March 22, 2004
Re: Legality of Fire Department Fees
Dear Fire Chief:
Your MTAS consultant asked me to give you an opinion on the legality of certain
fees to be charged for inspections and services performed by the Fire Department. In my opinion
these fees are legal if they are reasonably related to the cost of doing the inspection or providing
the service. Fees that go beyond recovering these costs may be attacked as unauthorized tax
measures.
You should also note that some versions of some fire codes have a suggested fee
schedule that is normally amended when the code is adopted by ordinance as authorized in
Tennessee Code Annotated, § 6-54-502. Since the fire code must be adopted by ordinance, any
amendment must also be adopted by ordinance. I do not know what fire code your City has
adopted, but to the extent the fees proposed overlap any suggested fees in the code, and to give
the fees greater dignity and enforcibility in general, it might be better to adopt the fee schedule by
ordinance.
Your City is incorporated under a private act charter (Ch. 380, Pr. Acts of 1972, as
amended). Section 1.04 of the Charter gives the City the same powers conferred on cities by
general law, particularly present T.C.A. § 6-19-101. Particularly pertinent to this inquiry are
items (20), (22), and (26), which provide that the City may:
(20) License and regulate all persons, firms, corporations, companies and associations
engaged in any business, occupation, calling, profession, or trade not forbidden by law;
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(22) Define, prohibit, abate, suppress, prevent and regulate all acts, practices, conduct,
business, occupations, callings, trades, uses of property and all other things whatsoever
detrimental, or liable to be detrimental, to the health, morals, comfort, safety, convenience, or
welfare of the inhabitants of the city, and to exercise general police powers;
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(26) * * * [I]nspect all buildings, lands and places as to their condition for health,
cleanliness and safety, and when necessary, prevent the use thereof and require any alteration or
changes necessary to make them healthful, clean, or safe;
These provisions and T.C.A. § 6-54-502 authorize the adoption of the codes and
inspection ordinances on which the fees in your schedule are based. These provisions say
nothing, however, about the charging of fees for these inspections. But as a general proposition
of law, the right to do an inspection implies the right to charge a fee to offset the cost of the
inspection. A legal encyclopedia states the rule this way:
The power to pass an inspection ordinance carries with it the right to charge a fee to
defray the cost of the inspection. 42 Am. Jur.2d Inspection Laws § 13.
2A McQuillin Mun. Corp. § 10.12.50(3rd. Ed.) states the rule similarly:
Express authority conferred on a municipality to enact inspection ordinances includes the
incidental power to charge a fee for the inspection.
Tennessee courts appear to follow the general rule. In Porter v. City of Paris, 201
S.W.2d 688 (Tenn. 1947), a group of taxpayers challenged the ability of Paris to charge a fee for
parking through parking meters. The Court in upholding the parking fees quoted from an Idaho
case, Foster’s, Inc. v. Boise City, 118 P.2d 721 at 728, which in turn had quoted from two (2)
treatises:
Effective exercise of the police power necessarily involves expenditures in many ways.
The means and instrumentalities, by and through which the supervising powers of the policing
authority are brought to bear on the subject to be regulated, involve costs and expenses. It is only
reasonable and fair to require the business, traffic, act, or thing that necessitates policing, to pay
this expense. To do so has been uniformly upheld by the courts. On the other hand, this power
may not be resorted to as a shield or subterfuge, under which to enact and enforce a revenue
raising ordinance or statute. Cooley on Taxation, 4th Ed. Sec. 1680; 3 McQuillin Mun. Corp.
sec. 987.
The fact, that the fees charged produce more than the actual cost and expense of the
enforcement and supervision, is not an adequate objection to the exaction of the fees. The charge
made, however, must bear a reasonable relation to the thing to be accomplished. 201 S.W.2d at
691.
See also Memphis Retail Liquor Dealers’ Association, Inc. v. City of Memphis, 547
S.W.2d 244 (Tenn. 1977); Miller v. City of Memphis, 181 Tenn. 15 (1944); and Op. Tenn. Att’y
Gen. 97-057 (April 28, 1997).
In addition to regulatory fees, your schedule contains some service fees, such as
the one for extrications. Although there are no Tennessee cases on this specific point, the general
rule appears to be the same as for regulatory fees. See Vandiver v. Washington County, 628
S.W.2d 1 (Ark. 1982) and Bloom v. City of Fort Collins, 784 P.2d 3011 (Colo. 1989). For those
cities that finance the purchase of equipment and facilities through bonds or capital outlay notes,
the Local Government Public Obligations Act (T.C.A. § 9-21-101, et seq.) provides specific
authority to charge fees for the use of the facilities or equipment. T.C.A. § 9-21-105 (21)(A)
defines a “public works project” that may be financed under that act as including “fire
department equipment and buildings” and “law enforcement and emergency services equipment.”
§ 9-21-107(8) authorizes any city to “Fix, levy and collect fees, rents, tolls, or other charges for
the use of or in connection with any public works project... .” Therefore, if the purchase of the
emergency equipment was financed under the LGPOA, the city has specific statutory authority to
charge fees for use of the equipment.
Some of the charges in the schedule, such as training and certain haz-mat fees,
appear to imply a contract between the city and another municipality or a business. The city has
the authority to “contract and be contracted with” (T.C.A. § 6-19-101(4)). T.C.A. § 12-9-108,
part of the Interlocal Cooperation Act, authorizes contracts between or among local governments
for the provision of services. A normal incident of a contract is a provision for payment for
services rendered. Therefore, a reasonable charge for providing these services to another
governmental entity or a business is defensible and in my opinion would be upheld.
Most of the discussions of fees in cases and other legal writings involve the
question whether the fee is actually a fee or an unauthorized and illegal tax. To levy a tax, a
municipality must have specific statutory authority. Fees can normally be justified by showing
authority to regulate or provide a service and showing a cost associated with the regulation or
service that is equitably apportioned among the regulated persons or service users. A fee does not
have to be exact in relation to the cost, but the closer the better. A fee that produced revenue
greatly in excess of the cost of providing the regulation or service could be construed as a tax and
ruled invalid. Therefore, the City should have some documented cost basis for levying the fee.
I hope this is helpful. If you have further questions, please feel free to contact us.
Sincerely,
Dennis Huffer
Legal Consultant