HomeMy WebLinkAbout14681ORDINANCE NO. 14,681
AN ORDINANCE APPROVING FEBRUARY 1, 1985
AS THE PERMANENT SYSTEM START UP DATE,
ALLOWING FOR A MUNICIPAL LEASE ARRANGEMENT
AND FOR THE REPEAL OF ALL LAWS OR PARTS
OF LAWS IN CONFLICT THEREWITH, AND DECLARING
AN EMERGENCY.
WHEREAS, the Board of Directors has determined that the
proposal of the Little Rock Ambulance Authority submitted May 30,
1984 is in the best interest of the public health, safety and
welfare; and
WHEREAS, the Board of Directors of the City of Little Rock
over a period of five (5) years has adopted a number of various
ordinances and resolutions setting forth different time frames,
schedules and commitments on the part of the City; and
WHEREAS, it has now become evident that some of those time
frames and commitments cannot be complied with strictly; and
WHEREAS, the Board of Directors of the City of Little Rock
has determined that February 1, 1985 should be the new date for
the start up of the permanent ambulance system.
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS
OF THE CITY OF LITTLE ROCK, ARKANSAS:
SECTION 1. That the Board of Directors approves, adopts
and agrees to implement the municipal lease arrangement described
in the report of the Little Rock Ambulance Authority submitted on
May 30, 1984 attached hereto and made a part hereof and described
as Exhibit "A ".
SECTION 2. The Board of Directors of the City of Little
Rock hereby establishes February 1, 1985 as the new date for the
commencement of the permanent ambulance system.
SECTION 3. All laws, parts of laws, all sections of all
ordinances and resolutions in conflict with the provisions of
Section 1 or Section 2 of this Ordinance are hereby explicitly
and expressly repealed. The Board states its approval of the
municipal lease concept and of the February 1, 1985 start up date
and expressly repeals any provision of law here before adopted in
conflict therewith.
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SECTION 4. Because the Board of Directors of the City of
Little Rock believes that the provision of adequate ambulance
service is of crucial importance to the health, safety and
welfare of the general public and that failure to repeal the
existing provisions of law and to adopt the municipal lease
concept would substantially endanger the public health, an
emergency is hereby found to exist and declared.
ADOPTED: June 5, 1984
ATTEST:
APPROVED:
CITY FLERK jaTi9f Czech MAYOR J. W. Bena rield
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EXHIBIT
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(Ordinance
#14,681)
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4' PROPOSAL TO PROVIDE INTERIM AND
A LONG -TERM AMBULANCE SERVICES
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Prepared by: Little Rock Ambulance Authority
Presented: May 30, 1984
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ABSTRACT
The attached proposal, prepared and approved by the
Little Rock Ambulance Authority describes a plan for maintaining
a high level of interim ambulance service coverage by the LRAA
until February 1, 1985, followed immediately by the full -scale
implementation of a permanent ambulance service system based upon
the Public Utility Model. Approximately $500,000.00 in short -
term interim system development costs are commercially financed,
with 'no additional financial support requested from the City of
L..ttle Rock, by incorporating most interim system developmental
activities into commercially financed long -term system implemen-
tation plans. Both interim and permanent system costs, develop -
m, >_ntal and operational, are financed entirely from user. fees.
System stability, clinical sophistication, and response time per-
formance will be steadily improved throughout the interim period,
culminating in state -of- the -art stability and performance, as
well as efficiency, with full system implementation February 1,
1985.
while no subsidy is ro
proposal, four types of City
include the following% (1) a
lease arranged by the City,
behalf of the City by LRAA
recognize the February 1 perman
the municipal leasing arrangemi
,program support, and (4) co
cooperation, as well as use of
to by the affected departments.
!quested from the City within this
support. are requested. Those
$1.9 million long -term municipal
with all lease payments made on
(2) two ordinance changes to
ent system start date and to allow
ant; (3) continued first responder
ntinued City staff support and
certain City facilities as agreed
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M = = M M
PROPOSAL TO PROVIDE INTERIM AND
LONG -TERM AMBULANCE SERVICES
Prepared by: Little Rock Ambulance Authority
Presented: May 30, 1984
This report is proposed to serve as a "scope of work" to
be incorporated within the body of an amendment to the contract
currently in effect between the City of Little Rock and the
Little Rock Ambulance Authority, if the proposal contained herein
is accepted and approved by the Board of Directors of the City of
Little Rock.
