Grants and Funding

Cities Implement First Responders’ Fee for Nonresidents to Fill Budget Gaps

Reduced budgets force some fire departments to implement emergency services fees for nonresidents, but some states are outlawing the practice altogether.

 

As the Great Recession causes municipalities to make cuts wherever possible and look for new revenue streams, some fire departments are implementing a first responders’ fee for nonresidents. If someone gets into a car accident where emergency response is necessary or is involved in a hazardous materials spill in a jurisdiction in which he or she doesn’t reside, the nonresident can be responsible for a fee, usually ranging from $300 to $400. The reasoning behind the fee is that cities can collect money from nonresidents for emergency services because they don’t pay taxes to that local government — and taxes are how fire departments, for the most part, cover the cost of emergency response.

In California, the Garden Grove City Council implemented a $350 Non-Resident First Responder Fee last year in response to a paramedic services tax that was put in place in 1974. At that time residents approved a per-parcel tax to provide funding for fire-based paramedic services in the city. For 35 years, nonresidents were provided the services for free, but that changed in 2009. “The council felt that because if you’re a citizen and you’re paying for a paramedic fee in the form of a tax, it wasn’t the citizens’ responsibility to pay for nonresidents who utilize paramedic services,” said David Barlag, deputy chief of the city’s fire department.

The fees don’t apply to Garden Grove residents, people who own a business in the city, and in cases where the response was at a city resident’s house and the patient is a family member, according to the city’s website. Barlag said the fee is billed through the city’s ambulance company, Care Ambulance Service, and he didn’t have an estimate for how much money the nonresident fee has brought to the city.

“A number of cities in Orange County have nonresident fees, and we’re not the highest and we’re probably not the lowest either,” Barlag said. “Every agency is looking for ways to increase their revenues, and our council felt this was the fairest way across the board.”



States Ban First Responder Fees



Although cities nationwide are implementing nonresident emergency services fees, at least 10 states have outlawed them. States forbidding the fee include: Alabama, Arkansas, Florida, Georgia, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee.

After Alabama’s Legislature passed a bill in April to ban nonresident fees, Monique Kabitzke of the Property Casualty Insurers Association of America said she supported the ban and called the fees a “back-door tax on consumers” in a statement. “Local municipalities calculate their tax structure based on the services provided, so adding charge-backs as a source of revenue amounts to a form of double taxation,” she said in the release.

Oregon’s municipalities have retained the right to employ the fee, and in June, the Ashland Fire Department passed an ordinance implementing the program. “The trigger is going to be … any event that is a motor vehicle collision or hazardous materials spill exceeding two staff hours — so that could be two people for one hour, four people for 30 minutes each,” said Fire Chief John Karns, adding that the fee falls under National Fire Incident Reporting System codes.

To collect the fee, Ashland is going to contract with vendor Fire Recovery USA, which provides cost recovery for fire departments, due to its experience in dealing with insurance companies, Karns said. Rick Benner, the chief financial officer of Fire Recovery USA, said the company is working with more than 160 agencies in about 20 states, and the company’s system allows it to have higher collection rates than what fire departments can obtain independently because of its software and expertise in working with insurance companies. “Right now most governmental entities are struggling financially, so they’re looking for ways to try to maintain their services,” he said. “They realize that they can’t raise taxes in this environment and they would like to reduce services as little as possible because that threatens life and property.”

The money collected from Ashland’s fee will go into the city’s general fund, which is how the fire department is funded. However, Karns said, budgets may be subsequently adjusted due to the additional money. But he doesn’t foresee a big difference in available funds. “We don’t anticipate a large revenue stream from this, so it’s mainly been instituted to protect us from large, long events that can tax our overtime budget quite a bit.”



Denver Debates Nonresident Fee



The Mile-High City is debating implementing a fee for vehicle accident responses made by the Denver Fire Department for nonresidents. The fire department proposed initiating the fee in 2009 during budget planning and if implemented, it’s expected to raise about $1.1 million annually, The Denver Post reported. However, Mayor John Hickenlooper said in early July that he’s not married to the proposal.

Three other fire departments in the Denver metropolitan area are charging nonresident response fees, but according to Deputy Chief Greg Champlin, instead of charging all nonresidents involved in vehicle accidents, Denver would only charge nonresidents at fault. “Which is a better model because other jurisdictions, if someone runs into you and you’re not at fault, you get a bill,” he said. “If you’re at fault, we were told by third-party vendors that people’s auto insurance would pay for it, but they would have already met their deductible because if they were at fault they would have had to pay for vehicle damage, medical costs, ambulance fees, towing and then the $300 to $400 service fee for the fire department if we provided service.”

If Denver implements the fee, Champlin said the amount would be based on the actual response cost, which can include auto extrications, first aid, auto fires, firefighters’ salaries and equipment costs. The city has been recovering these costs for hazardous materials spills for at least 20 years and a third party validated the cost estimates, he said. If the fee’s put into practice, Denver would use a third-party vendor to do cost recovery in order to not incur collection costs.

The issue will go back to the city’s Public Safety Committee on July 21 before going to the City Council and mayor for approval. “In the city we value business and people coming into the city to work and to visit, and spend their vacation dollars,” Champlin said. “I believe that’s why the mayor is reconsidering charging the fee.”

[Photo courtesy of Lucas Hirst/FireDepartment.org.]
 

Elaine Pittman  |  Associate Editor

Elaine Pittman is the associate editor of Emergency Management magazine. She covers topics including public safety, homeland security and lessons learned. Pittman is also the associate editor for Government Technology magazine. She can be reached via email and @elainerpittman on Twitter.

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