Final Lake Cities Proposed Contract

The City Manager brought the terms for the final proposal for the Lake Cities Fire Services Contract to the council July 31, 2012. These are the terms that the City Councils for Lake Dallas and Hickory Creek expressed agreement to in votes the prior week. At this point, the cities of Lake Dallas and Hickory Creek have not signed the Fire Services Contract, although their vote would seem to be an indication that they are willing to do so on these terms.

So what are the terms that have been negotiated? The changes from the original proposal the City of Corinth sent the other towns are primarily revolving around the costs each city is willing to pay. There were also some other minor changes.

The Fire Services contract has gone through several evolutions due to negotiations. The original proposal sent to the contracting cities was for 4.39 million for operations and 200 thousand for a vehicle replacement fund, totalling approximately 4.59 million dollars. While Lake Dallas and Hickory Creek were reviewing the proposed contract, our staff was able to trim about 30 thousand from the operations budget due to better than expected employee insurance renewal rates. This made little difference in the overal picture with the budget now 4.36 million and 200 thousand for the vehicle replacement fund, making an overall budget of 4.56 million.

Lake Dallas and Hickory Creek proposed that the EMS revenues of 420 thousand should be applied to the cost that was apportioned to the cities. At the same time 245 thousand in debt and legal expenses would be added to the apportioned cost. The Corinth City Council agreed with this, as it was reasonable to share the revenues from a service all were paying for - it would have cost the city of Corinth (and the Corinth taxpayers) about 70 thousand.

Lake Dallas and Hickory Creek then made a demand that the apportioned cost be reduced to 4 million, the vehicle replacement fund be eliminated, the debt and legal cost be removed, and that 470 thousand be revenue shared. Since the imperious wave of the other city's mayor's hands doesn't magically reduce the actual budget of the fire department, such an agreement would have cost the Corinth tax payers between 400 and 500 thousand in additional taxes, for no service improvement. It was at this point that the Corinth City Council basically said no. If we were going to have to charge people a half a million dollars more in taxes, we might as well figure out how to pay for it all and get dramatically improved service.

The offer made to the other cities dropped the vehicle replacement fund (200 thousand) in favor of a leasing program (70 thousand), kept the cost sharing, kept the revised 4.36 million operating cost, and added 40 thousand to the apportioned cost for payment on station 2. Compared to the original contract proposal, this proposal reduced the apportioned costs by some 300 thousand. Over the long term (5 to 10 years) this will ultimately cost all the cities more, as the cost to lease equipment is higher than to buy it cash which the vehicle replace program would have done. Short term all the cities have reduced costs, with Lake Dallas and Hickory Creek saving from 50 to 70 thousand each.