Revise MOFD Revenue and Expense

Revising MOFD Revenue and Expenses To Maximize Safety In Orinda

June 1, 2025

When MOFD was formed in 1997, both the voters in Orinda and in Moraga were told that one of the primary reasons to form an independent agency was to be able to use all property taxes allocated by Prop 13 to “fire protection” to local services in Orinda and Moraga, and not to other communities in the county. The Orinda voters’ pamphlet was very clear that Orinda taxes WOULD be used in Orinda not elsewhere in the county (“our tax dollars will be used in our city, now and in the future”), including in Moraga. The Moraga pamphlet was a little less specific, but it did tell the voters that by forming MOFD it would “bring control of Moraga’s tax money back to Moraga” (not to “Orinda and Moraga”). Orinda expected its tax dollars would be used for service exclusively in Orinda and Moraga assumed its tax dollars would be used in Moraga.

That has not happened. Over $4 million a year of Orinda taxes are used to either subsize service in Moraga or increase MOFD’s reserves, 100% funded by Orinda taxes. Orinda’s taxes are needed for safety improvements in Orinda including wildfire fuel removal, fire hydrant upgrades, and emergency evacuation improvements.

It was never envisioned that Orinda would subsidize Moraga’s MOFD’s expenses. It can no longer afford to do so.

The means exist for Orinda taxes to be used exclusively for service to Orinda and Moraga taxes to be used exclusively for service in Moraga. Possible options are outlined below.

MOFD’s latest Long Range Financial Forecast projects, over the next ten years (2026 – 2035):

$487 million in revenues
$427 million in expenses
Reserves increasing $60 million from $54 million to $114 million

The revenue sources are:

$412 million in property taxes
- $273 million from Orinda property owners
- $139 million from Moraga property owners
$11 million from special parcel tax
- $6 million from Orinda property owners
- $5 million from Moraga property owners
$63 million from other sources (fees, grants, etc.)

Expenses include:

$389 million general operating expenses
$37 million capital expenses
- $10.9 million for equipment
- $9.4 million to rebuild Moraga’s station 41
- $1.9 million to complete payments for rebuilding Orinda’s station 43
- $3.7 million to remodel Orinda’s station 45
- $11.4 million for a training center in Moraga

The $60 million in increased reserves include:

$20 million to the General Fund reserve, increasing it to $41 million.
Reduction of $8 million to the Capital Fund reserve, retaining $5 million.
$37 million to the supplemental pension fund, increasing it to $52 million.
$11 million to the OPEB (retiree medical) reserve fund with $17 million total.

Allocation of revenue and expenses between Orinda and Moraga

Orinda and Moraga receive equivalent service. 53% of MOFD’s residents live in Orinda (19,400) while 47% live in Moraga and Canyon (17,000). 53% of MOFD’s firefighters are stationed in Orinda (9 of 17) while 47% are stationed in Moraga (8 of 17). Operation records show that about 53% of MOFD’s operations are in Orinda and 47% are in Moraga/Canyon. And while there is “mutual aid” between units stationed in Orinda and those stationed in Moraga, these operations are equal and offsetting with the net result being Orinda-based firefighters service the incidents in Orinda and Moraga-based firefighters service the incidents in Moraga/Canyon.

While MOFD has never allocated either its revenues or its expenses to Orinda vs. Moraga, it should have. That’s what the voters were told would happen, otherwise how would they know if Orinda and Moraga tax dollars were being used in their respective communities for the safety of those communities?

Doing so shows that over the next ten years Orinda property taxpayers will be paying $89 million more to MOFD than MOFD is spending to service them while Moraga property taxpayers will be paying $29 million less than it costs to service them.

The $60 million difference (between Orinda’s $89 million overpayment and Moraga’s $29 million underpayment) results in a $60 million increase in reserves over that time period, 100% funded by Orinda property taxes. Including Moraga's 47% share of the $60 million in increased reserves, Moraga's total underfunding of MOFD over ten years equals $57 million, and Orinda will be overfunding it by the same amount.

What can MOFD do such that the original intent of the formation, funding local services with local tax dollars, can be realized? How can Moraga, which is currently underfunding its operating expenses by $29 million, plus its (47%) share of the $60 million in increased reserves, pay its fair share? Is it possible without disbanding MOFD and forcing both Orinda and Moraga to seek service from other providers?

