Water tender questions

General Discussion
#1

Hey guys,

Not sure if this is the right place for this but I need some help… First of all, thanks in advance for any and all help.

I’ve been doing a bunch of research on starting a water tender company. I’m a 9 year firefighter in California and Im super interested in buying a water truck and starting my own small business.

I’ve searched the web, called around to a bunch of different companies that own water trucks but I’m having a hard time getting solid info and advice.

My main questions are…

Is the demand for water trucks worth taking on this business idea? I am not a Vet but I believe I would be considered a small business so that would fall in tier 2.

What are the requirements for my driver? Class A license? Any firefighter training? Etc. and is there a problem finding drivers? I’ve seen ads posted searching for drivers.

Are there any major hurdles or hidden costs that I can’t foresee. Once I buy my first truck I see my main costs as: insurance, fuel, maintenance, storage.

I know everything with government/cal fire stuff can take a long time. Is the process for getting on the list as a deployable resource a long process. And can I even make that list if I only start with one truck?

I am also looking for suggestions on what kind of truck I should be looking for. I know DEF will be an issue very soon but in terms of what water capacity and buying a truck out of state, what would you suggest as a first timer trying to get my feet wet in this ?

Thank you in advance for any help you can provide. Like I said, I’ve called a ton of businesses but I can’t get anyone to help me out on these crucial questions. Don’t want to sink my life savings into an idea and get screwed.

Thanks again!

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#2

Good morning, there are a lot of things to consider and you have asked the right questions so far. I would first start at the CalFIRE and VIPR (Forest Service) https://www.fs.fed.us/business/incident/vipr.php?tab=tab_d contracts and requirements. More bang for your buck on CalFIRE contracts https://r.search.yahoo.com/_ylt=Awr9DuAPvZpfJPcAhelXNyoA;_ylu=Y29sbwNncTEEcG9zAzQEdnRpZANBMDYxNV8xBHNlYwNzcg--/RV=2/RE=1604005264/RO=10/RU=https%3A%2F%2Fcalfireslo.org%2Fwp-content%2Fuploads%2F2019%2F08%2F3934.pdf/RK=2/RS=PTnHREOW_WuwzViBzBzSVNo1M30-. These will lead you in the directions you need to look at. But in short, YES to all your questions. You need a curtain drivers license, wildland classes, more than 1 driver, curtain size of tender…and the list goes on. There are Contracting Officers in both departments that can also set you in the right direction also. Your pricing will also set you on the DPL (Dispatch Priority List, for VIPR) though CalFIRE goes by closest resource. Hope this helps. I now that with all the fires going this year alone, there was a need for more water tenders.

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#3

Before you commit to this enterprise please consider conflict of interest issues. If you are a current career firefighter, especially CALFIRE, you will run into conflict of interest and will not get a contract.

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#4

In addition to what everyone else has posted to help, make sure, double and triple sure, you understand the ramifications of AB5 particularly as it pertains to your 2nd operator for the 2nd 12 hour shift. AB5 is a real gotcha if you don’t properly plan for it. If you chose to limit yourself to only 1 operator being yourself, you will only be allowed a 12 hour shift and may well limit your callouts as most orders will be for 24 hour shifts on the initial requests. As an incident begins to wind down and enter into the rehab, there is certainly opportunity for 12 hour work.

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#5

Okay thank you! I will check those websites out! Appreciate your help

#6

I am a career firefighter, but not with cal fire.

As long as I do all the steps as anyone else would do, I’m not sure how this would be a conflict of interest. I’m thinking I will have my own separately owned small business. Open an LLC to protect myself. And My tender would be dispatched just like anyone that isn’t a career fireman.

Like I said though, I am completely green in this area so any and all info is appreciated. Can you give me more insight on this as I may be totally missing something.

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#7

Thank you for leading me to that. Read up on AB5, there’s a lot speculation on who it affects and who passes the “ABC test”. Hard to find specific info on water tender operators though.

So My main goal is to buy a water truck and employ subcontractors to take the rig on deployments. I will verify they have their own business and worker’s comp. To protect myself.

If this is the case, With AB5, can operators (subcontractors) not work for a 12 hour shift ? 24 hour shift?

