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Serving Northern St. Louis County, Minnesota

Townships seek changes in ambulance subsidies

Marshall Helmberger
Posted 2/4/20

REGIONAL— Last month, city officials in Tower asked townships to provide their input on potential revisions to a contract under which townships help subsidize the purchase of ambulances for the …

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Townships seek changes in ambulance subsidies

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REGIONAL— Last month, city officials in Tower asked townships to provide their input on potential revisions to a contract under which townships help subsidize the purchase of ambulances for the city-run emergency service. It turns out, city officials may not like what they hear.
The shift by the Tower Area Ambulance Service (TAAS) to a 24-hour, paid on-call service financed mostly by non-emergency inter-hospital transfers, has prompted some area townships to push for a piece of the action. They’re not seeking payments from the proceeds of those transfers. Instead, according to a framework developed by officials in Eagles Nest Township, they want a portion of the revenue generated from transfers dedicated to an escrow account that will help finance future ambulance purchases. They also want a business plan showing that current TAAS operations are sustainable along with more financial transparency after revelations that hundreds of thousands of dollars in past TAAS surpluses were spent on other city of Tower operations.
Township officials have complained that the change in TAAS operations is putting many more miles on ambulances than in the recent past. That puts more wear and tear on vehicles, which means replacement comes around sooner. TAAS director Steve Altenburg had proposed doubling the per-capita subsidy from area townships last year to help cover an anticipated shortfall for ambulance purchases, but township officials have mostly balked at that suggestion, at least until other concerns are addressed.
According to estimates developed by township officials and Virginia EMS director Allen Lewis, the transfers now account for approximately two-thirds of the miles operated by TAAS ambulances. And township officials have, to date, expressed reluctance to increase their contribution to the ambulance replacement fund unless at least a portion of the extra revenue generated by the transfers is dedicated to the replacement fund. That could prove challenging, however, since the increase in payroll costs as a result of the shift to round-the-clock paid staffing has badly eroded TAAS’s operating margins.
While ambulance services are required to respond to emergency calls, non-emergency transfers are optional even though they do generate considerable revenue. Less clear are the costs associated with the transfers. Altenburg insists they are highly profitable for TAAS, but the city’s new clerk-treasurer, Victoria Ranua, told the Ambulance Commission last month that she’s seen no cost analysis to support Altenburg’s claim.
A proposal that Eagles Nest officials plan to present to the city of Tower would require the city to commit to paying $4 per transfer mile into the ambulance replacement fund. That could generate about $80,000 a year to the replacement account, but would almost certainly put TAAS’s operational budget well into the red.
The Vermilion Lake Town Board, on Monday, approved comments noting that the township’s contribution toward the ambulance service is purely voluntary and that the city has some responsibility to provide more financial transparency. “It is the city’s duty to provide a plan covering projected revenues, costs, expenses, and project vehicle replacement as well as clear and concise historical data covering area ambulance replacement aid, vehicle replacement costs, and vehicle mileage broken down to show miles for medical calls, for transfers, and for other purposes,” read the  letter approved by the town board this week.
The Vermilion Lake board is also seeking a contribution from transfer revenues to the ambulance replacement fund. “If the transfer revenue is not sufficient to make such a contribution then the transfers are not profitable at the present rate and under the present conditions because they would not be covering their portion of vehicle replacement costs,” states the letter. “The transfers would be operating at a loss and the operating plan would be seriously flawed,” township officials concluded.
The Vermilion Lake board is also urging that the city ensure that their purchase of ambulances be handled in a legal and financially responsible manner. That’s a point made by Eagles Nest officials, as well, who urged that future ambulances be reviewed and approved by the ambulance commission. Those concerns come after Altenburg greenlighted the selection of an ambulance vendor without the required bidding. When that oversight was exposed, Altenburg issued a quick call for bids but it was too late for some of the potential vendors to respond in time.
Greenwood Township is expected to address the issue at their upcoming meeting, set for Feb. 11. Breitung Township has yet to discuss a potential response to the city. The subsidy contract between the city and the townships expired at the end of 2019. Failure to approve a new contract could cost the TAAS roughly $45,000 in revenue.

Ambulance, Tower

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John Bassing

Tower City officials wanted recommendations from the townships on the service agreement and that is precisely what they got. I applaud both Eagles Nest Township and Vermilion Lake Township for close examination of how contributions should be made with consideration to the increase in transfers. Good work Eagles Nest and Vermilion Lake!!

Wednesday, February 5