A Study of Standby Water Fees/User Fees for Fire Sprinkler System Connections to Water Mains

By Thomas R. Wood

Standby water fees/user fees for fire sprinkler system connections to water mains, levied by water utility agencies, were being challenged as excessive and unwarranted by fire protection organizations. Most water utility agencies claimed a right to charge standby water fees/user fees and believed they were reasonable and justified. The purpose of the research was to identify and evaluate the issues on both sides of the debate and to formulate recommendations. Historical and descriptive research methodology was use to answer these questions:

1. Which states have proposed or enacted legislation or rules regulating standby water fees/user fees?
2. What is a reasonable standby water fee/user fee?
3. What services do water utility agencies provide to justify their standby water fees/user fees?
4. What alternatives are available to water utility agencies that depend on the revenue generated by standby water fees/user fees?

Published literature was reviewed, including detailed accounts of legislative action in Florida and complaint proceedings before the Maine Public Utilities Commission. Two separate survey instruments were prepared. Survey questionnaires were received from state fire marshals in all 50 states. Survey questionnaires were received from 43 water utility directors from Broward County, Florida, and Palm Beach County, Florida.

The "State Fire Marshal Survey" revealed that legislation and legal challenges regulating or prohibiting standby water fees/user fees had been initiated in six states: California, Florida, Louisiana, Maine, New Jersey, and Wisconsin. The "Water Utility Director Survey" found that 53.3 percent of the water utility agencies in the 2-county area charged standby water fees/user fees. The fee schedules ranged from zero dollars for 20 water utility agencies to $10,283 annually for a 12-inch connection in Jupiter, Florida. The total annual revenue for the 2 counties was $1,785,201. If all or part of this revenue was lost due to a change in state laws a majority of water utility directors favored shifting the cost burden to all customers. The 23 water utility directors that charged fees also indicated the services provided to justify their fees.

A distinction was made between "standby water fees" and "user fees" for water service. The study found that "user fees" for "administrative costs," "mapping of connections and street valves," "annual inspection and maintenance of street valves," and "contingency funding for eventual replacement of pipe" were reasonable and justified. The study found that "standby water fees" that include "estimate for water that could be used during a fire" and "charges to maintain fire flow capability" were unreasonable and unfair.

The study recommended support for reasonable "user fees" for water service and recommended the elimination of unreasonable "standby water fees." Boca Raton Utility Services was encouraged to eliminate "charges to maintain fire flow capability" from their fee structure. Water utility agencies in Broward County and Palm Beach County were encouraged to use the statistics in the study as benchmarks to evaluate their own rates. The study also recommended that fire service agencies and water utility agencies open lines of communications to assure the cost of maintaining fire sprinkler systems is fair and reasonable.