Cottage Grove City Council members want to consider alternatives for how ambulance service is provided to St. Paul Park and Newport - and how it’s funded.

Council member Justin Olsen spoke three times at recent budget meetings in favor of changing the arrangement. Olsen, whose term ends this year, said “the only question is when, not if” Cottage Grove revises the ambulance service model it uses to serve its residents and those in the neighboring cities.

“At some point, we just have to say enough is enough,” Olsen said.

In 2015, the Cottage Grove ambulance service responded to 1,704 calls in Cottage Grove, 320 in St. Paul Park, 299 in Newport, 16 to Grey Cloud Island Township and 125 to other area cities.

Total EMS costs were about $1.59 million last year. Total EMS expenditures for each city last year were about $1.2 million in Cottage Grove, $136,091 in Newport and $160,835 in St. Paul Park.

The ambulance call volume is expected to continue increasing by 5 to 10 percent annually as Cottage Grove’s population grows.

The ambulance service is paid for almost entirely by those who use it: patients, or their insurance providers. The ambulance fund has budget reserves of roughly $917,923 and it generated income last year in each of the three main cities it serves.

However, council members say Cottage Grove taxpayers could be on the hook if the service started losing money, and the cities of St. Paul Park and Newport currently do not pay Cottage Grove to provide the service.

“We’ve had concerns with getting money back from those communities for a long time,” Cottage Grove Mayor Myron Bailey said. “What happens is, that now there’s no obligation to help fund that program. They only way we can fund the program is by revenue funded by ambulance trips.”

With the exception of some administrative overhead costs, all ambulance expenses are paid by its users. But Cottage Grove council members say their residents should be shielded from future costs.

“Our taxpayers in our city are supporting this model,” Olsen said. “There comes a point where you can’t get any more blood from the turnip, and we need to protect our taxpayers in our community because they don’t pay for just their own community.”

“We can’t have our taxpayers funding that service. We just can’t,” council member Steve Dennis added.

The ambulance fund has not lost money, according to city budget information.

“The ambulance fund collects money for the cost of services. We’ve collected enough for cost of services,” Finance Director Robin Roland said. “We’re just looking into the future.”

Council members have suggested two ways to change the service model, including requesting legislative approval to create a special EMS taxing district. The other alternative discussed is to cut off ambulance service to St. Paul Park and Newport, leading those cities to contract with a different provider.

Looking ahead

Cottage Grove’s ambulance service operates as an enterprise fund, much like the water or sewer funds, Roland said.

“The cost of the services are recouped via charges to the users, just like the water fund or the sewer fund, and bill for the cost of the service,” she said.

Previously it was a joint-enterprise fund, called SoWashCo ambulance service, from 1972 to 2000. It was run by representatives of Cottage Grove, St. Paul Park and Newport, said Cottage Grove Public Safety Director Craig Woolery.

Bailey said that with the growing senior population - usually insured through Medicare or Medicaid - the ambulance fund could struggle to recoup its costs. Medicare and Medicaid reimburse at under 50 percent of service costs.

“We can see at some point we would run out of revenue,” Bailey said.

Bailey said the recent decision to add three more full-time firefighter paramedics in 2017 could be another strain on the fund. Their salaries are paid 75 percent from the ambulance fund and 25 percent from the city general fund.

“The reality is we have not had the ambulance system operational with the full-time paramedics and now we will,” Bailey said, adding that with the new personnel, the ambulance fund potentially could lose money within four years.

The city could raise ambulance rates as expenses increase, Roland said, or find other solutions.

Bailey said he wants to discuss options with the cities before taking any action.

“Once the elections are done, my intent is to have a meeting with the mayors of St. Paul Park and Newport and discuss this option for the next season,” Bailey said. “I hope that we can work out a deal to move forward with them, whether that’s a special taxing district or something else.”

Cottage Grove council members agreed to wait until 2017 to begin talks.

St. Paul Park Mayor Keith Franke said he’d be interested to “see what it all involves and what the bottom line is.”

“It’s a tough call either way,” he said. “I’m never one for providing extra taxes, but I am one for providing good first response systems. How we get around that, I don’t know.”

Newport Mayor Tim Geraghty, whose term ends this year, said that the staff and sheriff’s office that serves Newport have been happy with the ambulance service.

“We’d be fine staying the way it is,” he said. “I’m not really in favor of adding any tax on any residents. I thought it was supposed to be self-sufficient and paying for it with the user fees. I’d have to see what they need and why the rates aren’t paying for it. I’m not sure the residents should be subsidizing it.”

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