When the Los Osos Community Services District (CSD) asked neighboring Morro Bay whether it could provide fire protection and emergency medical services (EMS) in September 2025, Morro Bay Fire Chief Daniel McCrain said it may be possible.
Now, the decision rests with Los Osos.
During the March 10 Morro Bay City Council meeting, council reviewed and approved sending a response to the Los Osos CSD outlining what a shared fire services agreement could look like and how much it might cost.
“This response does not commit us to providing this service,” McCrain told the council. “It is an answer to their letter of interest and a starting point for negotiations, should the Los Osos CSD decide to pursue this option.”
Los Osos has contracted with Cal Fire and San Luis Obispo County Fire since 2004. While the district owns its fire station and equipment, Cal Fire provides personnel. Rising costs, however, prompted Los Osos to explore alternative models.
“Recent sharp increases in contracted service costs—and persistent challenges in resolving operational and fiscal issues with the county—have prompted the board to direct staff, as of Sept. 4, to seek alternative service models that better meet Los Osos’ needs,” Los Osos CSD General Manager Ron Munds wrote in the September 2025 letter to Morro Bay.
In response, the Morro Bay City Council formed a subcommittee in October to evaluate the request and prepare a draft proposal outlining potential service levels and estimated costs.
Under the proposal presented to the council, Morro Bay would seek a 15-year contract if the arrangement moved forward. McCrain said a longer agreement would provide security since the city would need to hire additional staff to operate a station serving Los Osos.
“The Morro Bay Fire Department does not currently employ enough personnel to provide this level of service,” McCrain wrote in the draft proposal. “Recruitment of 12 personnel would be required prior to implementation. Funding for recruitment, training, and PPE would have to be provided in advance of the implementation date.”
The proposed model calls for four fire fighters on duty each day—one captain, two engineers, and one firefighter—staffing two apparatus, such as two engines or one engine and one squad. Each apparatus would include at least one paramedic on duty per apparatus.
“Having a larger pool of personnel provides greater flexibility for mutual aid, participation, special event coverage, and the ability to staff up additional resources in the event of a local disaster,” McCrain said.
The proposal includes two cost estimates for operating fire services in Los Osos under Morro Bay management.
Using the highest possible salary and benefit levels, the estimated annual contract cost would be about $4.6 million, including roughly $3.62 million in personnel costs and about $470,000 in operating costs.
A second estimate reflecting more typical first-year hiring conditions places the contract cost closer to $3.6 million annually.
Additional expenses—such as station utilities, vehicle replacement funds, and capital improvements—would be paid directly by the Los Osos CSD, bringing the estimated total annual operating cost to just under $4.2 million.
“Just for comparison, the current Los Osos CSD fire department budget is $4.155 [million],” McCrain said. “This is for three full-time employees, and not four. And their current contract costs with Cal Fire is $3.358 million.”
Council members emphasized that Morro Bay residents would not see a reduction in services if the city entered into a partnership.
“It would be unacceptable to have any degradation in the level of service here in Morro Bay,” Councilmember Bill Luffee said.
Mayor Carla Wixom echoed the sentiment, adding, “My priority always will be to the citizens of Morro Bay first and foremost.”
Los Osos officials are currently reviewing several options, including continuing with Cal Fire, seeking a state contract, forming its own department, or partnering with Morro Bay. If the district chooses the latter, both agencies would enter formal contract negotiations before any agreement could be approved. McCrain said implementation, including hiring and training, could take at least a year.
“This is just the first step in answering their question of, if we were to explore this, what’s an estimate of what those costs could be,” McCrain said. “Their board will deliberate and determine what their next steps are.” ∆
This article appears in March 12-19, 2026.