Mercy will continue to provide Pauls Valley’s ambulance service, after the Pauls Valley City Council voted to accept a new proposal for service from Mercy during the council’s regular meeting Aug. 8.
Negotiations between the city of Pauls Valley and Mercy, which has provided ambulance service to the city for the last five years, have been ongoing since December, when Mercy notified city officials its contract for ambulance service would need to be renegotiated due to rising costs.
The city solicited bids for ambulance service, and in February, council members approved a new three-year bid from Mercy that nearly doubled what the city had previously paid for ambulance service from the provider.
In June, Mercy notified the city it intended to terminate the ambulance service again after the two entities were unable to agree on the contract that would have solidified the February bid.
In response, Pauls Valley requested new proposals for ambulance service last month from area providers. The city received two proposals, one from Mercy and one from Pafford EMS. Those proposals were considered at the Aug. 8 meeting.
Mercy submitted a threeyear proposal at a cost of $725,000 the first year, with a 3% increase in years two and three, which was nearly identical to the bid the city approved in February.
The proposal from Pafford EMS was for five years at $672,000 the first year, with a 4% increase annually.
“The one concern we have, after reading the contracts, is Pafford cannot guarantee to have two paramedics per shift, every day,” Pauls Valley City Manager Lee Litterell told council members. “Mercy does that now and continues to do that. Based on that information, I feel like it’s better that we continue to contract with Mercy to make sure Pauls Valley and our (ambulance) district is covered with paramedics.”
Council members voted unanimously to accept the proposal from Mercy.
“Mercy has had the privilege of serving the Pauls Valley community as Emergency Medical Services (EMS) provider since 2018. The EMS program has operated at a six-figure financial loss annually since the contract began five years ago,” Mercy officials said this week in a written statement to the News Star.
“As a not-for-profit health system, Mercy’s primary goal is to serve the community, but we can’t continue to operate at a loss while the cost of providing EMS services has increased.
“We have been negotiating with the city since December. Mercy and city leaders have worked together to find a solution to continue providing high quality care at a rate that would cover our expenses. We are pleased city council members approved a new agreement and we look forward to receiving a signed contract.”
During the Aug. 8 meeting, council members also approved adding a subsidy to Pauls Valley water meters to help pay for ambulance service. The subsidy will consist of a $6 flat fee charged to residential water meters each month and a $12 fee assessed on commercial meters.
Pauls Valley has been using ad valorem taxes collected as part of its 522 EMS district and county sales tax money designated for public ambulance service to pay for its EMS contract. As the cost of ambulance service has increased this year, outpacing both of those funding sources, the city has been left scrambling to try to figure out how to continue paying for ambulance service.
Pauls Valley Fire Chief Mark Norman told council members the water meter subsidy will help provide some of the additional funding needed, and that all three funding sources are necessary to even get close to meeting the ambulance service obligation.
“It’s like a three-legged chair: the ad valorem, the county tax and the water meter subsidy. If any of those three goes away, it’s going to fall over. I don’t see any way at all we could pay for it without all three,” Norman said.
According to estimates presented to council members, the three sources together provide nearly $50,000 per month, which is still roughly $10,000 less than what is needed to pay the new contract with Mercy.
In an interview with the News Star this week, City Manager Lee Litterell said the city will have to find a way to cover the difference.
He said he anticipates water customers will begin seeing the new subsidy fee on their bills in the next month or so.