City of Lynden
Ambulance Utility Cost of Service and Rate Study
Presented by
Fire Chief Gary Baar
Agenda
 RCW 35.21.766 Ambulance Utility
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Requirements and Approach
Project Tasks
2014 Fire Department Budget and Responses
Cost of Service Analysis and Results
Alternative Rate Scenarios
Questions
Page 2
Key Elements In RCW 35.21.766
 Provides for ambulance service to be operated as a
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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
Page 3
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
Page 4
Consultant Project Tasks
 Conduct Kick-off Meeting
 Review and Analyze Fire Dept. Ambulance Costs
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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
Page 5
Lynden Fire Department 2014 Budget
2014 Budget Plus Additional Billing Costs
Budget Category
Personnel
Supplies & Services
Intergovernmental Services
Capital
Subtotal: 2014 Budget
Ambulance Utility Billing
Grand Total
General
Fund
$1,333,069
144,500
318,854
90,000
$1,886,423
15,250
$1,901,673
Page 6
2012 Number of Incident Responses
Type of Response
EMS
Fire and Other calls
Total Calls
Emergency
Responses
1,098
159
1,257
% of
Total
87%
13%
100%
Page 7
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
Page 8
Key Cost Assumptions: M&O
 EMS and Fire supplies, including EMS medical supplies, were
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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
Page 9
Key Cost Assumptions: Availability vs.
Demand
 For full-time line staff costs, 85% was assigned to availability and
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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
Page 10
Cost of Service Results
Page 11
Cost of Service Adjustments
Ambulance Utility Costs
Adjustments (Less Revenues)
Ambulance & Emergency Aid Fees*
Reimbursement for Fair/Rodeo
DOH Trauma Care Grant
SAFER Grant**
Intrgov't - EMS 1/10th of 1% sales tax
pass-through
Net Ambulance Utility Costs
Availability
Demand
Total
$
1,104,821 $
184,169 $ 1,288,989
$
$
Total
(190,000)
(7,000)
(2,000)
(182,801)
$
$
(2,000)
(182,801)
(190,000) $
(7,000) $
$
$
$
(95,000)
$
(95,000)
$
825,020 $
(12,831) $
812,189
*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.
Page 12
Customer Billing Units
Customer Class
Residential
Multi-Family *
Commercial
Nursing Home/Assisted Living **
Public
Total
Regular
4,133
921
393
166
30
5,643
Medicaid
58
58
Total
4,133
921
393
224
30
5,701
% Regular % Medicaid % Total
72.5%
0.0%
72%
16.2%
0.0%
16%
6.9%
0.0%
7%
2.9%
1.0%
4%
0.5%
0.0%
1%
99.0%
1.0%
100%
*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.
Page 13
Customer Class Costs
Customer Class
Residential
Multi-Family
Commercial
Nursing Home/Assisted Living
Public
Total
Availability
$
594,857
$
132,558
$
56,564
$
23,892
$
4,318
$
812,189
Demand
$
$
$
$
$
$
-
$
$
$
$
$
$
Total
594,857
132,558
56,564
23,892
4,318
812,189
Page 14
Full Cost Recovery Rates - $812,189
Customer Class
Residential
Multi-Family
Commercial
Nursing Home/Assisted Living
Public
Availability
$
143.93
$
143.93
$
143.93
$
143.93
$
143.93
2014 Annual 2014 Monthly
Rate/Acct
Rate/Acct
Demand
$
$
$
$
$
-
$
$
$
$
$
143.93
143.93
143.93
143.93
143.93
$
$
$
$
$
11.99
11.99
11.99
11.99
11.99
Page 15
Alternative Rate Scenarios
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Full Cost Recovery
50% Cost Recovery
SAFER Grant Cost Recovery
10 Month 2014 Cost Recovery
Page 16
Alternative Rates
Page 17
Questions
Page 18