Dear Reader:
The following document was created from the MTAS electronic library known as MORe (www.mtas.tennessee.edu/more). This online library is maintained daily by MTAS staff and seeks to represent the most current information regarding issues relative to Tennessee municipal government.
We hope this information will be useful to you; reference to it will assist you with many of the questions that will arise in your tenure with municipal government. However, the Tennessee Code Annotated and other relevant laws or regulations should always be consulted before any action is taken based upon the contents of this document.
Please feel free to contact us if you have questions or comments regarding this information or any other MORe material.
Sincerely,
The University of Tennessee
Municipal Technical Advisory Service
1610 University Avenue
Knoxville, TN 37921-6741
865-974-0411 phone
865-974-0423 fax
www.mtas.tennessee.edu
Tennessee fire departments are organized, equipped, staffed, and trained to minimize injuries, deaths, and loss of property from fires. Although some fires require chemicals for extinguishment, water is the universal agent for extinguishing fires. Many communities in Tennessee do not have sufficient quantities of water for effective firefighting service, and they lack adequate resources to obtain a needed supply. Small city and rural fire departments often spend much of their time locating an available source of water for fire extinguishment. “When assessing the water needs of a community, the water needs of the fire department are often not considered even though fire protection is the only municipal delivery service where improved capability can result in savings to taxpayers through reduced property insurance premiums.” [1] Deficient fire flows (defined as an insufficient amount of water needed to extinguish a fire in a given building) not only hamper firefighting operations, place civilians and firefighters at risk, and contribute to higher property losses from fire, they penalize the entire community in the form of higher property insurance premiums from a poorer ISO rating.
[1] Public Technology, Inc. (PTI) Washington, D.C. Model for Fire Station Location. Fire Suppression Rating Schedule Handbook.
Problems Confronting Local Government's Ability to Provide Water for Fire Service
1. There is a lack of resources to fund improvements to the water system, including fire hydrants.
Cities often are reluctant to increase the property tax rate, or increase water rates, to fund improvements in the water system that are needed to improve community fire protection, even though such improvements can lead to savings in homeowners’ insurance premiums. Elected officials should realize that the savings in insurance premiums can be used to pay for minimizing property loss, and to reduce the number of injuries and loss of life due to fires. The savings in homeowner insurance premiums usually offset the costs for fire service improvements.
2. Many water utility districts, both public and private, provide only potable water for consumption and do not provide water for fire service.
Although municipal governments in Tennessee are responsible for providing fire service, utility districts that struggle to provide water for consumption often think they are not responsible for fire service. Many utility districts are faced with the same lack of funds to finance improvements to the water storage and distribution system that would be beneficial to city fire service.
The typical response from many water utility managers is, “We are not in the fire protection business.” They may not, or do not, recognize that 40 percent of a community’s Insurance Service Organization (ISO) rating, which is used to set local property insurance rates, is based on the water utility system. Many water utility boards of directors are unaware what affect they can have on a community by providing good fire protection. The ISO rating for a community is based half on the fire department and almost half on the water service. If a water manager is doing the right things, he also must be concerned with fire protection. The water utility is not in the full-time fire protection business, but it is responsible for supply adequate fire flows to protect the properties that are at risk in the community. Fire departments must establish good working relationships with the water/utility system(s) that serve their fire protection area(s).
3. The water utility district is not materially linked to local planning.
A water utility district operating within a city, or the city’s urban growth area, is not required to comply with the city’s growth plans or the city’s subdivision regulations. A city cannot enforce its subdivision regulations within its urban growth area without permission from the county. Cities in Oregon and Washington, states with growth regulations similar to those in Tennessee, are authorized to require that utilities comply with local government planning regulations. Tennessee law does not require that utilities comply with a city’s local planning regulations or the 20-year growth plan required by Public Chapter 1101.
Many small-town mayors pose questions such as, “How can I require a public or private water utility district operating within my city and urban growth boundary to comply with the city’s subdivision regulations? How can my city provide water to the fire department to prevent the loss of property and life due to fires?” Invariably the answer is, regardless of any city police powers, subdivision regulations, county growth plans, or city land use plans, cities clearly lack the authority to direct a utility district to comply with its development regulations. Cities cannot require water utilities to install needed fire hydrants or replace substandard water mains, even if a developer or a city agrees to pay the cost.
