Synopsis: Feasibility of Fire Protective Services within Apex Mountain Resort

Transcription

1 Synopsis: Feasibility of Fire Protective Services within Apex Mountain Resort Introduction The following document contains excerpts from the 2006 report Feasibility of Fire Protective Services Fire with regard to Fire Insurance Grading and is intended to summarize the information provided within that report for the use of the Regional District of Okanagan Similkameen, and other interested parties and stakeholders. At the request of the Regional District of Okanagan Similkameen (RDOS), a physical inspection of Apex Alpine Mountain Resort was conducted in order to assess the feasibility of providing fire protective services within the resort area. A feasibility assessment of the same area was also conducted by Alexandre Tri-Lin and associates. However the scope of this assessment was to focus on the development of fire protective services that would qualify for fire insurance grading. The start-up, capital and ongoing costs to operate a fire department service are considerable when considering the costs of site acquisition, fire hall construction, apparatus and ancillary equipment purchase, communication requirements and operating budget. If there is sufficient tax base within a region, these costs can be offset to a large degree by the reduced cost of insurance premiums for property owners insuring the replacement cost of land and improvements. In order to qualify for insurance grading recognition of fire services, that if granted, would reduce the cost of insurance in the region, minimum requirements need to be met. These requirements are dependant upon the specific fire protection needs within each region. The capital costs of these requirements in each region are considerable. The recommended approach for implementation of fire service in the Apex Mountain Resort would be in the form of a stand-alone fire department with a paid fire chief and paid-on-call volunteer firefighters. Utilizing this method would provide the quickest method of achieving a status that would be recognized for fire insurance grading purposes and would remain cost effective. The RD should also review the option of providing a regional fire department satellite station with a local fire chief (volunteer) and a regional fire chief (paid). The regionalization option has many pitfalls and the benefits of this option must be weighed carefully against the possible problems implementing such a service. (ex. political issues within existing departments with established fire chiefs). Fire Underwriters Survey Page 1 of 7

2 Fire Insurance Grading There are fire insurance grading standards and requirements that need consideration when assessing the make-up of fire service structure and resources. Recognition of the fire department by the fire insurance industry will reduce the cost of property insurance within Apex Mountain Resort community, which will offset some of the capital and ongoing costs to operate the fire service. The success of implementing fire services at Apex Mountain Resort will likely hinge on the ratio of fire service capital and operating costs versus the reduction in fire insurance costs. Ideally these two factors will offset each other completely or will balance out at some point in the future. If the ratio between the two factors is not favourable to residents and property owners i.e. there are ongoing increased costs for fire protection; there would be little incentive for the community to initiate a fire service even though the need for high level of life safety and fire protection exists, and future community development will be hampered by the cost of fire insurance underwriting. To meet fire insurance grading requirements, a fire service needs to be organized and resourced at a level that is consistent with fire hazard and life safety risk that exists within the community. An assessment was undertaken at Apex Mountain Resort to determine risk and hazard levels. This analysis forms the basis of conclusions, recommendations and various options presented within the report. Currently, there is no fire protection at Apex Mountain Resort. The Regional District may consider regionalization of fire protective services which may be a viable alternative to a stand alone fire service for Apex Mountain resort, however the development of a regionalized fire department is beyond the scope of this report. Another alternative to a stand alone service would be contracting the fire protective services to a nearby municipal fire department (and building a satellite hall in the resort area). The development of a contracted fire protective service and its implications are beyond the scope of this report. Cost Benefits of Providing Fire Protective Services that Qualify for Fire Insurance Grading Fire insurance grading requirements refer to the evaluation and classification of a community s programs of fire protection versus the levels fire risk and hazard that may be present. Fire insurance grading classifications are used by fire insurance underwriters to assess the amount of risk they are willing to assume within a given community or class of business. The better the fire insurance grading classification is, the more competitive fire insurance rates tend to be, and the lower insurance premium rates generally are. There are two fire insurance grading systems used in Canada today. The first, Dwelling Protection Grade (DPG), applies to the protection a fire department is able to provide to single and double family residential dwellings. The 2 nd grading systems applies to all other structures such as commercial, multifamily residential and course of construction developments. The 2 nd grading system evaluates a community s overall programs of fire protection against the risk of Fire Underwriters Survey Page 2 of 7