BACKGROUND BRIEF
During recent months, the LRAA has been in the process
of implementing the Public Utility Model in accordance with poli-
cies previously established by the City of Little Rock Board of
Directors. Those major policies included: stable and reliable
state -of- the -art ambulance services, superb response time perfor-
mance throughout all neighborhoods of the City, competitive
selection of a private operator, safeguards to prevent service
interruption or deterioration, and user financing through fees
and subscriptions of all service costs including capitalization,
implementation, regulatory, operational, uncollectibles, and all
other costs associated with the ambulance service system.
Originally, the new system's scheduled start -up date was
November 1, 1984. However, delays and complications associated
with LRAA's long -term financing arrangements made it necessary to
consider postponement of the start -up date to February 1, 1985.
The LRAA and City officials were in the process of developing
solutions to these financing problems when a crisis with the pre-
sent ambulance service system necessitated an immediate takeover
of emergency ambulance operations by the LRAA.
With the help and cooperation of many individuals and
organizations, the LRAA did succeed in restoring paramedic
emergency coverage to the City within five hours after being
directed to do so by the Board of Directors. The borrowed
resources of numerous organizations and individuals have been
organized to provide this temporary service, and $5,000.00 has
been appropriated by the City Board of Directors to partially
defray the Authority's costs of service restoration.
The actual takeover scenario was complicated further by
the fact that, approximately three hours after the City Directors
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LRAA REPORT 209
authorized the $5,000.00 funding to restore paramedic coverage,
the City's only emergency provider notified the City of its
intent to discontinue all emergency response. Two hours before
paramedic coverage was to be restored, LRAA's mission was altered
to include total restoration of emergency ambulance services.
As of this date, LRAA's temporary coverage has produced
excellent clinical and response time performance in response to
all emergency requests originating within the city limits, as
well as several mutual aid requests. At the moment, citizens in
Little Rock are protected by paramedic level emergency coverage
at least as reliable as that which existed prior to the crisis,
and by some knowledgeable reports, the temporary service may
actually be superior to previous coverage.
LRAA estimates that this temporary service system can be
maintained for another two or three days. After that, borrowed
resources will, to an increasing extent, need to be returned, and
more permanent resources will be needed to provide extended
coverage. Those resources included personnel, administrative
services, various staff and consulting assistance, vehicles, on-
board equipment expendable supplies, and numerous other factors
of production.
The LRAA has prepared a plan to provide extended ambu-
lance coverage until a permanent system can be installed on
February 1, 1984. That plan, summarized in this proposal, provi-
des for a building upon the present temporary service system,
gradually phasing in the Authority's own resources as borrowed
resources are returned to the various owners, with financing of
all interim system costs from a combination of interim revenues
generated and slight modification of permanent system financing
arrangements previously anticipated.
II. GENERAL STRATEGY
The LRAA's Public Utility Model system is now scheduled
to become fully operational February 1, 1984. Therefore, LRAA's
interim system must be structured and managed to operate reliably
for approximately eight more months, and to do so without addi-
tional injections of local tax subsidy. LRAA has determined that
we can achieve this ambitious objective by adapting the following
strategic guidelines:
(a) Long -Term Stability and Direction. A stable
interim system depends upon its integration into the long -term
future. Little Rock's previous ambulance system structure suf-
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LRAA REPORT 210
fered, in part, from an inherent lack of stability and long -term
perspective. LRAA cannot bring stability to the interim unless
the path to long-term system stability is clearly in sight.
(b) Retain Investment in Current Personnel. Our com-
munity's current ambulance personnel constitute LRAA's most
valuable resource for maintaining interim service capabilities.
Unless those personnel can be persuaded to remain with us
throughout the interim system's life, LRAA cannot maintain
reliable service. Similarly, the same lack of long -term stabi-
lity and direction that might inhibit our ability to retain
current personnel would also inhibit our ability to recruit
replacement personnel. We must take steps to demonstrate clearly
what the future holds for field personnel after the interim
system's life, in order to persuade field personnel to remain
through the difficult and stressful experience of interim system
employment.
(c) Interim System F
Mechanisms. Working capital, capital equipment, initial supply
inventories, and other developmental costs associated with the
interim system are estimated at approximately $500,000.00, even
assuming all interim system operating costs would be recovered
from break -even fee - for - service revenues. However, by
integrating interim system financing plans into long -term system
financing arrangements, and by accelerating and slightly
modifying LRAA's original plans for borrowing long -term working
capital, the entire developmental costs of the interim ambulance
service system can be financed without requesting any additional
subsidies from the City of Little Rock.
