What Shall the Water Charge Be for Private Fire Service?
Does Fire Protection Benefit Derived from Automatic Sprinklers Warrant Free Service?—Opinions of Water Departments on Subject
THE question is often raised as to whether the charge for connections to automatic sprinklers is a fair one and whether this service is to be considered as sufficiently beneficial from a fire protection standard to warrant free connection being made by the water works. The following article throws some light on this vexing question:
In our work of fire protection for manufacturing properties our inspection department is often called on for advice regarding the fairness of a certain charge for connection to an automatic sprinkler system, and in connection with these questions we have found such wide variations in practice that we have attempted further inquiries into the reasons for them. In the latter part of 1922 a questionnaire was sent out to most of the water departments protecting properties insured in the Mutual Companies with the following results:
Tabulation of Information as to Charges
Replies were received from 259 cities and towns in eighteen States, including the New England States, Middle Atlantic States and the Mid-western States north of the Ohio River. The information is tabulated as follows, placing the States in the order of the degree of recognition of this service as a beneficial one. as shown by the absence of the annual charge:
It is interesting to note that no annual charge is made by 66 per cent. (130) of the municipally owned systems and by 21 per cent. (13) of the privately owned systems, and that no annual charge is made by 55 per cent. (143) of all from whom replies were received. In other words, more than one-half of those reporting make no annual charge: and this fact alone indicates that there is a very general recognition of the difference between a connection for industrial use and one for fire service only.
Basis Same in Municipal and Private Systems
It will also be noted that the water departments as shown in the first three States in the table number 80, or well above one-half of the total in this column, and in these three States are nearly all of the private companies reporting making no charges for this service. These States will be recognized as the pioneers in manufacturing industries.
Analyzing further the cases where some charge is made, we find the basis on which charges are made are about the same for municipally and privately owned systems, namely:
One-third base a flat charge on diameter of the pipe connection; one-third base a charge on the number of hydrants or sprinkler heads; one-third use a flat rate for some special combination of the number of sprinkler heads, hydrants and pipe sizes.
The extremely wide range in these charges in dollars is shown as follows:
Should Be Based on Cost of Service
It is, of course, impossible that all these charges, varying through such wide extremes, are equally fair. It is quite generally agreed that the charge for service to a private fire system should he based on the cost of service.
“Private automatic sprinkler equipments have prevented incalculable losses in manufacturing and mercantile properties without putting any additional burden on the public water system, and have relieved the public water and fire departments of many large demands for service which they would otherwise be called upon to meet.”
The committee of the New England Water Works Association on this subject closes its report with the words: “We strongly urge that in all such cases” (seeking of additional revenue) “costs of service should he considered and that in any new schedules rates should he based on costs.”*
The National Fire Protection Association at the Chicago convention in 1923 accepted as part of the report of the committee on private fire supplies from public mains, a report of charges for private services, which is reprinted herewith:
Report of Committee on Private Fire Supplies from Public Mains of the National Fire Protection Association, 1923
In the early days of the development of private fire protection, a charge for the fire service connection was the exception rather than the rule. There is at present an increasing tendency to impose a charge for this service, and these charges are mostly on a more or less arbitrary basis such as the number of hydrants, the number of sprinkler heads, or the size of the connection. These charges are often made without due consideration of the semi-public service a sprinkler equipment performs, and in a few cases they have been so great as to discourage the extension of automatic sprinkler protection.
The most important element in the solution of problems relative to charges for private fire protection is the status of the automatic sprinkler as a fire extinguishing device. This status is determined by what it has already accomplished due to its entirely automatic action and by the effect of the sprinkler equipments on the fire fighting efficiency of other and older means of extinguishing fires.
Functions of a Water Supply
A public water system has two functions, namely:—
- To supply water for domestic or industrial purposes.
- To supply water for extinguishing fires.
Service (a) is one delivering continuously widely varying amounts of water through a large number of connections mostly of small size. This service causes a continuous flow through the public system.
