EMS fees could drive up costs of insurance
New fees set to be assessed when out-of-town visitors need emergency service assistance in Youngstown could end up costing more than just the visitor.
That’s because the costs to visitors and their insurance companies for using Youngstown emergency services eventually could drive up insurance premiums of residents.
Youngstown City Council in October voted 4-3 to pass the plan allowing a contract with Fire Recovery USA LLC of Roseville, Calif., to bill and collect for use of fire department services. The city gets 80 percent of collections; Fire Recovery keeps the rest.
Here are some of the fees: $677, car fire; $1,461, vehicle extrication with equipment; $554, hazardous fluid spill cleanup; $448, for first-response vehicle plus $56 per rescue personnel for special rescue from swift water or confined spaces; $448 per hour per engine; $560 per hour per fire truck; $336 miscellaneous equipment. While it’s in the Fire Recovery USA contract, Youngstown fire Chief Barry Finley said the department wouldn’t charge for additional fees like creating landing zones or responding to fires.
Finley’s defense of the plan is that no city resident ever will be billed – only those visiting the city and falling on hard times. Their insurance will be billed for the fees, Finley said. But if insurance doesn’t cover it or they don’t have insurance, Fire Recovery USA would seek and collect payment from non-city residents, he said.
An Ohio insurance expert told us last week that when insurance companies establish rates for any geographical area, these additional insurance payouts could be taken into account, possibly driving up premiums for Youngstown residents.
“Rates are basically based on the probability of a loss, and what would that loss be,” Dean Fadel, president of the Ohio Insurance Institute, told us. “This could potentially increase the probability of that loss, so it could impact what the rating is for that area.”
Fadel described the fees as a “backdoor tax,” that comes on top of taxes residents and workers already pay to fund city services. And this emergency service “tax” comes without any opportunity for voters to cast ballots on whether it should be levied.
And we see other potential problems with the plan. For instance, what happens if a city resident causes a crash that injures a non-resident? In this scenario, under the fire chief’s plan, the city resident would not be billed for using city emergency services, but the non-resident would be. Why should the non-resident be required to foot the bill when he didn’t cause the crash?
And what guarantee exists that the city won’t dispatch additional trucks or equipment to accident scenes for standby? Should the accident victim also be billed for unused equipment that responds?
Despite these issues, Youngstown’s fire chief and other elected leaders think this is a good idea because they believe it will create a new revenue stream for the city.
We disagree. This is a bad idea that we view only as a money grab on the backs of victims suffering misfortune that requires use of the emergency services departments – services that exist and are staffed solely to help people in need.
After a recent meeting to discuss the details, Council member Basia Adamczak, D-7thWard, said the city needs “to find ways to generate revenue and this is common in bigger cities.”
But our research has shown many cities that considered or initiated similar plans dropped them quickly due to heavy backlash or discovering the plan didn’t generate as much revenue as they anticipated.
In Ohio, Macedonia, Sugarcreek Township, Miami Township, Springfield and Franklin all adopted and then suspended their accident response fee collections programs, according to media reports. Other larger cities across the United States, including New York City; South St. Paul, Minn.; Tulsa, Okla.; and Sacramento and Huntington Beach, Calif., have done the same, media reports show. Many state legislatures also have taken action to band communities from enacting such plans. They include Virginia, Pennsylvania, Indiana, Florida, Georgia, Kansas, Arizona, Utah, Oklahoma, Tennessee and more.
Let’s face it, public safety and emergency services are essential government functions that should be properly budgeted for with general taxes – not something that is addressed after the fact on the backs of those who need the service.
Council should vote to rescind this legislation.