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Fire Cost Recovery

Fire Cost Recovery

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Published by darnellbrandon
Staff report on Sacramento's fire cost recovery ordinance.
Staff report on Sacramento's fire cost recovery ordinance.

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Published by: darnellbrandon on Jan 26, 2011
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01/26/2011

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16
Meeting Date:
1/25/2011
City
of
SacramentoCity Council
915 I Street, Sacramento, CA, 95814www.CityofSacramento.org
Report Type: Staff/DiscussionTitle: Ordinance:
Adding
City
Code Chapter 8.128 Relating
to
Fire
Cost
RecoveryReport
10:
2011-00121Location: CitywideRecommendation: 1) Adopt
an
Ordinance adding City Code Chapter 8.128 Relating to Fire CostRecovery; 2) Adopt a Resolution establishing mitigation ratesContact: Ray Jones, Fire Chief, (916) 808-1300, Fire Department, Mark Prestwich, Special ProjectsManager, (916) 808-5380, City Manager's OfficePresenter: Ray Jones, Fire Chief, (916) 808-1300, Fire DepartmentDepartment: FireDivision: Admin Services Roll
Up
Dept
10:
City Attorney
Review
Approved
as
to
~or
Matthew Ruyak
..
---,
Approvals/Acknowledgements)
~...
D e p . a r t m e n ~ 
Director or Designee:
r j O n e S ~ s f d . C i t Y O f S a C r a m e n t o . o r g 
9~tiA\lGvv1t.
.
/~.~~
Assistant City Manager: Cassandra
J e n n l n g S C a : ' ( ) 0 t l M . . . / ~ $ m ? f - ' ( j ~ l 
Eileen Teichert, City Attorney Shirley Concolino, City Clerk
Gus Vina, Interim City Manager
Russell Fehr, City Treasurer
 
Description/AnalysisIssue:
Sacramento's Fire Department provides services for motor vehicle accidents, vehicle fires,and structure fires, among other services. A growing number
of
fire districts and cities, includingRoseville, Stockton, San Francisco, and Oakland, have adopted ordinances authorizing the recovery
of
costs associated with providing various emergency response services, including responding tovehicle incidents. All persons operating motor vehicles
in
the State
of
California are required tomaintain sufficient liability insurance coverage, which pays expenses related to accidents when theinsured is at fault. The adoption
of
City Code Chapter 8.128 will allow the City
of
Sacramento torecover a portion
of
the cost
of
providing these services to non-residents.
Policy Considerations:
Like most cities, the city already recovers the cost
of
some servicesprovided by the Fire Department (e.g., Advanced Life Support ambulance, hazardous materialscalls, high risk rescues, etc.). The Sacramento Metropolitan Fire District is also consideringimplementing asimilar program and recently concluded a Request for Proposal (RFP) processseeking a third party vendor to process the anticipated volume
of
claims. The proposedordinance applies only to persons who are not residents
of
the City.
Environmental Considerations:
The recommendation does not constitute a "project" andtherefore is exempt from the California Environmental Quality Act (CEQA) according to Section15061 (b)( 1) and 15378(b )(2)
of
the CEQA guidelines.
Sustainability:
Not applicable
Commission/Committee Action:
The proposed ordinance was reviewed by the Law andLegislation Committee on July 20, 2010. The Committee directed staff to forward the proposedOrdinance
to
Council for consideration and requested staff provide additional detail related to theproposed dispute resolution process and ability to audit the program.
Rationale for Recommendation:
The purpose
of
this ordinance is to recover costs for emergencyresponse services provided to non-residents.
Financial Considerations:
The city estimates annual recovery
of
$300,000
to
$500,000
in
GeneralFund costs associated with emergency response services. This figure is based
on
analysis
of
thecity's accident data and interviews with firms providing fire cost recovery billing services.
Emerging Small Business Development (ESBD):
Not applicable
Back to Tableof Contents
 
Background
The Sacramento Fire Department provides a variety
of
emergency response servicesincluding, but not limited to, motor vehicle accident response, motor vehicle hazardousfluid spill clean-up, and vehicle fire suppression. A growing number
of
fire departmentshave adopted ordinances authorizing mitigation rates for recovery
of
costs for firedepartment services, and to avoid service brown-outs and staff reductions. The FireDepartment responds to approximately 3,600 auto accidents annually in the city limits.
In
California, more than 50 public agencies have adopted ordinances authorizing costrecovery
of
fire related costs. More than 70 percent
of
these agencies seek cost recoverystrictly from non-residents. Others seek recovery from persons regardless
of
residency. Alist
of
these agencies is included
in
this report.Proposed OrdinanceThe adoption
of
City Code Chapter 8.128 establishes mitigation rates to recover thereasonable city costs from non-city residents who are responsible for incidents requiringservices provided by the Fire Department. Residents are defined by the ordinance as: 1)any person who maintains his or her full time residence within the city;
or
2) is the majorityowner
of
a business that operates from real property owned by the business located withinthe city. All persons operating motor vehicles
in
the State
of
California are required
to
maintain sufficient liability insurance coverage, which pays expenses related to accidentswhen the carrier is at fault.The proposed mitigation rates reflect the city's cost
of
providing services and take intoaccount the cost
of
personnel, supplies, and equipment. Rates cannot not exceed thecity's actual cost
of
provided services. Staff estimates the city will recover approximately$300,000 to $500,000
of
General Fund expenses annually via adoption
of
this ordinance.The fire cost recovery program will
be
managed by the Fire Department's OperationsDeputy Chief.Cost Recoverv and Reimbursement ProcessStaff intends to utilize a third party billing service selected through a competitive Requestfor Proposal (RFP) process just as the city does now for claims related to providingAdvanced Life Support (ALS) ambulance services. The city utilizes third party billingservices for ALS cost recovery because the expertise and advanced billing methodsprovided by these specialty vendors typically result
in
much higher claim reimbursementrates. Additionally, the city does not have the staffing to process the volume
of
ALSreimbursement claims nor the anticipated volume
of
claims. Most cities with similar firecost recovery ordinances utilize third party billing companies.Third party billing generally requires the city to pay a percentage
of
funds recovered(typically 14
to
20 percent). Because the volume
of
claims is driven by the number
of
accidents, the third party billing company only processes the claims and specific chargesprovided
to
it by the city. This is the same procedure used by the city for recovery
of
ALSambulance fees.

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