REGIONAL— A Timberjay analysis of the administrative expenses of local Basic Life Support (BLS) ambulance services has found a wide variation in overhead costs, ranging from $4,800 a year in …
REGIONAL— A Timberjay analysis of the administrative expenses of local Basic Life Support (BLS) ambulance services has found a wide variation in overhead costs, ranging from $4,800 a year in Orr to more than $40,000 a year in Tower. Administrative costs for services operating Advanced Life Support (ALS) services, like Ely and Virginia, run higher in absolute dollar terms although they are considerably less costly on a per-capita basis.
The Timberjay investigation also found that Tower Area Ambulance Director Steve Altenburg may be receiving substantial compensation which has not been clearly authorized under the existing terms of his employment, potentially a violation of state law.
For small rural ambulance services, maintaining financial viability is a continuing challenge, as the rising cost of ambulances and other medical equipment and the need to attract and retain ambulance staff has strained ambulance budgets.
Limiting overhead expenses is one means the Orr Area Ambulance Service has used to keep costs under control and to build the financial reserves it needs to finance the purchase of costly equipment, particularly ambulances, which now regularly cost over $200,000 per unit.
While the administrative tasks associated with operating even a small ambulance service are significant, Orr relies largely on dedicated staff who are paid very modest amounts for the work they do for their community.
Orr Ambulance Supervisor Donna Hoffer is paid just $450 per quarter, or $150 a month for her efforts. Hoffer’s assistant is paid the same salary and the service pays a finance director $100 per month, bringing the administrative costs for Orr’s ambulance service to $400 per month, or $4,800 per year. “I wish we could pay more,” said Orr City Clerk-Treasurer Cheri Carter. “I know it’s a lot of paperwork and getting ready for the annual inspections takes a lot of time.”
But despite a relatively limited number of runs, and a population that’s generally low-to-moderate income, which can limit reimbursement rates, the OAAS has managed to maintain a healthy fund balance of over $450,000, which helps to finance the cost of ambulance replacement as needed. The OAAS also minimizes the number of miles on its rigs— thereby extending their useful life— by limiting non-emergency transports solely to those emanating from the Cook Hospital.
Ambulance replacement is proving a financial challenge for the Tower Area Ambulance Service, although that’s primarily because past profits from the TAAS were used to finance other city spending, without being reimbursed. That means most of the funding for a new ambulance, that is expected to arrive later this winter, will come from township contributions (of $15 per capita) to a dedicated ambulance and equipment replacement fund. However, those reserves won’t cover the entire remaining expense of the ambulance, which will require the city to pay the rest of the cost from its already-stressed general fund.
But relatively high overhead costs are putting added stress on TAAS’s budget, which topped $513,000 in expenditures this year. While the TAAS, which spent less than $250,000 as recently as 2017, posted operating margins in excess of $100,000 annually in the recent past, those margins have largely disappeared as a result of the decision to convert the service to a full-time paid staffing model and due to higher administrative costs under current ambulance director Altenburg.
When the Tower City Council hired Altenburg in November 2016, he insisted on a substantial pay increase over the previous supervisor, Matt Tuchel, who took a leave from his ambulance work during recovery from shoulder surgery. Tuchel had been paid $1,300 a month, but at Altenburg’s insistence, the council raised the monthly pay rate to $1,800. The council, at the urging of Altenburg and former clerk-treasurer Linda Keith, further increased that to $2,000 a month early last year.
Unlike other area ambulance directors in the region, Altenburg has no required office hours, which was another of his demands that the former city council agreed to at the time of his hiring. That lack of established work hours has allowed Altenburg to rack up a significant number of hours on ambulance runs and, unlike other area ambulance supervisors, Altenburg is paid $25 an hour on top of his salary for those runs. That appears to be in violation of his job description, which clearly indicates that serving as an EMT on ambulance runs is part of his assigned duties as supervisor— for which Altenburg is paid his monthly salary. The job description includes no apparent provision for additional pay for ambulance runs, nor does it appear that the city council ever explicitly authorized the additional pay for the TAAS director.
Minn. Stat. 609.45 makes it a misdemeanor for a public officer to receive unauthorized compensation.
According to a joint response from Tower Clerk-Treasurer Victoria Ranua and Altenburg, the arrangement where an administrator would also serve as an EMT, appears to be a longstanding practice with the TAAS, dating back at least 20 years. “It was understood by the city council, the clerk-treasurer, the ambulance [director], and the staff that the terms of employment were that the administrative work was compensated via a salary and the runs be compensated at the hourly EMT rate,” stated Ranua and Altenburg in their response to questions.
