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St. Croix EMS future still uncertain

After the sale to HealthPartners was struck down, the city of Hudson and its partners is still looking at how to make St. Croix EMS sustainable, Mayor Rich O’Connor said. File photo.

Cheers broke out after the Hudson Common Council voted to scrap negotiations regarding the sale of St. Croix EMS to Hudson Hospital in June, but now that the noise has quieted down the city is searching for a way to sustain the service.

The sale would have placed Hudson Hospital and its partners Lakeview Hospital and HealthPartners in full control of the service operationally and financially. Doing so would have saved the city and its partners money, but would have cost up to 24 part-time EMT positions.

Mayor Rich O'Connor said the quality of service provided by St. Croix EMS was never an issue, but instead discussions were driven by financial concerns.

PREVIOUSLY: Council scraps Lakeview EMS integration contract

"Nobody has ever cast stones at our EMS or the paramedics and the EMTs," O'Connor said. "This has nothing to do with the quality of service."

Now that the deal is off the table, the city is looking for a new solution for future funding concerns.

Short term solutions

When discussions with HealthPartners first began, the council approved funding EMS through July only in 2017 with the assumption the sale would go through. Now for the rest of the year it is being funded from the general fund balance, the designated backup at the time.

Based on alternative plans presented by St. Croix EMS in May, the city is moving forward with changes for 2018. It will add another paramedic to its staff for next year. Currently the service runs shifts with two paramedics, and three EMTs who respond from home. The new model would have shifts run with two paramedics, and two EMTS who will now work from on-site.

This model would bring the per-capita contribution by municipalities from $14 currently to $19.25, Finance Director Brenda Malinowski said.

These changes will go into effect in January. In the meantime, St. Croix EMS is struggling to fill EMT shifts and retain paramedics. To address the problem until the switch in the new year, the council approved increasing stipends by as much as $6 and adding shift differentials at 20 cents an hour. These changes are not to exceed $1,800.

O'Connor said there is frustration with the difficulty filling shifts. Council Member Randy Morrissette spoke to it during the public safety meeting on Aug. 17.

"We'll do our part, we're committed, we said we would, now they need to do the same," Morrissette said.

Financial state

During the discussions for the sale, O'Connor said many expressed the sentiment that taxpayers were more than willing to pay for a service like EMS. How much the city can tax, however, is limited by state levy limits. While the city has the authority to raise the mill rate to any point, O'Connor explained its levy is limited by the overall evaluation of property in the city. If levy limits are not reached, the city can bank the leftover amount for future use. At the moment, O'Connor said the city has a cushion of about $800,000.

The city's current mill rate is at 5.03 with a council-imposed limit of 5.25. Though the city can go beyond that, it can only go to 5.7 before reaching the levy limit.

That cushion though will be eaten up quickly, O'Connor said.

The costs for EMS are increasing, while the reimbursements for service are decreasing. O'Connor said this is in large part due to an aging population that is switching from insurance to Medicare. Medicare reimbursement for EMS service is less than half that of insurance companies.

The 2018 budget revenues are $1,035,000, with expenditures at $1,690,308. With current municipal contributions total of $537,189 from city of Hudson, village of North Hudson, town of Hudson and town of Troy, the service will have about $500,000 at the end of the year.

Hudson's contribution for next year is budgeted at around $260,000, up from 2017's $190,000. The other four municipalities will see increases as well ranging from $10,000 to $45,000.

In addition to EMS costs that will affect the levy limit, the city is also looking at the costs from different departments including adding personnel, market rate adjustments and more. O'Connor said altogether that will add up to more than $400,000.

"We have a year and a half to two max and then we're at levy limits," O'Connor said.

Once the cushion is gone and the levy limit is reached, O'Connor said the city will be facing serious issues.

"At that point every single full-time employee that works at the city is at risk," he said.

Being at levy limits would mean the city could not cover costs of equipment, cost of living adjustments and other operating costs. Bonding would still be an option, with restrictions.

"We're trying to face the reality here that we have a serious financial problem," O'Connor said.

This is a fact that is recognized by most people, O'Connor said, as demonstrated by fundraising efforts for EMS.

"The numbers are scary but they're real," O'Connor said.

Partner problems

St. Croix EMS partners with city of Hudson, village of Hudson, town of Hudson and town of Troy for the service. Currently the municipalities fund their share on a per capita basis.

At the last EMS commission meeting on Monday, Sept. 19, partner representatives Tim Foster of Town of Hudson, Stan Wekkin of village of North Hudson and Ray Knapp of Town of Troy said the municipalities want to move to a 50/50 funding model. This means that 50 percent of the partner's funding would be based on per capita while the other 50 percent would be based on run call.

Foster said the towns and village are hurting financially in a way the city is not.

"Since the city is on a levy limit self-imposed and the rest of us are on a levy-limit imposed, we should move quicker to that 50/50 arrangement," Foster said.

Knapp said it goes beyond financial strain to what is equitable.

"As a municipality Troy is willing to pay its fair share. And I think that's what we're talking about, what is fair?" he said.

Hudson Council Member Tom McCormick said they were not taking into account the revenue that the city brings to the service, especially with senior care facilities. Foster said even with that in mind, the current model is not equitable.

The proposed 50/50 model would mean an additional $120,000 cost for the city to make up the difference, Malinowski said.

If this model is not accepted by the Hudson Common Council, O'Connor said it is possible that the partners may leave the service.

These municipal contributions from the four partners are what keep the service from running at a deficit. For 2017, EMS's cash fund is at zero net effect, meaning no gain or loss, and Malinowski said that is after contributions. Without the towns and village, St. Croix EMS would lose about half of its partner contribution funding. Losing the partners would also mean the city would reduce its staff by 50 percent, and go down to one ambulance.

"This is not a pretty picture," O'Connor said.

McCormick said he would ask to have the topic added for discussion on a future council agenda.

Moving forward

O'Connor said he feels the next step should be a study from an outside consultant.

"Someone who is not involved in the emotion and is not looking at these numbers every day that can take a more objective view from a whole different perspective," he said.

O'Connor said it would be smart to coordinate with other municipalities on a study like this, as Hudson isn't the only one looking at the sustainability of its service.

McCormick called for a study previously, but it failed without a second.

If the city does not accept the 50/50 funding model, Foster and Wekkin said during the Sept. 18 EMS Commission meeting they would want to see the city and St. Croix EMS make a request for proposals for alternate services to take over EMS. Foster said this should include looking at more than one option.

McCormick said he wasn't sure if the city was ready to go through that process after the response to discussions with Hudson and Lakeview hospitals and Healthpartners.

"I don't want us to go down the road again where we do an RFP, somebody is interested and then we have an uprising from people in the community," he said.

Knapp agreed it would be too early for the city.

Ultimately, O'Connor said what happens moving forward is up to the council.

Rebecca Mariscal

Rebecca Mariscal joined the Hudson Star Observer as a reporter in 2016. She graduated from the University of St. Thomas with a degree in communication and journalism. 

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