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#8

Yes, you can staff with strictly contractors, 1 operator per 12 hour shift, however, that means that you need to include the costs for not only the operator but also the expenses relating to AB5 into your business analysis and ROI models. And any contractors you do use, need to have all the necessary fireline certs., CDL, and experience to safely operate your valuable piece of equipment. Not much will damage your company’s reputation faster than having sub-standard people operating your equipment unsafely or not able to meet the standards and rigors of fireline assignments.

One additional factor that you need to keep in mind, fuel costs for your equipment are on your dime. There is a charge back for incident based fueling, so make sure you incorporate those into your calculations

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#9

Good points, thank you.

Can you explain AB5 and how it affects this specific business model a little more please? I’m trying to read all about it but all the legal mumbo jumbo is like reading a different language.

Also, what are the going rates for contracted tender operators right now? I’ve talked to operators on fires but I have a small sample size.

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#10

I am not an expert on all of the ramifications of AB5, however, what I do know is that you are now required to treat people you use as contractors as employees. This would mean that you are now responsible for their PPE, benefits, pay into the State Disability fund, pay into the unemployment, etc. and issue full W2’s instead of 1099’s for those “employees.” I would strongly encourage you to consult with a tax specialist and perhaps even a tax attorney to get the full ramifications of that particular subject. The last thing you would want to do, is forge ahead and find yourself jammed up by this scenario.

As for the equipment rate schedules, it varies by size but you can find the WT rate schedule on page 42 of the CalFire Supplier Manual here: CalFire Supplier Manual This is an invaluable tool for you as you consider the options and requirements.

Also, here is the link to the Hired Equipment Checklist of all the required elements that you need to be able to document and show proof of before you will be allowed to be placed onto the eligible list. Keep in mind that CF generally establishes the eligibility list somewhere in the April timeframe each year. CalFire Emergency Equipment Rental Agreement

In times past, Region 5 was mirroring this rate schedule but 2020 took a radical turn in that arena.

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#11

Well, in terms of CALFIRE this is strictly prohibited as a conflict of interest. You might want to check with your agency, if you have a hired resource on a fire that you or your agency are assigned to it can get real sticky. If nothing else, just the perception. Think about a reporter who gets their teeth into the story. Not saying anything with bad intent, but in this day and age, just make sure you do your due diligence.

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#12

Thank you. That’s huge. And quite the curve ball because I was under the impression that if you contracted out your operators, instead of hiring an employee, the contracting company provided most of those requirements, like PPE, benefits etc.

I wonder how this is affecting current guys that had to make all those changes to comply with AB5.

I’ve been looking at the CF supplier manual but I was wondering what my payment would be to the contractor for a 12 or 24 hour shift.

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#13

Another thing to keep in the back of you mind, normally after a big/bad/long fire season where there has been a lot of equipment hired, everybody runs out and buys a dozer and/or a water tender. And if next season is not as busy they lose their shirts. JMHO

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#14

Great point. All about perception today so I totally understand that. I will definitely check with my agency before I pull any triggers. I would hope it would be looked at as… “California has a need for water trucks… Firefighter starts his own water truck company to help out even more” Haha. But things can always be twisted

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#15

Another great point, thank you. Personally, I see this year as the new norm. YEARS of Mismanaging the forests can’t be undone. There will be ups and downs in terms of resource needs but if I decide to go this route I would hope to be in for the long haul.

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#16

So, it sounds to me like you have some serious misperceptions on how this all really works. There isn’t, to my knowledge a temp agency that magically provides line qualified WT operators. Perhaps for the construction world but not fireline qualified. If such an agency does exist, they’re not going to provide all of those elements for simply the cost of the operator rate. All of the costs including the operator rate, which will most likely be at Prevailing Wage classification, benefits, gear, licensing and insurance, and some amount of overhead costs will be baked into the hourly rate they would quote you to perform this activity.

Being a CWN participant is not a situation whereby you have an ownership in a WT and then wella it magically makes you a lot of money. It takes a lot of planning, involvement, maintenance and upkeep, both on the line and off. Keep in mind, that any line repairs or maintenance requirements are yours to coordinate with a mechanic of your choosing, not the incident mechanics and yours to pay for.

It really would behoove you to sit down with a business development person who will help you put together a business plan, financial plan that incorporates all of the details and from there determine if that’s in your budget.

