80 Op. Att'y Gen. 61 (1991)
 
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OPINION NO. OAG 11-91,

Wisconsin Attorney General Opinions

10 June 1991

Employer And Employe; Fire Department;
Classification of Chapter 213 and
Chapter 181, Stats., fire departments;

Public sector versus private
sector departments;

The classification of a fire department
depends upon the statute under which it was
organized.

CAROL SKORNICKA, Secretary Department of
Industry, Labor and Human Relations

Your predecessor stated that the application
of various existing and pending state rules
and statutes to individual fire departments
depends on whether the department is a public
sector employer or a private sector employer.

For example, Section 101.055, Stats., governs
public employes' safety and health.

Section 101.055(3)(a) provides, in part, that
the Department of Industry, Labor and Human
Relations

    "shall adopt, by administrative rule,
     standards to protect the safety and
     health of public employes."

A public employe is defined in Section
101.055(2)(b) as

    "any employe of the state, of any state
     agency or of any political subdivision
     of the state."

A public employer

    "means the state, any state agency or any
     political subdivision of the state."

Section 101.055(2)(d), Stats.

The safety standards mandated by Section
101.055 are inapplicable to private sector
firefighters.

Your predecessor further stated that private
sector volunteer fire departments have
traditionally been established under
Chapter 213 and under Chapter 181, as
nonstock, nonprofit corporations.

Section 213.05 provides that:

Any number of persons, not less than 15, not
residing in any city or village may organize
a fire engine, hook and ladder, sack or other
fire company for the protection of life and
property in the manner prescribed in Chapter
181 and thereupon shall have all the powers
of a corporation, including the powers
respecting real estate under these
statutes necessary or proper to accomplish
the purposes prescribed by its articles of
organization, and shall be governed by all
the provisions of these statutes
applicable thereto.

 
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Finally, your predecessor related that over
time some Chapter 213 or Chapter 181
volunteer fire departments have come to rely
on the resources or policies of their local
municipal governments.

For instance, he explained that Chapter 213
or Chapter 181 fire departments may acquire
operating revenue through assessment on the
tax mill rate, by contracting at a fixed rate
with the municipality, by billing property
owners per call, or by combining any of
these methods.

To summarize, the general focus of the
inquiry is:

a)   whether a private sector fire department
     may be transformed into a public sector
     department upon reaching a particular
     level of governmental involvement
     or sponsorship; and

b)   whether state regulation of a private
     sector fire department might, at some
     point, become appropriate depending on
     the level of governmental involvement
     the department has reached.

Your predecessor asked for an opinion on the
following specific question:

Is the classification of a volunteer fire
department as a private sector or public
sector department based on the classification
of the entity owning, housing, and
maintaining the equipment or on the
classification of the entity to which the
member firefighters belong?

Ownership or maintenance of fire fighting
equipment is not a determining factor in the
classification of private sector versus
public sector fire departments.

The statute governing town fire protection
is illustrative.

1983 Wisconsin Act 532 recodified
Chapter 60, relating to towns.

The legislation was developed by the
Legislative Council's Special Committee
on Revision of Town Laws.

Until the 1983 recodification, provision of
fire service by a town board was optional.

The recodification required towns
to provide fire services.

 
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1983 Wisconsin Act 532, at 2114.

Section 60.55 governs town fire protection.

The Special Committee's note to Section 60.55
states that the Section gives

the town board broad authority to provide for
and fund fire protection. Flexibility in
providing fire protection is necessary
because of the widely varying circumstances
of towns   circumstances that affect the
level of fire protection needed or desired,
such as population, geography, area,
proximity to urban centers and commercial
and industrial development.

1983 Wisconsin Act 532, at 2158.

Section 60.55(1)(a) permits a town board to
provide for fire protection in any manner
including:

1.   Establishing a town fire department.

2.   Joining with another town, village or
     city to establish a joint fire
     department. . . .

3.   Contracting with any person.

4.   Utilizing a fire company organized under
     Chapter 213.

Section 60.55(1)(b) authorizes the town board
to provide for the equipping, staffing,
housing and maintenance of
fire protection services.

Pursuant to Section 60.55(2), the board is
also authorized to utilize a variety of
mechanisms to obtain funding for fire
services, including a levy of taxes on the
entire town to pay for fire protection.

This flexible statutory scheme allows the
town board to raise money for fire services,
to purchase, house, and maintain fire
equipment, and to staff the fire protection
services, not only with employes of a
municipal fire department,
but with a private

    "fire company organized
     under Chapter 213."

Section 60.55(1)(a)1. and 4., Stats.

The Wisconsin Supreme Court considered a
challenge to public funding of a private
volunteer fire department in
Tonn v. Strehlau,
265 Wis. 250,
61 N.W.2d 486 (1953).

In Tonn, residents of two adjoining towns
formed a private volunteer fire department
under Section 213.05.

 
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The town boards of the adjoining towns levied
taxes and directly appropriated money to the
Chapter 213 department to cover its cost of
acquiring fire fighting equipment.

The court rejected the argument that the town
board was restricted to contracting with a
private fire department and could not
directly appropriate funds to provide
the private company with equipment.

According to the court, the town's direct
appropriation to the corporation was
permissible because of the private
corporation's public purpose.

The court observed that in Wisconsin the
practice of appropriating public funds to
privately owned or controlled corporations
was long-continuing and judicially
sanctioned.

There is no suggestion in Tonn that the
corporation's acceptance of public funds to
undertake a public purpose altered its
private sector status.

