After more than a half-century and a bitter spring election in which it fought to keep private fire service in the city, Scottsdale-based Rural/Metro Corp. announced Wednesday it would sever key ties with its birthplace.
In what is being called a historic announcement, the emergency services company said it will not renew its fire-service contract with the city when it expires on June 30, 2005. Executives recommended that Scottsdale begin to transition to a municipal fire department.
"It was a hard decision to make, partly because we fought a hard fight," said Kurt Krumperman, president of Rural/Metro's fire and emergency services group. "We had to step back and look at it soberly, at what was best for the city and for us."
The decision was made just six months after Rural/Metro spent more than $300,000 to convince Scottsdale voters to defeat two measures that would have created a city-run fire department.
Scottsdale is the company's crown jewel, representing its biggest contract and about 50 percent of its fire business in Maricopa County. Rural/Metro's ties to Scottsdale began 52 years ago with one firetruck, and has grown to serve more than 400 communities across the country.
But the company can no longer provide cost-effective fire service for residents in Scottsdale, Krumperman said. The decision came after a management team worked for months on a long-term operations plan for Scottsdale, he said.
The announcement affects about 200 firefighters in the company. Krumperman said the long transition time should minimize job losses.
The company also hopes Scottsdale hires Rural/Metro firefighters to staff a municipal fire department, executives and union leaders said Wednesday.
Nineteen months should allow enough time for a smooth transition to a municipal department, city leaders said. The company would stay on an additional year if needed, Krumperman said. Rural/Metro will continue to be headquartered in Scottsdale, he said, and is contracted to provide ambulance service to the city through 2007.
One measure voters defeated May 20 would have required the city to take over fire operations in six months, a prospect that sent city staff scrambling to come up with a contingency plan.
"The good news is we do have a lot of work done. I have people dusting off the transition plan," City Manager Jan Dolan said.
Last year, a private consultant recommended that Scottsdale would need to begin planning for a municipal department within several years. The "Maximus" report said a municipal fire department would eventually be more cost-effective as the city grows.
Mayor Mary Manross, who supported Rural/Metro during the election campaign, said it's "a historic decision for the company and the city." She said she stands by her decision to support the company.
"Had we not defeated those initiatives, our city would have been facing a totally unnecessary financial crisis today to pay for transition costs, and a rushed six-month transition," she said.
Steve Springborn, a Rural/Metro firefighter and local union leader who led the campaign to oust the company, said the "firefighters are absolutely committed," to making a smooth transition to a municipal department.
"It's wonderful that Rural/Metro has put the foresight into what is best for the community and what's best for the citizens of Scottsdale," he said. "I believe they have seen this department and city grow to a size where it is better
operated under a municipal service."
Since the election, a Rural/Metro management team worked on a long-range plan for the company's future in Scottsdale. It became clear over the last several months that Scottsdale — by far the largest city served by the company — no longer fit under Rural/Metro's business model, which is to serve mostly rural communities.
"The bottom line is that Rural/Metro's cost-effectiveness diminishes when the community we serve, and the department we staff, grows to the point that it is a large, urban fire department," Krumperman said.
The Rural/Metro contract for this year is $19.1 million. That represents only about 3 percent of the company's total revenue, and about 2 percent of its total profit, Krumperman said.
The company fought hard to defeat the ballot measures, in part, because the transition time would have been unsafe and financially troublesome to the city, he said.
In an interview with the Tribune in April, Krumperman said the company also wanted to hang onto Scottsdale for sentimental reasons.
"It was our first contract," Krumperman said at the time. "It's our history."