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#17

With AB5 Calfire has taken a “wait & see approach” till everything is fully adjudicated. The Current Prop 22 will only impact the “Gig” Workers (Uber, Lyft, Door Dash) Any EMPLOYEES (people keep calling them contractors) MUST be covered by Workers Compensation and as previously mentioned paid on a W2 and not a 1099… The rate you pay for W-C will be determined on what Classification you are in. I can tell you from experience,
W-C(Workers Comp) will cost you between
15-25% of the employees wages. General Liability insurance (required) will cost you between 3-5% of your gross receipts. Insurance is based on risk and you WILL be audited EVERY YEAR at renewal time. Also, California Labor laws require OT to be paid after 8hr per day and 40hr per week. So the rate you pay your employee should include at least 8hr straight time and 8hr OT as a 12hr shift can be extended to 16hr at the 1-operaror(standard) Calfire scale(see Supplier Participation manual) the W-C is based on the GROSS WAGES.

I “Technically” still own a S-Corp and use to be a contractor. I always “Plugged” my employee wage cost at 1.5% of gross wages. As an example, a driver that makes $25/hr straight time I would plug at $56/hr(25x1.5 for OT = $37.50 x1.5 =56.25) to cover costs. Cost include the previous mentioned W-C, plus FICA (Social Security employer part) at 7.5% plus Medical(1.5%) plus Unemployment (1%) plus overhead(other costs) As you can see, that’s $675.00/day for a 12hr day.

This doesn’t include Registration, Heavy Highway use taxes, fuel, repair, or acquisition cost, required equipment
(SPM requirements) safety gear or training. Remember, just like you, if its required training, the employee is entitled to get paid.

As a plug number, your costs per day will be between $900-1500 per day on the fire with employees. Employees are entitled to get paid weekly or bi-weekly. Calfire pays between 45-90+ days FROM END OF INCIDENT. There currently is no mechanism in place for progress payments. So the WT contractor that GROSSED $100,000.00 this season on say the August Complex (on the fire 45 days, with employees) is out $40,000 minimum and hasn’t been paid yet.

Finally, most AGENCY people who work in finance or time see these HUGE payments to the contractors and think THATS EASY. What they don’t see is the ACTUAL COSTS it takes to make that $100k. They don’t see the Owner/Operator that was gone from home for 45 days, lived out of town for 45 days, and now gets to wait an additional 60-90 days(avg) to get paid.

Good luck

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#19

I’m thinking you meant 1.5x, not 1.5%, right?

The cashflow part of contracting is a real issue. Being able to cover expenses and payroll for the first 45-60 days of each fire season means you have to save a big chunk of the prior year’s profits rather than being able to re-invest in new equipment. And the prep costs for each season (training, registration, insurance) are fixed whether there are fires or not.

It has always seemed to me that the people who did the best with WTs were the contractors, loggers, ranchers, and other folks who already had the shop, drivers, mechanics, and know-how to keep equipment running, and other ways to make money with the equipment when it wasn’t on a fire.

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#20

AB5 is why prop 22 is on the ballot. Uber and Lyft want an exemption from the AB5 rules. It will cost them a lot of money to have to treat their drivers like employees.

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#21

@pyrogeography you are correct one & half times not 1.5%:rofl:
@Reddgroom you are correct. Prop 22 will only exempt the “Gig” Economy (Uber, Lyft, Door Dash, etc). The rest of the subcontractors that cannot pass the ABC test will be required to hire “subs” as employees because of the way the law is written. As an example, in construction a lot of “B Contractors” General Building contractors(custom home builders) work for each other as Subs when they are between jobs/projects. They all carry GL, have a CSLB B-License, and are bonded. They pay each other on a 1099. With AB5 they cannot pass the ABC test and now have to hire each other as “Employees”. Another example is trucking, fully 70% of all trucks in the nation are “Owner/Operators, Independent Contractors” Since the passage of AB5 ALL of the large national carriers (SWIFT, JB HUNT, CRETE, CR ENGLAND) have eliminated 100% of their O&O fleet in California because of AB5. The net result has been a decrease in available trucks and an increase in the cost of freight. AB5 was nothing but a give away to SEIU.

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