While past TAAS directors did routinely respond as EMTs— as is typical of other area ambulance directors— it’s only been relatively recently that they received any additional pay for doing so. For years, TAAS EMTs, including directors, received credits that went toward their pension in lieu of cash payments. Former TAAS director Matt Tuchel said he made the change to cash payments during his tenure, either in 2013 or 2014, in an effort to encourage better participation from members.
City records indicate that at least two previous directors were paid at least something for run time in addition to their salaries, but the totals were modest, typically amounting to no more than a few thousand dollars per year. Tuchel, for example was paid a total of $18,899 in 2015, and $24,310 in 2016, for both his director duties and ambulance runs.
Altenburg, by contrast, spent approximately 390 hours over the past year on a total of 236 ambulance calls. That was more than any other member of the TAAS, including paid on-call staff, and it generated $9,771 in additional income for Altenburg, putting his combined 2019 city salaries and wages at $47,337. That includes the money he’s also paid as as the city’s fire chief.
The Timberjay’s analysis of administrative costs does not include Altenburg’s run time, nor his payment as fire chief, as part of the TAAS’s overhead costs. In addition to Altenburg’s supervisor salary of $24,000 a year, TAAS maintains two paid assistant supervisors, and a paid training officer. According to council-approved salaries in 2019, the four paid administrative positions cost a total of $3,350 per month, or $40,200 a year.
That’s substantially higher than the overhead costs of the Cook Area Ambulance Service. There, a single full-time administrator, Christina Roth-Leutner, is paid $16.19 per hour, or approximately $33,600 on an annual basis. Roth-Leutner has no assistants and also serves as CAAS’s training officer. In addition, her position includes serving as safety officer for all city departments and personnel, as well as the city’s emergency management director.
Roth-Leutner is required to perform ambulance runs as needed, at least during her regularly-scheduled work hours, but she is not paid extra for making those runs. Roth-Leutner said she averages about six runs per month, which is usually enough to meet the requirement of the Cook Ambulance Service that all EMTs put in a minimum of 24 hours of call time per month. EMTs for the CAAS are paid four dollars an hour while on call, while Emergency Medical Responders, or EMRs, make three dollars. The CAAS finished the year with a total of 377 ambulance runs.
Ely Area Ambulance Service Supervisor Geoff Galaski also performs ambulance runs as part of his duties but isn’t paid extra for doing so. “Typically, when you’re salaried, you’re salaried, and don’t get call pay like line staff,” stated Galaski, who is paid $57,000 annually for running the EAAS, which maintains both ALS and BLS service. Galaski has regular work hours and is on-call 24 hours a day, seven days a week, but receives no additional compensation for that. While he isn’t paid extra for ambulance runs, Galaski said he does typically bank those hours as comp time, which he can use for time off. Galaski does have one assistant, who is paid $13 an hour, and that assistant receives an extra $20 per run for serving as an EMT.
Ely’s ambulance service, which averaged close to 600 runs annually over the past two years, has managed to maintain surpluses in the $60,000-$80,000 range in most recent years. Expenditures for the service have averaged about $580,000 in recent years, without much variation year-to-year according to Galaski.
Virginia Area Ambulance Director and Fire Chief Allen Lewis said his position has no requirement to participate in ambulance runs, although he does serve in that capacity at times to maintain good communication with his ambulance personnel. “As an administrator though, my best way to serve the department is through strategy and long-range planning,” stated Lewis. “I am required in my job description to maintain my credentials as a paramedic and a firefighter, but I have a salaried position and am not eligible for overtime. I am also not eligible for additional compensation such as would be awarded in the case of a run.”
Small towns face high emergency service costs per capita
High fixed costs, like administrative overhead, can make a difference in how much communities pay for emergency services. On a per-capita basis, the cost of emergency services is comparatively high in smaller area communities. According to an analysis of combined police and ambulance costs by the state auditor, the city of Cook spent a total of $426 per person on these emergency services in 2017, the most recent year for which data is available. That ranked 14th highest among 413 cities of similar size.
Orr, with a population of just 295, ranked 11th among those 413 cities, with total police and ambulance spending of $140,487, or $476 per capita. Tower, meanwhile, was ranked as the most-costly community in the state for police and ambulance services, having spent $346,864 in 2017, or $702 per person. Based on the increases in TAAS spending since 2017, the city of Tower’s spending for police and ambulance services will exceed $600,000 in 2019, or approximately $1,255 per capita.
Ely, with a larger population base, spent $827,000 for ambulance and police services in 2017, or $243 per capita. That ranked 56th out of 228 similarly-sized communities. Virginia, with total police and ambulance costs of $3.05 million in 2017, was the seventh highest in the state for mid-sized cities, at $361 per capita.