The Economic Impact of Firefighting

Considering the tremendous financial impact of just 3%–5% of a department’s duties in saving commercial structures, that percentage alone may justify a department’s entire budget. Photo Bill Tompkins

Communities have long recognized and appreciated firefighters’ heroic efforts that result in lives and property being saved. Over the years the fire service has developed several methods of measuring how well these goals are achieved, such as response times, lives saved and historically, “fire loss.” These methods of assessment may improve our response tactics, but they fail to recognize the financial benefits provided by departments when they respond quickly and effectively and save businesses.

The Phoenix Fire Department and United Phoenix Firefighters Association (L493) recently partnered with Underwriters Laboratories (UL) and Arizona State University’s (ASU) Seidman Research Institute to scientifically assess the economic value of firefighting, and the results have proven to be a tremendous asset in justifying the bottom line of our department in the long run, and could likely help yours as well.

The Start of It All

In July 2011, a fast-moving, wind-driven fire in a Phoenix river bottom impinged upon Trendwood, Inc., a large furniture manufacturing and distribution business. After an aggressive firefight stopped the fire with minimal impact on the business, we incident commanders discussed the performance of our crews and recognized that their efforts literally saved this business and all the jobs of those employed by the company. This made us think: Why do we always measure fire loss, but never consider what we save?

This new concept led us to senior research analyst Dr. Anthony Evans with ASU’s L. William Seidman Research Institute. Among other business analytics, Seidman’s researchers scientifically analyze organizations using a program called REMI, a simulation model designed to forecast the impact of public policies and external events on an a community’s economy and its population.

ASU was intrigued by our concept of measuring fire service performance in terms of what is saved, and they agreed to utilize the REMI program to analyze the Trendwood fire at no cost to the fire department. Trendwood, whose premises were completely saved by the Phoenix Fire Department with no disruption in business operations, agreed to participate.

The initial study revealed that without this successful intervention, Trendwood’s production capability would have been lost for up to a year, and up to 203 jobs would have been eliminated. But further details from the analysis were staggering: production loss from the fire would have dropped gross state products by approximately $20 million in 2011, and disposable personal income would have been reduced by approximately $9 million for the same fiscal year.

Expanding the Study

Intrigued by the magnitude of these results, ASU wanted to expand the study to include all commercial fire responses that met pre-established criteria. UL expressed interest in funding additional research as well, so a partnership between ASU’s Seidman Institute, UL and the Phoenix Fire Department was established to conduct a more comprehensive look at this exciting new way of evaluating the fire service.

The first consideration was to determine what fires would be considered “saves” and be included in the study. The criteria established by Seidman’s researchers and UL were as follows: 1) The fire must have occurred in a commercial building/business. 2) The fire must have been in the post-incipient stage upon the department’s arrival. 3) The department must have deployed equipment/personnel to extinguish the fire. With the criteria and partnership firmly established, the Phoenix Fire Department developed a process for tracking eligible fires and gathering data from businesses willing to participate.

The study used the REMI model to estimate economic impact of the successful intervention at 42 fires affecting 51 commercial businesses or organizations from June 1, 2012 to May 31, 2013. The study concluded that these successful interventions saved approximately 7,446 jobs over the course of the year. Keeping these businesses operational saved the state an estimated $650 million in gross state product, as well as $295.6 million in disposable personal income. Finally, without the Phoenix Fire Department’s successful intervention at those forty-two commercial fires, state tax revenues may have fallen by an estimated $35 million.

Using the Numbers

The fire service is steeped in great traditions, and one of those has been humbly going about our profession without fanfare or calling much attention to ourselves. We are proud of what we do, and generally have never thought of our work in terms of “saving the city money.” But the data generated by this research changes everything. In a politically complicated, finance-focused environment in which we find ourselves having to defend our budgets, this study that shows that just 3%–5% of the total work we do (fighting fires in commercial buildings) saves communities millions of dollars each year. In other words, our salaries, pensions and overall infrastructure are justified without even considering the other 97% of what the fire department does every day.

The fire service will continue to go about risking our lives to save people and property and we will do it with the same level of passion and humility we have always given. But at a time when the fire service has come under attack by those who try to put a dollar value on what we do, attacking our pensions and salaries and failing to recognize our greater impact to the community, departments have to react and show with accuracy and scientific precision that we provide tremendous, if unnoticed, value. It is time that we bring to light the significant financial impact our efforts have on our communities. It is time to shift our focus from “fire loss” to “what we saved.”

Current Issue

October 2017
Volume 12, Issue 10