(d) Permanent System Operations Contractor Ass
Interim System Operations. While LRAA's long -term rinancing
arrangements were delayed by complications, LRAA's competitive
selection of an operations contractor remains on LRAA's original
schedule. That is, within approximately 60 days LRAA shall have
identified its operations contractor for the first several years
of Public Utility Model operations. By design, the winning com-
pany must possess strong credentials in paramedic service deli-
very, and must have considerable management "bench strength" and
successful field experience. In a variety of areas (e.g.,
vehicle maintenance, operations management, personnel recruit-
ment, etc.) the new operations contractor can assist LRAA in
maintaining and upgrading LRAA's interim service delivery, and
can also assist LRAA in effecting a smooth transition from the
interim system to the permanent system. As soon as LRAA's long-
term operations contract has been awarded, LRAA will immediately
enter into appropriate negotiations for interim system support
and transition coordination with the successful bidder.
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LRAA REPORT 211
III. SCOPE OF WORK - INTERIM SYSTEM
If so directed by the City of Little Rock, the Ambulance
Authority is prepared to carry out the following steps to main-
tain and improve the Authority's current ambulance coverage until
February 1, 1984, at which time the Authority's permanent Public
Utility Model ambulance system shall become fully operational.
(a) Interim Operations Manager. The Authority shall
immediately identify an interim operations manager to take charge
of the Authority's interim system operations. At such time as
the Authority's long -term operations contractor has been iden-
tified, LRAA shall negotiate to integrate interim systems opera-
tion management with long -term systems operations management.
(b) Interim System Finance. The Authority shall imme-
diately secure a revolving line of credit to finance all interim
system operating capital requirements and short -term equipment
requirements. These financing arrangements will not require City
participation, provided the Authority's long -range implementation
plans and municipal lease financing arrangements are approved by
the City. LRAA estimates that this line of credit will include a
maximum limitation of $400,000.00, made available immediately for
use by the Authority to finance interim system operations. The
Authority's accounts receivable will be pledged as security, with
the Authority's interim equipment serving as additional security
in a form compatible with LRAA's long -term municipal lease
financing plans. (Only a $400,000.00 line of credit is needed
for interim system development and working capital, rather than
the full $500,000.00 estimated costs discussed above in this
report, because it is assumed that approximately $100,000.00 in
short -term equipment financing will be either "rolled over" into
LRAA's long -term municipal lease arrangements or held out for
separate refinancing on a monthly payment basis, thus effectively
restoring an additional $100,000.00 to the LRAA line of credit in
either case.)
Present plans call for initial delay of interest
payments until permanent system start -up, with this interim
system line of credit serving as a long -term revolving line of
credit, probably declining cyclically over a five to ten year
period of permanent systems operation.
Thus it appears that LRAA can totally finance all
interim system start -up costs and operating capital requirements
without requesting additional subsidies from the City, provided
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LRAA REPORT
LRAA's long -range financial and operational plans can be soli-
dified.
(c) Interim System Data Processing, Rate Setting,
Billings, and Collections. To stop the drain on LRAA's working
capital reserves as quickly as possible, the Authority shall
immediately establish a conservative rate structure to remain in
effect throughout the interim system's life. Effective February
1, 1985, LRAA shall establish a new rate structure based upon the
known operations contractor costs and known histories of sales
volumes and collection effectiveness. LRAA estimates that the
all- inclusive interim rates for paramedic emergency service shall
be $375.00, with a base rate for paramedic nonemergency transfer
service of $120.00. The LRAA shall periodically adjust rate
structure formats to maximize third party recovery and minimize
patients' out -of- pocket expenditures. No on -scene collections
shall be allowed in either the interim or long -term systems. It
now appears that LRAA's original estimated maximum average total
bill will still remain within our $285.00 average total bill
estimate.
To institute a manual billing system immediately, and to
convert to automated data processing, billings, and collections
within approximately 90 to 120 days, LRAA shall modify its
current billing contract with The Fourth Party, Inc. (originally
scheduled for implementation after November 1, 1984) to effect
immediate manual implementation and conversion to full automation
as soon as possible. All up -front costs of computers, software,
data entry, and related office personnel shall be furnished by
The Fourth Party, Inc.
