BY ALLISON LEVITSKY
Daily Post Staff Writer
After a five-year dispute and more than two years of negotiations, the city of Palo Alto has agreed to pay Stanford $5.5 million to make up for four years of allegedly overcharging for fire and paramedic services, which the city has provided to the university since 1976.
The agreement was announced Thursday (Aug. 16). Word that the city had reached an agreement with Stanford was first reported in Monday’s (Aug. 13) Post.
The sum is a 15% rebate on what Stanford paid the city between 2012 and 2016. Stanford will also save about $1 million for the liquidation of fire equipment from the original agreement.
Stanford asked for a new contract after the city closed Station 7 in 2012, one of two fire stations on campus. After paying the city in October 2013, Stanford said it wouldn’t renew the contract and began shopping around for another fire department.
But Palo Alto was the only public fire agency that submitted a proposal to the university by the deadline.
Stanford paid the city $6.5 million for a year of services through Oct. 8, 2016. Prior to that, the agreement was $7.4 million per year. In December 2016, the city agreed to let Stanford save $1.9 million by paying $4.8 million for a nine-month agreement through June 30, 2017.
Stanford has also agreed to pay almost $6.8 million for fire services from July 1, 2017, through June 30, 2018.
Stanford’s costs will go up at the same rate as the city budget.
“The city and Stanford benefit from the continuation of these services,” City Manager Jim Keene said in a statement. “Stanford wants to receive and the city wants to deliver the highest quality and cost-effective emergency response services. Palo Alto residents will benefit from the economies of scale associated with the resources needed to serve Stanford that will be available community-wide.”
The new contract will last five years with a five-year renewal unless the parties decide to renegotiate.
“For more than 40 years, the city and Stanford have partnered on providing critical fire protection services to the campus and community,” Stanford Associate Vice President Jean McCown said in a statement. “We are very pleased we were able to come to an agreement.”
Palo Alto’s fiscal year 2019 budget assumed Stanford would pay $6.5 million for fire services. The new deal bumps that down to $6.1 million, including the $1 million for equipment.
“This agreement ensures long-term stability in the delivery of medical and fire/rescue services, and the innovative deployment model will meet community expectations,” Fire Chief Eric Nickel said in a statement.
Council is set to vote on the settlement at a meeting on Monday (Aug. 20).