*Now, what I supposed could have happened, is that the fire department puts the fire out, and then charges the guy for the full cost of doing so.  ie, full cost of labor, rental of equipment, etc. *

Sounds like a good idea at first glance but it has a huge drawback.

First it would encourage more property owners outside the township to not pay the fee for service.  "I will pay for it if I need it" mentality.

Having been an officer in a volunteer fire department I also understand the problem of maintaining coverage within its corporate limits.  How would you explain to a tax payer or a "fee payer" whose home was on fire that his fire department was busy fighting a fire out of town for someone who had in essence told the city it's service wasn't wanted?

If a city is large enough to have more than one station it will shuffle equipment and men to the emptied station to keep an area covered.  Volunteer units usually have like mutual aid plans.  It sounds like the town of South Fulton, Tenn. may not have the facilities to fulfill its obligation beyond its city limits unless a property owner "contracts" with them to get the service.  The size of the town and amount of people who pay for coverage will dictate the amount of equipment and number of firefighters necessary.  It is too late to buy another fire engine after the fire starts.

The folks outside of South Fulton have two choices: pay the fee so coverage can be provided by the city or form their own volunteer unit.  Actually a third choice, do neither and gamble your life and property on your decision.

Trust me it was not the firefighters decision to let it burn but it was also a difficult line that the decision makers had to draw in order provide uninterrupted coverage for its primary area.  If the poor guys whose house was destroyed lived within a volunteer fire departments area he would probably not been a supporter of that either. My guess anyhow.