Office of the Town Manager

Paul E. Cohen
Town Manager 50 Billerica Road Chelmsford, MA 01824-2777 978.250.5201 Fax: 978.250.5252

8/24/07 TO: Board of Selectmen FROM: Paul Cohen, Town Manager RE: Fire Department-Based Ambulance

Attached are materials pertaining to a Fire Department-Based Ambulance service. The analysis indicates that if the Fire Department were to operate two Basic Life Support (BLS) ambulances with the employment of five additional Firefighter/EMTs, the Town would generate net revenue in the amount of $285,000 from ambulance operations. To provide a minimum complement of 12 Firefighter/EMTs per shift in order to keep all five fire stations open, the net revenue from the reconfigured Fire Department operations would be approximately $150,000. Public Safety Consideration: Keep All Fire Stations Open My motivation in presenting this proposal for your consideration is public safety. My goal is to keep all five fire stations open. As you are aware, due to budgetary constraints, the Town is currently closing either the East, South, or West Fire Station on a daily basis. The current staffing level is 13 firefighters per shift, with a minimum of 9. By operating the ambulance service, the Town would increase its staffing level to 14 firefighters per shift, with a minimum of 12. Working with the Fire-DPW Facilities Committee, the MMA Consulting Group, Inc. is completing a Fire Services Study. T e t y vl t t cr nl ao o t T w h s d ea a d h ur to t n fh o ns u u e e e ci e five fire stations and explored alternatives to the current station configuration. The study finds that the Town needs to maintain five fire stations in order to have an adequate response time for fire and medical emergencies. An adequate response time is defined as four minutes of travel time for a fire company 90% of the time. Operating a Fire Department-based ambulance service with the additional minimum staffing levels would enable the Town to better achieve this standard as opposed to the current situation. A closed fire station reduces the response time coverage for a 24-hour period. A Fire Department-based ambulance service would require an average of six medical transports per day out of town to a hospital for approximately an hour. There would be enhanced fire and emergency medical coverage in almost all circumstances. If the Town were to operate two transport ambulances, one would be housed at the Center Fire Station and the other would be housed at the West Fire Station. The East, North, South, and West Fire Stations would be staffed by two Firefighter/EMTs. The Center

Fire Station would be staffed with four Firefighter/EMTs. This staffing allows the Fire Department to respond to two emergency medical calls and a first alarm fire with on duty personnel. High-Quality Pre-Hospital Medical Care The goal of any emergency ambulance service is to provide high-quality pre-hospital emergny m d a cr T e T w cr n pi t cn at fre e ec ec ei l a . h o ns ur t r a ot c r o m r ny c e e ve r o g ambulance service Trinity EMS meets the standard of providing high-quality care. This proposal is by no means to be interpreted as an expression of any level of dissatisfaction with Trinity EMS. The Chelmsford Fire Department responds to all emergency medical calls. A total of 54 o t T w 5 Fr i t sa trained and certified as EMTs. This follows the f h o ns 6 i f h r r e eg e e r o m nao o t A bl c Suy o m te Fnleot a dJ 26, 1995 e m edt n fh m u ne t C m ie i r rdt une c i e a d t s a p e t ti odro r a fr vn w i m y aet eesr t bi t a bl c h re t pe r o eet h h a m k incs y o r g h m u ne a n pe s c a n e a service in-house at some future date and to protect the investment the Town has made with respect to subject personnel, that firefighters be required to mai a E s t . n i MT tu tn as T eT w Fr C i Jc Prw hsepr nei a bl c oe t n. Highh o ns i h f ak a e e o a xe ec n m u ne pr i s i a ao quality pre-hospital emergency medical care would be maintained if the Fire Department were to provide emergency medical ambulance service. Ambulance Call Volume In calendar year 2006, there were 2,648 calls for emergency medical assistance. This equates to an average of 7.25/day. Approximately 81% of the emergency medical calls, a total of 2,145, required transport to a hospital. This equates to an average of 6 ambulatory transports/day. The amount of emergency medical calls has dramatically increased over time. For example in calendar year 1994, there were 1,032 ambulance transports from Chelmsford. Approximately 30% of the Townse e ec m d a cl r u eah hr ee o m r ny ei l as e i g c l qr i el lf g v care. Advanced Life Support (ALS), often referred to as paramedic response service, is currently provided to the Town of Chelmsford by the Greater Lowell Emergency Medical Service (GLEMS). GLEMS is a hospital-based, regional paramedic service operated out of Saints Medical Center in Lowell. This proposal does not alter the provision of ALS care. Simultaneous Ambulance Transports During calendar year 2006, there was an average of 23 times per month that two ambulance transports occurred within 90 minutes of one another. There was an average of 3 times per month that three ambulance transports occurred within 90 minutes of one another. Under its contractual agreement with the Town, Trinity stations an ambulance with two EMTs in Chelmsford Center at 15 Cushing Place. When an emergency medical call for Chelmsford takes place, Trinity sends its ambulance and mobilizes another ambulance to provide a secondary response.