Service (b) is a “stand-by” service ready to deliver a large amount of water through a few large connections, any one of which may be infrequently and possibly never used to extinguish a fire.
The delivering capacity of a public water system must be sufficient to deliver service (a) plus service (b).
Public and Private Services Defined
The general term fire service is composed of (1)—That commonly known as public fire service made available through the street mains and hydrants by means of pumps, stationary or portable, or by gravity and handled by the water department or the public fire department, and (2)—Private fire service which is that made available through automatic sprinkler equipments and standpipes and hydrants covering the parts of privately owned properties to be protected and permanently connected to the water mains or to other equipment for supplying water from other sources. These appliances must be supplied with water in sufficient quantities to meet without interruption the demands of all the outlets which it may be necessary to use at one time from sprinklers or hose nozzles for effective control of a fire.
Findings of Commissions, Courts and Committees
With a view to arriving at a more rational basis of charge for private fire service, Public Utilities Commissions and Committees of Water Works Associations have reported on this subject as follows:
The report of the Public Service Commission of Pennsylvania. No. 393, February 19, 1918, states: “The commission is of the opinion that no extra charge should be assessed for private fire protection service, provided the individual or individuals receiving this service assume the entire cost of installation and maintenance of the connection to the cityb system. Under these circumstances, to collect an extra charge must certainly amount to double taxation since the proper proportion of the capacity cost of the water works is always included in the public fire protection charge, and the payment is made by the Borough or Municipality out of the general funds raised by taxation.”
• EXCERPTS from paper read before the March meeting of the New England Water Works Association.
The report of the New England Water Works Association (Continued from page 636)
(Continued on page 662)
Committee on “Charges for Private Protection” closes as follows: “The committee realizes that very few water utilities have in use schedules of rates based on the cost of service as above indicated, and that in many cases considerations other than actual costs dictate what rates are charged for the various classes of service. In such cases, no rule can be laid down, but since, as we have already pointed out, increasing costs of service are compelling manywater utilities to seek additional revenue, we strongly urge that in all such cases costs of service should be be considered, and that in any new schedule rates should be based upon cost.”
The report of the American Water Works Association Committee on “Private Fire Protection Service,” states: “Rates vary with the cost of service. The cost of service varies with local conditions, and therefore the rate for one situation would not necessarily be the rate for another. … There are certain general principles, however, upon which courts and commissions on water purveyors seem to be agreed, among which may be mentioned (1) ‘The cost of service should be equalized between the water taker and the taxpayer, and heretofore the water taker has frequently been assessed more than his just share of the cost of water service, due largely to the fact that an insufficient amount of revenue has been derived from public fire protection service.’ (2) ’Public fire protection service is a property benefit, and the cost of this service should be assessed upon the property owner or taxpayer and not upon the water taker.’ ”
In the case of the Terre Haute Paper Co. vs. the Terre Haute Water Co., the court stated: “The fact that the general fire protection is furnished by the city affords no reason why the water company should not be compelled to supply water and pressure for additional private protection, so long as the taker is willing to pay for the additional service at a reasonable rate. But that rate, like all others, must be based on the cost of the service rather than on its value to the taker.”
In the case of Edgerly & Co. vs. the City of Ottumwa. Ia., the court stated: “Of course the amount of water used should be taken into account as well as any saving to the utility by reason of the saving on the general hydrant system in event of fire. But no element of benefit to the owner of the property should be taken into account.”
Rational Basis of Charge
The above and other rulings which might be noted indicate that there are two fundamental principles underlying the proper basis of charge for private fire service.
First—That the charge should he based on the cost of producing and delivering the service.
Second—That the charge should be paid by those who benefit by the service.
Cost of Service—The cost of fire protection varies with local conditions. It is usually a function of the population and varies much with the character of the city.
Capacity Burden Due to Sprinklers—Experience with fires in sprinklered factories has not shown the general need of large delivering capacities in excess of that which would normally be planned if the protection were to be only from hydrants in the public streets. On the contrary, for equal protection there must be more water if only hydrants are available than if automatic sprinklers are used. It has thus been demonstrated over a long period of years that private fire service connections do not place an additional capacity burden on the water system, hence no charge could logically be made on that account.
