By Eric Kurhi
San Jose Mercury News
SAN JOSE, Calif. — Santa Clara County officials are poised Tuesday to approve millions of dollars in additional relief for troubled ambulance company Rural/Metro, but they also appear determined to seek new bids when the company’s emergency response contract expires next year.
Under the county’s proposal, the Board of Supervisors will cut franchise fees that the ambulance service pays the county, as well as fines paid by the company when ambulances don’t meet response-time goals, while raising the rates it can charge patients and their insurers, saving Rural/Metro $7 million over the next year.
The proposed contract amendments would be the second time the county has taken a significant step to help Rural/Metro, which took over ambulance service from longtime provider American Medical Response in 2011 after the county approved its low bid in 2010. After getting the job, Rural/Metro initially struggled to meet response times, and reorganized under bankruptcy protection. In late 2013, the county agreed to use $2.6 million that Rural/Metro had paid in franchise fees and penalties to help pay Rural/Metro’s bills while the company reorganized.
San Jose Mayor Sam Liccardo, who had urged the county to stick with AMR, said it is unfortunate that residents are being asked to “subsidize a beleaguered EMT service provider.”
“I hope that my colleagues at the county will choose to hit the ‘reset’ button,” he said, “and work with all of the local fire departments to take a fresh look at the provision of emergency medical services, rather than persisting with an ambulance contract that has provided a Groundhog Day of bad news for our residents.”
County Executive Jeff Smith, who recommends that the board seek new ambulance service bids when Rural/Metro’s contract expires, acknowledged the ambulance deal hasn’t worked out as he’d hoped.
“If I knew then what I know now,” Smith said, “I would have thrown both bids away and started over.”
Smith said the adjustment he’s seeking on Tuesday is due to a contract “that is extremely difficult to comply with and be financially stable,” and estimated that the company is losing $8 million to $10 million a year in Santa Clara County.
He said that allowing an additional 5 percent rate increase on top of the 5 percent already promised to the company still keeps Rural/Metro well below competitors and the Bay Area average. Smith added that the fines the county currently levies on Rural/Metro for slow responses aren’t fair.
“Even if the company met all requirements and made response times 90 percent of the time, it still gets $3 million in fines and fees because it’s calculated based on every single response,” Smith said. “When each individual time has a large penalty, in a large region you can meet expected response times but still get fined a significant amount. That was something that was not intended.”
Under Smith’s proposal, if the company makes its deadlines 92 percent of the time for calls in a particular zone, all fines for that area will be waived. Rural/Metro spokesman Michael Simonsen said that with the modifications, the company will be financially viable through the end of the contract in the summer of 2016.
A decision on whether to put a new contract out to bid will come before the board in the next few months.
Supervisor Cindy Chavez, who was not on the board when Rural/Metro was selected, said a new bidding process is the way to go to “make sure we’re getting the highest quality service for the best price.”
AMR also bid on the previous contract, with service that would have used San Jose fire units, but it was considerably higher priced than Rural/Metro.
Yvonne Ryzak, a lobbyist for AMR, said Rural/Metro “came in and convinced the county they could do it cheaper and faster than we could even though we were very clear that wasn’t possible.”
While acknowledging the Rural/Metro deal didn’t pan out as expected, Smith maintained that the AMR proposal was unacceptably expensive and relied on a San Jose Fire Department that also has struggled to meet contractual emergency response time targets.
And despite Smith’s misgivings, Supervisor Mike Wasserman, who joined Dave Cortese and former Supervisor George Shirakawa Jr. in approving Rural/Metro five years ago, insisted that on balance it’s been a good deal for patients.
“I haven’t heard any Santa Clara County residents complaining,” he said. “They have benefitted greatly over the past four years and, at the end of the day, that’s who we serve.”
©2015 the San Jose Mercury News (San Jose, Calif.)