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Defenders: Some San Antonio-area municipalities charging drivers clean up fee for car crashes

Cities say it covers their costs; critics call it a hidden tax

SAN ANTONIO – If you’re involved in a serious car crash, you expect the police and fire departments to respond. What you probably don’t expect is to get a bill for that response, but that’s exactly what some San Antonio area municipalities are doing: charging drivers for cleaning up accident scenes.

Cities with tight budgets say it helps cover their costs, but critics call it a hidden tax. In June 2018, Ana Gutierrez was hit near the intersection of Bandera Road and Eckhert in Leon Valley.

“I was at a stoplight and all of a sudden a car crashed into me and I crashed into the car in front of me and it was a four-car collision,” Gutierrez recalled.

Her car was sandwiched between the others and took most of the damage and her vehicle leaked fluids onto the roadway. Following the accident, she got a new car and moved on with her life. But in October of last year, nearly 16 months after the accident, Ana got a surprise in her mailbox.

“I received a letter from Fire Recovery USA, saying that I owe the city of Leon Valley $608 for firefighter assistance at the site of the crash,” Gutierrez said. “I thought it was a scam.”

But she soon learned it wasn’t a scam. The invoice that was sent to her was a legitimate bill. She was being billed for the hour and 25 minutes the Leon Valley Fire Department spent at the scene cleaning up chemicals that spilled from her car.

The city has a contract with Fire Recovery USA to serve as a bill collector.

“It’s a fee for service,” said LVFD Chief Michael Naughton. “I mean, we’re providing this service, we’re expending these supplies and the city is attempting to recover those costs.”

The city of Leon Valley passed an ordinance in February 2018 entering into an agreement with Fire Recovery USA. The company gets a cut of the fees for their service and the city gets the rest.

Naughton said the agreement is designed to recover costs for emergency responses, which often involve people who don’t live in Leon Valley.

“Not everybody who receives this service is a Leon Valley resident and pays taxes to Leon Valley. Our statistics show us the drivers that travel down Bandera Road, where the majority of these accidents happen, only 7% of them are residents,” Naughton said. “The residents in Leon Valley fund us, but a lot of the services that we provide are for residents that don’t pay taxes. And some people would say, ‘Is it fair for the residents of Leon Valley to pay for services for people that don’t pay taxes here?’"

According to Naughton, right now the city only charges drivers a response fee if their vehicle leaks fluids. Strict regulations to protect the Edwards Aquifer recharge zone require the department to use special absorbents to clean up hazardous materials.

“It’s not cheap,” Naughton said. “It costs money to put clay down on the road, pick this stuff up, put microbes down to eat the rest of the hydrocarbons to leave the road clean.”

So far, the deal has been more bust than boom. In the past 12 months, the city has only collected $16,800 in fees. Leon Valley isn’t alone in charging the response fee. Converse, Seguin, Castle Hills, and New Braunfels also have contracts with Fire Recovery USA.

According to records provided to the Defenders, between January 1, 2018, and October 31, 2019, the city of Converse billed $51,550.65 in response fees but only collected $10,387.96 after the company took its cut.

During the same time period, Castle Hills billed $45,322.50 and collected $12,965.49. The city of Seguin billed $86,035.29 and collected $28,693.91 during a 12-month period. The city of New Braunfels, which passed its ordinance in 2015, has had much more success. “It varies, of course, by the number of calls but we recover about $400 (per response) is what our typical payment is,” NBFD Chief Patrick O’Connell said. “And we’ll generate anywhere from $120,000 to $250,000 a year in revenue.”

O’Connell said the city was looking for ways to recover costs as more tourists used more city services and charging a fee for service made sense to city leaders.

“This allowed us a way, like we do with the EMS calls, to recover the cost of those consumables and not have our taxpayers necessarily subsidize emergency services for people that don’t live in New Braunfels and pay taxes,” O’Connell said. “It takes the pressure off of the taxpayers and really it is more akin to a user fee for those people that are at fault in the accident.”

The fees the city of New Braunfels collects are put into a special fund used to purchase new fire trucks and ambulances. That helps out local taxpayers but critics argue these fees hurt all drivers.

“We see it as a sort of a hidden tax,” said Joe Woods, vice president of state government relations for the American Property Casualty Insurance Association. “It generates a lot of consumer complaints. A number of cities have tried it over the last 15 years and determined that it wasn’t worth the bad public relations and didn’t bring in as much money as they expected to begin with.”

Woods said these so-called crash taxes also lead to increased premiums and higher insurance rates. Worse yet, many consumers get stuck with the bill.

“A lot of auto insurance companies pay these fees but many don’t. Basically, an auto policy is written to cover property damage and bodily injury. These fees don’t fall into that definition anywhere,” Woods said. While the practice is perfectly legal, there has been backlash from consumers across the country, leading 13 states (AL, AR, AZ, FL, GA, IN, KS, LA, MO, OK, PA, TN, UT) to ban the collection of accident response fees.

“This is a vendor-driven episode. They go to small cities and say, ‘Hey, we can make you a hundred thousand dollars a year off these fees. You don’t have to do anything. There’s no risk on your part. You just sign a contract here. We’ll set up the fee structure, we’ll collect all the money and we’ll take 10% and you get everything else.’ And I don’t blame a city council person or small town with a very tight budget for thinking it’s a good idea,” Woods said. “I mean in the worst case, you turn your first responders motto from ‘serve and protect’ to ‘serve and collect.’”

Despite the criticism from the insurance industry, Chiefs Naughton and O'Connell both believe these fees will become more common as budgets get tighter and cities look for new revenue.

“I would expect as budgets get tighter and with the new restrictions at the state level on property valuations and how that generates revenues for communities, we’re going to have to look at other revenue streams to maintain the level of service that we have,” O’Connell said. “The only other option would be to decrease services, and that’s certainly not positive.”

But don’t tell that to Ana Gutierrez. Her insurance company refused to pay the fee to Fire Recovery USA.

The company eventually stopped its collection efforts when she showed them a copy of the accident report that showed she was not at fault. Even so, she’s no fan of the practice.

“I think there’s a reason we pay sales tax and property tax and if a small municipality can’t just provide basic services then maybe they should rethink their finances or annex into a larger city or a county,” Gutierrez said.

She’s reached out to state lawmakers, urging them to look into the use of accident response fees in Texas.

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