A local judge is allowing Mobile County to maintain a no-bid contract with a nonprofit ambulance service despite an ongoing legal challenge from one of its biggest competitors.
As Lagniappe has reported, Newman’s Medical Services, an 80-year-old private ambulance company, filed suit against the Mobile County Emergency Medical Services System Rescue Squad (MCEMS) last fall over its longstanding contract with the Mobile County Commission.
Despite what its name suggests, MCEMS is not an agency of Mobile County, though it has been contracted by the commission to provide emergency medical services in areas outside those covered by the Mobile Fire-Rescue Department since the early 1990s.
Thomas Benton, an attorney for Newman’s, claims the arrangement with the county — worth about $1.6 million a year — violates state law because the contract is not bid competitively. He has also accused MCEMS of using the rent-free space it occupies at the Mobile County 911 center to dispatch calls to its own ambulances and away from other private services.
The situation has led to a lawsuit that has entangled numerous public and quasi-public entities including Mobile County, the Mobile County 911 Board and the city of Mobile. One of the first substantive hearings in the case occurred last week after months of failed mediation.
“Since 1991, MCEMS has grown from a mom-and-pop organization to a $6 million-a-year company that does most of the ambulance business in Mobile County,” Benton said. “They receive a lot of money from Mobile County and benefit from space at the 911 center, yet they’ve never gone through a competitive bidding process. This was all just given [to them].”
Benton made those remarks before Circuit Judge James T. Patterson in support of a preliminary injunction Newman’s filed earlier this year asking the court to stop an $812,500 payment the county was scheduled to make to MCEMS by the end of March. The payment was the second half of the county’s most recent contract with MCEMS, which was awarded last September.
Attorney Matt Jackson argued that abruptly pulling funding from an ambulance service with a population the size of MCEMS’ could have catastrophic results — adding that “people might die.” Benton downplayed those claims and said private services like Newman’s were prepared to step in if MCEMS’ exclusive arrangement with the county were to change in the future.
While Patterson didn’t reach any kind of conclusion on the merits of Newman’s case, he was quick to let the plaintiffs and defendants know he wasn’t going to do anything to hamstring MCEMS’ operations because the services it provides to the public are too important.
“I may end up fashioning some remedy where Newman’s can play into the mix, but if you think I’m going to shut the thing down, I’m not. You’d be an idiot to shut it down,” he said. “The money is going to get paid, but the lawsuit is going to go forward.”
One of the biggest issues at the center of Newman’s lawsuit is whether MCEMS should be considered a nonprofit public entity. That’s important because the Alabama Attorney General’s office has consistently held that “public entities are exempt from competitive bid laws.”
While the state legislature passed a law in 2001 deeming “organized search, air and rescue squads” to be public entities, Benton has accused MCEMS of changing its name to meet that definition in 2005. Last week, he also argued — and Patterson seemed to agree — that a rescue squad in that context would be closer akin to something like a voluntary flotilla than a multi-million dollar emergency medical provider that charges for its services.
As far as the Mobile County Commission is concerned, the contracts it maintains with MCEMS are legal. Attorney Patrick Dungan said that’s because regardless of what becomes of Newman’s lawsuit, MCEMS is a recognized nonprofit and a quasi-public entity “on paper” today.
“We believe we have a reasonable interpretation of the law as it exists and of the nature of MCEMS as an organization,” Dungan said. “That allows us to have this contract without a bid.”
As mentioned above, Patterson denied Newman’s motion for a preliminary injunction, which will allow the county’s payment to MCEMS to go through on schedule. According to Mobile County attorney Jay Ross, that transaction should officially be made before the end of the week.
That said, Benton told the court he plans to file an amended complaint to move the lawsuit forward and would also submit motions to stop future payments to MCEMS. The next payment would come before the commission for consideration in October.
The lawsuit, however, is going to continue to move forward. Legal representatives for the county, MCEMS and Newman’s said they’d continue working toward an out-of-court resolution, but if that fails, the issue could come back before Patterson for a full civil trial.
From the bench, Patterson said there seems to be an “issue of law” at the center of Newman’s claim. He also urged the parties toward litigation in order to determine whether MCEMS is a public entity and excluded from state bid law. While he acknowledged the cost of litigating the case could be “tremendous,’ Patterson said without a firm resolution the issue would resurface.
“I do think there’s an issue as to whether all of this is an arm of government and somebody needs to decide whose powers are what instead of just kicking the can down the road,” Patterson said. “‘Is you is or is you ain’t’ is what you need to know. If you is, then [Newman’s] will never be able to do anything to you again … unless the law changes. If you ain’t, we may have a problem.”
Update: After this publication’s print deadline, the board of directors and executive director of MCEMS released the following statement about the lawsuit filed by Newman’s Ambulance service:
“As an initial matter, it’s worth mentioning that Alabama law allows a county to establish its own county-run dispatch and ambulance service or, alternatively, contract with and pay a separate entity to provide those services within the county.
For many years now, Mobile County has chosen to do the latter and has contracted with Mobile County EMS, a non-profit, for it to be the sole agency responsible for providing emergency dispatch and response services within the entire county.
With each annual contract, Mobile County invests $1,625,000 in Mobile County EMS to protect the lives of over 200,000 Mobile County citizens. While this is a generous and appreciated investment, it does not come close to covering Mobile County EMS’s annual expenses, which, during the most recent annual contract period, were roughly $6,000,000.
In response to your question about Mobile County EMS’s salary costs, as shown on the attached expense report, Mobile County EMS’s salary costs during the most recent annual contract period were just shy of $3,500,000, which more than doubles what Mobile County pays to Mobile EMS annually.
In setting and adjusting salaries, we work closely with outside Human Resources consultants, who consistently opine that our salaries are reasonable and well within industry standard.
Mobile County EMS’s Board of Directors and Management team believe in providing its services as efficiently as possible in today’s reality of significant regulation and risk in the public safety/healthcare environment.
We are unique in that we use this as a catalyst for revenue generation, all of which is returned to the citizens through our services. While the investments that local government makes in the industry creates jobs, the investment county government makes in us saves lives and property at a level that would not be possible without the county investment.”
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