Irvine soon might pull out of the Orange County Fire Authority, a move that could force an expensive and litigious re-working of the county’s emergency response network, according to a grand jury report issued Tuesday.

At its heart, the issue is this: Because of rapid growth, increasing property values, and a locked-in property tax formula, Irvine pays far more to the OCFA — which provides fire and emergency services to 22 other cities and the county — than it gets back in services.

Titled “Orange County Fire Authority – Financial Flames on the Horizon?” the Orange County grand jury’s first watchdog report of its 2017-18 term urges the city, the fire agency and other parties squabbling over who pays what to sit down together and figure it out.

Irvine is to decide by June 30 – “a rapidly approaching deadline” – whether it will stay or go. While Irvine and OCFA have been talking, a major player in the fight, the County of Orange, has been excluded, according to the grand jury.

“The grand jury report was quite interesting, and I think it gives a lot of reasons why we might want to exit (OCFA), but it remains to be seen,” Irvine Mayor Don Wagner said by phone Wednesday, March 21. “Exiting, to me, is a realistic option.”

Depending on how you factor it, Irvine’s over-payment to the OCFA could be as much as $23 million a year, or as little as $5 million a year. Either way, it kicks in far more than other cities and the county to fund OCFA. Various attempts to fix the issue have have failed.

If Irvine secedes and starts its own fire department, a giant hole would suddenly yawn not just in the OCFA’s budget, but in Orange County’s emergency response map, the grand jury said.

“Irvine’s withdrawal from OCFA would disrupt the strategic integrity of a uniform service area with regard to placement of fire stations as well as distribution of firefighting equipment and personnel,” it said. “The withdrawal would also have a negative effect on OCFA’s operating budget, financial stability, response times, and overall operations.”

John Wayne Airport, UC Irvine and Emerald Bay might have to renegotiate for emergency services, it said.

Fights would be long and costly. According to OCFA, the 11 fire stations in Irvine belong to OCFA. According to Irvine, those stations belong to the city.

“Possible litigation over this issue could be a very large expenditure for both parties,” the grand jury said.

Although withdrawal may seem like the answer to Irvine’s fairness issues, nothing about this situation is simple, it said.

The property tax funds its residents pay for fire and emergency services do not automatically revert to the city, as some have suggested.

And while city representatives have said that Irvine could leave without being on the hook for OCFA’s huge pension liabilities, “it seems unreasonable to assume that Irvine’s share of those liabilities, however they may be calculated, would not follow them if they withdraw,” the grand jury said. “This open question is another possible litigation issue, costly to both parties.”

Officials from Irvine and OCFA said they’re trying to find a fix. The two are having informal talks aimed at delivering extra services to Irvine.

“We’ve always wanted a solution to this,” said Lori Zeller, assistant chief of business services for OCFA. “We’re going to do everything we can to keep Irvine in.” (See OCFA’s take in its memo, OCFA Equity-Irvine Background and Key Messages.)

Irvine Councilwoman Melissa Fox, who represents the city on OCFA’s board of directors, said the agency is willing to provide more services to Irvine to keep up with the city’s rapid population growth. As part of that, the agency plans to open a second division in Irvine and another station in the developing Irvine Business Complex, a residential and office district near John Wayne Airport.

“I’m not advocating for us to be leaving,” Fox said. “We want to be a good neighbor. If there’s a wildfire in Tustin, it’s going to spread to Irvine eventually.”

If an acceptable compromise can’t be reached, however, OCFA feels that losing Irvine is not an existential threat.

“We can, most likely, function without Irvine,” said Battalion Chief Marc Stone.

Not everyone is so sure.

Without Irvine, said Supervisor Todd Spitzer, there’d be tremendous pressure on the remaining contract cities to make up the nearly $90 million that Irvine provides OCFA’s budget.

That, he said, could force some to form alliances elsewhere – for example, Placentia could contract with Fullerton for emergency services, rather than with OCFA. Enough of that, and OCFA could implode.

“I’m very concerned that the longer this gets delayed, the more it pushes Irvine,” Spitzer said. “These things don’t get done overnight. I’d really like to see this all worked out.”

For Irvine, the issue is fairness – but inequity is a feature of any representative democratic government, the grand jury said. Wealthier communities send more taxes to the government than less wealthy communities, and the money is redistributed for the common good.

Fred Smoller, political science associate professor at Chapman University, believes that regional partnerships are usually most efficient, and the future of local government. “Two steps forward, one step back,” he said.

“Irvine may, indeed pull out, but the long term trend is for cities to divest themselves of fire responsibilities. All the newer south county cities contract with OCFA, as does Santa Ana, a large legacy city. Irvine would have to establish its own fire department, or contract with one or more cities for fire services, which can be problematic,” Smoller said.

The grand jury would agree. “These possible effects make it apparent that it would be in the best interest of OCFA, the City of Irvine, other member cities, and the County to negotiate a mutually agreeable solution,” it said.

Wagner said the Irvine City Council is scheduled to discuss the issue at its first meeting in April.

Updated 5:30 p.m. 3/21/2018 with comment from Wagner.