LFR changes fines for ailing EMS company

Posted

Litteton City Council on Aug. 20 changed the fines it charges its backup ambulance operator, Rural/Metro Ambulance Company, for running late for a call.

Rural/Metro, based in Arizona, filed for Chapter 11 bankruptcy earlier this month, which allows it to reorganize in an effort to lower its debt. City Attorney Ken Fellman said he’ll monitor the filings in that case to ensure there’s no risk to the city, which neither pays nor gets paid by Rural/Metro to back up city paramedics.

The only financial transactions noted in the contract are the fines. Council approved a graduated structure ranging from $100 for 12-16 minutes up to $400 for 22 minutes or longer. Previously, the fines were based on average times per month. The fine for a total failure to respond is $100, which Littleton Fire Rescue Chief Mullin says is to encourage the company’s staff to let them know early on if they can’t make it rather than waiting until the last second, perhaps endangering the patient.

Prior to March, Littleton Fire Rescue only transported the most dire patients itself, while relying on back-up companies for others. Now it takes them all, only using Rural/Metro in emergencies.

“Increasing LFR transports has significantly diminished the number of transports provided by the current ambulance partner, Rural/Metro, making the fine structure in the current contract ineffective and unreasonable,” writes Chief John Mullin in a memo to council. He said the number has dropped to about eight a month from a high of more than 200.

Staff concluded there would be little financial impact on the city due to the change.

Reuters reported on Aug. 4 that Rural/Metro declared liabilities and assets each worth more than $500 million in its Chapter 11 filing. It reached an agreement with its debtors to reduce payments by nearly 50 percent. Bondholders have also agreed to infuse $135 million in new equity financing once Rural/Metro emerges from Chapter 11. Reuters said the company anticipates completing its restructuring in the fourth quarter of 2013.

“There’s somewhat a hope they come out of this bankruptcy stronger than they are now,” said Mullin. “I don’t have any knowledge of their financials, other than the performance they deliver, which has been really good.”

A request for comment to Rural/Metro’s corporate office went unanswered.

No comments on this story | Add your comment
Please log in or register to add your comment