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From Crash To Cash: City Weighs Cost-Recovery Fee

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By CHRISTIAN M. WADE

The Tampa Tribune

Published: July 26, 2008

ZEPHYRHILLS - Hundreds of auto accidents happen here every year, and city officials say most of them are caused by motorists from somewhere else.

The cost of providing police and fire rescue coverage, estimated in the tens of thousands of dollars annually, gets passed along to residents, city officials say.

To ease that burden, city officials are considering a proposal to create a cost-recovery program that would subsidize those expenses by charging insurance companies and most nonresidents who cause accidents for the cost of emergency services.

The last time city council members discussed creating a cost-recovery program, it didn't go over well. Some even criticized the move as another layer of taxation.

But city officials are planning to give it another try.

City Manager Steve Spina said council members appear to be warming to the idea.

"They've expressed some interest in considering this again," he said.
Fire Chief Keith Williams, who proposed the idea, said it would generate more revenue for public service while reducing the financial burden on residents.

"With the city's revenue shortfalls, I think we need to look at all opportunities to make up for the losses," he said. "The money would be earmarked to go back into public safety."

Williams said he is working on a proposal to submit to the council for consideration.

For Florida's municipalities, many of which are struggling financially amid state-mandated property tax reductions, cost-recovery programs have become an attractive revenue source.

The fees, collected by a firm that specializes in cost recovery, are based on the time and materials devoted to the accident and assessed on statewide and national averages.

If an insurance company refuses to pay, the city would authorize the cost-recovery firm to go after the insurer.

The move, if approved, would make Zephyrhills one of a growing number of cash-strapped cities across the state that are billing at-fault, out-of-town drivers and their insurers to recoup some costs of responding to and clearing traffic accidents.

In the past several years, municipalities in at least 15 states - including Florida, Michigan, Kentucky and Wisconsin - have passed such ordinances.

The most recent was Ocala, which expects to get $350,000 a year in reimbursements, according to news reports.

Port Richey officials approved a similar at-fault accident program in March, and the Pasco County Sheriff's Office recently implemented a cost-recovery program that bills people convicted of a crime for the cost of investigating and prosecuting cases.

Of course, such efforts aren't without controversy.

Critics worry such fees will drive up insurance rates and hurt local businesses that rely on out-of-towners. The practice has caused a backlash from drivers and insurers, and several communities have taken steps to rescind their ordinances.

Some have referred to the program as an extra layer of taxation, known as the "crash tax."

Samuel Miller, executive vice president of the Florida Insurance Council, said many insurers will pass the cost of recovery programs on to the consumer.

"Someone has to pay," he said. "And it certainly won't be the insurance companies."

Reporter Christian M. Wade can be reached at (727) 815-1082 or cwade@tampatrib.com.

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