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Serving Northern St. Louis County, Minnesota

Committee report calls for joint powers, taxing district

Jodi Summit
Posted 4/12/23

REGIONAL- An ad hoc committee established by the Tower Ambulance Commission is recommending the formation of a joint powers board and a taxing district to provide long-term oversight and financial …

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Committee report calls for joint powers, taxing district

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REGIONAL- An ad hoc committee established by the Tower Ambulance Commission is recommending the formation of a joint powers board and a taxing district to provide long-term oversight and financial stability to the Tower Area Ambulance Service (TAAS).
Local and tribal governments that agree to be part of the joint powers district would then elect representatives to a joint powers board which would oversee and directly manage the service. The ad hoc committee is asking for responses to this idea by the end of June.
The group, consisting of representatives from the city of Tower, and the townships of Breitung, Eagles Nest, Kugler, and Vermilion Lake has been meeting since last summer. Bois Forte, Embarrass, and Greenwood were all invited but did not participate in the effort, at least up to this point.
The committee was tasked with looking for options to ensure the ambulance service remains financially viable.
“As the service benefits the entire area,” the report states, “it should be managed by the entire area, and the city of Tower should be willing to step back to support the service.”
Currently the city owns and operates the service, so this option would mean the city would need to give up ownership of the service and its equipment.
“To remain operational,” the report concludes, “the service requires additional funding.”
TAAS has been operating with a financial loss for the last several years, though this is a problem being seen at many area ambulance departments, as well as at rural ambulance services throughout the state.
A joint powers board would create a new management structure, involving the entire area the ambulance department now serves. It would hopefully bring in a group with wider management and business experience to oversee the service.
But the real change would be the addition of a funding mechanism, a potential tax levy based on property values, which would spread out any subsidy needed over the wider area, not just the per capita payments currently in place based on the number of full-time residents.
“Keeping a good Basic Life Support (BLS) service is needed to support Advanced Life Support (ALS) when the communities can help fund an upgrade to ALS,” the report notes.
The joint powers board could also become a stepping stone to the consolidation of other emergency services, such as fire protection.
Tax levy
The report estimates a levy of $11-$15 per $100,000 in taxable property value would be sufficient to make the service run in the black. That assumes, however, that Greenwood Township, which has the largest property tax base in the coverage area, participates. The necessary tax levy would jump to $30-$40 per $100,000 in value if Greenwood opts not to take part. The proposed levy would raise $130,000 a year in additional revenue for the service and would replace the existing $15 per capita levy. These numbers are based on information received from the county auditor.
The amount levied could be reduced, or increased, as needed in the future, and would be determined by the joint powers board. The $130,000 is the group’s best estimate of what is needed to cover the current shortfall and the expenses (mostly management-related) now being paid by the city.
The report states that adding ALS service would cost about $332,000 a year, based on estimates from the Cook Ambulance Director Roland Shoen.
“Raising this kind of revenue and capability would increase the costs another almost three-and-a-half times,” the ad hoc committee reported.
The report notes that if Greenwood Township wants ALS coverage, they could consider funding a local paramedic as a first responder at the scene who could then ride with TAAS to the hospital.
“TAAS is willing to discuss adding ALS if the community commits to fund the increased expenses,” the report states, “or will discuss partnering with townships that hire their own local paramedic. This meets Greenwood’s objectives of faster response times, ALS, and not being in the ambulance business, but they would need to support the paramedic business.”
A joint powers board would have to assume the duties and costs now being borne by the city. This would include hiring and firing, management, billing, and grant writing. The ambulance is currently audited as part of the city’s audit. Audit expenses are projected to be $22,000 per year. In addition, the city has donated paid-on-call staff time, where city employees take on-call hours during their regular workday, but do not receive on-call wages, and then can leave their job if there is an emergency call.
The report says that under a joint powers agreement, areas served by the ambulance but not belonging and contributing to the joint powers board, could be assessed a surcharge per individual ambulance run.
Essential service
The report notes that the ambulance should be considered an essential service, like the fire department, but at this time it is not funded at the local, state, or federal level. Rising costs for personnel (state requires ambulance services to have on-call staff 24/7), equipment, and new ambulances has meant that the standard reimbursements for emergency calls, especially those paid by Medicare or Medicaid, do not cover the actual costs of operating the ambulance. These issues are being talked about at the state Legislature, but no funding changes are on the table at this time.

Other options
Other options discussed but not recommended included staying with the status quo. While the service is operating and paying most of its bills, there is not enough revenue to cover new equipment and additional operational expenses. The service is projected to have lost $22,000 last year plus depreciation costs. While the ambulance subsidy and contributions from the city to cover the number of transfer miles helps fund the purchase of new ambulances, there is no funding source for other equipment, such as defibrillators, snowmobile and rescue sled, EKG machines, and more. The study notes that reducing the payroll expense by reducing the wages paid to on-call personnel would risk losing staff and missing calls. If the service was forced to shut down, the EMSRB (Emergency Medical Services Regulatory Board) would likely expand the territory for Cook and Ely to cover the TAAS region, which would substantially increase response times.
Another option was to have the other townships in the service area contribute to the city for equipment and a small amount for operations to the current service, or to have the current ambulance commission oversee these additional contributions.
“This could be done if there was more confidence in the city of Tower running the service,” the report says. “The service is excellent and recognized by the EMSRB as an excellent service with quick response times, and excellent triage and other clinical measures.”
But the report notes that “the wider community is not supportive of giving more money without more control of the service.”
The idea of a combined or regionalized service was seen as problematic at this time because “all of the surrounding services have their own funding issues.” The report said TAAS is open to more partnering and sharing of administrative duties and training, but this is something that can also be put into action by the joint powers board.
The ad hoc committee did reach out to Essentia to see if they were interested in supplying private ambulance service in this area, like they recently did in Buhl. The report states that Essentia said they were not interested in expanding their territory, and that they had agreed to the service in Buhl to better accommodate their transfer business from the Range to Duluth.