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Cost Saving Presentation document sample
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Conducted by:
St. Joseph’s University
Public Safety and
Environmental Protection Institute
May, 2004
Contents
Introduction 3
Project Objectives 4
The Process 4
Cost Saving Formula and
Presentation Model Review/Testing/Validation 7
Feedback 8
Outcomes 8
Conclusion 9
References 10
Exhibits
Figure 1. Flowchart of Project Process
Figure 2. Instructions and Cost Savings Calculation Model for an Emergency
Service Organization
Figure 3. Power-point/slide model presentation for an emergency service
organization to use with elected leaders or public groups to promote their service
and value was created.
Figure 4. A projection of annualized savings of volunteer Emergency Service
Organizations within the United States as completed.
NVFC Emergency Service Organization Cost Savings Project 2
Introduction
The National Volunteer Fire Council (NVFC) is a non-profit membership association
representing the interests of the volunteer fire, emergency medical, and rescue services
provided in the United States. The volunteer segment of fire and emergency service
comprises 74% of the total fire and emergency service response capability in the United
States.1 The members of these agencies are first on the scene of a fire, natural or man
made disaster, or terrorist incident. While call volume has continued to rise, the number
of volunteer emergency responders has declined over the past two decades by ten to
fifteen percent (10%-15%); however, based on the referenced figures above, the numbers
of volunteer firefighters actually increased from 784,700 at the time of the last NVFC
report, to 816,600 at the time of this report.
Prior studies have estimated that the national value of service provided by America’s
volunteer emergency responders at $36.8 billion, annually. In addition, several states
have conducted studies to determine the annualized cost savings of volunteers. However,
a reliable, updated, national savings figure is not available. In addition, on a local level,
the fire department/emergency medical service agency needs a tool to aid them in
developing their cost-savings which can then be shared with the city council, town
managers, citizens, etc. Lastly, the methodology to determine actual savings has varied
and warrants a common, consistent approach to developing such calculations.
The project was conducted by the Public Safety and Environmental Protection Institute of
St. Joseph’s University’s Graduate School of Public Safety and Environmental
Protection. Department Chair, Dr. Vincent McNally; Master’s Program Coordinator
Robert Drennen M.S., CFPS; Adjunct Professor Dr. William F. Jenaway; and students
Michael McNally, Bryan Bortnichak, and Greg Robinson, students at St. Joseph’s
University, Philadelphia, Pennsylvania. All members of the project team are volunteer
firefighters.
1
U.S. Fire Department Profile Through 2002, National Fire Protection Assn., page 1.
NVFC Emergency Service Organization Cost Savings Project 3
The National Volunteer Fire Council Foundation supports the initiatives of the NVFC
through research and education projects, such as this initiative.
Project Objectives
The National Volunteer Fire Council established a “Statement of Work” for this project,
which provided the impetus for this project. The scope of work established two primary
objectives:
1. “Develop a tool that will determine the national and local
cost savings of a volunteer emergency service organization.
Local departments can use the tool to then educate legislative
bodies, local groups, etc. regarding the value of the emergency
service organization.”
2. “On a national level, develop a national Savings figure to
educate Members Of Congress and national organizations
regarding the amount of funds volunteers save taxpayers each
year and to demonstrate the need for Investment in emergency
services.”
Both objectives were completed.
The Process
There were several approaches considered to achieve the project goals. Each approach
was reviewed with consistency to the “Statement of Work” (as referenced above)
established by the National Volunteer Fire Council.
The ultimate process established to accomplish this project involved a variation of a basic
decision-making model and utilized the criteria provided for in the NVFC “Statement of
Work”. Twenty distinct steps were completed in this process.
This involved simultaneous actions of researching issues and potential emergency service
organization (ESO) variables for volunteer organizations; and researching various models
of presentations identifying the value/cost savings of volunteer emergency service
organizations. Upon researching issues and potential ESO variables, a cost saving model
was developed utilizing an excel model, tested and modified. Upon completing research
of various models of presentations identifying the value/cost savings of volunteer
emergency service organizations, a Powerpoint presentation was created of a sample cost
saving presentation, it was tested and modified. These simultaneous activities served as
the basis for conducting field test #1 of the models.