Other Burdens—In the absence of any capacity burden the remaining known burden is that due to the maintenance and inspection of the individual connection. This burden includes interest, depreciation and taxes on that part of the connection installed by the water company, and the cost of its maintenance and inspection.
Public Benefits from Private Equipments
Taking up the second principle stated above, “that the charge should be paid by those who benefit by the service,” records taken from figures of comparable conditions over different periods of time show that the effect of automatic sprinkler equipment has been to reduce fire losses in the properties where they have been installed to about one-seventh of the amount which would be expected without them. The reduction in loss for average conditions of all classes of property would doubtless be found still greater were statistics available. None of the great conflagrations of the country has started in properties under sprinkler protection, hut there have been hundreds of fires which could have developed to conflagration proportions if sprinklers had not extinguished or controlled them when they were small.
The automatic action of sprinklers in extinguishing and controlling fires makes it less likely that the public fire department will be called upon to extinguish fires. The fires open the sprinklers which can work in smoke, dark and heat without delay of human intervention, they work at comparatively low pressures and use but little water, thus, by controlling fires when they are small they decrease the probability that the public system will be called on to meet demands upon its capacity. In these ways the sprinkler system is of definite benefit to the community.
Furthermore, a private system of automatic sprinklers with hydrants in the factory yard and secondary supply from pumps is a valuable addition to the fire-fighting equipment in any city as by this means additional water at high pressure is made available on nearby properties, whose protection from the public department only might be entirely inadequate. Here again the existence of the private equipment is of benefit to the community.
Summing up, the foregoing experience has demonstrated that private automatic sprinkler equipments have prevented incalculable losses in manufacturing and mercantile properties without putting any additional burden on the public water system, and have relieved the public water and fire departments of many large demands for service which they would otherwise be called upon to meet.
This large saving of property and the unknown saving of life from fire indicates what may be called a community benefit due to the private sprinkler equipments as distinguished from the individual benefit enjoyed by the owner of the equipment. It is obviously impossible to fix accurate relative percentage values for this community benefit, and the individual benefit to cover all cases, nor is this important if the private equipment in view of its effect on the public fire service is recognized to be a part of that service and to be in a large measure identical with it.
This record of conservation resulting from the combined uses of public and private fire extinguishing equipments has automatically created a special class of service rendered through fire service connections from public mains and has amply justified the definite recognition of private fire service connections as in a class entirely distinct from the industrial service connections, and this recognition has been given by many civic bodies to the extent of requiring automatic sprinkler protection under certain conditions and by the exemption of such connections from special charges.
In conclusion, the following summary is given as presentative of the various elements entering into the problem of charges for private fire service connections:
- One of the functions of a water works system is to supply water for fire protection. There can be no just discrimination between public and private fire protection if the ultimate purposes of these services are identical.
- Every taxpayer, from the owner of the smallest house to the owner of the largest factory or mercantile property, is entitled to the protection furnished by the water and fire departments.
- If the taxpayer elects to take his fire protection through appliances of his own in order to protect his property in a more efficient manner than the municipality can afford to do it, he is still entitled to his fire protection on the same basis as the other taxpayers.
- The charge for private fire service should be based on the cost of producing and delivering that service.
- On the basis of fact and experience the actual cost of private fire service may be expressed thus:
- Item A—A definite sum representing the general tax payment of the user.
- The charge should be paid by those who benefit by the service.
- Private equipments relieve the community of part of the fire-fighting demands it would otherwise have to meet and so play a most important part in the fire extinguishing function of the water supply.
- In a community where average conditions exist, the application of these principles would not involve any stand-by charge for sprinkler service above that already paid for general fire protection through taxes.
Plus Item B—A definite sum representing interest, depreciation. maintenance and inspection costs of the pipe connections for private fire services.
Plus Item C—A variable or indefinite sum representing any elements of cost not already included in items A and B and which is zero under ordinary conditions.