By John Woolfolk
San Jose Mercury News
SANTA CLARA, Calif. — A divided Santa Clara County board of supervisors on Tuesday approved plans to negotiate with a new ambulance company, despite strong objections from San Jose officials and pleas from paramedics, school and business officials to continue with longtime provider American Medical Response.
The board’s 3-2 vote allows county officials to begin negotiations with low-bidder Rural-Metro Corp. for a five-year ambulance service contract valued at some $375 million. If the board approves the final contract in December, the new company would take over service in June.
“I’ve spent a lot of sleepless nights thinking about this,” said Supervisor Don Gage, who cast the deciding vote. “I’ve come to the conclusion, and make a motion, that I think Rural Metro can do the job we’re asking for less money and provide the same level of service.”
Joining Gage were Supervisors George Shirakawa Jr. and Dave Cortese, who had signaled their intent in August to approve County Executive Jeffrey Smith’s recommendation to negotiate with Rural/Metro.
Supervisors Ken Yeager and Liz Kniss suggested re-bidding the contract, citing concerns that sharp differences in the two companies’ proposals may have resulted from lack of clarity from the county.
“It does concern me that in many respects, it’s very difficult to compare these two,” Yeager said.
AMR, the largest private U.S. ambulance service and a subsidiary of Colorado-based Emergency Medical Services Corp., has been the county’s ambulance provider in one form or another since the 1930s.
San Jose officials argued that cities are subsidizing the ambulance service to the tune of $6.6 million a year — with San Jose alone footing half that bill — because firefighters arrive first to the scene of emergencies. That allows the ambulance company to operate with leaner staffing at lower cost.
San Jose officials had worked with AMR to develop a bid proposal that would help the city, facing a 10th straight deficit, recoup most of its $3.3 million in unreimbursed costs for emergency response.
But Smith urged the board in August to dump AMR for Arizona-based Rural/Metro, arguing the smaller company, which provides private ambulance and fire services in 20 states, could provide better service in Santa Clara County at lower cost to patients.
Smith and county emergency medical service officials said Rural/Metro’s ambulance price averaged 12.8 percent lower than AMR’s, yet Rural/Metro also proposed to deploy more ambulances.
After city officials in August questioned whether Rural/Metro, whose market value roughly a tenth the size of AMR’s parent, could deliver the promised service, Gage joined Yeager and Kniss in delaying a decision to allow more study of the competing companies.
San Jose officials have since argued Rural/Metro is too financially unstable to trust with the ambulance contract, noting the company owes $102 million more in debt than its $288 million in assets are worth and just announced plans to sell an additional $200 million in private debt to foreign buyers.
“It would not be prudent to assign this contract to a financially strapped company,” San Jose Finance Director Scott Johnson told the board.
AMR and city officials packed the board chambers with advocates. Paramedics shared fears that they would lose their jobs, suffer pay cuts or be forced into grueling 24-hour shifts. School officials said they dreaded the loss of AMR’s educational efforts to steer students away from drugs and alcohol. San Jose Silicon Valley Chamber of Commerce President Pat Dando, a stroke survivor, worried the county would backslide on AMR-assisted efforts to improve care for stroke victims.
Phil Forgione, Rural/Metro’s western vice president, was the only speaker on behalf of the company. In response to board questions, he assured that all AMR certified paramedics would be guaranteed a Rural/Metro job at equal or greater pay and that the company would potentially agree to modify the 24-hour shifts.
Smith said additional review did not shake his confidence in Rural/Metro, calling questions about the company’s financial stability a “red herring.”
“The question before us was whether or not the two companies could perform on their contract,” Smith said. “There’s no evidence to substantiate the assertion that Rural/Metro could not perform.”
Copyright 2010 San Jose Mercury News