On November 12, 2015, the Wisconsin Court of Appeals decided Town of Hoard v. Clark County, No. 2015AP678, upholding a Town of Hoard ordinance assessing a fee for fire protection on County-owned property located within the Town.
The Town of Hoard located in Clark County operates a fire department jointly with other municipalities in the area. To pay for the fire department, the Town enacted an ordinance imposing an “annual charge on properties located within the Town for the provision of fire protection according to a written schedule.” The schedule apportions the total cost of the fire department among properties based on their size and use. In 2014, the Town charged the County, which owns a medical center within the Town, $3327.68 under the ordinance. After the County did not pay, the Town sued. The trial court granted summary judgment in favor of the Town, requiring the County to pay.
On appeal, the County argued that the ordinance is invalid (at least as applied to the County) for two reasons. First, it argued that the charge is a tax rather than a fee. This matters because counties are exempt from general taxes. Second, it argued that even if the charge is a fee, the ordinance is not authorized under section 60.55(2)(b) of the Wisconsin Statutes. The Court of Appeals rejected both of the County’s arguments and upheld the Town’s ordinance.
First, the court considered whether the Town’s ordinance is a fee or a tax. “[T]he primary purpose of a tax is to obtain revenue for the government, while the primary purpose of a fee is to cover the expense of providing a service or of regulation and supervision of certain activities.” Here, the court determined that the primary purpose of the Town’s charge is “to cover the expense of providing the service or fire protection to the properties within its geographic boundaries.” Therefore, the charge is a fee—not a tax. The court said it did not matter that the Town imposed the charge in its role as a municipality rather than in the role of a public utility. Nor did it matter that non-payment of the charge results in a tax lien against the property.
Second, the court analyzed the ordinance’s validity under Wisconsin Statutes section 60.55(2), which provides that, in order to fund the cost of fire protection, a town may “[c]harge property owners a fee for the cost of fire protection provided to their property . . . according to a written schedule established by the town board.” The County argued that, based on its structure and legislative history, section 60.55(2) means that the Town may only charge for fire services “actually provided.” The court rejected this argument, deciding that a fee can be imposed for fire protection merely available, regardless of whether a property owner actually uses it. Indeed, “the presence of a fire district standing by ready to extinguish fires constitutes a fire protection service for which a fee may be assessed.” Thus, the Town “provided” the County’s property with fire protection within the meaning of section 60.55(2).
In the end, the Court of Appeals upheld the trial court’s ruling in favor of the Town. The Town’s ordinance properly assesses a fee under section 60.55(2). Therefore, the County must pay for the fire protection provided to its property located within the Town.
Thank you to Joseph Diedrich for his assistance in drafting this post.