING EVOLVED SIMILARLY IN OTHER western countries. But in Denmark and the

U. S., private fire companies have survived, primarily by offering cost savings and innovations that help prevent fires or put them out faster: Falck was first to regionalize control centres to improve coordination and achieve scale economies, to provide specialized external fire fighting and rescue training, and to introduce new types of chemical foams. Public fire companies imitated these innovations — sometimes only after rulings by Denmark’s state fire inspectorate, which governs public and private fire services — long after Falck instituted them nationwide.

Rural/Metro, the U.S.’s largest private fire company, has served Scottsdale, Arizona, a city of over 150,000 for over 25 years. Present and past mayors vouch for its long-standing popularity with residents, and for good reason. Rural/Metro’s record of public safety, along with other U.S. private fire companies, surpasses even Denmark’s. A 1989 University City Science Center study that compared private fire service in Scottsdale with public fire services in eight similar cities in Arizona, California, and Texas found that Scottsdale had the lowest per capita fire-service costs, the fewest fires, and the least fire damage. Scottsdale had, on average, half the structure fires for similar-sized cities served by public fire services, nationwide, and less than one-third the average per capita fire loss. Since even one bad incident can cost a contract, private fire companies have held their employees to such high standards that only a handful of cities have gone back to public services.

As in Denmark, success flows from innovation. When a U.S. study found lime green far more visible in bad weather and at night than traditional red, Rural/Metro quickly repainted all its equipment, immediately reducing its accident rate. Many public fire companies switched later, many have yet to do so. Rural/Metro also pioneered the use of “attack trucks,” or mini-pumpers — smaller and quicker pumper trucks that can get to a fire before it grows. The attack trucks, with just two firemen, can extinguish small fires by themselves, letting larger trucks answer other calls.

Because fewer fires are good business, private fire companies work at fire prevention. When not fighting fires, private fire fighters build and refurbish fire apparatus, train industrial fire brigades and volunteer fire fighters, operate alarm monitoring and installation services, and sponsor fire-prevention campaigns and other educational activities. They actively patrol the sites of industrial and commercial customers, and lobby against petty bureaucrats and penny-pinching developers that don’t want to install home sprinkler systems.

In Scottsdale (and nowhere else), residential sprinklers are commonplace. Following a 1985 ordinance, 40 per cent of residences have them, saving eight lives in the last 10 years and sparing much property damage — the average loss per sprinklered fire is $1,945 versus $17,067 for non-sprinklered fires. Thanks to this activism in public safety, the sprinkler market has expanded, justifying improvements in design and technology that reduced installation costs by nearly half. Because sprinklers also drop fire-insurance costs — by about 75 per cent — sprinkler systems may spread throughout the continent.

The fire-smarts that private fire companies bring to Denmark and the U.S. save money to boot. Attack trucks handle small fires with fewer firemen than larger pumpers. Better hoses let private fire companies spray more water on a fire in a shorter time. In Denmark, Professor Kristensen found that Falck charges residents 20 per cent less than public fire companies in rural areas, and one-third as much in large cities. In the

U. S., a 1993 Reason Foundation survey found that communities typically saved from 10 to 50 per cent by contracting with a private firm for fire protection, with most saving 15 to 25 per cent. The per capita cost of contract fire-protection services ranged as low as $10 compared with a national average of $79.

Private fire companies achieve lower costs through better training, superior equipment, and motivated employees. At Rural/Metro, employees have also owned the firm since 1978. As both owners and fire fighters, they have every incentive to make sure they and the fire fighter alongside them have the talent and tools to do the job safely, and no incentive to deny management the flexibility it needs to intelligently use company resources.

“Cities traditionally support the huge overheads of fire departments where men are sitting around all day waiting for a fire to happen,” Frank Aleshire, a Scottsdale city manager once told the press. “We don’t. We still produce the same number of men at the fire, but only half our force is actually sitting at the fire house, waiting.”

In Denmark, Falck employs other techniques to minimize downtime: It complements fire protection with a variety of services, including ambulance service, fire salvage, and roadside assistance for drivers whose cars break down. In rural areas, Falck cross-trains fire fighters to work on tow trucks, non-emergency transport ambulances, and other services that allow them to drop what they are doing to respond to a fire. When a fireman calls in sick, someone assigned to drive a tow truck works a fire truck instead. In dense urban areas, Falck provides full-time, dedicated fire fighters, just like the public fire companies.

The size of the private fire companies helps them save money as well. Falck and Rural/Metro are far larger than municipal fire departments, letting them buy equipment in bulk. Rural/Metro has manufactured much of its own equipment, with considerable cost savings.

In the United States, private fire fighters now protect over one million people across 16 states, with hundreds of small companies serving rural areas and small communities. Here, private fire companies that provide so-called “subscription” fire service charge residents an annual fee of about $100. Although fees are voluntary, most area residents — 75 to 90 per cent — tend to sign up since insurance companies typically charge subscribers about $400 less on home property insurance. While they aren’t required to, many subscription fire companies respond to all fires in their service area, and then hope for the best in billing non-subscribers whose homes catch fire. This policy can be good business, even when the fire companies don’t collect. For one thing, it generates goodwill in the community; for another, because fires are relatively rare, real ones provide excellent training opportunities.

Although no such subscription services are available in Canada, over 70,000 volunteer fire fighters, sometimes working with a small career cadre, still protect homes and businesses in rural areas and large and small towns. Composite forces (volunteers or on-call fire fighters working with a small career force) serve many towns with populations over 100,000 and protect highrise buildings, shopping malls, and industrial sites.

PRIVATE FIRE COMPANIES TEND TO IGNORE CANADA, mostly because labor laws prohibit them from operating efficiently. To increase flexibility, last year the province of Ontario changed its rules to let municipalities increase fire fighter’s workshifts from 42 to 48 hours and allow the use of part-time, on-call, contract, or volunteer fire fighters. But these are only half measures. In the U.S., unionized public fire fighters typically work 56-hour shifts, and private fire fighters 66-hour shifts. Longer shifts allow the same response capability with up to one-fifth less staff. During these long stints, fire fighters live in the fire station and maintain equipment when not answering fire alarms.

Canadian fire fighters have unusually comfortable working conditions: In the

U. S., public fire fighters often work only 10 to 14 days a month, and many take second jobs. For the unions themselves, shorter shifts and more employees mean more members and more bargaining power. Predictably, the Ontario changes drew fire from unions who fear the new rules may persuade municipalities to privatize fire-fighting services, a power they already hold.

In Alberta, a Banff search-and-rescue business did offer to provide fire-protection services for the city’s 10,000 residents. In spite of provincial cuts in funds to municipalities, when city employees opposed the proposal — which offered a saving of almost 50 per cent — city leaders turned it down.

But fiscal pressure makes a compelling case for contracting out. With citizens around the country seeing social services and other municipal government functions getting the ax, sooner or later some communities will question the wisdom of paying sky-high fire fighting costs for mediocre public fire-fighting services. Once a few switch to more efficient private services, the trend may catch like wildfire.

This entry was posted in Regulation. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s