Fire District Increases, By 50%, Hydrant Rental Fee Paid By Town

The Norwich Fire District set at $18,000 the Hydrant Rental Fee (now known as the Town Fire Protection charge) that it will charge the Town this year, according to draft meeting minutes of the Prudential Committee meeting of October 22. Last year the hydrant rental fee was $11,700, although during budget discussions, the Fire District told the Selectboard to expect the increase.

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. 

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.

Part III: How to pay for fire hydrants?

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.

The Fire District thinks of itself as a water company serving 310 residences and 20 commercial businesses. For that customer base, charging customers for that fire hydrant infrastructure is a legitimate expense. See Part I .  

Map Of Fire District Hydrants

What about properties outside of the Fire District, that are not customers?  There are over 1300 residence and business parcels on the Grand List in Norwich. The Fire District covers an area somewhat larger than Inset 1 and 2 of the General Highway Map of Norwich. See map below. Why should non customers (Town taxpayers) pay a hydrant rental of 20%, when they are neither the primary nor intended beneficiaries of the 67 hydrants that serve a small part of Town?  

Insets 1 and 2 of General Highway Map of Norwich are outlined in red

It is important to note that hydrant rental has no relationship with funding the fire department. which is paid by the Town. 

Question: How do other towns and fire districts in Vermont address the issue of hydrant rental, when most residents do not get their water from the the fire district? That question was posed in Part I and the Selectboard should want to know. 

A similar issue arose in the Village of Weston, Wisconsin in 2012. It decided that only customers should pay for hydrants because “the Village can no longer afford to artificially subsidize the [Water] Utility through the use of general property taxes.” The Village’s Talking Points Memo, the Village of Weston included this question and response:

I’m not on Public Water, but I do have hydrants near my house, will I still have to pay the fee? The public fire protection charge will only be collected from customers of the water utility within the Village of Weston. State law requires that if any non-utility customers are directly charged for PFP, then ALL non-utility customers must be charged. As a rule, our Fire Department indicates that the longest they can run a hose line is 1,000 feet. If you’re on the public water supply you’re generally within 500 feet of a fire hydrant. Although some residents outside the area served by the utility will be within 500 feet of a fire hydrant, the majority are not. Therefore non-utility customers do not benefit from the water utility’s public fire protection capabilities to the same degree as people served by the water utility. No method of billing Public Fire Protection will ever be perfect.

 Other items the Selectboard may want to consider: 

• Agreement: The Fire District says there is a long standing agreement for the Town to pay 20% of the hydrant budget. As observed in Part II-A , the 20%  seems derivative, not expressed. The real terms of that “agreement” are not actually known because a written agreement has not yet surfaced. In addition, there is another agreement the Fire District does not mention - the agreement with the Town to repair its sidewalks before giving them to the Town. In 2015, the Fire District abandoned this agreement unilaterally. 
• Fire Insurance: My local insurance agent said homeowners get a discount on insurance if they live within a 1000 feet of a Fire District hydrant. That is a monetary benefit not available to most of the Town. 
• Hydrants Serving Town: The Fire District has 67 hydrants within its system. Selectboard member Flanders estimated that six or seven, approximately ten per cent, are accessible to SOME residents outside of the Fire District. See map above of hydrant locations. The Town also maintains a number of dry hydrants, the latest installed at 1285 Union Village Road in 2018. 
• Firefighting benefits: In Part I, I surmised that running a tanker shuttle was a benefit to residents outside the Fire District. At the Fire District's suggestion, I emailed the Town's Fire Chief over a week ago to get his take on the topic but have not heard back. Should that be taken as a lack of support for paying hydrant rental or simply a less than high opinion of this blog?  In Part II-B, the Fire District identified a number of benefits to the Town other than firefighting. The Selectboard needs to decide if the sum of these benefits should be compensable as hydrant rental of 20%. That is the question. 
• Water Use: The hydrant rental issue is not about water use. The Fire Department pays the metered rate when it fills the tanker at the Fire Station. Plus, the cost of unmetered water from hydrants for fighting fires is "relatively insignificant" compared the infrastructure costs. See Part I.  

Hydrant rental is probably a top 25 line item in the budget, putting aside compensation and capital costs. The Selectboard's decision on sidewalks put the hydrant rental issue front and center. See Sidewalk Repairs More Costly Than Anticipated.  It is budget season. Time for the Selectboard and Fire District to justify this expenditure

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LINKS: 

Public Fire Protection Charges On Water Utility Bill, Talking Points Memo; Village of Weston, Wisconsin

http://westonwi.gov/DocumentCenter/Home/View/386

General Highway Map, Norwich VT

http://norwich.vt.us/wp-content/uploads/2012/06/map1.pdf

 

Originally published on the dailyUV.

Selectboard Should Reconsider Takeover Of Fire District Sidewalks

Last Selectboard meeting, the Board authorized the Town Manager “to approach the Prudential Committee with the idea of acquiring the Fire District sidewalks, [in “as is” condition].” Although seen as non-binding, the action backs the Selectboard into a corner when the Fire District gladly and quickly accepts the Town taking over this liability. The matter is again on the Selectboard agenda for October 11 and I hope it gets fuller discussion. Here are some things the Selectboard should consider that were not raised the first time through.

