Contracting Out
There are a number of key reasons why fire services are much more affordable as a contract, "commodity service".
Biggest reason is pensions. With CalPERS the cities not only have to make up annual "investment loss" if the 7% investment target is not hit, but the employers annual rate has nearly doubled in 9 years to 15.551% of wages. Local Government also must pay losses to CalPERS if somebody retires early (lost investment years) or retires on disability. Seams like larger fire depts have less of both. Nearly every "contract city" has zero or near zero pension liability.
In the last three decades regulations and standards that fire service have to meet have skyrocketed. Departments with 1-6 stations, or even bigger, typically struggle meeting regulatory requirements. Larger departments can afford to assign full time compliance staff, both uniform and civilian, purchase tracking software, even accounting staff. LACOFD as an example just added $2 million a year for better physician oversight of EMS.
Can't speak to Redondo Beach directly, however a number of smaller departments are spending $1 million just in administrative overhead, Chiefs, office staff, training staff. There are savings in sharing, Battalion Chiefs, trucks, hazmat, paramedic squads with other areas. Savings also adds up in large scale equipment and vehicle ordering, plus savings in maintenance. Although the contract cities pay for replacement (or new) fire stations, it does appear LACOFD comes in a few million cheaper than comparable stations that are "one offs".