Ambulance company seeks $1.8M to $2.6M subsidy from Youngstown
YOUNGSTOWN — American Medical Response is seeking an annual subsidy from Youngstown of $1.8 million to $2.6 million to continue to provide ambulance service to the city or the company will pull out.
“If the city wants to stay with us, it’s what it’s going to cost,” said Edward Powers, AMR’s northeast regional director of operations. “Either pay us or come up with a transition plan and we’ll help them. But that’s what it will cost AMR to stay.”
AMR’s contract with the city, in which Youngstown doesn’t pay any subsidy, expires Dec. 31.
AMR had said that without an annual subsidy of at least $750,000 it would be forced to close its Youngstown operations.
When the city sought proposals for ambulance services in October, AMR was the only company to submit one.
That subsidy request, which was revealed Wednesday, was $1.8 million annually for three ambulances, $2.2 million for 3 1/2 ambulances and $2.6 million for four ambulances with a 5 percent annual increase in the second and third years.
During earlier negotiations, AMR said it would provide four ambulances to the city.
When city officials heard AMR’s proposal, Law Director Jeff Limbian said Wednesday they were “shocked. We thought they were kidding. We thought it was a crass opening volley. We thought clearer heads would prevail. It’s shocking, absolutely shocking.”
In a Wednesday letter to Powers, Limbian wrote AMR’s proposal “is untenable and unacceptable as a subsidy,” and the cost “is not a fair or wise expenditure of public funds.”
The letter came a day after Limbian said he spoke to Powers.
Limbian suggested a $500,000 subsidy for six months in the letter “so we could work toward a common goal or work to disentangle your company from doing business within the city limits.” That request was rejected by AMR.
Powers said AMR needs the proposed subsidies to stay in Youngstown. He said the $2.2 million expense is Youngstown’s best option.
“We are feeling financial and inflationary pressures in the post-COVID world,” he said. “We have to maintain a high wage increase of about $700,000 a year, and there’s the increased price of fuel, too. We were sticking to the $750,000 number and things have gotten crazy in the past year.”
The administration recommended a $625,000 payment to AMR, which the company sought earlier this year for the final 10 months of 2022 using some of the city’s American Rescue Plan money, but council voted against that in April.
If the city can find a cheaper ambulance service or wants to run one itself, Powers said his company wishes the best for Youngstown. But he pointed to comments made in the past by city Finance Director Kyle Miasek that it’s cost prohibitive for Youngstown to start its own service. Also, Youngstown received no other proposals for the service.
“We love the city and want them to have EMS,” Powers said.
Limbian said the city will “look at other options,” but consideration for paying what AMR wants “has not been pulled off the table. We hope decency will trump price gouging. We want to continue negotiating.”
At this late stage, it would be almost impossible for the city to create its own ambulance service to be up and running by Jan. 1, Limbian said.
In a Nov. 21 letter to city officials, Powers wrote with “only 40 days left before we cease operations in Youngstown,” he wanted to hear from the city about AMR’s subsidy request or a transition plan.
AMR gave notice Sept. 14 that it wouldn’t renew its contract with the city without financial assistance. The current contract would automatically roll over for another year if AMR didn’t inform the city at least 90 days before the end of the year that it wants a new deal.
AMR officials say a subsidy is also needed because an average ambulance run costs about $300 and Medicaid reimburses about $130, so AMR is losing money as 54 percent of its calls in Youngstown are for Medicaid recipients.
The company has asked since 2019 for money from the city to pay for the reimbursement shortfall.
City officials have resisted, but realized one would have to be paid. The AMR request, Limbian said, was considerably more than what city officials expected.
Miasek said at a Sept. 22 council safety committee meeting that Youngstown could use a portion of its ARP allocation to pay the AMR subsidy through 2026. But that was before the company submitted its proposal with the specific financial subsidy amounts.