Others Implement Cost-Recovery For At-Fault Parties

citycatDuring the course of Councilmember Lamar Heystek’s presentation of the alternative budget, one of his proposals for possible additional revenue was the idea of billing the party at fault when it requires fire or ambulance service.

Councilmember Heystek called it cost-recovery for at-fault party for public safety response.  He projected it could produce an additional 25,000 dollars in revenue for the city which would enable it to off-set some of the cuts to service for the public.  The city and the city council seemed to reject it almost on principle, but it established the idea of looking for alternative means by which to fund city services.

And while Davis rejected this idea, the city of Woodland has apparently implemented it according to an article in the Woodland Daily Democrat from Thursday July 16, 2009.

According to that article, as of July 1 the responsible party’s insurance in an automobile accident would be billed by a third party on behalf of the Woodland Fire Department.  This comes as the result of the city of Woodland’s need to balance a budget deficit while attempting to avoid cutting back services provided by the fire department.

Said the Woodland Fire Chief Tod Reddish:

“(In) most accidents, somebody has done something negligent to cause it.”

The article continues:

“Reddish equates this new system to people calling an ambulance knowing they are responsible for the bills. Emergency response incidents are often written into people’s house, vehicle, or health insurance. If the insurance won’t pay, or the at-fault party doesn’t have insurance, the at-fault party will not be billed.

Rick Benner, chief operating officer for Fire Recovery USA, said each city wants different things. Woodland opted to only bill insurance and not go after individuals. Other cities bill all responsible parties, insured or not.”

This is very interesting since the city of Davis seemed to reject the idea of having to charge people for this service since they claimed it might mean that people might avoid calling for emergency services altogether.  Woodland clearly looked much more closely into how to avoid that problem by going after insurance companies rather than individuals.

Woodland is employing this tactic as a means of avoid laying off firefighters which puts their plight a bit higher than Davis’.  Nevertheless it demonstrates the willingness for Davis to cutback on services without exploring other means of revenue enhancement without direct taxation.

While Councilmember Heystek projected the city of Davis could collect about $25,000 in revenue from such a program, the city of Woodland is expecting to collect about $167,000 from the emergency response fees.  That would amount to about 2 percent of their fire budget.  The Fire Recovery web site, according to the article, suggests that emergency response fee is less than $450.  However, when the fire department has to make numerous calls, those numbers can add up and become a burden.

The other point that the Woodland Fire Chief correctly assesses is that if an at-fault driver causes a wreck, the insurance company is generally going to have to pay in the thousands if not tens of thousands to repair vehicles or reimburse for cost.  This service would only add less than $500 to that bill.

As the Fire Chief said:

“What we add pales in comparison to the other charges associated to a wreck, in general. It’s relatively small compared to all the other things that would make that person’s rate go up.”

And yet for the city, the reimbursement is probably worth the cost of one firefighter.  For the city of Davis it could enable the city to keep services open for the public or any number of other things that have been cut in the current budget.

The article concludes by arguing that fire departments have hesitated billing for their services in the past but given current budget situations, it gets to the point where cities have no choice but to search for ways to pay for city services.

From the start, my argument to the city of Davis in terms of the budget was they were too willing to cut back on services to the public.  The public is the bill payer.  Without the public, there is no revenue.  And yet when the going gets tough, the public loses out on their services first. 

The big money comes in employee compensation as we have discussed at great length, however, at the margins Councilmember Heystek looked for some alternative ways to produce revenue.  Here is one of his ideas at work for the city of Woodland and they project receiving far more in revenue that Councilmember Heystek ever envisioned.  The city of Davis lacks any kind of creativity in how to alternatively approach the loss of revenue.  Other cities, worse off in terms of their current budget situation, have been forced to find ways to fund vital city services. 

But given the state budget picture and now the furloughs and resulting pay cuts at UC, the city of Davis next year might be facing a far worse situation than they are today as the bulk of their workforce figures to be effected either by UC cuts or state cuts.  We have to find ways to fund city services and apparently we did not perform due diligence in looking into means by which to do so.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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8 Comments

  1. anon

    Should I be ready to write a check if I have a bike accident? This is draconian. Agree w/ David. The public provides the money to fund city services. Why do we lose? There’s also another point. Many fire dept calls are medical. Instead of 2 engines/2 full crews responding to an obvious medical event (individual health emergencies), why not explore something like an ambulance w/ 1 high level medical team?

    Response cost is only $450 for 2 expensive engines and 6 firefighters? I want to make it clear that I think the fire dept is valuable, provides important services and is too often underappreciated. What I am saying is perhaps a more targeted response might save some money.

  2. Mike Harrington

    I brought this issue up when I was on the CC, and the Fire Chief convinced me that it was a bad idea to charge for emergency responses (police and fire), since it would certainly cause many people to hesitate to call for help … I still think charging for 911 calls is a vey bad idea for public safety.

    DPD, you are exactly correct: when the going gets tough, staff are very quick to terminate services to the public.

  3. earoberts

    The City Council majority knows of only one way to balance the budget – raise fees and taxes. Soak the taxpayer. Should be interesting to see if citizens go along with extending the parcel tax and sales tax. I know I won’t vote for either. I want a clear message sent to the CC majaority (A.S.S.): “You have not done your job, in negotiating the labor contracts to the benefit of the citizens of Davis, so I do not want to give you any more money to play with irresponsibly.”

  4. Mike Harrington

    Who decides what is “at fault”? That is a hotly contested factual issue in many motor vehicle accidents. Is the city going to litigate it? Although well-intentioned, I don’t think that a proposal to charge for public emergency services is going anywhere.

    (As to the tow trucks and accident site clean up companies, they have statutes protecting their rights to collect from the involved vehicles. This can get pretty expensive, especially when hazmat is involved.)

  5. Anon

    If the tow trucks and accident clean up companies can collect, then why not the ambulance/fire companies? It isn’t that difficult to assess fault – the police will do it anyway at the scene of an accident. Believe me, if anyone is at fault, the police will give them a ticket on the spot, as they are loaded into the ambulance or at the hospital.

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