City of Marshfield Discusses $615,000 Negative Balance in EMS Fund

MARSHFIELD, WI (OnFocus) – In a joint meeting Tuesday, the City of Marshfield’s Common Council and the Police & Fire Commission met to discuss the EMS Enterprise Fund, which is facing a surprise $615,000 negative balance (Full Background Story Here).

“It’s a complex topic,” City Administrator Steve Barg stated. “We’re not in panic mode. We just want to address it and which options are available to us.”

Fire Chief Pete Fletty presented on the background of the Enterprise Fund.

The Enterprise Fund has been used to pay for a varying number of employee salaries and benefits, ambulances/vehicles, EMS equipment, supplies, building costs, a portion of building repairs, maintenance, etc, and is supported mainly by user fees, contracts with outside agencies and townships/villages, and annual State-funded grants. (It is not tax-based).

City of Marshfield Finance Director Jennifer Selenske (who joined the City earlier this year) shared how she first noticed the issue and then presented the financial situation.

“We’re going to work to improve those communications,” she said, presenting then on how the issue came to be. (Full Background Story Here)

Bottom line: The City and Fire Department were basing their budget on billing, while not paying full attention to the status of accounts receivable. LifeQuest is a third party company the City uses to help collect on medical bills. It is unclear what the communication was from LifeQuest on their failures to collect. The majority of outstanding bills will likely be un-collectable, due to their age. The budgeting was not making allowance for this, however.

“In the past, the EMS staff is basing on what they think revenues are. If we aren’t making that allowance, they are thinking they have more to spend than they actually did,” explained Selenske.

“The problem we’ve got is no one knows how to read the damn statement,” said Council member Ed Wagner. “This stuff should have been known, and I’d expect our management staff to wave the red flags a lot earlier…  The question we have to ask is: how are we going to be able to operate an ambulance system that we can afford?”

Chief Fletty explained immediate cost-savings the department implemented, including holding off the hiring process, moving personnel into a different budget line item, and putting on hold a new ambulance purchase.

They also identified the main issues that caused the shortfall and provided solutions.

Marshfield’s Enterprise Fund is operated differently from the few other Wisconsin departments that have a similar fund. Tomah, for example, charges the City of Tomah, as well as surrounding townships, a per capita fee for ambulance service to assist their EMS Enterprise Fund. The City of Marshfield’s EMS Enterprise Fund model charges surrounding townships a user fee for EMS services (contract), but does not charge the City an EMS user fee.

Beloit’s Enterprise Fund is not charged for housing the ambulance service (utilities, station maintenance and associated building cost, etc.) or professional service fees. The City of Marshfield’s EMS Enterprise Fund is charged for housing the ambulance service and is charged a professional service fee.The City of Marshfield’s EMS Enterprise Fund also pays a portion of utilities, station maintenance, station supplies, station equipment.

“Based on this information, the Marshfield Enterprise Fund is at a disadvantage as compared to other EMS Enterprise Fund models,” Fletty outlined in his presentation. “Thinking about this strictly from a business sense (the EMS Enterprise Fund being the business), it would be difficult to make a business work if you are not charging your largest user a fee for service, but in turn, are incurring cost and fees by the largest user of your services. The EMS Enterprise Fund charges all other townships a fee by way of a contract for service, which begs the question; why isn’t the EMS Enterprise Fund charging the City of Marshfield for the same service?”

Fletty’s recommendation is to adapt the Marshfield EMS Enterprise Fund model to mirror the Tomah or Beloit model, or to develop a combination thereof, so Marshfield’s EMS Enterprise Fund can continue to keep up with increasing costs of running an EMS service and combat the flat rate of Medicare/Medicaid reimbursement rates.

“I believe this option would also allow us to keep our current staffing levels (12 personnel per shift) to continue to provide the citizens of the City of Marshfield and surrounding communities with the excellent services they have come to expect from us,” he stated.

This is a developing story.

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