TOWER- The city clerk-treasurer here told members of the Tower Ambulance Commission, Monday, that they can no longer count on the city to backfill the the Tower Ambulance Service’s financial deficits in the future.
Based on documents that clerk-treasurer Michael Schultz provided to commission members this week, the city contributed $41,833 from its general fund to cover ambulance expenses in 2023. That’s substantially higher than the $15,000 the city provided in stopgap funding the year before.
“The ambulance service is scraping by, but it needs infusions,” said Schultz.
Schultz noted the city also provides administrative support and oversight to the ambulance service out of its general fund.
Most of the township representatives on the commission, except for Greenwood, appeared to agree, but most said finding a solution will involve looking at both short-term options and long-term funding issues.
“I understand this commission only cares about an ambulance,” said Breitung representative Matt Tuchel. “But without operations, there is no need for an ambulance.”
Tuchel noted it wasn’t fair to have the city paying a significant portion of their levy just to keep the service operating.
Tuchel noted that many area cities, including Ely, Virginia, Nashwauk, and Hoyt Lakes are seeing the same funding issues as Tower.
“When I first joined the service, we didn’t get paid,” Tuchel said, “we just got a pension. I carried a pager for 20 years for no pay.” But the reality of running an ambulance service since then has also changed. The call volume has increased greatly, Tuchel said. “That’s why we can’t rely on volunteers anymore. The fire department might get two or three calls a month,” he said, “but the ambulance gets two to three each day.”
“One thing we are guaranteed is change,” Tuchel said, urging the commission to look towards the future, and not dwell on the past.
As part of the meeting, Schultz presented a draft of a new three-year “Ambulance Vehicle Aid Donation Agreement” that city officials have developed in hopes of generating additional revenue to the service. The two-page document is a simplified version of the previous agreement and asks for a $25 per capita donation to the ambulance subsidy account, up from $15 previously. It also seeks a $6,500 donation from Fortune Bay Resort Casino and $3,500 donation from the Bois Forte Band. This would total $75,925 per year, though Greenwood Township has not contributed its share since 2021. Without Greenwood’s participation which would total $26,025 under the new agreement, the fund would receive $49,900 a year. Schultz said initial estimates show that over a 10-year period with all the townships participating, the new agreement would raise enough to cover rebuilding the older ambulance rig and then purchasing or upgrading ambulances when needed.
Transfer mile payment
This draft agreement does not specify any payments on transfer miles and Schultz said the city would be asking for a change in that fee. The previous agreement required the city to contribute $1.66 per transfer mile to the ambulance replacement fund, an unprecedented fee instituted by the commission in 2020 after concerns were raised about wear and tear on the ambulance from the large number of transfer runs being taken in the previous year as well as the service’s failure at the time to account for depreciation of its rigs. Since then, the number of transfer calls has fallen significantly and the ambulance service now accounts for depreciation, which comprises about half of its annual deficit.
The state’s Emergency Medical Services Regulatory Board, after an examination of Tower’s service in 2021, recommended eliminating the fee.
Given the ambulance service’s precarious financial situation, it has been unable to keep up-to-date on these payments, though Schultz said he would be asking the city council to make the final payment due for 2023.
If the commission opts to continue the fee, the city would like more flexibility for using the funds, including for maintenance and repairs on the rigs. City officials have also suggested that the city contribute for loaded miles only (the ambulance doesn’t get reimbursed for ambulance mileage without a patient in the rig), or calculating the reimbursement as a percentage of the profit made on a transfer run, noting that some transfer runs do not make a profit. The service only took 38 transfer calls in 2023, which totaled 6,748 miles (an average of 178 miles per run).
The new draft agreement also does not include any type of indemnity clause, something that has been a sticking point with Greenwood, which has sought to have all liability at ambulance scenes rest with the service, even if errors are caused by Greenwood Township employees who are not members of the ambulance service.
Greenwood representative John Bassing was not happy with these changes. He said that using the $1.66 for maintenance would fundamentally change the purpose of the board, though this had only been in effect since 2020. Bassing also was upset with the changes to the agreement leaving out the indemnification clause though he said he wasn’t willing to talk about the indemnification at this time. “There is not enough knowledge here [to understand it],” he said, in an apparent swipe at the commission members.
“We are asking for a donation,” said Schultz. “This is not a contract…All we are saying is we want some money to support the ambulance purchases. You can agree to pay it or not. But if you do, you get a seat at this table and a vote.”
Bassing said Greenwood residents, who tend to be older, have concerns about response times. Most of the Greenwood and Eagles Nest areas are on the outer edges of the ambulance’s service area, though also far away from any other ambulance hall.
Bassing said the financial issues being faced by the ambulance were the result of “bad decisions.” He faulted the service for not adopting the recommendations of plans developed by consultant Betsy Olivanti, from Northland Small Business, or the EMSRB study which came shortly after.
Ambulance Supervisor Dena Suihkonen noted there were issues with both these studies, which were based on assumptions, not necessarily on actual data. Olivanti left before completing the study, and Northland Small Business did not have the background on ambulance service finances that the study should have required. The city then commissioned the EMSRB study which was completed in 2021. This study also projected the $11 on-call wage as the highest in the region although there is some question whether that conclusion is still valid.
Ambulance income from calls is based on insurance and Medicare/Medicaid payments, something the service has no control over. “If the city is behind on its water and sewer fund, it can raise it rates,” Suihkonen said. “If we are behind, we cannot.”
Subsidy options
The idea of creating a per parcel tax, or a joint powers board, was also briefly discussed. The commission is waiting to see what options are discussed in the current study being funded by the Ely-Bloomenson Hospital, as well as outcomes of a statewide ambulance task force. There is also a chance the state Legislature may approve some one-time funding for rural ambulance services this session, which would be a short-term fix. Any taxing option would need to get state and/or county approval.
Special meeting
The commission members were asked to bring the draft agreement to their respective boards in February and bring back any changes or ideas.
The board also discussed the new ambulance, which is not yet ready for delivery. The total cost will be $253,000, and $16,050 has been paid in advance. The service will owe $237,000 at that point in time. Right now, there is only $212,613 in the ambulance subsidy account, leaving the service $24,336 short. Greenwood has not paid their per capita subsidy the past two years, which would total $46,845.
The service is also hoping to accrue another $150,000 in the subsidy account to have the older rig rebuilt in two years. The box on the rig can be reused, saving the service a substantial amount of money.
The commission will meet again on Monday, Feb. 26 at 5:30 p.m. at the Lamppa Civic Center.