Officials table plans for safety service fees
According to the mayor, residents fear insurance premiums will rise.
By JOHN W. GOODWIN, JR.
VINDICATOR TRUMBULL STAFF
GIRARD -- Some city officials think legislation allowing the city to charge for some police and firefighter services might raise residents' insurance rates, and some in the insurance business say they are right.
City council, earlier this month, gave first reading to an ordinance that would establish user fees charged when police officers or firefighters are called out for accidents, structural fires and hazardous material spills.
The city planned to partner with Cost Recovery Corporation of Dayton to collect the fees if the ordinance passed.
Before the ordinance could be given a second or third reading, Mayor James Melfi asked that it be tabled indefinitely. The mayor said many residents have expressed concern that insurance rates will go up.
According to Melfi, city officials do not have enough information to answer insurance questions posed by the community.
"I have not been given any data proving to me that insurance rates will or will not go up," he said. "I am concerned about this affecting the rates of our citizens who pay insurance."
Melfi said the city should wait and see what happens with the practice in other communities across the state in the long term.
Representatives in the cities of Hubbard, Niles, Warren and Youngstown said no such fee collection system is used in those communities.
Police Chief Frank Bigowski, at the time of the first reading, said insurance rates would not increase because these types of fees were already figured into premiums. Mary Bonelli, Ohio Insurance Institute, said that is not the case.
Bonelli said communities' charging for police and firefighter services is a growing practice across the state. She said it is being pitched to cash-strapped communities by various companies as a way to save money.
"This is becoming a common practice in Ohio. [Companies] are marketing their services to cities and municipalities all over the state," she said. "From our standpoint, we, as an industry, are taking issue with this practice."
According to Bonelli, some insurance companies will pay the fees and others will not, but insurance companies do not set premium rates with those fees in mind.
She said there is a potential for those fees to be passed on to policy holders in the form of higher premiums. Most insurance companies, she said, are waiting to see how the fees affect their bottom line.
According to information supplied by Cost Recovery Corporation, if the insurance company refuses to pay, the charges are written off. The city administration, however, can request collection action against the individual responsible for the service call.
Bonelli said those in the insurance business have other concerns with the practice as well.
A major concern, Bonelli said, is the collections penalize those who follow state law and maintain mandatory car insurance. She said there are no provisions for collecting the fees from individuals with no car insurance.
Bonelli said insurance companies feel another problem is that there is no consistency in fee amounts from jurisdiction to jurisdiction.
According to a price list provided to the city from Cost Recovery Corporation, fees for one officer at an accident for 30 minutes will range from $189 to $214. Those fees increase with additional officers or added police services.
Cost Recovery's list for firefighter fees can range from $587 to $618 for 15 minutes of service. Those costs also increase with additional firefighters and services.
According to the company information, any call for police will be billed a minimum of 30 minutes and any call for firefighters will be billed a minimum of 15 minutes.