Alternative EMS Tax Structure

1. Alternative EMS Tax Structure “No Out-of-Pocket” for District Residents Presented to the Coast Life Support District Board of Directors September 19, 2011

2. Is This Our Community? Why does our Community have a publicly-funded emergency response system that: • Cares for its members in their darkest hour, and then hands them a bill for $4000? • Can only survive if at least 400 of its members seriously injure themselves or fall ill every year?

3. Outline • Background • Alternative EMS Tax Structure • Tax Change Impact to Residents • Benefits of Alternative Structure • First Year Scenario • Recommendation

4. Background • Ambulance rates are beyond means of most residents • FY11 average transport bill $3749 • Most residents who have insurance either have deductibles >$5000 or 20% co-pay • CLSD Board has no flexibility in budgeting or taxes • Operating at “bare bones” quality ALS/BLS service • Tax rates are pegged at maximum authorized • Cannot lower without reducing services • Cannot raise to increase services if needed • Parcel tax categories are complicated and hard on business • Business do not benefit more from higher tax rate • Ambulance billings go to patient, not businesses

5. Alternative EMS Tax Structure • No “Out of Pocket” cost to District taxpayers and residents • Similar to REACH or CALSTAR memberships • District still bills insurance, Medicare, Medicaid • Will not bill patient for deductibles or co-payments • Simplify property tax categories from eight to three • Based on After-Hours Urgent Care tax model • Not Buildable – Zero Units • Vacant, Buildable – One Unit • Developed – Two Units • Set maximum per-Unit rate to fund EMS system even with low use • Fund like a fire department: • Not dependent on call volume to maintain quality operations • Board adjusts tax rates annually based on: • Budget needs • Previous year’s collections

6. Maximum Tax Change Impactat maximum rate of $120/unit

7. Example: First Year ScenarioEstimate Based on Current Year Performance • Tax rate set by budget and need: • Current 2011-2012 EMS budget: $1285K • Forecast Collections: $420K • Forecast Tax Need: $865K • 2012-13 Tax Rate Needed: ~$80/unit – or ~$160/developed parcel • Change in your taxes for next year • Increase over 2011 rate for single family dwelling: ~$64/yr • Decrease in taxes for local businesses to help local economy

8. Example First Year ScenarioEstimate Based on Current Conditions

9. Benefits of Alternative Structure • No “Out of Pocket” cost to District taxpayers and residents • At current charges, family break-even point is seventeen years, even at maximum tax rate • Board has ability to make financial and tax choices • Service improvements • Community programs • District is not dependent on accidents and illnesses to financially survive

10. Multi-Year Projection EstimateEstimated Tax Rate for “No Out-of-Pocket” EMS Service • Assumptions: • Budget growth at 4% annually • Revenue growth at 3% annually • No significant change in population or insurance mix • No significant change in services

11. Hard Questions • What happens if we don’t do this? • We go back to the voters anyway in 1-2 years, just on financial need alone. This is an opportunity for a game-changer. • What about Medicare? Isn’t that already “no out-of-pocket”? • “Treat and Release,” currently $352, is not covered by Medicare • If anybody needs to support a robust ambulance service, it’s the Medicare population. • Why are we asking for $120/unit if we only need $80 next year? • We don’t want to go back to the voters any more times than absolutely necessary—elections are very expensive. • CLSD Board are elected officials who care about tax rates. • Unlike county, state, or federal taxes, every penny of the EMS tax goes to service for our community.

12. Recommendation • Pass board resolution for No Out-of-Pocket EMS • Specify alternate structure and maximum rate • Target measure for Spring 2012 Special Election • Include with No-Cost AHUC change measure