Once we conducted a basic test we decided that the models were functional and made the
necessary corrections. We then did a field test with actual emergency service
organizations completing the models.
NVFC Emergency Service Organization Cost Savings Project 4
Based upon the results of field test #1, the Powerpoint model was modified, finalized for
use and prepared for presentation to the National Volunteer Fire Council. Once we
conducted a basic test we decided that the models were functional and made the
necessary corrections. We then did a field test with real companies completing the
models.
The Excel model was modified, based on field test #1 and field test #2 was conducted.
The second test went extremely smooth and we could start to use the completed model to
start forming our projection of the national savings of volunteer firefighters. As test #2
was completed, two projects were initiated; first to modify the Excel model, finalize for
use and prepare for presentation to the National Volunteer Fire Council, and consolidate
savings data identified, compare findings to data researched from other state and national
volunteer saving studies, and develop and release a hypothesis on nationwide savings to
the National Volunteer Fire Council.
A flowchart of the project process is graphically represented in Figure 1.
It became quickly apparent that an extensive number of variables could be used. The
recommended variables included
- Area protected
- Population protected
- Number of stations
- ISO classification
- Current number and type of apparatus
- Number of active volunteers (involved in fire ground operations)
- Number of active volunteers (involved solely in administrative support
functions)
- Minimum wage
- Average number of hours volunteered by both categories of active volunteers
- Number of residents protected
- Starting salary for career personnel in the vicinity
- Who owns the vehicles and how are funds secured to purchase vehicles
- Who owns stations and how are funds secured to purchase and maintain
stations.
- Number of firefighters involved in and income from fundraising (if
department uses fundraising a way of raising funds)
- Current tax rate for fire protection (if funded by direct tax)
- Current funds provided by Governmental agency (if not funded by direct tax)
- Operating expense of department
- Current fire department budget
- Nearest governmental agency with full time career personnel
- Budget of department with career personnel.
The practical applications and results identified a significant challenge in the integration
of multiple variables into a final cost savings equation. At the conclusion of analyzing the
NVFC Emergency Service Organization Cost Savings Project 5
data, it was found that the consistently true savings among organizations, that could be
quantified, were actually personnel costs, and only personnel costs. Thus subsequent
models for benchmarking purposes and consolidated savings calculations was
personnel costs and related benefits. Figure 2 represents the actual variables found
functional in this process.
If we are to compare firefighters equally throughout the country, we must compare
“apples to apples”. Thus to compare true savings we must compare the true localized
savings. The baselines integrated into the model were:
1. All staffing would be comparable to what a fire department would have
to provide, if it were a totally career service. NFPA 1710 was the
standard used to determine the staffing needed to support all of the
apparatus of the fire company, making the assumption that the ESO had
apparatus that was not “excessive” to meet the local needs.
2. Where there was no career staffing in the community, respondents were
directed to use the salaries of comparable ESO’s in the area. Where no
career staffing existed in the area, the ESO was directed to use law
enforcement salary structures in their area for the model.
3. While there could be differences in equipment among career,
combination and volunteer organizations, it was clear that a consistent
approach was necessary. Developing a consistent approach ultimately
negated any value to either volunteer or career organizations with
respect to equipment procured and related savings. In fact, there may be
more frequent purchases of apparatus in volunteer organizations raising
their costs; while career organizations may be purchasing protective
clothing or smaller equipment more frequently or for each member, thus
raising their costs. As a result of the inability to establish a benchmark
for these situations that could be comparably used, they were not
considered as key factors in true savings.
As it relates to staffing, to be consistent, the model hypothesis suggests that if career
staffing were used, the volunteers would staff apparatus to the same level suggested by
NFPA 1710. While the numbers can be argued, they are consistent with NFPA 1710 and
provide a consistency in comparison.
