Office of the City Attorney January 11, 2013

Contact: Jonathan Heller (619) 533-4782 JHeller@sandiego.gov

CITY ATTORNEY UPDATE

REPORT TO MAYOR AND COUNCIL ISSUED ON CITY'S EMERGENCY MEDICAL SERVICES CONTRACT
The Citys contract for emergency medical services (EMS) expires in less than six months. We are legally obligated to provide continuous ambulance services for our residents and we are further obligated to put this contract out to bid. Our office recently issued a report to the Mayor and City Council on this issue which can be found here. Over the past two years, City staff has developed a Request for Proposals (RFP) seeking a new EMS contract. The City submitted a draft RFP to the State and the County, which jointly oversee EMS in California, in the spring of 2012 and received final approvals on October 5, 2012. However, City staff has delayed publishing the RFP and instead has begun developing a new one that may allow the City to take advantage of federal funds set aside for certain Medi-Cal service providers, based on recent changes to state law. A new RFP will have to go through the same approval process at the State and County levels. That will significantly delay the RFP publication date, putting at risk the Citys ability to provide contractually obligated EMS services. If the City wants to seek a delay of the bidding and extension of the existing contract to explore the Medi-Cal reimbursements, it should do so in a legal manner. Absent doing that, the City must move forward with the current RFP without delay. Simply not posting the RFP is not a legally acceptable option. At this point, it is unclear whether the City would actually benefit from the recent changes to state law regarding Medi-Cal reimbursements. The State has not yet explained exactly which Medi-Cal costs will be recoverable. Publishing the existing RFP does not preclude the City from studying other options for future EMS contracts. The current obligation to rebid the EMS contract arises out of a settlement in 2010 of various claims and restructuring of the Rural/Metro contract. The existing contract with Rural/Metro was intended as a stop-gap measure to give the City time to issue a new RFP by the expiration date of June 30, 2013. The contract was signed after the City and Rural/Metro agreed in 2010 to dissolve their unique public/private partnership in the wake of a whistle-blower or qui tam lawsuit brought by a former Rural/Metro employee alleging improper financial dealings by Rural/Metro. It was announced last September that the City of San Diego and Rural/Metro had amicably resolved questions of accounting irregularities concerning the Citys contract for emergency medical services. A report from Cornerstone Research, an independent accounting firm hired through a mediation process at Rural/Metros expense, focused on the funds in question and found no evidence of Rural/Metros alleged fraudulent withholding of revenues. The report can be found at www.sandiego.gov/cityattorney under Documents and Other Resources.

City Attorney Update January 10, 2013 Page 2 of 2 The parties entered into a Mediation Resolution Agreement in which Rural/Metro paid the City $1.4 million. Additionally, Rural/Metro paid the City $5.5 million to dissolve the public/private partnership.

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