The Springfield City Council passed an ordinance instituting fire service fees Tuesday night.
“We did not write this ordinance to charge the members of our district money,” Fire Chief Edwin Rahn said. “There’s money that’s built into insurance companies on the payout side that is sitting there waiting for someone to claim it. Some insurance companies do not have this built in. If it’s not built in then we go home.
“If it’s built in the insurance company you send a bill to them they do have a max on it, and they’ll only pay you what you bill, but they won’t pay you any more than what they have sitting over there in the cookie jar waiting for you to collect,” Rahn said. “If you don’t collect it they put it in their pockets.”
Rahn said there are companies across the country that provide billing services for these fees for a percentage fee.
“They range from 20 percent off the top to less, and I don’t know where the bottom is,” he said. “The bottom we found is 9 percent. That was a local company, and she is involved in EMS billing cycles at this time, so she knows what she’s doing.”
Rahn said there was a company that used the report logs from two years ago and taking out a percentage to represent the insurance companies that would not pay told him the department could have collected between $14,000 and $15,000.
“The only time that a homeowner would see any document from this fire department would be when they have a negligent burning without permit,” he said.
The ordinance is written that user fees charged to residents would be used for fixed costs while service fees would be for costs incurred from responding to a scene.
“It’s called a service fee you are paying for the services you used up,” Rahn said. “Not for us being ready to go, but us actually going. Current funds pay for what we have now. We’re just looking to recoup some of the expenses we have.”
The ordinance passed unanimously.
Councilman Dennis Webb told Rahn the contract for the billing company would have to be approved by the city council.
Council members also approved to send a letter Rahn wrote to increase user fees countywide.
The letter requests the user fees be raised from $35 to $50 for residences, and from $50 to $100 for businesses. The letter also asks that persons over the age of 64 be except from the increase on the home they live in.
“There is something I want to bring up after thinking about it,” Councilman Kenny Usher said. “I chewed on it and chewed on it and we had a fire department committee meeting yesterday. I feel the need for revenues is great enough to add a little bit on to everyone in the city as a means to get us to our goal of lowering our ISO rating.
“I know there’s a lot of sensitivity on that, and I respect that, but my main goal here is to see the ISO rating to put insurance premium dollars back into the pocket of every resident of the city of Springfield. I would like to modify this to have the rates go up about $15 a year.”
Councilman Max Neidlinger saw Usher’s point, but also wanted to know that senior citizens were being taken care of. He reminded councilmembers that he said he would support the user fee increase as long as senior citizens were exempt.
“I think that we really and truly are getting away from that,” he said. “I’ll support you one way if you eliminate the senior citizens totally from the tax digest of the city of Springfield, I’ll support you on your motion.”
“That’s something to be considered, but not right now,” Usher said.
Webb said eliminating a group by age from taxes would be difficult.
“Another point is that we do not chart people by age in this city, so if you pass such an ordinance people are going to have to apply to be exempt from it with proof of birth,” Webb said.
“I just feel this is a small investment to put a sizable amount of money back in people’s pockets particularly senior citizens,” Usher said. “If we can put an average of $200 a year and I don’t know how set in stone that is, but I do know there are some substantial savings when the ISO ratings are lowered and we’re shooting for two points lower. That’s what I would like to see. We’re talking about $200 a year, investing $15 a year out of every resident’s pocket. That’s $185 back in savings. That’s the angle I’m working from.”
Usher said the council would be going out on a limb by increasing user fees inside the city with the chance that the county did not do the same.
Mayor Barton Alderman said the council has not done anything to the user fees.
“This is for permission to send the letter to the county; however, as stated at the last council meeting it would look pretty bad if we raised the rates on somebody who is 100 yards outside the city and their neighbor right inside the city who is in hydrant range is paying less than they are,” Rahn said. “I still think the city needs to take the lead on the rate increase.”
Rahn said those over 64 who live inside the city limits would have to fill out a simple form showing a driver’s license or birth certificate to verify age and mail to prove they reside at the address exception from the increase is asked for.
“Is there any way you could put information out to the citizens how much the reduction would be how much savings,” Councilman Charles Hinely said. “If they see what they’re going to get from this $15, they’ll sign on.”
Rahn said savings would depend on where a home is and what the insurance company covering the property is.
Rahn said he couldn’t guarantee anything and it could be least three years before the department is ready for another ISO rating.
“This is not a ‘turn the key and have it in here tomorrow and you’ve got your savings,’” he said. “This is an investment that takes a couple years to get it built.”
Usher made a motion to approve the letter deleting the exemption section. The motion failed when there was no second.
Neidlinger made a motion to accept the letter as written. The motion passed unanimously.