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Lack of fire station pushes some insurance rates up

Thursday, April 5, 2018 by Jo Clifton

Some Southeast Austin homeowners have been receiving bad news from their insurance companies – the rates on their homeowners insurance are projected to rise as much as $1,000 this year.

District 2 Council Member Delia Garza told her colleagues at Wednesday’s budget work session that the reason for the big jump in insurance rates for some of her constituents is the distance from their homes to the nearest fire station.

Those distances are reflected in the average number of minutes it takes to get from the nearest station to a home requesting fire, medical or other emergency assistance from the Fire Department.

Garza, an attorney and former firefighter, sponsored a resolution passed by City Council on March 24, 2016, directing the city manager “to develop a comprehensive plan … during the FY 2016-17 budget process with proposed funding mechanisms and timelines for building fire stations in five areas of immediate need identified by the Austin Fire Association and the Austin Fire Department.”

More than two years later, on March 30, 2018, Garza and other Council members received a memo from Fire Chief Rhoda Mae Kerr outlining a plan to build five new fire stations within the next 10 years, starting with a new station in Travis Country in 2020.

According to Kerr’s memo, there is a departmental and national goal of arrival on a call in eight minutes or less 90 percent of the time. But the city does not meet that standard in five areas: Travis Country, Del Valle/Moore’s Crossing, Loop 360/Davenport, Goodnight Ranch and Canyon Creek.

In the Del Valle/Moore’s Crossing area, for example, the average wait times are from nearly 12 minutes to more than 19 minutes, depending on the exact location. In Travis Country, which is slated to be the next area to get a fire station, wait times can average close to 12 minutes, the memo says, and in Canyon Creek, wait times can be more than 16 minutes.

The department proposes to open one new station every two years, starting with the Travis Country station opening in October 2020, followed by the Del Valle/Moore’s Crossing station in October 2022.

On Wednesday, Bob Nicks, president of the Austin Firefighters Association, explained to the Austin Monitor the rating system that insurance companies use to determine how much to charge a homeowner partially depends on the home’s proximity to a fire station.

Even though Austin has an overall rating of superior, Class 1, from the Insurance Services Office rating agency, Austinites living in the Del Valle/Moore’s Crossing area are rated a Class 10. Insurance rates are set based on that rating, Nicks explained. Speaking specifically about the Berdoll Farms subdivision, Nicks said, “Their insurance has gone up an average of over $1,000 a year. And these are the people that can probably afford it the least.” Garza told the Monitor that another subdivision facing similar rate hikes is called Los Cielos.

Nicks said, “That’s the area we’ve been targeting for years to get a new fire station. I think it’s really sad. I went out to Berdoll Farms neighborhood association,” and someone in the group suggested that they go door to door to collect money for a fire truck. If the neighborhood collected the money, the person said, maybe the city would then build a fire station.

“I said no – you’ve been paying taxes for 10 years and not receiving service. … There’s 1,000 homes there. We aggressively annexed them and didn’t provide service. That’s bullshit,” he concluded.

Nicks also argues that the property the city wants to use for a station in the area is less convenient than property right across the street from Berdoll Farms. However, according to Kerr’s memo, Moore’s Crossing has already donated 6 acres for a new station.

That memo also states that area residents would see a significant reduction in their fire and medical response wait times: “With a station closer than five miles, the current Class 10’s (the lowest rating) will improve to Class 1’s (the highest rating).” That will reduce the residents’ insurance rates by (greater than) 50 percent, the memo says.

The Travis Country area, which is scheduled to get the next fire station, currently has an 11- to 12-minute wait for service, which would be improved to 8 to 9 minutes. However, Travis Country residents will not see an improved service rating with the new station, because the area is already considered a Class 1, according to Kerr’s memo.

In fact, of the five areas listed as needing new stations, the Del Valle/Moore’s Crossing area is the only one that does not have a Class 1 insurance rating. There are 175 homeowners in that neighborhood who could be subject to higher insurance costs because of their distance from a fire station.

According to the memo, the construction costs for the Del Valle/Moore’s Crossing station would be about $11.4 million, with the Goodnight Ranch station, tentatively scheduled for construction by October 2026, at $12.5 million. The land for both the Moore’s Crossing and the Goodnight Ranch stations has or will be donated.

Probably because land costs more on the west side of town, the costs for Travis Country ($14.7 million), and Loop 360/Davenport ($20.5 million) are greater. A new station at Canyon Creek is estimated at $18.1 million, even with a donation of land.

Of course, equipment costs and ongoing operations will add more to the Fire Department’s budget. Total station costs for the five stations are estimated at $86.4 million and the annual operating costs range from about $3 million to about $5 million in their first year.

Financial planners hope to use a public-private partnership to build the stations because it will save the city money. Garza noted that the memo outlining costs projected a 10-year timeline for building the five stations that were needed two years ago. In addition, she told the Monitor, “In 10 years we’re going to need five more fire stations. We were five fire stations behind two years ago.”

Photo by J.Köster (Own work) [CC BY 3.0], via Wikimedia Commons.

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