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Fire service deal in works

City could tap revenue source

The Butler Fire Department may be the fifth fire department in Butler County in four years to use a company to help generate more money for the municipality.

City council tonight will vote on a motion to sign a contract with Pennsylvania Fire Recovery Service.

If the motion passes, the department would join those from East Butler, Chicora, Bruin and Marion Township as departments in business with this service.

This proposal was outlined at Tuesday’s council meeting.

Under this, Fire Recovery Service would bill homeowner’s and automobile insurance companies for services provided by the city fire department on emergency runs.

Health insurance companies would not be eligible to be billed.

“It’s a little stream of revenue that we have never gone after before,” Kathy Kline explained after Tuesday’s meeting. “They’re hidden fees. If you have insurance, you pay it, and that money has just been staying with the insurance companies.”

Pennsylvania Fire Recovery Service is a 12-year-old company in Allentown that contracts with just under 700 fire departments across the state. It brought in $2.3 million in revenue last year and is projecting more than $3 million this year.

Shawn Meder, Fire Recovery Service president, calculated an estimate of what Butler would have received last year had it been in business with the company.

By taking the number of department calls able to be billed, dividing that by the company’s 50 percent collection rate, and multiplying that by its averaging collection amount of $800, Meder determined that Butler would have gotten $50,000 to $60,000 in 2015.

Under the contract, 15 percent of what is collected goes to Fire Recovery Service while 85 percent will go to the city.

The city also would be eligible to get revenue from emergency calls from the past two years. If the city would do that, 35 percent of revenue will go to Fire Recovery Services and 65 percent will go to the city.

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