3 significant fire or life safety event occurring within a community. Fire Underwriters Survey 1, which is a division of the Insurers Advisory Organization (IAO), conducts the fire insurance grading reviews of community fire protection and assigns insurance grading classifications based on the review. Fire Underwriters Survey requirements are being considered in the course of commenting upon the direction a proposed fire service should be taking. The Insurers Advisory Organization (IAO) was recently acquired by CGI (Canadian General Insurance) however the scope of the services provided by IAO and Fire Underwriters Survey has not been altered. Currently, Apex Mountain Resort does not meet fire insurance grading requirements due to the lack of a fire department. This usually means that residents, property and business owners are paying the highest fire insurance rates for property and contents. One of the goals of this assessment is to assist stake holders (Apex Mountain Resort, property owners and the Regional District of Okanagan Similkameen) to understand fire insurance grading requirements such that they will be able to improve Apex Mountain Resort s fire insurance grading classifications and reduce fire insurance costs. Implementing a fire department structure that meets insurance grading requirements is the initial step in this process. TABLE FUS Grades correlation to commonly used Insurance terminology and simplified grades Insurance Bureau of Canada Dwelling Protection Grades. Statistical 5 tier System A 3B 4 System Used by Many Insurance Companies Underwriting 3 tier system. Table 1 Table 2 Insurance Companies refer to this grade as : Protected Semi - Protected 5 Table 3 Unprotected 1 Fire Underwriters Survey is a national organization that represents more than 85 percent of the private sector property and casualty insurers in Canada. The Survey provides data to program subscribers regarding public fire protection for fire insurance statistical and underwriting evaluation. It also advises municipalities of deficiencies in their fire defences and recommends improvements to enable them to better deal with fire protection problems. Qualified surveyors conduct full field surveys of the fire protection programs maintained in municipalities across Canada. The results of these surveys are used to establish the Public Fire Protection Classification (PFPC) for each community. The PFPC is also used by underwriters to determine the amount of risk they are willing to assume in a given community or section of a community. The overall intent of the grading systems is to provide a measure of the ability of the protective facilities within a community to prevent and control the major fires that may be expected to occur by evaluating in detail the adequacy, reliability, strength and efficiency of these protective facilities. Fire Underwriters Survey Page 3 of 7

4 The protected assignment refers to DPG 1 to DPG 3A. An unprotected designation refers to DPG 5. DPG 3B and 4 are given the semi-protected designation. The lower the DPG assignment the larger the discount given in fire insurance rates. The discounts given for an identical property considered semi-protected over those considered unprotected can be approximately 60%. Where there is sufficient population and sufficient taxation base, the savings generated can more than offset the operating and capital costs of a fire service. The approximate base rates of a national underwriter of single family properties is displayed below. These rates have been compared with the rates of other companies to ensure their competitiveness. Fire insurance cost is typically based upon the replacement value of building and contents. (Additional options are available that tend to increase the cost of base coverage rates which are not included in the following table.) The following sample rates do not apply to manufactured homes, which are valued with a different methodology. Table 3.1-1a: Comparison of Insurance Premium Cost between Protection Classifications Replacement Value Unprotected Semi Protected Fully Protected 100, , , , , , , , , , s are representative of base cost (comprehensive all risk) for single family non pre-manufactured homes 60±% reduction Table 3.1-1b: Comparison of Insurance Premium Cost between Protection Classifications (specifically from Apex Mountain Resort Quoted rates) 32±% reduction House House Replacement Unprotected Value 200, , , , Fully Protected Unprotected to semiprotected reduction Semiprotected to Fullyprotected reduction Semi Protected Total Reduction 1, % -32% -68% 2, , % -35% -69% Condo Condo 100, , not specified % -26% -43% NA NA -44% Fire Underwriters Survey Page 4 of 7