Cities need to investigate innovative ways of providing fire service and innovative ways for funding those services, many of which are outlined in this report. Cities should not approve new development projects unless there is sufficient water available to provide the needed fire flows. The fire chief or fire official should have a seat at the review table when developers bring proposed developments to a community and asked for preliminary review and comments. An adequate water supply commensurate with the risk should be required as part of the approval process. Deficient water for fire protection should be grounds for rejection of the proposed development until an adequate water supply is available.
4. Local governments generally lack the authority to take over and upgrade water utilities operating within their political jurisdictions.
Although state law allows a city to take over a utility operating within its jurisdiction, federal law prevents such action if the utility has outstanding bond obligations for utility infrastructure within the area. Cities have been unsuccessful in getting needed federal law amendments that would allow them to take over the utility upon paying off the bond debt.
The fire department is one of every city’s greatest assets. Even though cities may allocate significant resources for fire equipment and facilities, they are confronted with the need for an adequate water supply and delivery system. The water supply and delivery system counts for 40 percent of the Insurance Service Organization grading system that determines, to a large extent, private and commercial property fire insurance premiums. All properties in a community have minimum needed fire flows, especially commercial and industrial occupancies, which range from 500 gallons-per-minute (gpm) to 3,500 gpm or more. A large factory or warehouse, for example, might have a needed fire flow of 5,000 gpm. If the water system is not capable of delivering the needed fire flow, the Insurance Services Office (ISO) considers that a deficient fire flow, which has a negative impact on the community's Public Protection Classification (i.e ISO Rating) and corresponding property insurance rates.
“Water is our most precious resource. This is especially true when considering firefighting applications. When it comes down to it, water is the fire department’s ammunition. Despite all the equipment, training, and efficiency of the firefighting personnel, an adequate water supply for firefighting plays the most important role in our ability to protect life and property from fire.” [2]
Not having an adequate and readily available supply of water for fire service can result in the following:
[2] Water Supplies for Commercial and Residential Fire Protection, Colorado Springs Fire Department.
Water System Regulations that Affect Fire Service
Minimum requirements for fire service are 500 gallons of water per minute (gpm) and water flows at 20 pounds per square inch (psi) residual pressure. This requires a minimum six-inch water main (see TDEC Regulation 1200-0400-45-01-.17(18)) for lower residential requirements. A professional engineer licensed in the state of Tennessee should determine the community’s water system storage capacity. Water is stored in standpipes, elevated water tanks, reservoirs, and clear wells at treatment plants. Many small-city fire departments take water from nearby streams, portable storage tanks, distant hydrants, and large tanker fire trucks. Tennessee fire departments are required to track the water usage from fire hydrants. and report the amount of water used to the local utility company.
Tennessee public water system regulations require that all community water systems planning to, or having installed, fire hydrants must protect the distribution system from contamination. Fire hydrants shall not be installed on water mains less than six inches in diameter, or on water mains that cannot produce 500 gallons per minute at 20 psi residual pressure, unless the tops are painted red. Out-of-service hydrants shall have tops painted black or covered with a black shroud or tape. Existing Class C hydrants (hydrants unable to deliver a flow of 500 gallons per minute at a residual pressure of 20 psi) shall have their tops painted red.
As of January 1, 2008, the water system must provide notification by certified mail at least once every five years to each fire department, that may have reason to use its hydrants, that fire hydrants with tops painted red (Class C hydrants) cannot be connected directly to a pumper fire truck. Fire departments may be allowed to fill the booster tanks on any fire apparatus from an available hydrant by using only the water system’s available pressure. (Fire pumps shall not be engaged during refill operations from a Class C hydrant.) While these regulations protect the water distribution system from contamination, they also speak to the need for an improved water source for Tennessee’s rural fire departments.
