 |
 |
By LORI A. CARTER
THE PRESS DEMOCRAT
Dave Albaugh was waiting to hear if his wife’s car was repairable after a collision when he got an unexpected call from his insurance agent. She asked about a $550 bill to reimburse Petaluma for sending emergency personnel to the crash.
Albaugh, a retired Coast Guard lieutenant commander, was surprised, thinking his taxes already pay for such public services.
But the more he researched, the angrier he got. And he’s not slowing down.
Dave Albaugh, a Rohnert Park resident, is fighting Petaluma City Hall over a bill his insurance company received after his wife was involved in a traffic accident in Petaluma on Jan. 8. Petaluma billed Albaugh for the fire department’s service, which Albaugh says was minimal. (Christopher Chung/ The Press Democrat)
At issue is an “accident response fee” or “crash tax” that Petaluma charges nonresidents for sending fire and paramedic personnel to wrecks they cause.
Albaugh — and some politicians and insurance companies — say the charge is unfair, discriminatory and an illegal form of double taxation.
“It’s a scheme. It’s a revenue tax that’s flying under the radar that the public doesn’t know about,” said Albaugh of Rohnert Park, whose wife and daughter work in Petaluma.
The city and its billing company, Fire Recovery USA, defend the fee as necessary to recover of the cost of services provided to those who don’t pay property taxes in Petaluma. Those taxes, in part, fund emergency services.
It’s an issue that surfaced about seven years ago when the economy soured and local jurisdictions sought additional ways to increase revenues to ease budget shortfalls.
State law allows municipalities to seek cost-recovery fees, but cities have passed different ordinances that create a patchwork of rules motorists are subject to — mostly unknowingly until their insurance company receives a bill, as in Albaugh’s case.
Thirty-four states allow the fees, while 13 others have banned them. In California, about five dozen cities charge the fee, although none besides Petaluma in the North Bay.
Some cities, including Sacramento, Roseville, Woodland, Huntington Beach and Ocean-side, have repealed the fee after public outcry, complaints that the cities were unfriendly to visitors or unrealized revenues. In Crescent City this month, the City Council voted not to charge fees for traffic collision response.
“There is something of a philosophical difference that’s going on with this particular party,” said Petaluma Fire Chief Larry Anderson, who brought the idea to the Petaluma City Council in 2009. “It’s just that, it’s philosophical. You’re on one side or another.”
Albaugh has used the power of social media to whip up a frenzy of anti-tax sentiment against Petaluma’s fee, starting a group called End Petaluma Misery Tax Committee.
He is encouraging citizens to contact Mayor David Glass and soon will start circulating fliers to local businesses threatening a boycott as long as “this discriminatory practice” is in place.
It’s likely that most motorists have no idea Petaluma charges such a fee.
During the June 2009 meeting in which it was considered, the City Council spent just over 30 seconds on it. There was no public comment, no council questions and no discussion. It passed 7-0.
“We’re all in favor of increasing revenues. That’s a good thing,” quipped then-Mayor Pam Torliatt after the vote, which came after adoption of a budget that included layoffs.
Anderson presented a case in which it was estimated the city would recover $100,000 annually in fees from nonresidents at fault in collisions.
But those expectations have fallen far short, which critics say is common and is partly why some cities have discontinued the policy.
A total of $36,000 has been collected since mid-2009 in 90 of 180 crashes. That’s about $400 a case. In 60 wrecks, the at-fault drivers had no billable insurance and 30 others were rejected by insurers.
“It way underperforms what we thought it was going to deliver,” Anderson acknowledged.
Fire Recovery keeps about 20 percent of what it recovers, according to its contract with the city. It bills insurers only; it doesn’t try to collect from individuals.
In Albaugh’s case, his insurance company approved about $350 of the charge. The remaining $150 was rejected, and Albaugh said he won’t pay it.
Insurance industry associations, including the Association of California Insurance Companies and the National Association of Mutual Insurance Companies, say most policies don’t cover it.
“The big problem here is there are some third-party vendors across the country that have been trying to convince municipalities that property/
casualty insurance companies are the cash cows they’ve been looking for,” said Joe Thesing, assistant vice president of NAMIC, which represents 1,400 insurers nationwide. “They’re selling a bill of goods.”
But Mike Rivera, co-founder of Fire Recovery, said insurance policies’ property damage provisions cover the fee.
“It is covered under all policies,” he said. “We show the insurance companies where it’s covered in their policies and they pay it.”
He said his company has a 90 percent collection rate. Cities that report less either aren’t billing all possible calls or aren’t collecting the right data for billing, he said.
Nicole Mahrt Ganley of the Association of California Insurance Companies, which represents more than 300 companies, said her organization has lobbied against the fee on several grounds.
“Cities say, ‘This doesn’t affect our constituents, our voters. Let’s just hand it off onto the insurance companies,’ ” she said.
Some cities that repealed their fees found it “was a reputational issue,” she said. Visitors who get hit with the fee after returning home end up having a negative view of the town.
“It really adds insult to injury,” she said. “They’re victimized twice, once for the unfortunate accident, then when they get this bill. It really does have a negative impact on local businesses.”
Despite the paltry returns for using Fire Recovery — about 10 percent of what was expected based on 2009 estimates — Anderson said it’s money Petaluma property owners won’t have to pay to support negligent nonresidents.
“There comes a point where we can’t afford to give a service away without trying to recover a portion of our costs,” he said.
He takes issue with Albaugh’s Facebook group, which he said “morphs into inaccurate information” and has turned “into a disaster.”
For Albaugh, it’s about fairness. He pays property taxes in Rohnert Park and his family shops in Petaluma. Petalumans who cause wrecks in Rohnert Park don’t get charged, he argued.
