City of Lynden Ambulance Utility Cost of Service and Rate Study

1. City of LyndenAmbulance Utility Cost of Service and Rate Study Presented by Fire Chief Gary Baar

2. Agenda • RCW 35.21.766 Ambulance Utility Requirements and Approach • Project Tasks • 2014 Fire Department Budget and Responses • Cost of Service Analysis and Results • Alternative Rate Scenarios • Questions

3. Key Elements In RCW 35.21.766 • Provides for ambulance service to be operated as a public utility • Authorizes the City Council to set and collect rates and charges for regulating, operating, and maintaining an ambulance utility • Requires that rates and charges be based on a cost of service study • Does not allow capital costs for construction, major renovation, or major repair of facilities • Categorizes costs by availability of ambulance service and the demand placed on the service • Exempts Medicaid eligible persons in a nursing home, boarding home, or adult family home and persons who receive in home services

4. Ambulance Utility Approach • Availability costs include the basic infrastructure needed to respond to a single call for service and may include dispatch, labor, training, equipment, patient care supplies, and equipment maintenance costs • Demand costs are based on the burden placed on the ambulance service by individual calls, such as those costs associated with the frequency of calls, distance from hospitals, etc. • Availability costs are uniformly applied across customer classes, while demand costs are based on the calls for service by each customer class

5. Consultant Project Tasks • Conduct Kick-off Meeting • Review and Analyze Fire Dept. Ambulance Costs and Workload Data • Develop Cost of Service Framework and Establish Cost of Service • Identify Customer Classes and Cost Allocation Methods • Calculate Availability and Demand Rates for Each Customer Class • Prepare Reports • Make Presentation

6. Lynden Fire Department 2014 Budget 2014 Budget Plus Additional Billing Costs

7. 2012 Number of Incident Responses

8. Key Cost Assumptions: Labor • An average of 2.9 full-time line staff and 1.1 volunteers are on duty 24/7 • 76% of the time spent by full-time line staff and 70% of the time spent by volunteers is for EMS/ Ambulance activities • Administrative staff time (i.e. Fire Chief, Assistant Fire Chief, and Support Services Manager) was split between EMS and Fire based on full-time line staff and volunteer hours, except for 10% of the Fire Chief’s time which is spent on fire plan review and inspections

9. Key Cost Assumptions: M&O • EMS and Fire supplies, including EMS medical supplies, were split 60/40 between EMS and Fire • What-Comm 911 and Whatcom County Fire Agencies Radio System (FARS) dispatch services were distributed between EMS and Fire based on total calls for service • Dispatch services provided by the Prospect Fire Dispatch Center are associated with BLS transports to Bellingham and were assigned entirely to EMS • Fleet & equipment maintenance costs were split 44/56 and fuel costs 33/67 between EMS and Fire • Facilities (i.e. fire station) costs were split 40/60 between EMS and Fire • Also included $15,250 of new costs identified by the Finance Department for utility billing services

10. Key Cost Assumptions: Availability vs. Demand • For full-time line staff costs, 85% was assigned to availability and 15% to demand. For volunteers, 78% was assigned to availability and 22% to demand • The costs of administrative staff were assigned entirely to availability • Ambulance billing services, EMS supplies, fuel, and Prospect Fire Dispatch Center were assigned to demand • Professional services such as insurance costs and biohazard waste disposal were distributed between availability and demand using the availability to demand ratio for full-time line staff • All other costs were assigned to availability

11. Cost of Service Results

12. Cost of Service Adjustments * * *According to RCW 35.21.766, revenues from the direct billing of individual users of the ambulance service must be netted against the costs of demand. **The $241,743 in budgeted 2014 SAFER Grant revenue has been allocated between fire and EMS based on the results of the cost of service study. Based on the distribution of full-time staff hours, 76% ($182,801) was attributed to EMS, and 24% ($58,942) to fire.

13. Customer Billing Units *Includes 72 independent living units at Meadow Greens. **Includes 85 rooms at Christian Health Care Center, 107 rooms at Lynden Manor, and 32 rooms at Meadow Greens.

14. Customer Class Costs

15. Full Cost Recovery Rates - $812,189

16. Alternative Rate Scenarios • Full Cost Recovery • 50% Cost Recovery • SAFER Grant Cost Recovery • 10 Month 2014 Cost Recovery

17. Alternative Rates

18. Questions