(d) Interim On -Board Equipment and Central
Inventory. As soon as possible, LRAA's current borrowea on -Doara
equipment shall be replaced by approximately $90,000.00 in new
on -board equipment purchased through LRAA's line -of- credit
arrangements, to be later refinanced under LRAA's long -term muni-
cipal lease. Currently, the University Hospital is furnishing
ambulance expendibles and softgood supplies, with the promise of
being reimbursed for costs at a later time. LRAA shall imme-
diately order approximately $18,000.00 in central supply inven-
tory for interim system use. Under LRAA's permanent operations
contract arrangements, as already released for bid, central
supply inventories are to be furnished by the operations contrac-
tor. Therefore, LRAA shall immediately amend its operations
contractor bid document to require the winning bidder to purchase
LRAA's remaining central supply inventory at a reasonable and
competitive cost, thereby restoring that aspect of LRAA's line of
credit.
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LRAA REPORT
(e) Temporary Vehicle Acquisition. LRAA's long -term
vehicle procurements are currently, in process, and cannot be
accelerated. Therefore, LRAA shall immediately acquire six used
ambulances, or possibly lease six new ambulances for a short
term, and shall acquire at least two additional used or leased
ambulances within two or three months. Funds for purchase or
lease of these vehicles shall come from the Authority's line of
credit, which shall be restored when the temporary vehicles are
converted to longer term financing arrangements. After selection
of the operations contractor, the Authority shall negotiate with
the winning bidder to attempt to institute an accelerated main-
tenance incentive program which may allow the Authority to delay
acquisition of all twelve of LRAA's permanent system vehicles, to
the mutual financial benefit of LRAA and the operations contrac-
tor. However, the winning bidder does retain the right to
require LRAA to furnish the full complement of twelve new state -
of- the -art vehicles of identical configuration. It should also
be noted that, should LRAA's interim system marketing plans prove
exceptionally effective, especially as regards long distance
transfer services, the VA contract, and similar services, it may
be necessary for the Authority to acquire! additional vehicles and
on -board equipment during the interim. In such event, however,
the increased demand for services causing tht_ need for additional
equipment will also furnish the additional revenues to allow com-
mercial financing of that same additional equipment, at no addi-
tional cost to the City. (Remember that regionalization is
anticipated as a means of stabilizing rates and improving econo-
mics of scale.)
(f) Franchise Fee Payments. The Authority shall pay
the $10.00 per run franchise fees, as required by current City
ordinance, until such time as the City's original $140,000.00
developmental appropriation has been repaid. At that time, the
Authority's franchise fee payments shall be made directly to AEPF
at $3.00 per transport.
(g) Interim Communications SystEMi. As of this writing,
it appears that, assuming the Authority -does execute a purchase
order for the Authority's permanent communications system pro-
curement, the Authority's interim system communications require-
ments can be incorporated into long -term communications system
costs, without requiring any additional. contribution from the
City or any depletion of the Authority's line of credit.
(h) Miscellaneous Interim Activities. In addition to
the above areas, the Authority shall develop and implement
programs dealing with the following areas of responsibility:
(1) New Personnel Recruitment Program;
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LRAA REPORT
(2) Interim Equipment Maintenance Program;
(3) Purchase and Inventory Control of
Controlled Drugs;
(4) Interim Facility Arrangements;
(5) Interim System Status Management,
Dispatching, Emergency and Nonemergency;
(6) Interim Mutual Aid Agreements;
(7) Acquisition of State Paramedic Provider
License (current temporary approval is
for 90 days only);
(8) Refine First Responder Program and Improve
Extrication Capability (Note: Fire Depart-
ment's Hurst tool request);
(9) Prepare to Bid VA Contract (Probably during
July, 1984);
(10) Arrange Nonemergency Telephone Access and
Yellow Page Ads;
(11) Interim System Public Information and
Marketing Programs;
(12) Institute Subscription Program (as soon as
full service capabilities are established);
(13) Interim Payroll and Personnel Management,
Salary Structures, Personnel Transition
Arrangements (currently handled by Red
Cross);
(14) Interim Fuel Purchasing Arrangements;
(15) Interim In- Service Training Program;
(16) Interim Internal Accounting and Financial
Management Services;
(17) Interim System Insurance Coverage;
IV. SCOPE OF WORK - PERMANENT SYSTEM IMPLEMENTATION
Permanent system implementation activities overlap
somewhat with interim system activities. As discussed above, a
key feature of this plan, and in fact its financial viability,
depends upon making many interim system developmental activities
perform the dual function of permanent system installation.