A Fire Department-based ambulance service would consist of two ambulances, one stationed at the Center Fire Station and the other located at the West Fire Station. During those occasions when a third ambulance is required, the Fire Department would send an engine crew with two Firefighter/EMTs to the scene. The Town would establish mutual aid agreements with the adjoining Towns of Tewksbury, Westford, Billerica, and Carlisle. The Fire Department would also seek to establish mutual aid agreements with Trinity EMS and other private ambulance providers located in town and in neighboring communities. Other Towns Experience As noted above, the neighboring Towns of Tewksbury, Westford, Billerica, and Carlisle provide Town-Based ambulance service. Across the Commonwealth of Massachusetts, 242 out of the 351 cities and towns (69%) provide a town-based ambulance service. Information from fire department-based ambulance services in the Towns of Tewksbury, North Andover, and Westford were utilized in the development of this proposal. Tewksbury and North Andover have a similar population, geographic size, and are located in close proximity to the Town of Chelmsford. Those fire departments operate two ambulances with a minimum staffing of 12 Firefighter/EMTs per shift. The Town of Billerica provides both BLS and ALS emergency ambulance service for its residents. Billerica operates its ambulance service as a stand-alone department outside of the fire department. A separate ambulance department providing BLS emergency ambulance service in the Town of Chelmsford would be a financial disaster. This is c a y so n i t aahd dcm n etl u m r Pooe A bl c l r hw n h tce ou et n td S m a rpsd m u ne el e t ie y a E t pi Acm i d L &ALS emergency ambulance service similar to the Town n rre. o b e B S e s n of Billerica may be viable. However, such an action would displace the ALS service provided by GLEMS and would likely undermine the financial stability of one of the few remaining regional paramedic service providers. Ambulance Revenue Ambulance billing only occurs when a patient is transported to a hospital. The revenue projections are shown on the attached spreadsheet. The 2,145 emergency medical transports are classified as BLS or ALS calls. The Town would charge a base rate of $500 for BLS-only medical calls. GLEMS bills patients for ALS calls and would provide $150 per call to the Town as a BLS provider. Medicare and Medicaid establish an annual fixed rate for ambulance service. Adjustments have to be made for uncollected debt. A private billing company with experience in municipal ambulance collections would perform ambulance billing. It is projected that the Town would realize a total of $1,261,554 for its annual amount of 2,145 ambulance calls. With adjustments and bad debt, the Town would net a total of $820,010 in collections. This equates to an average of $382 collected per medical transport. These numbers are in-line with the actual experience of the comparable communities.

Ambulance Expenditures The financial spreadsheet details the annual cost of $75,000 for a five year lease-purchase of two Type III (box style) ambulances, at a per vehicle cost of $150,000. Other annual expenses such as the purchase of medical equipment and supplies are listed, along with fuel and maintenance costs, insurance of the vehicles, licensing, and billing service fees. The annual expenses total $157,400. The personnel costs are also broken down by base salaries for the five new Firefighter/EMTs, benefits pay, uniforms, paid time off, health insurance, training, etc. In addition to the hiring of the five new Firefighter/EMTs, one of the existing members of the Fire Department would be promoted to the position of EMS Captain. The additional compensation for this position is also included in the analysis. The total amount of payroll expenses amounts to $376,973. The total of $820,010 in collections, less the personnel expense of $376,973, and the operations expense of $157,400 results in an annual net revenue of $285,637. The additional cost to provide a minimum staffing level of 12 Firefighter/EMTs per shift results in a final annual net cost of approximately $150,000. Unknown Costs/Risks A major concern with proceeding with a Fire-Department-based ambulance service is unforeseen and unknown costs. With respect to liability, since the Chelmsford Fire Department already responds to all medical emergency calls/scenes, the Town already has in p c alb i i uac ply T eT w i uac pe i w u nt l e i it n r e o c. h o ns n r e r u ol o a a ly s n i s n m m d increase if the Town were to provide emergency ambulance transport services. Wi r pc t Wokr C m est ni uac cvr e Fr i t sadP le t e et o re o pnao n r e oe g, i f h r n o c h s s i s n a eg e i Officers are not covered under Workers Compensation insurance in Massachusetts, but are instead covered under the provisions of Massachusetts General Laws Chapter 41, Section 111F which provides for medical expense coverage and no loss of pay if injured on duty. The Town has an insurance policy with an annual premium of $28,531 which provides for injured on duty medical benefits to a maximum amount of $200,000 with a deductible of $35,000. The FY08 operating budget contains $100,000 for the payment of the injured on duty insurance policy premium, the medical deductible, and any other asc t epne frh T w 56 firefighters and 53 police officers. s ie xesso t o ns o ad e Another concern is the post-employment pension and medical costs for the additional five Firefighter/EMTS. The present value of projected benefits for all active, non-school employees is $27.6 million, or an average of approximately $115,000/employee. The contribution levels of newly hired employees into the pension system essentially cover their future pension costs. As for retiree health insurance costs, these costs would also not likely be incurred for about 30 years. It is uncertain as to what will be the state of the nt ns el crss mat ti e aohah a yt th t . i t e e a m

