There are a number of water supply issues that impact the installation of a fire sprinkler system in a building. Not the least of which is the issue of stand-by charges levied against properties with fire sprinkler systems due to their potential for water use. The common thread that runs through all discussions pertaining to fire sprinkler systems is that these systems use large amounts of water and should be taxed for it. The author believes that these misconceptions can be changed with a better understanding of how fire sprinkler systems are designed and how they operate in a fire. This paper discusses six basic steps used in determining the total water flow demand of a fire sprinkler system. These steps include: selecting the installation standard; selecting the correct classification (light hazard, ordinary hazard group 1, ordinary hazard group 2, extra hazard group 1, extra hazard group 2); determining the location and size of the building; identifying the location and size of the hydraulically most remote area in the system; designating a minimum density of water to be delivered over the floor of the most remote area; and determining the number of sprinklers that will operate. The author concludes that building owners that opt for, or that are required to install sprinklers per the building code should not be assessed an additional fee. Under the current practice, the owner of the building that is not sprinklered requires the highest water demand, putting the greatest strain on the capabilities of the water utility and pays the least. Therefore, stand-by charges, if they must be enacted, should cover all buildings in the water district and be assessed contingent on the fire flow demand of the building.