NVFC Emergency Service Organization Cost Savings Project 6
Research issue and
potential Emergency Develop Modify
cost saving Conduct basic test
Service Organization Excel
model of Excel model
variables for volunteer model
organizations
Research various Conduct field
models of presentations Create Conduct basic test #1 of
Identifying the value/cost Powerpoint test of Modify Excel
savings of volunteer cost saving Powerpoint Powerpoint and
Emergency presentation model model Powerpoint
Service Organizations models
Finalize Modify
for use Powerpoint
PRESENT TO NVFC model Modify Excel model
per comments based on field
test input
Finalize Modify Excel model
Research various prior based on field
Develop volunteer savings for use
test input Conduct field
and studies and results test #2 of
release Excel
hypothesis model
on nationwide Compare Consolidate savings
savings findings data identified
Figure 1 – Flowchart of project process
Cost Saving Formula and Presentation Model Review/Testing/Validation
The data inquiry and polling involved a nationwide database as provided by the National
Volunteer Fire Council. Additional data was provided from U.S. Fire Department Profile
Through 2001, Fire Protection in Rural America, Tax Savings and Economic Impact of
New York State Volunteer Firefighters, Funding for Pennsylvania Emergency Services
Beyond 2001International Association of Fire Chiefs Volunteer and Combination:
Officers Section
The original scope of work stated that three (3) volunteer and (3) combination fire
departments would serve as pilot departments while developing and finalizing the
formulas. In reality, it was necessary to use a more extensive baseline of data which
resulted in:
Round #1 involved 95 organizations
Round #2 involved 105 organizations
Final testing involved 5 organizations
For a total of 200 organizations.
NVFC Emergency Service Organization Cost Savings Project 7
Feedback
We evaluated the following comments……………….
“Should I then enter the number of fire ground people in this area as will or are
there departments that strictly have fundraising staff.”
“The current expense per residence and per business numbers seem to be rather
high if you are trying dividing it out per residence and business. If you are looking
at just separating the business expenses from the residential them I would remove
the “per” in each line to help in the perception it gives.”
“By the calculation I am assuming you are looking at the difference in businesses
vs. residential and not individual properties or households.
“My city fathers and rural boards know that the volunteer provide great savings to
the tax payers and putting a value on that is good information but I don't think
they would ever approve the saving to going to an all volunteer fire department.”
“I think it over calculated the number of career firefighters needed to serve the
city, it appears to have done this on the number of apparatus we have.
“It just seemed to me that 76 people for our area is a bit too many to be able to use
the figures for any kind of presentation.
and acted appropriately on each, recognizing that some further explanation may be
needed, or changes to the model required.
And felt confident, based on these…………………………….
“I do believe I will be able to use the Powerpoint presentation and look forward
to doing so.”
“Overall this will be a good tool to most departments”
“I think this is a good idea and a great attempt to show the volunteer worth to our
communities.”
“Over all I found the form easy to use”
“Although I do not agree with some of your numbers, The bottom line is within
$10,000 of the estimate for a full-time department I completed for my town board
in 2002. It took me about a month to put that together.” I completed your study
in about an hour.”
“I think the presentation program can be used if the figures are realistic.”
“I was surprised with the outcome. Made me set up and look at the numbers and
the savings the volunteers provide”
Outcomes
There were three distinct outcomes from this project, all of which are now available on
the NVFC website (www.nvfc.org).
1. A model was created to calculate cost savings of an Emergency
Service Organization.
(Figure 2)
NVFC Emergency Service Organization Cost Savings Project 8
2. A model Powerpoint/slide presentation for an emergency service
organization to use with elected leaders or public groups to promote
their service and value was created.
(Figure 3)
3. A projection of annualized savings of volunteer Emergency Service
Organizations within the United States as completed.
(Figure 4)
Conclusion
We are confident that the Cost Savings model will be a valuable tool for companies to
easily quantify their worth. They can use the information to create a presentation to city
officials or their board of directors. The Power-Point presentation is just an outline to
help the department and can be customized to fit individual needs.
To make sure that our numbers in the model were reasonable, we conducted a number of
tests to compare the numbers. We used four different sets of figures to come up with an
average to compare our figures to. The numbers we used are:
Pennsylvania New York Delaware NVFC - NVFC –
2001 2004
Annual
Savings $2.3 Billion $2.2 Billion2 111.3 Million $36.8 Billion $37.2 Billion
#
Firefighters 70,000 109,678 1,675 784,700 816,600
In Study
Average
Savings $32,857 $20,059 $66,448 $46,897 $45,500
When we conducted our tests the total average savings from the completed models was
$45,500. The prior results identified from other studies as noted above, was $42,000.
