HomeMy WebLinkAboutFS 2014-08-19 Item 2G - Discussion - Billing for Motor Vehicle Accident ResponsesTO:
City of Tukwila
Jim Haggerton, Mayor
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Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky CmNsem,0eputy Finance Director
DATE: August 13, 2014
SUBJECT: Option to Enhance Revenues: Billing for Motor Vehicle Accident Response
USSUE.
Review billing for motor vehicle accident response (MVA) as an option to enhance revenues for
the City.
BACKGROUND
At the January 14, 2013 City Council Committee of the Whole, Councilmember ROb8rtSOO, as
Chair of the Finance and Safety Committee, distributed a draf of committee goals that included
researching revenue increases and expenditure decreases.
An Info Memo identifying 3 potential revenue sources was distributed at the June 12, 2013
Finance and Safety Committee meeting. One option proposed was billing for motor vehicle
accident responses on highways.
DISCUSSION
Government agencies have the ability to recover costs for emergency response to motor vehicle
accidents. The at-fault drivers' liability portion of insurance is charged for services provided
and/or supplies used on scene of an accident. It appears that insurance companies are willing
to pay the claims because they believe the fire response protects the scene and prevents
additional accidents which could result in more claims. When more than one vehicle is involved
and law enforcement has not determined who is at fault, Fire personnel would need to collect
data from all drivers in order for the billing services provider to work with law enforcement to
determine who is at fault.
Emergency service providers can bill for a variety of items including the number of responders,
type and number of appanatus, service tasks perforrngd, time spent on eoenu, as well as
supplies used. Currently, the Fire Department only bills to clean up spills of hazardous
materials at MVAs. If no hazardous materials are invo|ved, the fire department does not send
bill for services provided; less than 10% of MVAs that the Fire Department responds to involve
hazardous materials. Average recovery for an incident is just under $500.
A number of emergency response agencies have started programs to bill for services rendered
m1MVAS. Snohomish County Fire District 3 (Monroe), Snohomish County Fire Districts 1 and 7,
Lewis County, City of BOtheU, and a large portion of fire districts in Pierce County are either
considering or have implemented a program to bill for this fee.
This program is relatively new in this State so there is not much historical data available for
analysis. One fire district, Snohomish County Fire District 1 implemented a cost recovery
INFORMATIONAL MEMO
Page 2
program in spring of 2013. To date, collection rates have been lower than anticipated and they
have struggled to get complete and accurate data required for billing.
Current City Data for MVAs
The table below shows response statistics for MVAs on highways for the period of 2010-2013:
Year # of Average Duration Average
responses of Response Cost
2013 355 35 minutes $341
2012 390 31 minutes $259
2011 424 32 minutes $352
2010 408 29 minutes $236
If the City were to bill for services rendered at all MVAs a minimum of $500 per call and the
recovery rate was over 50%, the City could potentially increase revenue at least $100K and
probably more if the Department aggressively pursued this revenue stream.
CurnenUv, billing and recovery is performed by EF recovery. The Fire department estimates that
of all billings that currently are sent to EF Recovery, the rate of recovery is between 50% and
75%. It is important to note that the gathering of insurance information for billing purposes does
not take priority over operations, life safety or scene safety. Some billing opportunities do, and
will fall through the cracks.
Variables to Consider
There are a number of variables that need to be considered in determining the direction the City
should take regarding billing for services provided at MVAs:
1. Bill both residents and non-residents or only non-residents
2. Bill for all MVAs or only those that occur on state-owned highways and freeways
3 . If what the City bills for is expanded, is there a minimum time on scene before at-
fault motorists are billed
4. If the City decides to expand what is billed for, do we continue to utilize EF Recovery
for billing services or should other billing service providers be considered
5. If billing is expanded, what is the impact on administrative staff to prepare documents
for billing
6. Are uninsured motorists that are at fault billed, and if so, do responding personnel
need to collect additional data
7. Are past due bills sent to collections or written off
RECOMMENDATION
At this time staff recommends that this issue be tabled. The current Fire Exploratory Committee
will be making recommendations to the Administration and Council regarding future operations
of the Fire Department. If the recommendation is for the City to operate and maintain a
municipal fire department, then MVA billing should be revisited in more depth.
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