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Set Up of N.Y. Ambulance Service Using Taxpayer Money Called "Not Proper"

ORCHARD PARK, N.Y. -- Orchard Park Fire District commissioners acted improperly when they provided taxpayer money and public equipment to establish a nonprofit ambulance service, an audit by the state comptroller released Friday determined.

"The fire district made available cash and other assets totaling more than $1.3 million to an organization it had no legal authority to create or subsidize," Comptroller Thomas P. DiNapoli said.

EMS Inc. was set up as a nonprofit ambulance company in 2009. The district's commissioners say the service was needed because of increasing medical emergency calls, fewer available volunteer firefighters during critical times of the day to man ambulances, and slower response times.

In fact, the average response time for ambulance calls since EMS Inc. started has dropped from 10 minutes to 3 minutes and 51 seconds, fire district officials pointed out.

"The sole reason for the existence of the program [EMS Inc.] is to save lives and to reduce taxes. A medic is now available for residents on every call, thereby improving the level of care," Robert Eiskant, fire board chairman, stated in a response included in DiNapoli's audit.

With quicker response times and a higher level of care, a number of residents who were in cardiac arrest have been resuscitated "exceeding the national average," according to the district's fire chief, Daniel J. Neaverth Jr.

DiNapoli, however, took a hard stand against the fire board.

"This situation serves as an example to other fire districts statewide as the way not to do public safety," DiNapoli said.

It was wrong, he said, for the district to loan EMS Inc. $200,000 in start-up costs, then purchase and maintain a building for EMS on the 3900 block of Taylor Road that the district had limited access to, and to provide the district's three ambulances on lease to EMS Inc.

Also, volunteer firefighters who drove EMS Inc.'s ambulances should not have received remuneration -- $20 per call -- from the district, or an alternative option in the form of a credit toward their state firefighter pension, since EMS was separate from the district's volunteer firefighting mission and raised the question of whether they could be considered paid firefighters.

Eiskant and other district officials, in responding to these audit points, stated that the district charged 4 percent interest on the start-up loan, which has been repaid.

As for the leases on the ambulances and use of the district's building, the amounts charged, they said, are above fair market value.

"The commissioners wanted to start high to make sure all of the costs were covered and then eventually have the opportunity to adjust downward," said Neaverth, who also serves as Erie County's commissioner of emergency services.

The audit claims that the district has not received full reimbursements on the leases and that the district overpaid for the building, given that it only has access to a few rooms in it for firefighter training.

EMS Inc. covers its costs by charging private health insurers and public health care plans, Medicaid and Medicare, for transport and treatments fees.

It is with that revenue that EMS is able to pay the district leases. The district, in turn, takes that money and reinvests it into EMS Inc., which, Neaverth said, results in a reduction in the taxes residents pay to the fire district.

EMS Inc. now directly pays the $20 fee to volunteer firefighter ambulance drivers, rather than reimbursing the district, and the option of instead getting a credit toward the fire pension is no longer offered.

The fire district claimed it was permitted to form EMS Inc. under state law and, in fact, had an obligation to take steps to provide timely ambulance service or face potential lawsuits from town residents.

DiNapoli, however, said the district misinterpreted those laws.

State law, the comptroller said, gives fire districts limited authority to receive supplemental back-up ambulance services when the district's first aid squad is not readily available.

"EMS Inc. is clearly not providing a 'back-up' service because, among other things, the fire district transferred its 'ambulance operating authority' to EMS Inc. and no longer has authority to operate an ambulance ," he said.

Neaverth said that the district's lawyer, Michael F. Chelus, thoroughly researched whether a nonprofit ambulance service could be established to serve town residents and issued an opinion that the district was within its legal rights.

In addition, Neaverth added, prior to establishing EMS Inc., the district sought creative solutions to improving ambulance response times in Orchard Park.

"This included for-profit agencies and they never officially prepared a proposal for the Orchard Park Fire District," he said.

And while the district disagreed with some of DiNapoli's findings in the advisory audit, it has ostensibly adopted the recommendations.

"We are encouraged by some of the steps they [the district's commissioners] have taken so far," said Kate Gurnett, a spokeswoman in the comptroller's office. "We will review their formal corrective action plan when it is submitted in 90 days."

EMS Inc., Neaverth said, "should stand as a model for other communities and fire departments if you believe patient care comes first."

He explained that "dramatic measures" were needed in recent years as Orchard Park's pool of volunteer firefighters dwindled during critical periods of the day when ambulance calls are higher.

"Western New York is no longer a three-shift community, which was the backbone of the volunteer service," he explained. "If someone was working the second or third shift, they would be available during the day for fire or emergency medical service."


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