Both amounts, $18,000 and $11,700, deserve review by the Selectboard. The amount of $18,057 was placed in the budget with the understanding that the Town might need to pay up to that amount, but had not agreed to do so. At least that is my recollection.
It not clear how this Selectboard and the Town Manager will approach the issue. Last budget season, Selectboard member Stephen Flanders questioned the amount of the hydrant rental fee, even at $11,7000. In a memorandum to the Selectboard, in the January 10 2018 Selectboard packet, Mr. Flanders, who has since retired from the Selectboard, suggested $7,000 was an appropriate amount using a cost approach. He recommended an "interim budget figure of $18K, until an agreement is reached" between the Fire District and the Town.
About 10 months ago, I discussed the hydrant rental fee in a series of four blog posts, How to pay for fire hydrants?. Part I, Part II and Part II-A are located here , here and here. Part III is here and raises a number of points for the Selectboard to consider.
As discussed in those blog posts, hydrant rental fees, also known as fire protection charges**, are a legitimate charge. As currently operated, the Fire District is in essence a water company that provides drinking water to customers and delivers water for fighting fires. To perform the latter, a water company needs added infrastructure in order to provide the high flows and pressures needed to fight fires, such as larger pipes, larger reservoirs and more powerful pumps. That is what the hydrant rental fee is presumably supposed to cover.
However, of the 67 hydrants of the Fire District, few hydrants, if any, serve the area outside of Village. Plus, the Fire Department already pays for the water to fill its tanker truck. On the other hand, the Town does not pay any property tax to the Fire District. That 'may' mean the Town gets all its water at a discount. See Did you know: The Fire District Charges Property Taxes
Mr. Flanders' memorandum raised two questions. First, is the amount the Fire District allocates to fire protection overhead, $90,000, appropriate, when maintenance of the hydrants costs $35,000? Second, why should Town taxpayers cover 20% of that $90,000, when the hydrants are all located in the Village. The memo also noted that the Fire District allocation formulas were "based on judgment and rule of thumb," meaning to me, back-of-the-envelope.
I don't know what is an appropriate amount. A first step might be to see how other municipalities in Vermont approach the matter.
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In Part III of my blog post, the opening paragraph says:
Has the Fire District made a convincing case for the Town paying hydrant rental of over $18,000? If the Selectboard serious about being cost conscious, then it needs to take a hard look at this expense. So far, the Selectboard has not.
Ten months later, it seems the Selectboard is no further along.
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** The Fire District now labels the hydrant rental fee as "Town Fire Protection" charge per the draft meeting minutes.
Originally published on the dailyUV.
