Support the Timberjay by making a donation.

Serving Northern St. Louis County, Minnesota

Townships balk as ambulance miles rack up

Jodi Summit
Posted 3/4/20

TOWER— Four area townships in the Tower area, along with the Bois Forte Band, have made payments for years to help cover a portion of the cost of replacing ambulances for the city-run emergency …

This item is available in full to subscribers.

Please log in to continue

Log in

Townships balk as ambulance miles rack up

Posted

TOWER— Four area townships in the Tower area, along with the Bois Forte Band, have made payments for years to help cover a portion of the cost of replacing ambulances for the city-run emergency medical service.
But now they’re balking as a result of a shift in the ambulance service’s economic model, which is putting many more miles on those ambulances to generate revenue from non-emergency inter-hospital transfers.
Their concerns were front and center at Monday’s meeting of the Tower Area Ambulance Commission and they expressed their displeasure at the city of Tower’s proposal to reimburse the ambulance replacement fund by 22 cents for every mile driven for a transfer. That proposal was part of a new one-year ambulance contribution contract that the city is hoping to sign with the area townships to replace an existing contract that expired at the end of 2019. The township subsidies contribute about $40,000 a year to the ambulance service, while Fortune Bay Resort Casino pays $5,000 per year.
“I am not sure whether to laugh or be insulted,” said Eagles Nest Fire Chief Larry McCray, a commission member. “Twenty-two cents a mile is an insult.” McCray noted the IRS pegs the cost per mile for running a personal vehicle at 54 cents per mile.
“I kind of have the same feeling,” said Vermilion Lake Township Supervisor Sarah Schmidt, who is also member of the Tower Area Ambulance Service (TAAS). “The transfers should pay for the wear and tear on the vehicles.” Schmidt said that the transfers were an important source of revenue for the department, but agreed it was only fair that transfers should be able to help fund the replacement cost of new rigs.
Some ambulance commission members noted that without the transfer miles, the current lifespan on each ambulance would be much longer than the currently projected six-to-eight years, and that transfers were accounting for nearly two-thirds of the mileage put on ambulances last year.
“Without the transfers, what we contribute would buy an ambulance every six-to-eight years without any other money whatsoever,” said McCray. “If you need to replace ambulances sooner than that, it is because of the transfer miles.”
While TAAS Director Steve Altenburg claimed again on Monday that the transfers are highly profitable, making about $1,000 per run, his claim doesn’t consider costs like depreciation or the cost of TAAS’s shift to 24-hour paid-on-call staffing, which Altenburg said would be covered by extra revenue from transfers.
Some of the township officials were unconvinced, however, and Altenburg didn’t help his case by arguing that the service can’t afford to make contributions to the replacement fund of anything more than an amount that township officials consider to be token at best.
Tower Clerk-Treasurer Victoria Ranua, who drafted the new contract, challenged Altenburg’s claim as well. Ranua asked Altenburg how many transfers were done last year.
“One hundred and thirty-two,” he replied.
“You are saying there is $1,000 profit per transfer,” she said. “That’s $132,000, and you are using the ambulance for free.”
“We are putting that money back in the service,” Altenburg said, without elaborating.
But the TAAS has also seen its profits drop dramatically since Altenburg assumed the director position in late 2016, declining from steady profits of $100,000-plus as recently as 2017, to barely break-even since the adoption of Altenburg’s paid on-call model. And TAAS’s much-diminished operating margins don’t account for the cost of ambulance depreciation, a significant expense.
Breitung Township representative Chuck Tekautz, who told the Timberjay last week, he believes from his own calculations that the transfers actually lose money, questioned Altenburg’s claims of profitability. “If it is so profitable, why doesn’t a private party do it?” he asked.
Ranua said the ambulance service would be developing a new business plan, which should help guide the commission and city as they seek to answer questions of actual profitability and put together subsidy agreements in future years.
Altenburg balked at a proposal by McCray for the city to add $1.66 for every transfer mile to the ambulance replacement fund, which would cost the TAAS about $400-$500 for the average transfer. “There isn’t that kind of money in it if its $57,000 a year,” said Altenburg. “It’s not realistic.”
Schmidt said that she saw 80 cents per mile as a better option, one that would generate about $26,400 if the TAAS runs similar transfer miles this year as in 2019. The meeting ended without any agreement over the reimbursement rate. Once agreed, this amount would be paid retroactive to January 2020.
Ranua tried to keep the meeting on track during the spirited conversation. While the Ambulance Commission meetings have typically seen little if any audience attendance, Altenburg had used TAAS’s emergency communications system to get service members to the meeting, telling them the service was under threat.
It is actually Altenburg, who has been the subject of an ongoing investigation into his conduct and questionable management of the TAAS, who is facing a potential threat to his hold on the director’s position.
Despite the element of tension in the room, some tried to keep the focus on the ultimate goal of the commission. “The one thing we all should remember here,” Tekautz said. “We all want to have an ambulance located in Tower, serving our area.”
And while the parties didn’t reach a final deal on reimbursement to the replacement fund, the city did agree to other revisions suggested by the townships, including giving the commission equal say with the city on when replacement is needed, adding language to indemnify the townships from any liability, and providing the townships with a business plan for TAAS. The city will also give the townships quarterly updates on the finances, and clarify that the replacement account is separated from all other ambulance and city funds.
The commission consists of representatives from Tower, Breitung, Kugler, Greenwood, Eagles Nest, Vermilion Lake, and the Bois Forte Band. The ambulance service coverage area also includes a portion of Embarrass Township, but residents there have not chosen to be part of the ambulance commission because their township is served by four different ambulance services.
The ambulance commission generally meets the first Monday of each quarter (Jan., April, July, Oct.) The next regular meeting is Monday, April 6 at 7 p.m. at the Tower Civic Center.