“It’s an issue of the principle,” Albaugh said. “It’s wrong. No wonder our citizens are becoming apathetic to their governments because they’re losing faith in their government’s ability to do the right thing.”
Plus, he argued, the charge is collected only from those who have insurance willing to pay, and the drivers can’t vote out the City Council members who instituted it.
“I understand they were hurting for money, and I understand the worthwhile end of not cutting firemen or policemen,” he said. “It’s probably a worthy end, but it’s a poor means to that end.”
You can reach Staff Writer Lori A. Carter at 762-7297 or lori.carter@pressdemocrat.com.
Subscribe by Email
Follow us on Twitter
The Petaluma Fire Department is billing non-residents for fire services that their tax dollars don’t pay for. As a citizen of Petaluma, who pays taxes for fire services, I don’t feel like I should subsidize non-residents who utilize Petaluma City services. And, I am ok with being charged for services in a community I don’t live in if I have to use those services. There’s no such thing as a free lunch and a free lunch is what these folks are looking for.
First, thank you for your support.
Please continue to pass the word to friends, neighbors, and co-workers. The public has a right to know about this Crash or Misery Tax. Also, consider joining the Facebook User Group by searching for MISERY Tax as a key word. No one person or small group is going to change the Mayor’s or City Councils mind; but together we can do it. Let’s repeal this miserable tax and get the City of Petaluma back to being the “Friendly” City.
V/R
Dave Albaugh, Sr., LCDR, USCG (Ret.)
So the question is: What if a property tax paying resident of Petaluma hit’s a non-resident and is considered 100% at fault? Well, I guess I’ll just have to drive through Petaluma now find other stores to shop at.
This is the same thing as a speed trap in the Old South. Only the out of towner’s get the fines because they didn’t see the sign that reduced the speed from 65 to 25 and the deputy hiding behind the road sign.
It’s another way the government extorts money from the public. If not illegal, it is certainly immoral.
If these beggers in Petaluma can’t honestly come up with a way to tax their citizens, they will figure out a way to take it our of your pocket while your are looking the other way.
First stay away from Petaluma and if must go ket the business owners now. Thanks to Mr. Albaugh for not paying for extortion. Let your insurance companies know because your rates will clearly go up. If it happens to an illegal alien driver do they pay? Who pays for that service?
Unfortunately, this is one example of city adminstrators, staff and departments including police and fire throughout California are trying to push all conceiveable costs to the taxpapeyrs and non taxpayers so there is more funds avaialble for their bloated pensions and other liberal causes. Other recent moves are too have property owners pay for seweral lateral damage under public roads. There’s more coming and these people call themselves neighbors.
The city council voted to create a law that costs non-residents money, but those non-residents can’t vote for the city council. Isn’t that taxation without representation?
At the very least, cities that institute such fees should be required to post signage at every major entry into the city that informs drivers that they may be charged.
Lastly, the city isn’t charging uninsured drivers the fee. But as a legal, insured driver, they would bill my insurance company. That’s not equal protection under the law.
” The city and … Fire Recovery USA, defend the fee … to those who don’t pay property taxes in Petaluma. Those taxes, in part, fund emergency services.”
Does Petaluma not get state and federal funding ?
As long as Petaluma gets any state or federal funds it should not charge this fee.
Some first thoughts:
I wonder how much of these garbage fees Fire Recovery keeps? What happened to the concept that cities had a business unit (reporting to the Board & citizens) that was responsible for collecting taxes & fees. Who profits from the city turning their business over to private companies? And how many employees does it take to deal with this private company?
It also seems that the Fire Chief lied to the Board when he told them they could collect $100,000 / year from the unsuspecting victims of an accident. Just a small untruth to help justify the fire department not doing their jobs. What has happened to the concept that fire, police and other emergency agencies were there to help all the people all the time. This fee business changes that to helping only those that can pay.
Since this is a ‘fee for service,’ can a person from another jurisdiction simply turn down the services of the Petaluma Fire Department? Let the street(s) stay blocked, and any damage (water, fire, etc.) spread to the adjacent (locally owned) properties. Then see how long it would be until the fee is overturned.
The city of Petaluma is totally stealing this guys money. Guess non-residents know where not to shop or visit. Shame on you city of Petaluma!
We need more response-able citizens like Albaugh.
It is redundant taxation.
More anti-automobile crap.
Again; like belonging to a club that starts charging for towels and to use the pool.
Meanwhile, the management gave themselves raises and big pensions.
To make matters worse, they’re poisoning the water!
I wish Dave Albaugh success in his fight.
Its discriminatory for one jurisdiction to charge motorists any fee that ALL motorists don’t have to pay in other jurisdictions.
And although its allowed by state “law,” we all know what a farce the “law” really is.
The “law” is anything that the government figures it can get away with without a fight.
All you have to do to understand that is to witness police who make arrests and brand people with a permanent arrest record… knowing full well that no conviction would ever be allowed by a jury.
Thats not good “law”… when citizens are harassed by government simply based upon the notion that the government can overwhelm a citizen with legal fees rather than correct the errors of its ways.
Either every county and every city in CA adopt this or none should be allowed to adopt it.
The state “law” means nothing more than the big bully says “you’re going to obey” (unless you fight us in court).
To charge some people but not others for the same services is unprofessional.
It says, Fire Recovery “bills insurers only; it doesn’t try to collect from individuals.” This makes the fee more uneven and, therefore, more unfair. If there are good reasons for these fees, then those reasons ought to apply no matter who is paying. To collect only from the deep pocket is just gouging.
These fees create an incentive for the investigating officer to find the out-of-towner at fault. Even without any actual bias on the part of the officers, the mere incentive for misconduct creates its own problems and weakens trust.
Fees like these also sound like they would drive up insurance rates for residents in the surrounding towns.
I don’t like any of it.