Fire Service Planning for Water
Most municipal subdivision regulations require six-inch water mains capable of delivering at least 500 gpm at a residual pressure of 20 psi, and they require that hydrants be installed no more than 1,000 feet apart or 500 feet from residential structures. Desired fire hydrant spacing for residential areas is to have fire hydrants spaced on 500-foot centers. For commercial and industrial areas, fire hydrants should be on 300-foot centers. Some commercial and industrial occupancies with needed fire flows exceeding 3,500 gpm may need hydrants to be spaced much closer in order to provide enough hydrants to meet the needed fire flow. With the use of GPS equipment, insurance companies now can more accurately determine the exact distance of a structure from a fire hydrant and charge the correct property insurance rate. Public and private water utility districts operating within a city and its urban growth area are not required to comply with municipal subdivision regulations that require the installation of fire hydrants. There often is a serious disconnect between municipal planning and the provision of water by utility districts and private utility companies. It is somewhat ironic that only the largest utility, usually the electric system or the telephone company, was required to participate in the development of the 20-year urban growth plan required by Public Chapter 1101, and utilities are not required to comply with the city’s growth plan.
According to Kevin J. Lauer, UT County Technical Assistance Service fire consultant, water systems typically can be designed and installed for fire protection with an increase in total project cost of only 4 to 10 percent over a potable system only. This is another area that will pay huge dividends over the next 10 to 15 years. He goes on to say that water systems and community development planning is a complex subject that local governments cannot afford to ignore. It is vital, not only for safety and property conservation, but also for the continued economic growth of a region.
Many communities in Tennessee want a water supply with six-inch or larger, depending upon the needed fire flow, water mains and community-wide fire hydrants. They want improved fire service to save lives and property; however, they complain about the affordability of such improvements. The Environmental Protection Agency (EPA) bases its affordability determinations on the criterion that a household with the median (50th percentile) income should be able to pay 2.5 percent of its pre-tax income for water. The 2015 median family income in Tennessee was $57,830. At 2.5 percent this affordability measure indicates that customers should be able to pay up to $120.48 per month for water. The average monthly water bill in calendar year 2000 for Tennessee cities with populations of less than 5,000 was $17.46. Most households in Tennessee are paying approximately one-sixth of the EPA affordability index amount. While the author is not advocating a six-fold increase in water rates, many families are paying considerably more for cable television service than for water service.
Reducing Costs
Studies by the Federal Emergency Management Agency’s United States Fire Administration indicate that installing residential fire sprinkler systems could have saved thousands of lives, prevented a large portion of injuries, and eliminated hundreds of millions of dollars in property losses. “Automatic sprinkler systems were the first and still are the foremost forms of automatic fire suppression system used throughout the world. With over 100 years of operating history and a 95 percent plus success record, these systems represent one of the most readily available means for effective fire suppression for a wide range of different occupancies. The success story for automatic sprinkler system in confining, controlling, and extinguishing developing fires in structures has been a phenomenon.” [3]
Using quick response sprinklers and approved piping, homes can be built or even retrofitted to include low-cost automatic sprinkler systems connected to the domestic water supply, lowering insurance rates by 5 to 15 percent. At present, the cost of a home sprinkler system is approximately $1 to $1.50 per square foot in new construction amounting to about 1 percent of total building cost. More than 270 communities [4] now have residential sprinkler laws. The use of residential sprinkler systems and smoke detectors remains the key to reducing the overall fire death toll, which amounts to 83 percent [5] of all fire deaths.
“A study based on 15 years of data from Scottsdale, Arizona, categorized fire damage in two types of homes — those with and those without sprinkler systems. Property loss due to a fire in a residential home with a sprinkler system was $2,166 compared to $45,019 in the home without a sprinkler system. A 12-year study of Prince George’s County, Maryland, reported fire damage in the home with sprinkler system amounted to $3,429 and, without, $326,752.” [6]
A residential sprinkler system can help communities with a deficient water system allow sub-division development where the needed fire flow would otherwise be inadequate. For example, a sub-division with homes no larger than 4,800 square feet, with between 11 and 20 feet of separation between homes, requires a minimum fire flow of 1,000 gpm. However, if all of the home in the sub-division were protected by a properly installed, NFPA 13 code compliant residential sprinkler system, the needed fire flow would be the demand at the base of the rise, or 500 gpm, which ever is greater. If the water system was capable of supplying 500 gpm, but not 1,000 gpm, the residential sprinkler system would provide the level of fire safety needed.