Major aspects of permanent system implementation shall include:
(a) Full implementation by February 1, 1985.
(b) Completion of municipal lease for approximately
$1.9 million in capital equipment and facilities, with such
financing arrangements to be finalized by the City within 60
days, but no later than September 1, 1984. (All such lease
payments shall be made by the Ambulance Authority, with ownership
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LRAA REPORT
of paid -off equipment reverting to LRAA.)
(c) Completion of operations contractor bid, execution
of contract, and negotiation of interim system provisions.
(d) The present Little Rock Ambulance Ordinance shall
be modified to anticipate a February 1, 1965 Public utility Model
start date, and § 9 of Ordinance No. 14 -062 shall be amended to
allow the required municipal lease finance.
(e) Complete new vehicle procurement and permanent com-
munications system procurement, possibly with accelerated vehicle
maintenance incentive programs, as discussed above.
(f) Effect central supply inventory buy -back by winning
bidder.
(g) Institute long -term marketing plan.
(h) Continue franchise fee payments.
(i) Complete building of permanent ambulance facility,
including permanent dispatch center.
(j) Convert to permanent insurance coverage program.
(k) Complete transition from interim system to per-
manent system.
(1) Revise all financial projections and establish
medium range fee structures.
(m) Launch first annual major subscription drive.
(n) Continue to operate the permanent ambulance system
at increasingly higher levels of clinical sophistication, with
periodic competitive bidding for operations contractor services,
and without reliance upon local tax subsidization, throughout the
term of the amended City /LRAA contract. (Note: LRAA's permanent
system financing plans anticipate a minimum of 10 years of
planned operation for amortizing communications system and cer-
tain other equipment costs, and 20 years of operations for amor-
tizing facility costs, thus, a 20 year contract term is
recommended.)
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LRAA REPORT.
V. CONSIDERATION
Sections III, IV, above, outline LRAA's scope of work as
proposed herein, both interim and long - term. Where relevant,
City involvement is specified. The following items, however,
summarize the areas of assistance and cooperation required of the
City of Little Rock to enable LRAA to carry out its respon-
sibilities as described herein, with the first item listed below
identifying what will not be required of the City if this propo-
sal is accepted, and if the City carries out the remaining tasks
listed below.
(a) No Subsidy Required. This proposal does not
require or anticipate any requests for subsidy from the City. In
fact, this proposal incorporates franchise fee payments to help
pay back the City's previous appropriation of approximately
$140,000.00, with further franchise fee payments earmarked to
finance ongoing regulatory and medical supervision costs. All
interim system costs are commercially financed, interim system
operating costs are covered by fee - for - service revenues, per-
manent system installation costs are commercially financed, and
permanent system operating costs, including municipal lease
payments, are covered by permanent system fee - for - service reve-
nues.
(b) Municipal Lease Required. Because the LRAA is
unable to obtain its own direct long -term equipment and facility
financing, at this early stage in LRAA's business life, it is
necessary that the City authorize the creation of a municipal
lease in the amount of approximately $1.9 million, structured in
accordance with LRAA's capital requirements and lease payment
plans; provided that LRAA shall make all such municipal lease
payments on behalf of the City from its operating revenues. it
is understood, that property paid off by this method shall revert
automatically to ownership by the Ambulance Authority, so that
the Authority may gradually establish its own financial strength
to avoid the need for further reliance upon City assistance for
financing purposes. It is also understood that, in order to
effect the Authority'.s interim system line -of- credit financing
arrangements, the municipal lease arrangements must be finalized
within 60 to 90 days from the date of this proposal.
(c) Amend Current Ordinances. Current City ordinances
must be amended to both accomodate the new February 1 permanent
- system start -up date, and to allow the use of the above - discussed
municipal lease arrangement.
(d) Continued First Responder Services. It is
necessary that the City continue its commitment to a sound first
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LRAA REPORT
responder program, provided that with the eventual establishment
of fully centralized paramedic dispatching and system status
management, a reduction in reliance upon first responder services
may be anticipated.
(e) Continued Staff Support and Use of Facilities.
Because of the aggressive work program outlined herein, LRAA's
small administrative staff, and the zero- subsidy mandate of the
City Directors, it is necessary that LRAA continue to receive
liberal assistance and cooperation from various City staff mem-
bers, and that LRAA be allowed the use of certain City facili-
ties, as necessary and agreed upon by the affected City
departments.
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