Guyton’s fire chief is considering charging service fees to the insurance companies of individuals the fire department serves.
Chief David Starling approached the Guyton City Council on Tuesday evening with the idea of implementing a cost recovery program, in which homeowner and auto insurance companies are billed for services rendered to their policyholders.
“We’re trying to find other alternatives to getting money for the fire department,” Starling told the council.
He said he first learned about the service fees about four years ago when a fireman at the Guyton fire department was involved in a wreck out of state and his insurance company was billed for fire services.
However, he never initiated the service fees in Guyton because he didn’t have anyone who could handle the billing and set-up.
Michelle Johnson, collections manager for the Effingham County EMS and president of Billing Solutions, explained how the billing process would work and offered her company’s services to handle the billing.
She explained that the fees would be charged to the individual’s insurance company, if they are at fault. The policyholder would pay nothing.
According to Johnson, insurance companies already set money aside for these fees and it is up to the individual policyholder to elect this benefit as part of their coverage.
Starling stated that car and structure fires and auto accidents would incur a service fee. There would be a flat rate per hour for service. On average the Guyton Fire Department receives 225 calls a year.
The money attained would go toward repairing equipment that was damaged while in service, training and training materials, according to Starling.
One resident at the council meeting asked about insurance premiums rising in light of the service fees being charged.
Johnson countered that in the case of a car accident, if the policyholder is at fault, their premiums will rise anyway. If they are not at fault, the insurance company pays nothing and neither does the policyholder.
She admitted, however, that she did not know if homeowner’s insurance companies work the same way.
A reduction in the budget is a reason for implementing the cost recovery program, according to Johnson.
“The budget cuts — they seem reasonable, they seem legitimate, but it creates a need, a need for a department to find alternate ways in which to broaden the revenue base,” she noted.
Departments can either raise funds through service fees or raise taxes, according to Johnson.
Yet, what are the benefits to Guyton residents and drivers electing to get the benefit?
Johnson said the real benefit is to the local fire department. These service fees enable fire personnel to get needed funds to keep the department functioning properly and responding in a timely manner to calls. The benefit to the local fire department in turn becomes a benefit to the whole community.
Starling has yet to determine the amount of the fees, so he cannot say how much the fire department stands to make from the cost recovery program.
The county fire department already charges service fees and uses one of their own employees to handle the billing. Springfield plans to start implementing its cost recovery program in the next couple of months, according to Amber Nettles, deputy city clerk.
An ordinance was passed last month permitting the program, and the fees have already been set. The city is collecting bids from outside sources to do the billing for them.
Springfield’s rate structure will have three levels based on the amount of work and time involved on each service call. The local fire department averages 20 to 30 calls a month, according to Nettles. Fees will be incurred for auto accidents and brush, car and structure fires.
The money gained will be used to restock their equipment and to improve the fire department in order to lower the ISO rating.
Johnson mentioned that many cities have a cost recovery program.
Guyton’s council decided to work on an ordinance implementing the service fees and determine the amount of the fees.
Starling said that in addition to the cost recovery program he is trying to get a grant for the fire department for next year.