[3] Water Supply Systems and Evaluation Methods, Dr. Harry E. Hickey.
[4] Residential Fire Safety Institute.
[5] Ibid.
[6] Economic Analysis of Residential Fire Sprinkler Systems by Hayden Brown.
The ISO uses a grading system from 1 to 10 with 1 being the best and 10 representing a community without an effective fire service. Within this grading structure, a split class means that all properties within 1,000 feet of a water supply (usually a fire hydrant) are eligible for the first class (1-8).
Properties that are more than 1,000 feet from a water supply, but within five road miles of a fire station, are eligible for either a Class 9 alone or Class N/NX split classification, where the X signifies an area protected by a Class N fire department and the area lacks an adequate water supply. All properties more than five road miles from a fire station are Class 10. An example would be a 3/3X classification, where most of the properties are within 1,000 feet of a water supply and meet other fire standards (Class 3), and some of the community is more than 1,000 feet from a water supply but within five road miles of a fire station (Class 3X). The challenge to local government is to improve the fire service using the savings from an improved insurance rate classification.
The ISO rates community fire service in Tennessee. According to the Tennessee County Fire Handbook, “For areas without a public water supply system, the following flow rates must be achievable for a minimum of two hours:
| ISO Rating | GPM |
| 9 | 100 |
| 8 | 250 |
| 7 | 350 |
| 6 | 450 |
The flow, measured in gallons per minute (gpm), must be established within 15 minutes from the alarm time.” [7]
[7] Tennessee County Fire Handbook, Kevin J. Lauer, County Technical Assistance Service.
In the following example, if a homeowner pays $1 per year for fire insurance in a Class 10 rating, then:
This information is just a guideline, as the actual rates a property owner will pay depend upon the proprietary formula their insurance company uses for calculating property insurance premiums.
ISO Mitigation Online reports the following breakdown for Tennessee communities as of August 2020:
| Grade | Number of Communities |
| 1 | 7 |
| 2 | 32 |
| 3 | 63 |
| 4 | 113 |
| 5 | 257 |
| 6 | 187 |
| 7 | 49 |
| 8 | 6 |
| 8B | 12 |
| 9 | 117 |
| 10 | 15 |
| Total | 858 |
[8] www.isomitigation.com [1]
Of the 858 ISO-classified communities in Tennessee, 117, or 13.64 percent, are grade 9, as they meet only minimum standards.
The Tennessee ISO ratings are consistent with national ratings, as more than 14 percent of the fire districts in the United States have a Class 9 rating, which indicates the minimum recognized standard of fire protection.
Fire Service Rating Effect on Commercial and Economic Development
Every small town and rural community in Tennessee is interested in promoting growth and commercial and economic development. They budget for economic development, participate in area development efforts, become Three-Star certified, subsidize new development, and support it in other ways. They want business and industry to locate in their communities for jobs and economic opportunities. A community that does not have adequate water for fire service is at a tremendous disadvantage over a community that does. The difference in commercial fire insurance premiums between a community with adequate water for fire service and a community that does not have adequate water is significant, and in many instances may prevent industry from locating in the community. If two or more communities are competing to land a business, a community with a better ISO rating will have an advantage, as the business will pay lower annual property insurance premiums, which lowers the business's overhead costs.
Examples
A MTAS fire study for an East Tennessee city with a population of just over 4,000 with an ISO rating of Class 9 indicated that for a $100,000 home structure paying an annual fire insurance premium of $806, the annual savings per household where the ISO class was improved to Class 5 was $298. When multiplied by the estimated 1,477 homes inside the city, the annual savings to city dwellers amounted to $440,146. The cost of improving the water system was $695,470, 57 percent of the total $1,220,123 cost of improving fire service, including the water distribution system and installing hydrants. By using long-term debt and paying approximately$100 annually per household for fire service improvements, each household received savings of approximately $298 annually.
