City Council Study Session: Third-Party Fire Cost Recovery Discussion – September 29, 2026

The City Council held a study session on September 29, 2026, where Fire Chief King, Deputy Chief Chester, and Assistant Chief Smith presented a proposal to use a third-party vendor, Fire Recovery USA, to recover costs from at-fault parties in certain emergency responses, primarily motor vehicle accidents. The presentation covered billing mechanisms, mitigation rates, potential revenue, administrative impacts, and policy concerns. Council members discussed insurance implications, equity, staffing, and public perception, ultimately directing staff to gather more data and revisit the topic after additional study.

Discussion Items

• Proposal Overview: Fire Recovery USA would handle billing for qualifying incidents (e.g., auto accidents, hazmat, illegal burns) with no upfront cost to the city, taking 20–22% of gross billing. Integration with the department’s records management system (Emergency Networking) would require an interface.
• Potential Revenue: Based on 284 auto incidents in the prior year, the estimated gross revenue was $234,130, with a projected net of $182,000 after the vendor fee (calculated at a 90% recovery rate). Chief Chester noted that the actual national recovery rate is 50–75%, and it may take up to two years to reach full revenue realization.
• Mitigation Rates: Standard rates were presented: Level 1 (basic response) at $637, Level 2 (with cleanup) at $726, with higher rates for vehicle fires and extrication. Rates are based on national cost data and can be customized to reflect Norman’s actual costs. Council member Grant requested local cost data for a recent multi-vehicle accident at Highway 9 and 24 SW.
• Scope of Billing: The presentation focused on auto accidents but also identified potential billing for hazmat incidents, illegal/control burns, and water rescues. Deputy Chief Chester noted that most departments limit billing to auto accidents to avoid complexity, but hazmat billing was discussed as a way to recover high costs.
• Insurance and Public Impact: Council members expressed concerns about potential insurance rate increases and whether fire response costs are already included in insurance premiums. Council member Margaret questioned whether residents would see this as “double billing” after paying sales tax (PSST). Chief King acknowledged ambiguity but noted that vendor claims rates won’t increase, while some insurers suggest otherwise.
• Administrative Burden: Chief Chester warned of significant training and oversight needs, including documentation by fire captains and interface maintenance. Fire records management already requires substantial staff time, and adding this program could require additional positions.
• Equity and Billing Concerns: The city would need to decide whether to bill uninsured motorists. Council members Curry and Dansbury argued against writing off uninsured individuals, while others worried about discriminatory billing. Council member Deck also questioned the high projected recovery rate in the presentation (90%) versus the more realistic 50–75%.
• Comparisons to Other Cities: Guthrie generates $20,000–30,000 from a similar program but has lower call volume. Tulsa began a program only in January 2026 and has not yet released data. Council members suggested obtaining Tulsa’s contract and year-end data before proceeding.
• Hazmat and Special Cases: The discussion highlighted the growing cost of hazmat incidents, including electric vehicle fires, natural gas leaks, and university-related incidents. Council member Kerry supported billing for hazmat due to high expenses and easier fault determination.
• Revenue Destination: City Manager noted that revenue could be dedicated to a fire department account, similar to the hotel bed tax, with funds appropriated in the following year’s budget after collection.

Key Outcomes

• No formal vote was taken. Council members generally supported further study rather than immediate implementation.
• Staff will obtain a copy of Tulsa’s contract with Fire Recovery USA and request data after Tulsa completes one full year (through December 31, 2026).
• The issue will be brought back for discussion when staffing concerns are addressed and additional fire stations (10 and 11) are online. It may also be referred to an ad hoc committee.
• Council member Grant emphasized the need for cost calculations based on Norman’s actual response data, and council member Bodger requested clarity on whether fire response costs are already included in insurance premiums.
• The City Manager suggested that any future program should target provable negligence (e.g., hazmat, illegal burns) rather than routine auto accidents, to minimize public backlash and administrative overhead.