Drexel Heights fire board warns Workers' Compensation shift could strain FY2027 budget

Drexel Heights Fire District officials said March 27 that uncertainty over Workers' Compensation insurance is stalling key elements of the Fiscal Year 2027 draft budget. "Our current Workers' Compensation carrier will stop writing policies in Arizona, July 1st, 2026," Fire Chief Douglas Chappell told the board, and the district does not yet have replacement rates.

Chappell told trustees two alternative carriers are under consideration: the State Fund and Securis, a pool composed of Arizona fire districts. He said Securis "is not capitalized" and that "the deposit may be substantial at $300,000 with a five year deposit requirement." Because the district lacks final rates, the chief said salary increases and other budget changes "cannot be considered" until the carrier situation is resolved. Chappell also reminded the board the district's most costly Workers' Compensation loss was a line-of-duty death four years ago, a factor that has driven long-term cost volatility.

Board members pressed for more detail on timing and financial exposure but the district said it has not yet received firm rate quotes from either replacement carrier. The board left the FY2027 budget in draft form and did not adopt salary changes or other cost decisions at the March meeting; staff were directed to continue seeking rate information and to report back when quotes are available.