If a fire department improves its ISO rating, homeowners and businesses in the community often save money on their insurance premiums. If the savings are spent in the community, the extra cash can help the local economy. The U.S. Chamber of Commerce states that every dollar that stays in a community will turn over more than six or seven times. Using the above example, the $440,146 annual savings in insurance premiums minus the annual cost of $147,700 will generate an additional $292,446. When this turns over six times during the year it generates an additional $1,754,676 ($293,846 x 6) for the local economy. At the rate of 2.75 percent local sales tax, this savings generates $48,254 in additional tax revenue to the of improving the fire service and the water system. Much of this money currently is going to insurance companies outside the community. In this example, it clearly was in the local government’s interest to make the improvements with the projected savings. Cities in need of revenues for improving fire service may want to do a similar analysis.
“In 2000, the Rural Fire Protection Work Group, a committee appointed by Arkansas Governor Mike Huckabee, quantified the economic benefits of improved fire protection for that state. In its final report the work group estimated the statewide cost of projects to be about $150 million or $15 million a year for 10 years. Next, the work group projected the reduction in property insurance premiums when each of 839 rural fire departments has improved its Public Protection Classification (PPC) to Class 7. According to that analysis, the statewide savings would total more than $100 million per year. More than 425,000 homeowners would share the benefits, with an average savings of $235 per household. The Arkansas work group projected increased economic activity at more than $2 billion over a period of 13 years. According to the work group’s analysis, that economic activity would generate additional state and local sales tax revenue more than offsetting the cost of the improvements.” [10] These savings from approximately 700 fire departments in the state of Arkansas are consistent with the savings of the East Tennessee city cited previously. Perhaps a similar approach would work in Tennessee.
[10] www.iso.com. [2]
Councils (RC&Ds) in East Texas have begun a pilot project that will turn over to the state of Texas a model to improve rural volunteer fire department (VFD) fire suppression and to provide VFDs with training in homeland protection. The key, long-term measure of success will be that insurance ratings for many volunteer fire departments will be lowered, and, as a result, substantial savings will be returned to rural homeowners. The impact of a successful project in just 10 years could potentially be millions of dollars saved in reduced insurance premiums, which will boost local economies. In the short term, during the pilot project, 50 counties and their volunteer fire departments will:
The pilot project is modeled after a very successful statewide project in Arkansas. In just six years, that project improved the fire suppression capability of hundreds of volunteer fire departments and realized $25 million dollars in annual savings for rural counties when homeowner insurance rates dropped because of the improved ISO ratings.
The above examples demonstrate that there are substantial insurance cost savings from improving a community’s fire service. Often the problem is that the government agency, the fire department, has the expense, and the homeowners receive the insurance savings from their insurance premiums. Many homeowners are not willing to return any savings realized from a reduction in insurance premiums to pay for needed fire service improvements. They do not want their property taxes increased to pay for the savings. Another funding mechanism is needed to capture these savings for the benefit of the fire service as well as the homeowner.
Could insurance companies enter into agreements with local governments to provide upfront the costs of needed fire service improvements, with the insurance company, the fire department, and the homeowner sharing in the savings? Could a government fund be established to contract with local governments for improving fire service with the fund and the fire department sharing in the savings? With a 3-to-1 return on investment from improved fire service, there are many potential ways to recover the insurance savings for the benefit of the fire department, the homeowner, and the finance organization. Tennessee cities have not sought optional and innovative ways to capture the insurance rate savings for the benefit of the fire departments and the homeowner.
Small municipal fire departments using volunteers are important to Tennessee cities. There are 723 recognized fire departments in Tennessee. Most of them are small fire departments struggling with water supply issues. Many small-city fire departments lack an adequate supply of water and the necessary funding to provide for needed supplies, equipment, and facilities. Improving a city’s fire service rating can lead to homeowner insurance savings, and it can provide a mechanism to fund needed improvements in the fire service. Residential sprinkler systems can reduce the loss of life and property. Growth issues affecting a city’s ability to provide an adequate level of fire service to its community need to be adequately addressed.
MTAS recommends that cities look for innovative methods to improve the water supply required for fire service such as:
Links:
[1] http://www.isomitigation.com
[2] http://www.iso.com/
DISCLAIMER: The letters and publications written by the MTAS consultants were written based upon the law at the time and/or a specific sets of facts. The laws referenced in the letters and publications may have changed and/or the technical advice provided may not be applicable to your city or circumstances. Always consult with your city attorney or an MTAS consultant before taking any action based on information contained in this website.
| |