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Tower Ambulance Commission agrees on subsidy payments

City presents financial reports, draft of business plan at meeting

Jodi Summit
Posted 7/9/20

TOWER- The wrangling over the adoption of a new subsidy agreement for the Tower Area Ambulance Service (TAAS) vehicle replacement fund appears to be over. At Monday’s Tower Ambulance Commission …

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Tower Ambulance Commission agrees on subsidy payments

City presents financial reports, draft of business plan at meeting


TOWER- The wrangling over the adoption of a new subsidy agreement for the Tower Area Ambulance Service (TAAS) vehicle replacement fund appears to be over. At Monday’s Tower Ambulance Commission meeting, area township and tribal representatives all agreed to bring the agreement to their respective governmental units for formal approval. The agreement commits townships in the TAAS service area to pay a per-capita amount into an ambulance replacement fund. Bois Forte, which is also in the service area, agreed to an annual donation. The payments were kept at 2019 levels, with no increases.
Last year, townships balked at the request of former ambulance supervisor Steve Altenburg to double the annual per-capita subsidy rate from $15 to $30, citing the lack of financial data to show the need for such an increase, along with a general displeasure at the fact the city, under previous city hall leadership, had been transferring profits out of the ambulance’s general fund to pay for other city spending. The previous agreement expired at the end of 2019 without a new agreement in place. Questions had also been raised about the ambulance’s finances and whether or not the increased number of inter-hospital transfer calls, and the subsequent hiring of paid-on-call staff, were a net gain or loss for the service.
The agreement calls for the city of Tower, which also pays the per-capita subsidy, to contribute $1.66 per transfer mile driven from the ambulance service’s general fund into the ambulance replacement account, to account for the added depreciation of vehicles during these non-emergency runs. This amount is substantially higher than the 22-cents-per-mile initially proposed by Altenburg earlier this year.
“You’ve seen this agreement three times now,” said Tower City Clerk-Treasurer Victoria Ranua, who noted that all the changes suggested by the commission so far have been incorporated into the agreement.
Ranua said they were waiting for final approval on some of the language from the Bois Forte tribal attorney, and then the agreement would be finalized and sent to the members’ governments for approval.
Ranua also reiterated that the ambulance subsidy account was never used for other purposes and commission members received copies of bank statements, along with the regular ambulance fund bank statements, to provide evidence of that claim.

Ambulance updates
Commission members received a comprehensive report at this week’s meeting, which included data on usage of each of the three ambulances, information on major maintenance and repairs and their costs, and a general summary of the vehicles’ condition.
The ambulance service has driven a total of 7,130 miles for 911 calls and 5,372 miles for transfers in the first six months of the year. The service has cut back on its transfer calls, only driving 640 miles on transfers in the last three months.
Ambulance Supervisor Dena Suihkonen reported that the service currently has only one ambulance, Unit One, in service. Unit Two, the ambulance slated for replacement right now, is out of service with a diesel fuel leak, which the service may opt not to repair. Unit Three is currently having some electrical repairs done and is expected to be back in service next week.
“We did need to have Virginia Ambulance respond to one call over the Fourth of July weekend,” Suihkonen said.
The ambulance replacement fund shows a balance of $159,155 as of June 30. The city will need to pay about $180,000 for the new ambulance upon delivery. The remainder of the money needed will come from the ambulance’s general fund. The new ambulance, which was ordered in December 2018, is now projected for delivery sometime in September.
“The delays are still due to COVID-related issues,” said Suihkonen. “We made some changes to make the delivery go fast, but it is still slow.”
Runs so far this year are running well below the record number of calls the ambulance service responded to in 2019. Of the 202 calls recorded as of July 6, 65 involved no patient transport.
Suihkonen said the decline in call volume is partially due to reduced hospital usage during the COVID-19 pandemic. Calls during the first half of the year were down by 54 over 2019 levels, with the biggest declines coming in April and May.

business plan
The commission got its first look at a draft business plan, something that members of the commission have been seeking for a long time. The plan, still in its early stages, is being developed with help from the Small Business Development Center. Betsy Olivanti, SBDC Business Consultant, was on speakerphone during the meeting, and reviewed the plan with the commission.
Olivanti explained she used data on revenues and expenses from the previous three years. The plan also details staffing costs, breaking out costs for paid-on-call wages versus other wages.
“We looked at an analysis of previous years and the changes that have happened so we could understand the increases in revenues,” she said.
Olivanti noted that the pandemic had affected call numbers, and subsequently revenue, so far this year, and said they were not sure how it would impact revenue for the rest of the year.
The business plan uses actual expenses and revenue for the first six months of this year, and then projects the next six months to be similar to 2019.
Those preliminary projections, which are almost certain to be modified significantly, suggest a dramatic turnaround in the service’s financial picture in the second half of the year. Based on actuals through June, the projections show the Tower Area Ambulance Service took in $75,875 in receipts, while spending $156,233 on its operational expenses, for a net loss of $61,245 during the first six months of the year. But Olivanti projects a stunning turnaround beginning in July, suggesting that the service will take in $393,120 in revenue in the second half of the year, while expenses will decline to $137,958.
City officials were quick to advise that the numbers are merely preliminary. “The draft financial projections were provided to the Ambulance Commission because there was a previous obligation that the city would provide the commission a draft business plan at the July 6 meeting,” said Ranua in a written reponse to questions from the Timberjay. “This is the work product available at this time.  I personally would hesitate to draw any definitive conclusions about the financial projections at this stage, knowing that the work is not done.”
While the projections appear to rely on call volume and revenue from 2019, last year appears to have been an outlier and reflects a pace of runs that the TAAS is unlikely to match in 2020.
“This is a start,” Ranua told the commission on Monday. “A lot of work has gone into what we have in front of us today.”
Moving forward, the plan will include data that will allow the service to understand the costs of each type of call, expenses of various supplies used, fuel costs, repair costs for each ambulance, and more. It will also allow the service to budget the cost of more expensive medical equipment that needs to be replaced.
“We needed to start somewhere,” said Olivanti. “We will see how the numbers break out.”
Vermilion Lake Township representative Phil Anderson was happy with the information being presented.
“This seems to be a much better way of keeping track than what was done in the past,” he said. “It will be more understandable going forward.”
“We all know we have a good ambulance service,” said Anderson.
Breitung Township representative Chuck Tekautz said if the profit projections are true and projected profits are set aside, it might mean the township subsidies are no longer required in the future.
Olivanti said another goal of this type of planning is to find the most cost-effective ways of running the service.
“We want to find your sweet spot,” she said, “so you can target your services to what is best for your community.”
Ranua said once the budget is completed, it will go to the Tower City Council for approval, possibly at their Aug. 10 meeting.
The Tower Ambulance Commission meets quarterly. Their next meeting will be on Monday, Oct. 5.


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  • jbassing

    Clerk Ranua is quoted as saying the ambulance subsidy fund was never used for any other purpose but just 9 months ago the acting clerk, Ann Lamppa, said that fund had been depleted several times but had been restored. Clerk Lamppa presented this information at the Sept Tower City Council meeting and was reported on and referenced to in the Timberjay both in Sept and Nov of last year. The Clerk’s statements are incongruous, what is a reader to believe?

    Thursday, July 9, 2020 Report this