In the fall of 2011, North Naples Fire Commissioner Jim Burke brought together members of the community, who neither knew each other nor had any previous involvement with any of the fire districts in Collier County, to look for possible ways to save the districts money.
The original volunteers included me, Ken Ginsberg, Joe Moreland and John Svirsky. We were later joined by Carson Beadle and George Danz.
We offered to conduct an administrative study of the five independent fire districts and all five boards voted to participate. The study concluded the districts could save the most money, with the least change, by jointly purchasing various products and services. The objective is to obtain better pricing, based on their combined volumes, which will benefit the fire district budgets, and benefit the taxpayers who provide the funds for those budgets.
In September 2012, the commissioners of four of the fire districts (East Naples, Golden Gate, Immokalee and North Naples) voted to establish the Collier Fire Administrative Services (CFAS). The CFAS board is made up of a commissioner from each of the four CFAS fire districts: Chairman Steve Hemping of East Naples, Vice Chairman John McGowan of North Naples, Treasurer Dave Stedman of Golden Gate and Chief Paul Anderson of Immokalee.
Under the leadership of East Naples & Golden Gate Fire Chief Kingman Schuldt and Director Tara Bishop, and North Naples Fire Chief Orly Stolts and Assistant Chief Becky Bronsdon, the initial joint bid tests were for landscape/lawn care, fuel and HVAC maintenance. The landscape bid resulted in a 10 percent reduction from the previous year. The fuel price contract resulted in no price increase over the previous year, and the HVAC bid did not meet expectations. But the fire districts established how they can better work together, and as two or more districts require the same product or service, additional joint purchases will be made.
The study determined the biggest fire district expenditure, other than salary and capital equipment, is employee benefits, mainly health insurance. Each district currently uses individual, fully-insured health care contracts with broker agents in the local area. This is the most common method for smaller employers and is the most expensive way to purchase health insurance. For many years, most medium to large private-sector companies and municipalities have changed to a self-insured model, taking on more control of the risk and reward of health care costs. Under a self-insured model, if employees and their covered family members’ claims are less than forecast, the sponsored organization gets to keep the unspent claims dollars. If they exceed the projected claims forecast, there is a stop-loss insurance policy in effect to cover most of the difference. The profit element of a fully insured health care model is reduced when using a properly designed self-insured model.
Eight health care broker/agent/consultants, including all current insurance representative companies, were invited to present their experience and recommendations to the CFAS board, the chiefs and the other commissioners in April. The two companies showing the most experience were asked to make another presentation in late May. One company was then selected by the CFAS board as the consultant to provide a consortium self-insured model, in which smaller organizations can join together to realize the same advantages that larger organizations currently enjoy.
In a survey of Collier and Lee counties fire districts, plus others in the state, the typical insurance premium increase for the 2013 renewal is 8 to 12 percent. With the introduction of competition into the CFAS Fire District 2013 renewal process, one of the fire districts received only a 4 percent increase from its current agent, while another district received a 20 percent decrease. It appears aggressive competition truly is a factor in insurance renewal pricing, a type of competition that appears to have been quite beneficial this year.
With interest expressed by multiple fire districts and other municipalities statewide in the consortium self-insured model, the CFAS-selected consultant is in negotiations to team with a major health care insurance provider to implement the consortium self-insured model throughout the state.
Competition by CFAS coming into the marketplace during this renewal period helped produce significant savings for some of our fire districts. The Oct. 1 renewal deadline created a challenge for the CFAS consultant to fully establish the self-insured consortium product statewide and to accommodate the needs of the four CFAS fire districts. It is expected that other Florida fire districts and municipalities with a later renewal date will be the first to sign up for the money-saving self-insured consortium plan. The CFAS fire districts will have that opportunity for their 2014 renewal.
The CFAS committee would like to thank the chiefs, administrative staffs, commissioners, firefighters’ representatives and insurance/benefits consultants for the support to bring savings to the fire districts and their taxpayers.
I would like to thank the others on the CFAS committee for their efforts.