Leadership

Fire Service Level Can Be Selected By Evaluating Public, Private Costs

Issue 5 and Volume 130.

Fire Service Level Can Be Selected By Evaluating Public, Private Costs In determining the amount of fire protection a municipality should provide, there is an important trade-off between the public costs of a fire department and the private costs of fire insurance. This article illustrates a use of mathematical methods which sets a lower bound on the amount of fire services which a city should provide. This is done by finding the point at which the sum of the public and private costs are minimized. Municipal decision-makers face the difficult task of determining the amount of funds to be allocated for fire department services. This decision affects both the insurance class of the city and the total cost of fire protection. Total fire protection cost is the sum of the tax dollars spent for fire department services (public expenditures) and fire insurance premiums paid by residents and businesses (private expenditures).…

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