Hiring additional employees and increasing the responsibilities of existing employees presents a risk of claims. Negative claims experience would result in the actual per claim costs, as well as an increase in the cost of future insurance policies. It is difficult to determine the risk presented by taking on the responsibility of transporting patients from an emergency medical scene to the hospital. The cost is certainly not zero, but it is likely to be less than $150,000 per year. Future Financial Condition of the Town The five-year financial projection for the Town presented by Finance Director Kerry Speidel at the October 2006 Fall Town Meeting forecast a $3.1 million deficit in FY09, increasing to $7.2 million in FY12. We are currently revising the financial forecast for presentation at the upcoming Fall Town Meeting. Early indications are that the financial deficits are reduced, but still remain. The latest draft of the forecast projects a deficit of $873,000 in FY09, increasing to $7.87 million in FY12. Budgets have been tightly squeezed during the past few fiscal years, as evidenced by the dcn i t T w anaFe C s crf ao b the Department of Revenue to an el en h o ns nul r ah e ict n y i e e ti i amount less than $700,000 for an annual operating budget of $96 million. Clearly, the provision of a Fire Department-bsda bl c sri wlnto e lo t T w ae m u ne e c i o sl a fh o ns a ve l v l e financial problems. However, it is difficult to determine where further budgetary reductions could occur in public safety, as well as in other budget categories. This proposal along with other recent initiatives such as increasing employees health care deductibles, contracting out towing services, and leasing the Old Town Hall to the Innovative Academy Charter Schools may be part of the solution. Federal law prohibits the Town from bidding ambulance services to the highest dollar bidder. Conclusion The Town Charter provides for the Town manager to inform the Board of Selectmen of the needs of the Town and the financial condition of the Town. The Town has public safety needs as evidenced by inadequate fire and medical response times created the daily closing of a fire station. The Town is experiencing financial difficulties as evidenced by t r et o nr ent T w bn r i deoa i dqa Saizt nF nd h e n dw ga i h o ns od an u t n n eut t lao u e c d e tg a e bi i balance, the deficits projected in the Five Year Financial Forecast, and the possible capital facilities needs for a new Fire Department Headquarters facility and a new DPW facility. I believe that it is my duty to bring this proposal to you for consideration. I understand that this difficult issue was considered only a year ago. However, circumstances have deteriorated since that time. This Fire Department-based ambulance service proposal is not a perfect solution. It has its risks and uncertainties. However, it needs to be considered in comparison to the alternative current situation. I think that this proposal is better than the current practice of closing a fire station and its associated risk. I offer this closing comment from the 1995 Ambulance Study Committee Final Report: i l , eblv t th m s i pr n e m n o e e ec r cei aw l Fn l w eee h t otm ot t l et f m r ny e u s eay i a e a e g s l trained and professional First Response team. The Town should never lose sight of the fact that it is the immediate response of our EMT-trained firefighters, police officers and

ambulance personnel in those first few minutes of an emergency medical situation which can literally determine life or death. During the highly publicized and politicized course o ort yt s a r a e t cn afcs f u cm ie. f u s d, ihse i dh et lou o oro m te u h m n e r t I would like to thank Fire Chief Jack Parow, Police Chief Jim Murphy, Finance Director Kerry Speidel, and Assistant to the Town Manager Kellie Hebert for their contributions towards examining this important issue. Thank you for your consideration of this matter.