Drexel Heights Fire Board warns budget uncertainty after Workers' Compensation carrier exits Arizona

The Drexel Heights Fire District Governing Board heard that the district's current Workers' Compensation carrier will stop writing policies in Arizona effective July 1, 2026, creating an unresolved cost question for the Fiscal Year 2027 draft budget. District Administrator and Fire Chief Douglas Chappell told the board that two alternate carriers remain under consideration: the State Fund and a pooled entity called Securis.

Chappell said the district has not yet received rate quotations from either option and therefore placed a placeholder for Workers' Compensation in the FY2027 draft budget. He warned that Securis could require a substantial deposit to capitalize the pool and cited a potential $300,000 deposit with a five-year commitment. Because final rates are unknown, the board was told salary increases and other budget changes cannot be finalized.

Board Member Laura Dailey asked whether rates were "likely to be a doozy," and Chappell replied that rates may increase but "there will be an increase"; he added that some districts joined Securis years ago while Drexel Heights historically remained outside the pool. Chief Chappell also said the district's Workers' Compensation costs have fluctuated over two decades and that the most expensive claim was a line-of-duty death four years ago.

The discussion did not include finalized premium amounts or a formal direction to select a carrier; board members did not take a vote on carrier selection during the March 27 meeting. The board will revisit the budget after the district receives concrete rate information.