Agenda Report
Fullerton City Council
MEETING DATE: November 21, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: adam loeser, fire chief
PREPARED BY: ANDREW YANG, ADMINISTRATIVE ANALYST I
SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH falck mobile health corp. for emergency basic life support ambulance services
SUMMARY
Provide direction regarding ambulance service levels and authorize City Manager, or designee, to finalize and execute a three-year Professional Services Agreement (PSA) with Falck Mobile Health Corp. (dba “Falck”) with two additional one-year optional renewals for Emergency Basic Life Support Ambulance Services.
RECOMMENDATION
Authorize City Manager, or designee, to execute and administer a Professional Services Agreement with Falck Mobile Health Corp., related documents and options to renew, including expansion of Emergency Basic Life Support Ambulance Services on July 1, 2024, in a form approved by the City Attorney.
Approve $191,340 budget appropriation from available General Fund (Fund 10) fund balance to Fire Department Fire EMS Program (Subprogram 246).
CITY MANAGER REMARKS
The City Manager concurs in part with the recommendation to have 3 ambulances and to have the Council consider adding a 4th 12 hour ambulance as part of the 2024 – 2025 Budget.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Public Safety.
FISCAL IMPACT
The number of ambulance units generates the difference in fiscal impact between the current and enhanced level of ambulance services. The current level provides three ambulance units, 24 hours per day annually. The enhanced level offers three ambulance units, 24 hours per day annually and a fourth ambulance unit for 12 hours per day annually. Falck proposes the following hourly rates per calendar year: $85 per hour in 2024, $90 per hour in 2025 and $95 per hour in 2026. The initial three-year term of the agreement with Falck ends on December 31, 2026. The City would negotiate hourly rates for extension years prior to executing any extension year agreements.
The following tables outline the difference in fiscal impact between the enhanced (3.5 units) and current (3 units) ambulance service levels.
Enhanced Level of Emergency Basic Life Support Ambulance Services Fiscal Year
July - December
January - June
Units
Estimated Cost
2023-24
$110.86 / Unit Hour
$85.00 / Unit Hour
3 $2,582,516
2024-25
$85.00 / Unit Hour
$90.00 / Unit Hour
3.5 $2,682,120
2025-26
$90.00 / Unit Hour
$95.00 / Unit Hour
3.5 $2,812,740
Current Level of Emergency Basic Life Support Ambulance Services Fiscal Year
July - December
January - June
Units
Estimated Cost
2023-24
$110.86 / Unit Hour
$85.00 / Unit Hour
3 $2,582,516
2024-25
$85.00 / Unit Hour
$90.00 / Unit Hour
3 $2,298,960
2025-26
$90.00 / Unit Hour
$95.00 / Unit Hour
3 $2,417,400
Gross ambulance revenues exceed City costs for the third-party ambulance service provider, third-party billing provider and staff time to administer the ambulance program. Net revenues generated from the ambulance services offset City costs to provide fire emergency and paramedic public safety services. Staff does not know at this time whether addition of a fourth ambulance unit would generate additional revenues to cover the cost of the additional unit.
The prorated net fiscal impact of Amendments 5 and 6 and to continue ambulance services through the remainder of FY 2023-24 would exceed the $2.4 million for ambulance services in the FY 2023-24 Adopted Budget by $191,340. This amount includes both the $263,261 budget increase from prior ambulance amendments approved in June and October 2023 and a $71,921 decrease due to a lower hourly rate with the current level of ambulance services for the remainder of the fiscal year. The lower hourly rate is based on the City entering into an agreement with Falck and on the current level of ambulance services for the remainder of the fiscal year. Staff requests approval of a $191,340 budget appropriation from available General Fund (Fund 10) fund balance to the Fire Department Fire EMS Program (Subprogram 246) to amend the FY 2023-24 Budget.