The answer is, YES IT CAN. By increasing revenue, decreasing costs, spreading out costs (debt funding long-life capital projects), limiting reserves, and distributing any excess revenue back to the communities providing it or spending that excess on safety needs agreed upon by the City/Town in the City/Town the funding is originating.

The following (Tier 1) changes would get MOFD part way there:

Increasing Moraga’s parcel tax to the limit the voter agreed to when they voted for the tax in 1992, resulting in an increase in revenue of $2 million per year.
Replacing the two paramedic-firefighters staffing Moraga’s ambulance with paramedics (but maintaining 24/7 service), saving about $1 million per year.
Delaying the construction of a training center until Moraga has the revenue available to share in the $11.4 million cost.
Funding the $9.4 million rebuild of Moraga’s station 41 and the $3.7 million remodel of Orinda’s station 45 with debt (20 year) instead of cash from the Capital Fund.
Reducing the Capital Fund balance to $5 million and maintaining it at that level.
Maintaining the General Fund reserve balance at the current level, $21 million.
Maintaining the projected funding of the Pension Stabilization and OPEB funds.

These changes would result in:

The increase in Moraga's average annual funding from $2.2 million per responder to $2.4 million and decrease the average annual cost to service Moraga from $2.9 million per responder to $2.5 million.

The distribution of $63 million to Orinda between 2027 and 2035 or MOFD would provide that amount of additional service specifically to Orinda.
A reduction of surplus funding by Orinda over the next ten years from $89 million to $33 million and an increase in Moraga’s contribution from a deficit of $29 million to an excess of $8 million.
However, the total excess of $42 million which would go to increase the retirement funds reserves, would still funded 80% by Orinda and only 20% by Moraga, not in line with the 53/47 split in service and population.

These changes still do not result in the desired result of Orinda taxes being used in wholly in Orinda and Moraga taxes being used in Moraga. Unless Moraga wishes to increase its parcel tax by an additional $1.3 million a year (about $200 per parcel), the only way to bring MOFD’s finances into balance is to further reduce costs in Moraga and/or reduce the funding of the retirement accounts.

Tier 2 Adjustments

One way to do this, without impacting the retirement fund reserves, would be to “rethink” the service Moraga wants. Currently Moraga has, and is happy with, 3 response units: two 3-firefighter engine units (with most of the firefighters being paramedics) and one 2-responder ambulance unit (with both responders also being firefighter paramedics). While these units respond to a number of emergencies, far and away the greatest need is emergency medical response. MOFD firefighters respond to about 65 medical emergencies for every 1 fire (structure plus vegetation).

MOFD’s population of 17,000 is currently serviced by 8 firefighters, a ratio of 2,125 residents per firefighter. This is about 3 times the service provided by ConFire to its service area, and no one there is dying in burning buildings.

The key to good service in Moraga is three medical response units, not necessarily staffed by 8 paramedic-firefighters. Tier 1 adjustments replaced 2 of the paramedic-firefighters with 2 paramedics for a $1 million/year savings.

A second option would be to reduce the number of firefighters in Moraga from 8 to 7, either reducing the number in Moraga's station 41 from 5 to 4 or reducing the number in station 42 from 3 to 2. There would still be 3 response units (one with 3 firefighters and two with 2 firefighters) to respond to medical emergencies. And in the event of a fire, two response units, one with three firefighters and one with four firefighters, would be available.

It would save MOFD / Moraga about $1.2 million a year; 3 shifts at an annual cost per firefighter of $400,000 (salary, overtime and benefits). Also, if Moraga only had 7 firefighters per shift and Orinda maintained 9 firefighters, then Moraga should be “responsible” for only 7/16th (44%) of the overhead instead of 8/17th (47%).

The changes for this “option” (Tier 2) include:

Reducing the responders per shift in Moraga from 8 firefighters to 7 firefighters starting in 2026/27.This would reduce their general expenses from 47% of the total to 44%.
Retain general income allocated to Moraga at 47%, proportionate to the population served, plus Moraga property taxes.
The same adjustments to capital spending and fund balances as Tier 1.

These changes would result in:

The increase in Moraga's annual funding per responder increasing from $2.2 million to $2.7 million, not because the dollars increase but because the number of responders decrease.

A small decrease in Moraga's expenses to $2.8 million per responder with both the dollars expended and then number of responders decreasing.

