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Hudson -- According to the fire chief, the EMS department is projected to be running in the red by the end of 2016.
The cost for EMS personnel is projected to be $100,000 higher than budgeted in 2016. The department's projected ending balance in 2016 is -$174,345, with -$419,517 projected in 2017.
Hudson Fire and EMS Chief Jerry Varnes said the revenue estimates for 2016 could be higher, based on recent information obtained from a new ambulance billing agency the city switched to early this year.
The 2016 budget is projected to collect $355,046 from ambulance billing, but Varnes said it could be $100,000 higher.
"If there is still a negative balance at year end, we would likely need to transfer money from the General Fund to keep the ending balance positive," said Communications Manager Jody Roberts on Oct. 17.
In addition, EMS is responsible for half of the $1 million in planned renovations to the safety center, which remains in the unfunded category with no date set for the work.
Varnes told Council Oct. 11 that $1 million in estimated renovations is needed because the parking lot is falling apart, carpet is 20 years old and a single bunk room needs to be divided to accommodate personnel. A larger vehicle bay also is needed, he said as a couple vehicles have to be left outside because the bay is full.
The updates to the safety center would be paid equally by EMS and Fire, he said.
"The EMS budget doesn't have the wherewithal," said Council President Hal DeSaussure. "Their run rate is in the negative balance."
The fire and EMS departments receive tax dollars from Issue 3 passed in 2004, which doubled the income tax collection from 1 percent to 2 percent. Hudson is budgeted to collect $15.3 million from income tax in 2017.
The fire department receives 15 percent of the 1 percent increase, or approximately $1.58 million in 2017. The fire department also places funds in the replacement reserve for vehicles and will have $707,088 in the fund in 2017.
EMS receives 9 percent of the 1 percent increase of tax dollars or $962,191 in 2017.
Although expenses for the fire department in 2017 are $1.7 million, the ending balance is $1.4 million and increases over the next five years.
"The ending run rate is in very good shape," Finance Director Jeff Knoblauch said. "$1.5 million stays fairly constant over the next five years."
Knoblauch said in the past, EMS and fire had their own levies and were always separate entities. When levies were replaced by income tax, each department was allocated its share.
But those allocations break down over time, Knoblauch said. Billing for EMS has changed over time. Less is being collected by insurance companies.
Billing for an ambulance transport has been "soft" for residents or those who work and pay taxes to the city, Varnes said.
"When the insurance company pays, we accept what they pay," Varnes said. "We don't go after the full amount if it's not paid."
The problem was when insurance companies paid the patient, and they did not send the check to Hudson.
"That's insurance fraud," Varnes said. "We have to chase them to get money."
Having a local company handling billing has helped, Varnes said. They have a relationship with local hospitals and insurance companies.
"The huge news for the first eight months of this year with the new billing company is instead of a 55-percent write off, we have a 28-percent write off," Varnes said. "So we are increasing our revenue."
The number of volunteer paramedics has decreased also, Knoblauch noted, and more have to be paid.
"It's a different environment today than when we passed Issue 3," Knoblauch said. "At the time it made sense financially, but the personnel numbers in EMS have gone up. The number of paid paramedics has risen dramatically over time. The revenue from the ambulance runs has gone down. So both are going in the wrong direction."
DeSaussure suggested instead of splitting cost for the shared facility equally, fire could pay 75 percent.
"There was no legislation telling us how to split the funds in a shared facility," DeSaussure said.
Council member Dan Williams said he would approve moving money for building improvements, but not for personnel.
"To take fire money and expand the facility and not charge exactly half is a different question than taking fire money and paying EMS personnel," Williams said.
Varnes said he would like to have a legal opinion about the options, since voters decided the percentage allocations for the two departments.
Council is scheduled to discuss the budget again Oct. 25.