Agenda - Council - 02/24/1987 - Laserfiche WebLink

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10 Minutes CASE #25: REVI~ POLICY ON O~AiR~I/~G FOR FIRE AND RESCUE CAI.I.~ By: Noel (~raczyk~ Finance Officer Background: The City Council, at the January 27, 1987 meeting, began a review of the current City policy of charging ~ior fire calls. Additional information was requested. Enclosed please flexi this additi )hal ip3]ormation. Section I of the e~closure a~]m~rizes billing data for 1985 and 1986. The collection success of the City ].as been between 40% and 53.1%. Section II lists what the current tots] cosmos are to the City for providing the current level of fire protection~. Sect3 on III highlights what the additional cost would be to the City if the Ci~ y discontinued trying to bill for fire and rescue calls. Section iV estimates the current cost to City of Ramsey residents for l~r¢c?~asJ.ng ~ fire ~i~].1 rider with their fire insurance. C6servations: The current billin~l policy for fire calls requires substantial labor hours for billing, phone que~tions, collec~ion, and reconciling in order to collect a small portion (10o6% to 5~28%) o~f the total cost of providing the current level of fire protection~ The curre..~%, policy at this time can be confusing and disheartening for residents~ The current policy ~%so creates ~'.~ accounting/collection problem in that it creates a receJ_vabJ e with an ofi~etting allowance that needs to be removed from the balance sheet. .This was co~-ae~ted on by the 1985 auditors. By changing currenl. City t~liqy ,m(] no longer billing the party receiving the benefit, there are ~vera_'L adva,~tg~ges to the City and the residents of the City: 1) Residents may be ~.ble ~o dirop the cost of the insurance rider from their pol Jcy. 2) There wou].d be no conf%sJ(~n as to the reasons and amount of the bill. 3) It wo~g~d tmnefit tkose who have paid their fire calls, since they would no [longer indire¢~)y pay for those calls that have been written off as uncollect~lole~ 4) The s]mus~ $3,000 to $~0()0 cost of changing the policy would not only help to measure on a more timely basis the true cost of fire protection for the Cit/,. but would also help measure the cost for providing additi()n~! l~'w~3s of fire protection in the future. Recommendation: It is recommended that fo~' the ~timated annual cost of between $3,000 and $5,000, the City discontinue it£ current practice of trying to bill benefitting parties for fire ~d rescue cal].s~ The current year additional cost can be funded out of the City's ~n~ren~ C, eneral Fund, Fund Balance as a part of a