News

Financial Incentive Proposed in Wis. Regional Merger

04/12/2013

City of Oconomowoc - The three municipalities that own and control Lake Country Fire and Rescue - the City of Delafield and the villages of Nashotah and Chenequa - appear ready to provide the City of Oconomowoc with a financial incentive to join the regional fire department.

Oconomowoc would receive a $220,000 "credit" as part of a cost-sharing formula that representatives from LCFR proposed during the April 4 meeting of a 12-member committee reviewing consolidation alternatives.

Elected officials in the three communities have indicated their willingness to absorb the cost of the credit in order to help Oconomowoc offset additional expenses it might face as a result of the consolidation.

Under a proposal by LCFR, the four communities would share the cost of the regional department based on each community's population, number of emergency calls, and estimated value of improved properties, which is the same formula presently used to fund LCFR.

City officials have not embraced that formula and have proposed an alternative method for funding the department.

Mayor Jim Daley has suggested that the budgets of the two departments be combined and their total costs be divided among the four communities rather than relying on the formula proposed LCFR. Daley argued his plan would spread the cost savings that resulted from consolidation more evenly among the communities. The credit in the LCFR formula serves two purposes: It helps bridge the gap between the labor costs of LCFR and the Oconomowoc Fire Department, and it reduces some of the "sticker shock" that Oconomowoc would experience during the initial years of the consolidation.

The disparity in payroll costs for the two departments is one of the biggest challenges in establishing a formula that spreads the costs of the regional department equitably across the four communities, according to Gordon Gunnlaugsson, one of Chenequa's representatives on the consolidation committee.

Gunnlaugsson, retired chief financial officer for M&I Bank, played in leading role in the creation of the formula that presently funds LCFR.

There are 10 full-time firefighter/paramedics at LCFR compared to six full-time firefighters - two of whom are paramedics - in the Oconomowoc department.

Oconomowoc's fire and emergency medical services budget would have to be increased by about $250,000, according to the LCFR funding proposal.

The increase is necessary to help pay for the additional firefighters/paramedics that would be needed if the service area of LCFR is expanded by consolidation.

The credit would be phased over a period of years as additional staff is hired.

Gunnlaugsson said the size of the credit might vary according to terms and conditions of the final consolidation agreement.

A $220,000 credit could result in an approximately $43,000 savings for Oconomowoc rather than the $250,000 in additional costs, according to LCFR documents.

Elected officials in the three communities indicated they may be willing to absorb the cost of the credit.

Nashotah Village President Rich Lartz pointed out that each of three communities would experience substantial savings that would offset the cost of the credit if the consolidation were successful. Mayor Ed McAleer said he thought the Delafield Common Council would support the credit if there was a timetable for phasing it out and if it resulted in savings to the city. Chenequa Village Trustee Susan Wilkey predicted her Village Board would support the credit as long as it was endorsed by the village's three representatives on the consolidation committee.

Chenequa's representative on the committee include Wilkey, Gunnlaugsson and Village Board President Robert Foote Jr.