5 Since DPG 3B and DPG 4 fall within the same designation by the fire insurance industry, DPG 4 is very difficult for a community to qualify for. Rural communities normally provide protection with two fire apparatus, one being a Pumper truck and one being a water tanker. DPG 4 was intended for areas where only one emergency vehicle is available to provide response because of the inadequacy of such a protection level it is rarely assigned by FUS. DPG 4 is normally assigned to rural protection areas where there are two emergency vehicles in place but where deficiencies exist such as inadequate apparatus or a deficient number of fire fighters on an active roster. Fire Department Basic Requirements A stand alone Apex Mountain Resort Fire Service would consist of: Fire Department managed by o Regional District of Okanagan Similkameen, o Apex Mountain Resort resident association, or o Resort Owners The Fire Department would be supported by taxation of local residents and businesses. Ownership of capital improvements such as fire hall and fire apparatus to be retained by the Regional District of Okanagan Similkameen and supported by local area taxation One full or part time fire chief Full complement of part time fire fighters (minimum 15) within the community 24 hours per day, 7 days per week, and 365 days per year Fire apparatus: 2 to 3 units Adequate fire hall facilities and equipment Flexibility in community road improvements and access requirements Adequate emergency communication equipment A full time paid fire department officer in attendance 24 / 7, 365 days a year is recommended for Apex Mountain Resort based on the community s risk and hazard profile, however if cost ratio is the driving factor whether a fire service is initiated, permanent 24 / 7 staff support may not be feasible. Alternatively, if initial capital start-up costs could be reduced or funded in a different manner, then there may be some flexibility in additional paid staffing. Similarly, in future years, as the community taxation base improves with community growth, the feasibility of increasing staffing will improve. Obstacles to Providing Fire Protective Service In addition to the issue of costs to implement the service, lack of potential fire fighters will be the biggest obstacle facing Apex Mountain Resort. The lack of trained fire fighters is common at resort communities that are in their early development stages. A recent straw poll indicated that are currently approximately fifteen residents / employees that may be interested in joining a fire service on the Mountain. Currently there are approximately 40± year round residents, which is a Fire Underwriters Survey Page 5 of 7

6 very low number to draw potential fire fighters from. During peak season period, the resort employs approximately people. This body of personnel should be sufficient to draw fire fighters from, but there are drawbacks: The employee base is only present in peak season. In shoulder and off season, the Resort and other employers employ very few the fire department would have a high turn-over ratio and may not have sufficient fire fighters at different parts of the year. There is very little employee housing. The majority of seasonal employees currently reside outside the community and bus into the community during the workday. Staffing levels would be limited during afternoon and evening periods. The cost to train fire fighters is expensive and time consuming. With a part time fire fighter training program, a minimum of six months training is necessary prior to a fire fighter recruit being able to perform limited secondary duties at a fire emergency. If training is accelerated, this time frame can be reduced, however this is not always possible in part time fire departments for both the trainee and trainer due to other work commitments. Short peak seasons do not lend themselves to fully developing fire-fighting skills through training and actual circumstance. Out of community live fire training is strongly recommended for recruit fire fighters prior to going on duty. This training usually occurs at the end of an initial basics training period and has a considerable cost. Conclusions The current tax base in the Apex Mountain Resort region makes the feasibility to undertake the cost of implementing a fire service in the region, in order to reduce the cost of fire insurance, acceptable. The most recent assessed values of the resort are in excess of 48 million dollars and as such warrant protection. The population of the resort swells through the winter months and life safety issues are critical to a resort s viability. A major accident or loss involving loss of life, major injury, or significant property may seriously harm the economic viability of the entire resort. The community has a current bed base of 2600 and is expected to have a bed base of 3800 at build-out in The recommended approach for implementation of fire service in the Apex Mountain Resort would be in the form of a stand-alone fire department with a paid fire chief and paid-on-call volunteer firefighters. Utilizing this method would provide the quickest method of achieving a status that would be recognized for fire insurance grading purposes and would remain cost effective. The RD should also review the option of providing a regional fire department satellite station with a local fire chief (volunteer) and a regional fire chief (paid). The regionalization option has Fire Underwriters Survey Page 6 of 7

7 many pitfalls and the benefits of this option must be weighed carefully against the possible problems implementing such a service. (ex. political issues within existing departments with established fire chiefs). The community should be progressively look toward achieving a DPG of 3A and a PFPC grade of 7 so that the property owners and residents will see a significant cost-benefit that will sufficiently offset the cost of providing fire protective services. Fire Underwriters Survey Page 7 of 7