9 key questions you must be able to answer during budget negotiations
People expect more than an impassioned plea; they want data-driven details
The impact of the COVID-19 pandemic will, undoubtedly, be with us for years to come. What exactly this will mean for first responders and public safety is unclear; however, what appears to be certain is the adverse economic impact to communities. While it is difficult to predict what budgets will look like in the future, it is reasonable and responsive as organizational leaders to sharpen the pencil and begin to look at bottom-line dollars and cents.
Our duty to the public: Early and intentional engagement
Responsible and accountable leaders must recognize the social contract they have with their communities. In many communities that support paid fire service organizations, firefighters often make well above the median income. This means taxpayers are continuing to support the cost of emergency response in their communities because they believe in the intrinsic value the fire service provides.
We are the arbiters of that sacred trust and responsibility. Being accountable with our budgets is not only an obligation but also a foundation of community trust.
Fiduciary responsibility requires us to analyze some critical information that is on the horizon, long before we arrive there. Though many of our communities are facing similar challenges (e.g., climate change, housing crisis, opioid epidemic, homelessness, loss in revenue), the fire service is uniquely positioned to be at the forefront of many of these issues within our communities.
Each of the aforementioned issues gives the fire service the unique privilege to address the effects of these challenges on the community. Early and intentional engagement with community members, stakeholders, governing boards and city councils are critical to fostering meaningful relationships that place the fire service at the center of community value. Understanding community needs and the application of meaningful value will pay dividends when budget restrictions and allowance are considered.
Needs vs. wants: It’s in the numbers
So, if we are cutting the budget, how deep can we cut before we are decreasing our service to the community and safety of our organizational membership? This question is the crux of all budgetary woes. If the sky was the limit, what would our organization look like? Since the likelihood of that ever happening is somewhere near zero, we need to critically analyze what we need and what we want to successfully and safely deliver service – and then do so at the level the community expects.
Fight for what you want now, or fight against what you didn't want later. Passionate budget pleas that are not founded in data-driven, evidence-based discussion will fall on deaf ears. The “city will burn, and people will die” motif has been well-rehearsed but has long lost its relevance as a standalone talking point. People expect more than an impassioned plea.
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Budgetary restrictions and reductions can be seen as finding opportunity in adversity, but only if we use the right lens. If you are fortunate enough to have a firefighter’s union, their leadership can be a great ally. Additionally, the guidance provided by the NFPA standards should be leveraged as best practices and desired (defendable) positions for the community and organization. Honest, civil dialogue should rule the day. It is a painful cycle to be perpetually defending your budget. The process shouldn’t feel like a hostage negotiation.
“Nothing is more powerful for your future than being a gatherer of good ideas and information. That’s called doing your homework.” – Jim Rohn, entrepreneur, author and motivational speaker
The critical questions
Going into budget talks and negotiations, we should responsibly – and reasonably – be able to navigate the critical questions that will arise. You would do your organization and community a disservice if you answer key questions with a shrug of the shoulders and, “I’ll get back with you.” You must be ready to justify and demonstrate value for every dollar your constituents share with you.
A few extra tips: Don’t try to dominate the discussion, present condescending information, or attempt to relitigate the past, and don’t try to impose the fire service interest as community interest.
Here are nine critical questions that you must know the answers to so you can respond appropriately during budget talks:
1. How efficiently are you managing your current budget? This will require data-driven, evidence-based assessments. Empirical evidence is required. No one wants anecdotal stories in an attempt to support budget demands. Be willing to entertain budget negotiations with good faith and honest willingness to compromise in order to achieve a win-win solution.
2. How easy is it to connect the dots in your budget? Do line items accurately reflect expenditures? Color-coded graphics can help illustrate budgetary commitments. These illustrations are invaluable at providing contextualized references in a sea of numbers.
3. How much red and black ink is at the bottom of the page? In simple budget terms, operating in the black is a desired state; conversely, operating in the red is unsustainable. When reviewing past budgets, ask the question, by what margin is your organization and community operating? It has always been a desired state to demonstrate budget surpluses or rainy-day funds. However, for many communities, these have been replaced with loans and deficit spending. Where is your organization and community on this spectrum? Financial prospectus reports that are in the black will have favorable consequences for the community and long-term organizational health.
4. What are your staffing levels? Are you facing cuts? This is where data-driven decisions become critical. This is where our organization's management information systems become paramount. Many of our organizations’ analytical and policy changes related to sustainability involve systems, and their interrelations with one another. What metrics are you using to determine value and deficits? Are you fully utilizing NFIRS reporting, rescue net, Intergraph and GIS modeling? If management systems are correctly utilized, they do the heavy lifting on the front end. Make sure your report writers and officers can see the connection between report accuracy and completeness as it relates to demonstrated value and bottom-line dollars and cents.
5. Are you being asked to look at different deployment or service models? In almost every case, proactive approaches rule the day. Legwork and homework will be your allies in demonstrating competence in budget negotiations. Illustrate to the community how response times are associated with performance and outcomes. Highlight how budget changes will affect the department's response times and ultimately, outcomes.
6. Are you facing the decommissioning of an apparatus or station closures? This requires an all-hands approach, involving the community, organization and community leaders to ensure that this decision is in the best interest of the community and the safety of its citizens and first responders. A very useful tool for negotiating can be found in performing impact analysis. This analysis can offer a tangible visual representation of how changes could demonstrate enhanced or reduced service. Tableau is one example of impact analysis software. Finally, is this a temporary or permanent change or closure? What will call volumes look like in adjoining stations or response areas? How will this potentially affect your standards of cover? The argument that “things will get worse” offers zero returns.
7. Before decommissioning an apparatus or closing a fire station, have considerations about restructuring or redeployment models been discussed? Redeploying resources can offer cost-saving benefits that may in fact better serve the community's emergency response needs.
8. Are your budgetary plans and data that you are presenting bulletproof? They better be. Providing guesstimates or a fortune-teller’s estimate will not suffice. When you say an apparatus will cost $1 million, it better cost $1 million. This generates fidelity for future budget talks.
9. Have you considered working across the aisle with other departments and agencies to reshape responsibilities within your community? There is a strong argument that you will find many opportunities to bring value-added and mutually beneficial solutions to the discussion. Sharing responsibilities and dual-purposing offices and equipment with other city departments may not only be worthwhile, but it may also find efficiencies where inefficiencies exist.
The time is now
Ultimately, what we are doing – or not doing – right now will reverberate throughout our organizations and profession for many years to come. Responsible, proactive and engaged attention to budgets needs to be done now. Our community and organization's safety and solvency are at stake. Leaders, it's time to hop in the driver's seat; we cannot afford to just be along for the ride. Remember, when it’s budget negotiation time, nothing is agreed upon until everything is agreed upon.
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