April 9, 2013 Mr. Dan Crowley Chairman, Board of Commissioners St. Tammany Fire District No.

1 1358 Corporate Square Slidell, Louisiana 70458 Subject: Letter of Intent - Retirement of Fire Chief Larry Hess Dear Chairman Crowley: It is with profoundly mixed emotions that I inform the Board of Commissioners of St. Tammany Fire District No. 1 of my imminent retirement as Fire Chief following 48 years in the Fire Service. My last day of service will be Monday, 30 September 2013. I will not be exhausting my accumulated leave during the month of September leading up to my final day, which would have made my last day in the office Friday, 30 August. It is my intention to stay on the job, cashing in my accumulated leave as I retire on 30 September. I wish to thank the Board of Commissioners, present and past; the citizens of our Fire District; the members of Fire District No. 1 who unselfishly serve our community; and most of all the love of my life, my wife Janice, who has endured so much over my 48-year career and has provided so much love, comfort, and support during my ten years as Fire Chief for St. Tammany Fire District No. 1. Last, but certainly not least, I thank God. On those several occasions where those with whom I served were killed in the line of duty or suffered horrific, life-altering injuries, He sent me home to my loved ones. This was not the case for 13 of my brothers. I have no idea as to why I was allowed to go home; however, I am eternally grateful. There are so many others to acknowledge and thank for their contributions, hard work, and leadership in the maturation process of this Fire District over the past 10 years. I am absolutely sure if I tried to identify each of them and their individual accomplishments, I would unintentionally overlook someone or something of importance. To be sure, all of the business and operational improvements developed and implemented at St. Tammany Fire District No. 1 are as a result of a collective effort. That fact alone is one of the major changes that materialized over the past 10 years. Employee inclusion has become a keystone in the organizations continuous improvement efforts.

I leave a financially stable public safety agency. Ten years ago circumstances were much different. We have positioned Fire District No. 1 to operate and, indeed flourish, while not only meeting budget, but also consistently rolling back millage rates beyond that of any public agency in St. Tammany

Parish. Our financial stewardship has resulted in a cost avoidance of over $10 million in taxation on our community. As we started the overwhelming job of fixing the fire department there was an eight page list of recommendations and findings complied by the State Auditors Office. Within two years that list had been totally eradicated. The only finding since was to develop a procedure to handle cash taken in during the sale of Katrina bells. Every third party audit, of any part of our business operation, has reinforced the strengths of our practices. We were able to restructure our revenue generation model with voter approval of a $39 Parcel Fee. This fee applies to property owners irrespective as to Homestead Exemption. This caveat made the election proposal much more palatable to the voters and it passed with a 68% approval rating. The Parcel Fee generates approximately $1.2 million per year and is one of the primary reasons that our millage rollbacks have not been financially onerous. This creative approach to generating revenues is unique to our Fire District in the State of Louisiana. The participation of our Board of Commissioners during the confection of the next years budget has been a great step forward. The BOCs inclusion has been very beneficial in working out the budget details before a proposed budget is presented. Ten years ago our business insurance carrier VFIS informed us they were going to no longer insure our Fire Protection District as our management practices were considered too great a risk. Without property and liability insurance, I have no idea as to how we could have run the business of the Fire District. PMI called the VFIS Headquarters and requested an emergency meeting. The result of the meeting was that VFIS placed us on Consent to Rate and increased our annual premiums by nearly three times. Within five years the Consent to Rate had been removed and the VFIS utilizes our Risk Management Program as a model for other fire departments throughout the United States. Additionally, we have not been the subject of a single lawsuit brought over the past 10 years. The improvements to our Risk Management Program have also been elemental in being recognized by the LWCC as one of the Top Ten Safest Companies in Louisiana. The LWCC insures Workers Compensation Insurance for over 17,000 individual businesses throughout Louisiana last year we were recognized as being in the top ten of those companies. During the two previous years our Risk Management Program was recognized as being in the Top 75 Companies by the LWCC. Beyond making our work environment safer, our Risk Management Program has been elemental in receiving almost $500,000 in premium rebates from the LWCC over the past 10 years. We were notified today that our premium for next year has been reduced by 2.5%. During our budget preparation process we estimated a 10% increase to the LWCC premium as a result of the Station 14 fire claim, increasing our coverage, and national trend. Despite those considerations our execution and administration of the Risk Management Program garnered Fire District No. 1 a reduction in premium. I believe this is another solid indication of our strong financial oversight.