In my opinion, a privately organized Chapter
213 or Chapter 181 fire department does not
lose its private character by accepting funds
or equipment from a local governmental unit.

A similar conclusion was reached in
66 Op. Att'y Gen. 113 (1977).

The Palmyra Volunteer Fire Department was
organized as a nonstock, nonprofit
corporation under Chapter 181, pursuant
to authority granted in Section 213.05.

The chief of the department asked the
attorney general whether the department
was subject to the provisions of
the open meeting law.

The answer turned on whether the department
was a governmental or quasi-governmental
corporation.

The attorney general concluded that the fact
that a private corporation receives payment
for fire service from a town does not change
the corporation into a governmental or
quasi-governmental entity.

I conclude that a private fire department
does not become a public department if it
utilizes municipal equipment or accepts
municipal funding.

Expressed in the terms of the inquiry,
classification of a volunteer fire department
as public versus private is not determined by
ownership of the fire fighting equipment
utilized.

 
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Your predecessor next asked if members of a
Chapter 213 or Chapter 181 volunteer fire
department would be reclassified as public
sector employes if a municipality becomes
responsible for their insurance or
worker's compensation coverage?

A pertinent worker's compensation
statute exists.

Section 102.07(7) provides, in part, that:

Every member of any volunteer fire company or
fire department organized under Chapter 213
or any legally organized rescue squad shall
be deemed an employe of such company,
department or squad. . . . If such company,
department or squad has not insured its
liability for compensation to its employes,
the municipality or county within which such
company, department or squad was organized
shall be liable for such compensation.

Members of Chapter 213 fire departments are
deemed employes of the fire department by
operation of Section 102.07(7).

Their status under the statute does not
change if the municipality assumes
responsibility for worker's compensation
coverage when the Chapter 213 corporation
fails to do so.

Instead, liability is statutorily transferred
to the municipality with no attendant change
in the firefighter's classification as an
employe of a private sector company.

Under the reasoning followed in the answer to
the first question, just as a municipality
may directly fund and equip a private sector
fire department without affecting the
department's private sector status,
there appears to be no reason why a
municipality could not similarly elect to
provide insurance other than worker's
compensation coverage for the individuals
providing it with fire protection services.

Therefore, members of a private volunteer
fire department would not be reclassified as
public employes if a municipality were to
undertake responsibility for their worker's
compensation coverage or other insurance.

Your predecessor next asked whether a Chapter
181 volunteer fire department would be
considered a public fire department if the
articles of incorporation require that the
board of directors of the corporation include
one or more representatives of the
municipality or municipalities for which the
fire department is providing protection?

 
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There are no reported Wisconsin decisions or
opinions of the attorney general that address
a private fire department's practice of
providing that one or more municipal
representatives be seated on its board of
directors.

Section 213.05 simply states that any number
of persons may organize a fire company

        "in the manner prescribed
         in Chapter 181."

Section 181.18 provides that the affairs of a
Chapter 181 corporation shall be managed by a
board of directors.

Section 181.18 further provides that

    "directors need not be residents of this
     state or members of the corporation
     unless the articles of incorporation or
     bylaws so require.

     The bylaws may prescribe other
     qualifications for directors."

Section 181.20(2) states, in part, that

    "the directors constituting the first
     board of directors shall be named in the
     articles of incorporation . .thereafter,
     directors shall be elected or appointed
     in the manner and for terms provided
     in the articles of incorporation
     or the bylaws."

    "The articles of incorporation may
     include any provision, not inconsistent
     with law, which the incorporators elect
     to  set forth in the articles of
     incorporation. . . ."

Section 181.31(2), Stats.

The practice of designating municipal
representatives as Chapter 181 corporate
board members does not seem to be
inconsistent with the necessarily close
relationship between private fire departments
and the municipalities that they serve.

Furthermore, because it appears that such
appointments can be statutorily accomplished
without creating any conflict of interest,
see Section 181.225, the independent
nature of the Chapter 181 fire
department is not likely
to be compromised by
the practice.

In short, no statutory provision or judicial
precedent directs that a Chapter 181
volunteer fire department be considered a
public department if the department chooses
to include municipal representatives on its
board. Statutes and case law aside, policy
reasons are likely to favor, rather than
prohibit, appointment of municipal
representatives.

 
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Finally, your predecessor asked what criteria
should be used to determine whether a Chapter
213 or a Chapter 181 fire department retains
its status as a private (private employer)
fire department.

The final question presupposes that a
volunteer fire department's private status
can be lost depending on how closely its
affairs become entwined with those of a local
governmental unit. The classification of a
fire department depends on the enabling
statute under which it was organized.

A fire department created by a town board
pursuant to Section 60.55(1)(a)1. is
certainly a public fire department, as are
village and city departments established
under Sections 61.65(2)(a)1. and 62.13(8).

A fire department organized under
Chapters 213 and 181 is a private entity,
despite its evident public purpose.

In my opinion, although a private, volunteer
fire department can be disbanded or
dissolved, then reconstituted as a public
entity, public status does not automatically
accrue by virtue of increased municipal
involvement.

The mechanisms for disbandment or for
voluntary dissolution of private departments
are found in Sections 213.04 and 181.50.

I believe that the only certain criteria for
determining whether a volunteer fire
department has lost its private status are
findings that:

(1)  Chapter 213 disbandment and/or Chapter
     181 dissolution have taken place; and

(2)  either by town board action or by
     ordinance, the department in
     question had been recreated
     as a municipal entity.

JED:LD

 
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