This substantiates that the numbers resulting from our research are generally consistent
and completely reasonable (considering more variables and cost per year increases) and
demonstrates that our hypotheses and model works.
The second use for our model is to project the national value of the volunteer fire service.
We did this by taking the average that we had found from our tests and applied the per
2
As this project was being completed, the Fireman’s Association of the State of New York
released an update on this information that savings are now estimated at $2.9 Billion. Details of
the numbers of firefighters and annual savings per member were not available.
NVFC Emergency Service Organization Cost Savings Project 9
fire fighter savings to the estimated number of fire fighters in America. We calculated it
like this:
Model Average $45,500
X # of FF 816,600
= $37.2. Billion
The 37.2 Billion dollars is our prediction of what it would cost annually if we had to
replace all volunteer firefighters with career staffing.
References
Carpenter, Ed, “Volunteer Firefighters Save NYS Taxpayers Over 2.9 Billion”, Volunteer
Firefighter, FASNY, Spring 2004, Page 1.
Karter, Michael, “U.S. Fire Department Profile, through 2002”, NFPA, October, 2003.
National Volunteer Fire Council, “Fact Sheet”, NVFC, Washington DC, 4 pages.
Pennsylvania Fire and Emergency Services Institute, “Funding for Pennsylvania
Emergency Services……Beyond, 2001”, PFESI, Harrisburg, PA, 2001
Volunteer & Combination Officers Section, IAFC, “A Call for Action”, IAFC,
Washington DC, March 2004.
NVFC Emergency Service Organization Cost Savings Project 10
SAINT JOSEPH’S UNIVERSITY
MISSION STATEMENT
Saint Joseph’s University is a nationally recognized Jesuit institution which was founded
in 1851 in the City of Philadelphia, Pennsylvania. The University provides
comprehensive academic opportunities for students in both undergraduate and graduate
level programs.
With a growing reputation for academic excellence, Saint Joseph’s University has earned
recognition on a national level with ranking among “America’s Best Colleges” by U.S.
News & World Report in addition to placement as “very competitive” in Barron’s
Profiles in American Colleges.
Saint Joseph’s is a member of the American Council on Education, the National
Association of Independent Colleges, the American Library Association, the Association
of Liberal Arts Colleges of Pennsylvania for the Advancement of Teaching, the
American Association of Colleges for Teacher Education and the Middle States
Association of Colleges of Business Administration.
PUBLIC SAFETY AND
ENVIRONMENTAL PROTECTION INSTITUTE
The mission of the Public Safety and Environmental Protection Institute is to provide an
umbrella organization under which continuing education programs are offered and
training grants are pursued.
Established in 1980, the Institute has been at the forefront in providing for continuing
education in the areas of emergency management, disaster planning and occupational
safety. The Institute is committed to developing and presenting appropriate training
programs to improve the quality of life for people who work in the corporate world as
well as the government sector.
The cornerstone of the Institute is built on this reputation by remaining highly visible
within the local emergency response community through hosting, sponsoring and
participating in training and educational initiatives.
Working with VFIS, the SJU team developed several formulas to determine local and
national economic impact of volunteer and combination departments to taxpayers. The
project was facilitated thru Saint Joseph’s University by VFIS.
NVFC Emergency Service Organization Cost Savings Project 11
Figure 2.
Instructions and Model
to calculate cost savings
of an
Emergency Service Organization.
NVFC Emergency Service Organization Cost Savings Project 12
Figure 3.
Model power-point/slide presentation
for an
emergency service organization
to use with
elected leaders or public groups
to promote their service and
value that is created.
NVFC Emergency Service Organization Cost Savings Project 13
Figure 4.
Presentation for projection
of annualized savings of
volunteer
Emergency Service Organizations
within the United States.
NVFC Emergency Service Organization Cost Savings Project 14
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