Fire dept. cuts could mean higher biz insurance rates

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Published on 03/29/2012 - 10:05 am

Written by Charles McCarthy

Fresno businesses and firefighters agree that commercial insurance rates could rise citywide if budget woes cut deeper into Fire Department response levels.

On a scale of 1 (best) to 10 (worst) Fresno's firefighting response is now rated a 3 by the New Jersey based Insurance Services Offices Inc. The rating hinges on water availability, distances from fire stations along with Fire Department equipment and manpower.

“If they have to cut personnel then obviously there could be a ripple effect. The ripple effect could hurt business in a big way,”  said Al Smith, president and CEO of the Greater Fresno Area Chamber of Commerce, said after last week's warning of the need for deeper city budget cuts.

San Diego based Southern State Insurance Services warns property owners in an open message to take more risks for the business but not for the business property. Any loss or damage to the property could stop business for days or months. Major damage could close the business forever.

Contacted by telephone, a Southern State representative who didn't give his name confirmed the company's business warning.

In Fresno, Smith said, “Anytime you reduce the police force or fire department personnel, that's going to have a negative effect on business.”

Michelle Barnett at Fresno's Barnett Insurance said she didn't think that homeowners' and dwelling rates would feel much of an impact from a 3 or 4 ISO rating.

One Fresno insurance agent who didn't want his name used said that any insurance rating 1 through 6 wouldn't change Fresno rates drastically. The difference between a 3 to 4 rating and a 5 or 6 rating would be minimal. He noted that the bankrupt city of Stockton held a 1 rating despite its budget woes. This was due to the quick availability of fireboats along Stockton's waterfront business area.

Established in 1877 in response to a rash of fires, many of which leveled wooden business buildings, Fresno Fire Department counts itself one of the nation's oldest.

Fresno Firefighters Union Local 753 president Kirk Wanless is also an active-duty fire captain. He said last week that if the Fresno department is forced to cut drastically: “My gut feeling is that we would be treading into territory that would be 5 (ISO rating). We are the lowest staffed fire department in the nation ... certainly on the West Coast.”

Fresno has an average of two fires daily that put people out of their homes or “businesses out-of-business,” Wanless said.

With a nationwide ideal of four firefighters on an engine or ladder truck, Fresno is below the national standard of having 15 firefighters on-scene within eight minutes of dispatch on 90 percent of fire calls. In Fresno, the average is 24 percent of the calls, he said.

“The more people you have, the more effective you are,” Wanless said.

Statewide safety laws prohibit firefighters from entering any structure until at least four firefighters are on-scene. Firefighters are allowed to violate this “two-in, two-out” rule when a life is in-danger.

In 2011, Fresno's union firefighters voted to support changes in the city contract which would cut their salaries and save the city's general fund an estimated $1 million. The department reported a decline of some 17 positions and no active recruiting at this time.

The one-year 2.5 percent wage cut expires in June 2012. Regular safety inspections of business facilities have reportedly dropped.

Before this week's Fresno budget meetings, Interim Fire Chief Micheal Despain said he believes that individual insurance providers deal differently with ISO than they did with the somewhat doctrine-setting National Board of Fire Underwriters. Today's insurance providers still do consider ISO ratings and the effect on commercial rates.

Fresno, he said, has risen from a 4 rating before 2007. The city now has on-duty 19 engines, five ladder trucks, two water tenders, two brush-fire rigs, two Hazmat rigs, two patrol units, one rescue truck two personal water craft and two aircraft rescue units stationed at Fresno Yosemite International Airport.

“Typically, the majority of the units all respond with three firefighters,” Despain said.

Three of the city's 19 active fire stations have four firefighters assigned. The engines go out the door with three firefighters aboard and the fourth firefighter responds with an individual emergency unit also housed in those stations, the interim chief said.