DISCUSSION
Background – Emergency Basic Life Support Ambulance Services The City has continually held the right to contract for ambulance services in accordance with California Government Code Section 38794. Additionally, it undertakes the billing and collection for these services as stipulated under Health and Safety Code Section 1797.201. City Council has always served as the approving authority for City ambulance service provider selection consistent with these statutory rights and responsibilities.
The City entered into a five-year agreement with Care Ambulance Service, Inc., now Falck Mobile Health Corp., on June 6, 2018. This agreement, including extensions, concluded on June 30, 2023. City Council approved Amendment #5 as a temporary extension, contracted at prevailing market rates, with the understanding that staff would initiate a Request for Proposal (RFP) process to competitively bid for a new Emergency Basic Life Support (BLS) Ambulance Services Agreement.
Staff posted RFP #2324-01 for Emergency BLS Ambulance Services on July 31, 2023 with an August 25, 2023 electronic submission deadline. Staff posted a Notice of Intent to Award the bid to Falck Mobile Health Corp. following a thorough evaluation process. The Falck bid package met or exceeded all standards outlined in the RFP, including professional qualifications, competitive pricing and ability to meet overall City needs. City Council approved a second temporary extension, Amendment #6, to allow for further evaluation of service levels on October 18, 2023.
Staff recommends a delayed expansion of Emergency Basic Life Support Ambulance Services within the framework of the new proposed Agreement to balance public safety needs with City financial readiness. The recommendation proposes implementing a fourth 12-hour ambulance unit starting July 1, 2024. This option provides a later start date for the expanded service with a correspondingly lower cost but prolongs the current dependence on mutual-aid ambulances from neighboring cities to meet demand for emergency transport.
Ambulance Program Revenues
The Ambulance Billing Program generates sufficient revenues to cover the cost of the ambulance services agreement and administering the program which includes an agreement with a third-party billing provider as well as staff time to administer the program. Net revenues offset the cost of fire emergency and paramedic services. Fees collected for Emergency Medical Services (EMS) provided by the Fire Department generate ambulance revenues. The County of Orange establishes ambulance fees.
The program generated gross revenues of $4.3 million in FY 2021-2022 and $5.3 million in FY 2022-2023. Staff anticipates an incremental year-over-year increase to gross revenues in FY 2023-2024.
Notable Changes in the Proposed Agreement
Falck has provided ambulance services to the City of Fullerton in various capacities since 2003. RFP #2324-01 introduced new requirements for the Bid Awardee with new service levels and changes compared to the prior agreement with the City. Notable changes compared to the 2018 Agreement include:
Pricing: The agreement includes highly competitive proposed Average Unit Hour Costs, beginning with an $85.00 hourly rate, representing the lowest rate the City has contracted since Fiscal Year 2018-19. The contract price includes Second-Tier Mutual Aid Service (“surge” ambulance capacity) and quotes hourly rates for Years 2 and 3 of the Agreement at $90.00 and $95.00, respectively.
The average hourly rate under the temporary extensions Amendments #5 and #6 equaled $103.50 per hour, plus a charge for Second-Tier Mutual Aid Service. This company billed surge capacity at $63.75 per quarter-hour increment for the first hour for each ambulance and $60.00 per quarter-hour increment for all subsequent hours.
Additional 12-hour Ambulance Unit: Provision of a fourth unit at Fullerton Fire Station No. 1. This addition improves response times during periods of exceptionally high demand. Fullerton residents require availability of another ambulance for the busiest 12-hour periods of the day. 64% of dispatch volume occurs between 8:00 a.m. and 8:00 p.m. Over 200 incidents required dispatch of a non-Fullerton ambulance over the past 12-month period. Fullerton’s three ambulances rank in the top 11 for dispatch volume (Fullerton Ambulance 1, 3 and 6 rank 5th, 9th, and 11th, respectively) out of the busiest 50 ambulances that belong to the seven cities in the Metro Cities JPA (Anaheim, Brea, Fountain Valley, Fullerton, Huntington Beach, Newport Beach and Orange).
