Title
RESOLUTION 2018-054 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A SIXTY DAY EXTENSION OF THE CITY’S AGREEMENT WITH AMERICAN MEDICAL RESPONSE, INC. FOR BASIC AND ADVANCED LIFE SUPPORT AMBULANCE SERVICES WITHIN THE EXCLUSIVE OPERATING AREAS OF THE CITY OF CHULA VISTA, THE CITY OF IMPERIAL BEACH, AND THE BONITA/SUNNYSIDE FIRE DISTRICT
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RECOMMENDED ACTION
Recommended Action
Council adopt the resolution.
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SUMMARY
The City is currently under contract with American Medical Response, Inc. (“AMR”) for the exclusive provision of emergency ambulance transport services within a service area comprised of the City of Chula Vista, the City of Imperial Beach and the Bonita/Sunnyside Fire District. The contract is due to expire on March 31, 2018. The proposed amendment would extend the contract until May 31, 2018 to give the parties an opportunity to negotiate possible terms for a longer-term extension. If during this 60-day extension period such an agreement cannot be reached, the agreement would automatically terminate on August 31, 2018. This additional 90-day period is designed to allow all parties to wind down the existing arrangement in an orderly manner, and to transition to an alternative provider.
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
Not applicable
DISCUSSION
The City is currently under contract with American Medical Response, Inc. (“AMR”) for the exclusive provision of emergency ambulance transport services within a service area comprised of the City of Chula Vista, the City of Imperial Beach and the Bonita/Sunnyside Fire District. The contract initially expired on September 30, 2017, but was extended by the City Manager to allow the parties additional time to negotiate terms for a longer-term agreement. The term for that interim extension is now itself due to expire on March 31, 2018.
The City has been working with AMR over the past 18 months in an attempt to resolve issues with the existing contract, and to pursue possible terms for an extension. To date, the parties have been unable to reach such an agreement. Both parties have concerns with the economics of the existing arrangement. The City’s primary concerns are that City costs incurred in providing first responder services are not being fully reimbursed, AMR’s cost and revenue structure is difficult to audit, and that AMR’s rates continue to increase. By contrast, AMR has expressed the concern that a low local “collection rate,” combined with City reimbursement requirements, and constantly changing federal and state insurance rules and regulations, make the contract unprofitable.
The proposed amendment would extend the contract until May 31, 2018 to give the parties one more opportunity to negotiate terms for a longer-term extension. If during this 60-day extension period such an agreement cannot be reached, the agreement would terminate 90 days later. This period is designed to allow all parties to wind down the existing arrangement in an orderly manner, and to transition to an alternative provider.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section 18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. This item is consistent with the City’s goals of Operational Excellence and Secure Neighborhoods as it extends a contract for the provision of a vital City service, and provides for the orderly transition, if necessary, to an alternative provider of such service.
CURRENT YEAR FISCAL IMPACT
The agreement continues an existing arrangement between the City and AMR for the provision of emergency ambulance transport services within the City and the surrounding service territory. The costs of such services are billed to the patient pursuant to “maximum rates” established under the agreement. Under the terms of a separate agreement with AMR, the City provides “first responder” firefighter/paramedics services to AMR and in exchange receives a payment from AMR at a fixed rate of $583,683 per quarter. This payment defrays a significant portion of the costs City incurs in providing such services. During the extended term of the primary agreement, the City will continue to receive reimbursement from AMR under this separate agreement as it runs concurrent with the term of the primary agreement.
ONGOING FISCAL IMPACT
Ongoing fiscal impacts for the provision of emergency ambulance transport services will be determined by the provisions of any extended agreement the City might negotiate with AMR or an alternative provider. It is expected that the terms for such an agreement will be presented to the City Council for its consideration within the near future.
ATTACHMENTS
1. Letter Agreement between the City and AMR
Staff Contacts: Jim Geering, Fire Chief, Glen Googins, City Attorney