The distribution of $65 million of excess funds to Orinda between 2027 and 2035 (or MOFD would provide that amount of additional service specifically to Orinda).
A reduction of excess funding (above allocated operating costs) by Orinda over the next ten years from $89 million to $25 million and the increase in Moraga’s net-funding from a deficit of $29 million to an excess of $16 million. The total excess of $41 million would be funded 61% by Orinda and 39% by Moraga, almost (but not quite) proportion to the firefighters serving each community (9:7 = 56%:44%).
Orinda tax dollars would be "mostly" used in Orinda.

A third option would be staffing Moraga's 3 response units with 2 firefighters each. Moraga would have the same 3 medical response units has today. If there were a fire, the 6 firefighters would man 2 fire engines. MOFD would still have the 5 fire suppression units it has today and ambulance backup could be "brought in". The biggest hurdle in getting this to work would be getting the firefighters’ union to accept the reality that this is the service Moraga needs AND it is all Moraga can afford.

It would save MOFD / Moraga about $2.4 million a year (6 firefighters on 3 shifts of 2 at an annual cost per firefighter of $400,000; salary, overtime and benefits). Also, if Moraga only had 6 firefighters per shift and Orinda maintained 9 firefighters, then Moraga should be “responsible” for only 6/15th (40%) of the overhead instead of 8/17th (47%).

The changes for this “option” (Tier 3) include:

Reducing the responders per shift in Moraga from 8 firefighters to 6 firefighters starting in 2026/27.This would reduce their general expenses from 47% of the total to 40%.
Retain general income allocated to Moraga at 47%, proportionate to the population served, plus Moraga property taxes.

These changes would result in:

The increase in Moraga's annual funding per responder increasing from $2.2 million to $2.9 million, not because the dollars increase but because the number of responders decrease.

The maintenance of Moraga's expenses at $2.9 million per responder because both the dollars and then number of responders decrease.

The distribution of $58 million of excess funds to Orinda between 2027 and 2035 (or MOFD would provide that amount of additional service specifically to Orinda).
A reduction of excess funding (above allocated operating costs) by Orinda over the next ten years from $89 million to $24 million and the increase in Moraga’s net-funding from a deficit of $29 million to an excess of $16 million. The total excess of $41 million would be funded 60% by Orinda and 40% by Moraga, in proportion to the firefighters serving each community.
Orinda tax dollars being used wholly in Orinda.

Moraga tax dollars being used wholly in Moraga.

SUMMARY

Current MOFD Long Range Financial Forecast

Over the next ten years Orinda taxpayers pay MOFD $312 million, $89 million more than it will cost MOFD to provide Orinda service. $29 million will go to subsidize Moraga's operating and capital expenses including $10 million for a new fire station and Moraga's share of an $11 million training facility. The other $60 million will go to fully fund (100%) increases in MOFD reserves from $54 million to $114 million.

Moraga will retain the services of 8 firefighters forming three response units; get one of their two stations rebuilt; and get a new training facility built in Moraga.

Option 1

Two of Moraga's firefighters manning Moraga's ambulance based at station 41 are replaced with two paramedics. Moraga's parcel tax is increased to its maximum level increasing the cost to the average Moraga property owner $320 a year.

Orinda will receive $57 million cash back (or increased service) over the ten years. Its excess funding will be reduced from $89 million to $33 million, all going to MOFD's employee retirement fund reserves. It would still be paying $11 million more to those reserves than its pro-rata (53%) share.

Option 2

One of Moraga's 8 firefighters is eliminated, leaving Moraga still with 7 firefighters and 3 response units. Moraga's parcel tax is still increased to its maximum level increasing the cost to the average Moraga property owner $320 a year.

Orinda will receive $57 million cash back (or increased service) over the ten years. Its excess funding will be reduced from $89 million to $25 million, all going to MOFD's employee retirement fund reserves. It would only be paying $2 million more to those reserves than its pro-rata (56%) share.

Option 3

Two of Moraga's 8 firefighters are eliminated, leaving Moraga still with 6 firefighters, 3 medical response units or two firefighting units. Moraga's parcel tax is not increased.

Orinda will receive $57 million cash back (or increased service) over the ten years. Its excess funding will be reduced from $89 million to $25 million, all going to MOFD's employee retirement fund reserves. This would be its pro-rata (60%) share. In compliance with the original intent of MOFD's formation, using Orinda taxes exclusively for service in Orinda.