One of the strongest components of the Risk Management Program is that of our Case Management Protocols. Our active follow up on fire department members on Extended Sick Leave has been the single most effective tool in eliminating malingering. The LWCC uses the protocols as suggested guidelines to other organizations throughout the state. We have done much to professionalize the fire department and improve the public safety profile. Our Standards and Qualifications for Promotion (SAQFP) that are just now going into force will insure we have a plan which will provide us the best opportunity to put the right person in the right job, while at the same time, be free from arbitrary and capricious application. The SAQFP requirements sever the old fire department tradition of promoting the most senior individual without consideration to qualification. This concept and implementation of the SAQFP required the entire fire department to change their perception regarding the environment that existed ten years ago. Less than 65% of the members had the requirements that were identified in the SAQFP protocols. Today, that number stands at 82.8%. In raw numbers, we have gone from 376 certifications in 2004 to 1541 as of today. Continuing with improvements to our Human Resources efforts, the codification of our scattered, illdefined practices into sound, well-communicated Rules and Regulations has resulted in far fewer employee complaints being generated. There were in excess of 100 employee complaints outstanding when we began overhauling Human Resources. Today we receive fewer than 10 per year. Prior to the overhauling of the human resource system the fire department administration was not sustained in almost 70% of the actions taken to the Civil Service Board on appeal. Over the past 10 years only one case has been overturned on behalf of the complainant. That 180-degree turnaround is a direct result of improved due diligence when preparing the issuance of disciplinary action. Because of operational changes to our department brought about by employee inclusion and a more structured needs analysis tool, we have achieved significant improvements to our PIAL Protection Rating. The homeowners in Fire District No. 1 now enjoy an improved rating of a 3 throughout the fire district. This improvement has also positioned the fire department to further improve the rating for homeowners to a 2 over the next three years. The cost in millage rate increase required to improve the rating to a 2 is far outweighed by the insurance premiums saved by the homeowners. We have improved our EMS deliverables by implementing a Paramedic Program. Today a member of our fire department is capable of administering advanced EMS field protocols such as inner-osseous infusion of drugs and medicines directly into the bone marrow of patients. This improvement was accomplished in an environment where some of our employees were against the fire department providing any level of EMS. There is no doubt that the Paramedic Program has saved lives. St. Tammany Fire District No. 1 has become far more deeply involved in the leadership and fabric of the community. Many of our employees have participated in Community Leadership Program stewarded by the East St. Tammany Chamber of Commerce. This involvement has made many of those in community leadership roles more aware of the operation of the fire department, the

competencies of those who manage it, and the stewardship of the public funds with which we are entrusted. The change to develop and maintain a much higher public profile and level of involvement has gone a long way in providing the fire department with a positive corporate image. Our performance and the checks and balances built in our employee health insurance packages have allowed us to negotiate premiums each year that have been consistently below those of the national rate of premium increase. A year ago we even saw an unprecedented REDUCTION IN HEALTH INSURANCE PREMIUMS! Over the past 10 years this has the aggregate cost avoidance to the Fire District Tax Payers exceeding $750,000. We are the only St. Tammany Parish Fire District to have pursued a public/private initiative designed to improve our mission readiness, but do so at no cost to our taxpayers. That initiative is the relocation of Station 17 to the Johnny Smith Business Park on Highway 11. This project has an estimated value of $1.3 million. Thats a heck of a deal for our taxpayers. This project will also directly enhance future PIAL considerations regarding Fire Station Distribution. We developed and implemented a 3 to 5-Year Strategic Planning Process that consists of Needs Analysis, Financial Assessment (Return on Investment or Cost Avoidance), Project Justification (2-step presentation), Forced Ranking Assessment, and presentation to the BOC during the budget preparation process for approval. To be sure, there will be significant challenges for my successor. Just to identify a few: 1. The potential for political intrusiveness and the uncertainty of governance 2. The direction of the Parish Councils Fire District Study 3. Recruitment of minority candidates 4. The decision to choose between a transformational or transactional form of management 5. Legislative changes especially addressing millage and required fire department staffing issues It is with overwhelming humility, eternal gratitude, and pride that I leave this most noble of professions. There has been little in my life that has meant so much or that has been so rewarding.

I remain Respectfully Yours,

Larry Hess Fire Chief St. Tammany Fire District No. 1