NEW ROCHELLE, NY -- If taxpayers needed a reminder of why New Rochelle needs a fully staffed fire department they got one at 5:50 a.m. this morning in the form of a two-alarm fire that brought every Engine and Ladder company in the City to Kress Avenue and calls for mutual aid to Yonkers, White Plains and Eastchester.
Over the summer a Citizens Budget Committee recommended reducing staffing levels for the New Rochelle Fire Department during overnight hours because the number of calls overnight was lower than calls during the day. The City Manager responded to those recommendations by proposing an effective reduction in minimum manning levels from 27 to 24 firefighters with the result that Ladder 12 will be out of service at times during 2013.
This morning's fire caused significant damaged to the third floor, attic and roof of a three-family house on Kress Avenue. At home sleeping, as an electrical fire sent smoke pouring through the structure, was a grandmother, a mother and her baby. Two residents were not at home. All together, five people were left homeless as a result of the fire.
First on the scene were the men of Ladder 12. Men who might not have been there had the call come next month instead of this month.
Nowhere to be seen were members of the Citizens Budget Committee who were, presumably, safely snuggled in their beds while the men of the NRFD were struggling to lug heavy equipment up six flights of stairs inside the house and up a fully-extended truck ladder outside the house.
Reducing the firefighting capability of the New Rochelle Fire Department is not only a safety hazard for residents and firefighters both but the ongoing, short-sighted degrading of the City's fire-fighting capability will have a negative impact on the City's fire risk rating causing an increase in property and casualty insurance rates for residential and commercial property. In the aggregate, saving a few hundred thousands of dollars in overtime may cause New Rochelle property owners millions of dollars in increased insurance premiums.
Never has there been a more clear cut case of "penny-wise, pound foolish" in the annual ritual of chipping away at the fire department budget while City Council members luxuriate in lifetime medical benefits, the Mayor drives around in a taxpayer-provided SUV and a woman is paid tens of thousands of dollars a year to remind municipal employees to throw their aluminum cans and newspapers in blue bin not gray bins.
As municipal budgets are squeezed throughout Westchester County, essential services provided by fire departments, police departments and sanitation departments are under increasing financial pressure. When it comes to reducing manning in local fire departments, there is often discussion among government officials about a municipality's "ISO Rating". Yet few residential and commercial property owners have ever heard of an ISO Rating. Fewer are aware of how the ISO rating of their town or city impacts the cost of owning property.
So what is an ISO Rating and why should a property owner care?
The term "ISO Rating" is a colloquialism which refers to a measure of risk, on a scale of 1 to 10, that is assigned to a municipality by a company called Insurance Services Office or "ISO" located near Syracuse, NY. The rating is formally known as a Public Protection Classification ("PPC) which is assigned by ISO analysts. The PPC is determined by analyzing information collected on municipal fire-protection efforts across the country against ISO's Fire Suppression Rating Schedule ("FSRS"). Class 1 indicates the highest level of property fire protection and Class 10 indicates that the area has no property fire protection at all. The company maintains data on 47,000 fire-response jurisdictions throughout the United States.
ISO is a subsidiary of Verisk Analytics, an international company that offers products and services that help customers — mainly in the property/casualty insurance industry — define, measure, and manage risk. The company's corporate headquarters is located in Jersey City, N.J. According to the company's web site, their mission is to help risk-bearing businesses understand and manage their risk. In short, their clients are insurance companies who write policies against various types of property and casualty risk including fire risk.
The lower a community's "ISO Rating" the lower the premiums charged by insurance companies for fire insurance.
The rating system is what one fire risk expert recently described as an "open book" test. ISO will work with municipalities to advise them on how to improve their classification. If a community's ISO rating is in danger of going up, ISO will delay publication of the new rating by 90 days to give the community an opportunity to correct problems. If the community does not make changes after 90 days the new rating will be issued. To that extent, the ISO rating functions in a manner similar to a municipal bond rating. In the bond market, Moody's, Standard & Poors and Fitch function the way ISO does but for rating credit default risk.
The ISO Rating has an indirect impact on the cost of property insurance. Almost every property and casualty insurance company in the United States uses ISO Ratings to determine both the availability and price of insurance throughout the country.
One of the largest fire departments in Westchester County is the New Rochelle Fire Department. It is also one of the oldest professional fire departments in the county. From 1861 to 1901, the department was all volunteer. Starting in 1901, the department hired employees, mostly to clean up stables back in the day when fire engines were drawn by horses.
The department was organized as a fully professional fire department in 1927. The decision to form a professional department was driven primarily by the business community which realized it was cheaper to pay for trained, professional firefighters than pay higher insurance rates on commercial property.
From 1927 until 1997, the City of New Rochelle has an ISO Rating of "3".
Twenty years ago, the City of New Rochelle made a concerted effort to improve the City's ISO Rating. In 1997, New Rochelle was rated a "2" for the first time.
The impact of the ISO rating is more directly felt by commercial property owners although the change is smaller. An increase or decrease in a single rating point can cause an increase or decrease of about 4% of the cost of fire insurance. Each insurance company will change their rates based on their own formulas so there is no one percentage increase for all policy holders for all companies.
For residential property owners, an ISO rating will not have an impact within a certain range (1-3, 3-6, 7-10). So, going from a "2" to a "3" will have little or no impact. When there is a change outside the range, however, the impact is far larger -- about 8% per rating point instead of 4% per rating point.
With New Rochelle currently rated a "2", there will be little or no impact on residential property owners is New Rochelle's rating were to go to "3" but commercial property rates will increase by about 4%.
Should New Rochelle's rating go to "4", commercial rates will increase by 8% but residential insurance rates will jump by a whopping 16%.
White Plains has the highest rated fire department in Westchester County with an ISO Rating of "1". Just over 50 communities in the United States have an ISO Rating of "1". In New York State there are just two, White Plains and Syracuse, NY.
There are several factors which drive an "ISO Rating" for a community.
The quality of the fire department accounts for 50% of the rating. That New Rochelle has a highly rated, well-trained professional fire department is a large part of the reason the community has had a "2" rating since 1997.
Water pressure in a community accounts for 40% of the rating. New Rochelle's hydrants are owned by United Water of New Rochelle. There has been some concern about the level of water pressure in New Rochelle as the City has expanded without upgrading its water mains and pipes.
Communication accounts for 10% -- how fast it takes for a person to report a fire before the fire department is dispatched to the scene. The New Rochelle Fire Department is dispatched through a centralized county communications system.
Communities are evaluated every few years. The Insurance Services Office has scheduled another evaluation of New Rochelle for this year but was been reportedly awaiting the results of the current budget negotiations and testing of fire hydrant water pressure by United Water.
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