The current provider says it needs millions more, but its contract doesn't allow increases.
By MICHAEL SANDLER
Published February 27, 2004
CLEARWATER - Faced with an urgent request for millions more dollars, Pinellas County may be ending a longtime relationship with the company that provides its ambulance service.
American Medical Response has managed the county's Sunstar service since December 1987, when Pinellas first went to a countywide system and, this fiscal year, stands to be paid nearly $19-million.
But officials for the Colorado ambulance provider say they need as much as $5.9-million more to meet the rising cost of wages and insurance. Last fall, they asked county officials to amend the final year of a five-year contract that ends Sept. 30 and pay them almost $25-million.
The terms of the contract do not allow for a price increase, county officials said. So, this week, county administrators sent commissioners an urgent memo saying they must open up the contract to bids from other ambulance providers.
Assistant County Administrator Gay Lancaster said the county had no choice.
"They (Sunstar AMR) are saying they are unable to provide the service under those terms," said Lancaster, who oversees the EMS authority. "We are not going to just increase it without giving other bidders the opportunity."
Chuck Kearns, the county's EMS director, said 55 interested parties across the nation are being invited to compete for the contract, and he hopes to have another provider lined up by April.
Even though the request for the proposal is being sent out today, he's already heard from a few providers.
"The rumor is out in the industry," Kearns said. "We've had five companies come for visits on sites, just to look the place over."
That would end a unique relationship that Bob Silar, Sunstar AMR's vice president of operations for West Florida, called the largest contract of its kind in the nation.
Sunstar AMR operates 54 ambulances in Pinellas County and employs 388 emergency medical technicians and paramedics. Pinellas bills the patients and sets standards.
The five-year contract has an option for two three-year extensions, as long as the company meets performance standards and agrees to terms and prices established in the contract.
But Silar said the company has incurred greater costs since 1999.
For example, a paramedic earned an average annual salary of $29,000 in 1999. Now, that paramedic earns $41,000 - a 41 percent increase.
The company has also had to deal with rising liability insurance, as well as health insurance increases for employees.
"We felt that we needed more of an increase than what the contract called for," Silar said. "So, we have been talking to them about possibly finding ways to put some more revenue in the contract for us."
The county is looking to help by authorizing an additional $1.2-million to help AMR meet some of the increases. But Kearns said that money must first be approved by the board of county commissioners. He expects to present the request to them in March.
If Sunstar AMR pulled out, Kearns said the county is prepared to take over and run the ambulance service. But he said that's unlikely, considering the safeguards written into the contract.
Sunstar AMR would forfeit $2.5-million in cash secured by a letter of credit with a bank, another $1.5-million in liquidated damages, and Pinellas would have the right to seize all assets - from ambulances to software.
"A contractor thinking about defaulting, that's going to be a $4-million decision," Kearns said.
Silar said AMR has no immediate plans to pull out. He said county officials are acting responsibly.
"Putting it out for bid is really the best thing the county can do," Silar said. "That way, if we continue to win it, we go forward with a new contract. If we don't, someone else will be here and run it under the new terms."