Los Angeles Fire Department - The Financial Story
There is much more to a financial report than just debits and credits. If you know how to look, you will find an organization’s collective aspirations over time, the goals and directives that shape an entity’s success or failure — all there in dollars and sense.
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The financial story of the Los Angeles Fire Department is fascinating. It reveals the triumphs and failures of a once-championed Department that finds itself beset with criticism and whispers of scandal. Let’s review how LAFD got to where it is by the numbers.
A Fire Department is like an Army. It can be called into battle at any time, often in the middle of the night. When the bell rings, the firefighters leap into action, mount their engines, and fight against a usually intractable foe. (Is it any wonder that Firemen have one of the highest incidents of heart attacks of any industry?)
For LAFD, these calls are not just for fire but also for Emergency Medical. An accident on the job or a health emergency at home can often be addressed by those LA Emergency Units — fire personnel specially trained as paramedics.
These two functions, fire and medical, are the essential mission of the Fire Department. There is no discretion; lives may be at stake, and the Department must respond.
LA City’s Financial Reports (found here: https://controller.lacity.gov/budgets)
show the formidable challenge the LAFD faces. These two functions, fire suppression and Emergency Medical, make up roughly three-quarters of the Department’s 2024 Budget, and, as we’ve noted, they are non-discretionary. In the 2024 Budget, the City spent $633 million for just these two functions (fire and emergency medical), while the total Department expenditure came to $837 million.
Digging further into the numbers, an extremely worrisome trend emerges.
Looking Back At The Last Decade
During the past 10 years, the cost of the Department’s two principal functions diverged dramatically. While the cost of fire suppression rose by about 26%, which is about in line with inflation, the cost of emergency medical services rose by an astounding 80%. Although more research is required, this jump in medical expenses is consistent with the nationwide jump related to the COVID-19 Pandemic.
In any event, it should have been evident to the Los Angeles Financial Officers and Department Heads, including the Fire Chief, that they had a significant problem on their hands, an issue that needed addressing immediately.
One suggestion would have been to outsource at least part of this responsibility to the private sector. Releasing the Fire Department from at least a few alarms could have saved money and precious human resources. Regrettably, there is no indication that outsourcing was even considered.
Instead, LAFD, the City Comptroller, and the Treasurer elected to freeze non-essential expenses, which was easier.
The fire prevention budget was frozen at $41.52 million for the fiscal years beginning in 2023, 2024, and 2025. Fire Prevention includes functions such as brush and hillside clearing, a major contributor to recent fires.
The Department also froze the Procurement, Maintenance, and Repair Budget at $27.62 million. However, a recent entry in the Budget bumped this line item to $40.82 million. Someone recognized a maintenance problem. The New York Post reports that 75 fire trucks could not respond to the recent fires because they needed repair. Unfortunately, the 2025 Budget drops maintenance and repair back to $29.79 million.
Looking Forward
The Los Angeles Fire Department’s financial future is clouded. Tough decisions must be made, resulting in some very unpopular solutions. Hiding increasing expenses behind frozen non-essential items is no longer an option.
Here are three items that the LAFD’s financial report highlights as needing immediate attention.
Emergency Medical — it is clear that the Department needs help in this sector. Expenses up 80% in ten years are not sustainable. I’m not an expert in municipal medical response, but I don’t believe that most cities provide this service, at least not to the extent that Los Angeles does. City management needs to consider reducing this burden on the Fire Department.
Fire Prevention—A lack of access roads, fire breaks, and overgrown underbrush consistently contributes to California wildfires. Once again, in recent conflagrations, fingers have been pointed at the lack of fire prevention. Dimes spent prohibiting future fires can save dollars in fighting them. Long-term planning would prioritize Fire Prevention.
Procurement, Maintenance, and Repair. It goes without saying that fire trucks and equipment that need repair and cannot leave the station are useless. This is a scandal of the first order and needs to be corrected immediately.
Where’s The Money?
Budgeting is never easy. It often involves choosing between two worthwhile goals. This is especially true for the City of Los Angeles, which must choose between multiple valuable projects. Some may have to be cut.
This is a propitious moment to make some of those decisions, as the fundamental value of fire suppression is on everyone’s mind.
PS
Here’s a suggestion: perhaps the City should consider freezing some of its “Special Purpose Funds, “ which, at $2.11 billion, are 250% larger than the Fire Department’s Budget. The Special Purpose Funds are far and away the largest expense item in the City’s Budget, and the law of big numbers suggests that this would be an ideal place to look for additional revenue for the Fire Department.