Branding and Appearance: The ambulance unit exterior will be red, prominently branded with the Fullerton Fire Department emblem and feature the fire station designation such as “Fullerton Ambulance 1.” Technological Enhancements: Ambulance units will have Mobile Data Computers (MDCs) that interface with the Computer Aided Dispatch (CAD) systems used by the Fire Department dispatch provider, Metro Net, for location tracking and dispatch optimizations.
The City would negotiate any subsequent rate changes proposed by Falck after the initial one-year term and would adhere to an annual cap based on the Consumer Price Index (CPI) for the previous 12-month period. Staff anticipates Falck rates to remain market-competitive throughout the length of the agreement and would incorporate any subsequent increases through the annual budget process.
Staff anticipates these proposed modifications to enhance service levels and public safety response times. Both parties retain the right to terminate this Agreement, with or without cause, with a 90-day written notice to the other party.
Staff would also like to introduce consideration of different options within the framework of the Agreement.
Option for Expansion of Emergency Basic Life Support Ambulance Services Starting January 1, 2024 City Council may prioritize public safety needs and accelerate introduction of the fourth 12-hour ambulance unit. Incorporating the fourth ambulance at the start of the new calendar year results in higher initial costs but has potential to substantially lower response times during a critical juncture of the year for public health. The prorated fiscal impact of this option would exceed the $2.4 million FY 2023-24 Adopted Budget allocation by $376,980. This amount reflects the previously mentioned $263,261 budget increase from prior ambulance amendments approved in June and October 2023 and a $113,719 increase due to expanded services proposed in the PSA. Staff requests City Council approve a $376,980 budget appropriation from available General Fund (Fund 10) fund balance to the Fire Department Fire EMS Program (Subprogram 246) to amend the FY 2023-24 Budget should City Council elect to incorporate the fourth 12-hour ambulance at the start of calendar year 2024.
Option for the Non-Expansion of Emergency Basic Life Support Ambulance Services Alternatively, City Council may prioritize fiscal stability and forego a fourth 12-hour ambulance unit throughout the duration of the proposed Agreement. The prorated fiscal impact of the proposed PSA would exceed the $2.4 million FY 2023-24 Adopted Budget for ambulance services by $191,340. This amount includes both the $263,261 budget increase from prior ambulance amendments approved in June and October 2023 and a $71,921 decrease due to a lower hourly rate in the proposed PSA. Staff requests City Council approve a $191,340 budget appropriation from available General Fund (Fund 10) fund balance to the Fire Department Fire EMS Program (Subprogram 246) to amend the FY 2023-24 Budget should City Council elect to forego expansion of Emergency Medical Services.
Future Considerations
The Fire Department will closely evaluate the viability of an internal ambulance program operated by the City within the duration of the Agreement. This would involve purchasing six ambulance vehicles, creating a new job classification for Ambulance Operator (EMT-1) and creating a program which would take 18 to 24 months to develop. Implementing an “in-house” ambulance program would have a significant net positive impact on the City budget over the long-term. The program would introduce further measures for cost control, price stability, enhanced operational efficiency and increased staffing flexibility. Moreover, it would serve as a valuable recruitment source and training platform for Ambulance Operators to gain necessary skills and experience to become Fullerton Firefighters.
Staff has attached RFP # 2324-01 (Attachment 2) and Falck’s Proposal to the RFP # 2324-01 (Attachment 3) for reference. The proposed Agreement would become effective January 1, 2024 when the current agreement expires.
Attachments:
Attachment 1 – PowerPoint Presentation
Attachment 2 – Falck Mobile Health Corp. Professional Services Agreement Attachment 3 – RFP #2324-01, Emergency Basic Life Support Ambulance Services Attachment 4 – Proposal to RFP #2324-01 by Falck Mobile Health Corp. cc: City Manager Eric J Levitt
Falck Mobile Health Corp. Agreement
November 21, 2023 - Page 2