• The Norwich Fire District is a separate and independent municipal entity, with its own tax base. In Vermont, Fire Districts provide a variety of public services, including sidewalks. Our Norwich forefathers created this special entity to provide sidewalks and water to the homes and businesses in that area. By taking over the sidewalks, and the repair and maintenance costs, the Town is making a “gift” to another municipality. The decision to reverse that history and incur ongoing liability should not be taken lightly.  I admit that the Town has been taking over sidewalks on a piecemeal basis for several years but that does not make it right.

•  The Fire District’s sidewalks need over $25,000 in repairs (excluding labor), according to information provided to the Selectboard in the packet for the July 29, 2015 meeting by then Town Manager Neil Fulton. At that 2015 meeting, the Selectboard took the Town Manager’s recommendation and did not accept the proposal that the Town take the sidewalks “as is”.  I don't know what finally happened afterwards. However, the 2017 Selectboard did not have any information about the 2015 Selectboard consideration of the issue.

•  My understanding (although I could be wrong) is that the Town pays approximately $11,000 a year to the Fire District for fire hydrant rental.  I don't know how much a fire hydrant costs or if the Town should pay the “fire” district for hydrants.  However, if the Town is going to take over the liability of sidewalks, perhaps the Fire District should give the Town the hydrants too.

• One of assumptions underlying the takeover is that this benefits the Town. That, however, is not axiomatic. In facts, lots of people do not use the sidewalks. Indeed, history in Vermont suggests such costs should be borne by the residents of the Fire District, rather than the entire Town.

•  Another assumption is that the Fire District cannot afford the upkeep of the sidewalks. That assumption has never been analyzed, for example by seeing what tax hike within that municipality would support upkeep. Indeed, in this week’s Selectboard packet is a letter from a solar company offering to pay $75,000 to rent land of the Fire District.

At the end of the day, the Town taking over the sidewalks might be a win-win. That, however, has not been shown nor have all factors been discussed.

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A history of Fire Districts in Vermont is discussed at the website of the Colchester Fire District.

Hydrant rental is a line item in the budget for the Town’s Fire Department. The Town Report for FY 2015 lists the recipients of the payment as the Norwich Fire District. Town Report 2015 at I-98.

The pertinent materials from the July 29, 2015 Selectboard packet are available here

Town Proposes $23,000 Gift To Norwich Fire District For Sidewalk Repairs

Sidewalks need repair and maintenance and that takes money.  Many years ago, our Norwich  forefathers decided that the homes and businesses in the Village, rather than the entire Town, should pay for the Village sidewalks. Hence, the Norwich Fire District, a special municipal entity that can tax and spend, is responsible for most sidewalks in its geographic area.  Today, the District’s principle purpose is to supply potable water to approximately 310 homes and 20 commercial businesses in the Village, but the sidewalk responsibility is not unusual for Fire Districts in Vermont.
On Wednesday, July 29, the Selectboard will consider two proposals that will shift the responsibility for the sidewalks from the Fire District to the Town.    Item 8 on  the Selectboard agenda for its meeting sounds innocuous  — “Main Street Sidewalk from Hazen Street to Koch Road” — but these proposals will increase taxes for Town taxpayers.  Both proposals shortcut the democratic process without much analysis of the pros and cons.

The first proposal is that the Town pay $23,000 for sidewalk repairs that should be paid by the Norwich Fire District. Call the payment what you like, but the money will not be repaid, and that is simply a gift from the taxpayers of Norwich, Vermont to the Fire District.  I doubt the gift was part of the budget approved by the voters at Town Meeting in March, but I could be wrong.  For budgetary reasons, the Town has not funded the sidewalk reserve fund for several years, so its sidewalk budget is not flush.  If the Norwich Fire District budget is tight this year, because of the pump house fire, then the Town should be patient and tackle the work next year or after fire insurance issues are resolved.

The second proposal carries the recommendation of the Town Manager and is for the Town to take over ownership and the ongoing responsibility to repair and maintain sidewalks of the Fire District.  This is a complete reversal of the cost sharing policy that our Norwich forefathers established.  However, nothing in the packet explains why a change is justified, other than that the Town previously assumed responsibility for some sidewalks from the Fire District.  The cost to the Town is not clear; nor is it clear why the Fire District can not raise the money in the coming years, as it has done in the past.
Both proposals deserve an airing when the agenda description gives better notice to the public.  A vote of the public at Town meeting is appropriate before the Town takes over the obligation of the Fire District.

More information about Fire Districts in Vermont is available at the Colchester Fire District No. 1 web site.

The portion of the Selectboard packet relating to sidewalks is here.


LINKS
http://www.cfd1.org/about_fire_districts.html
https://drive.google.com/file/d/0B5p_pfaeTTstNzkzUXgyWDVSWlU/view?usp=sharing