KC Skyline

City Clerk Web Search

Search the Ordinances:

Legislation #: 020061 Introduction Date: 1/10/2002
Type: Ordinance Effective Date: 2/3/2002
Sponsor: None
Title: Authorizing the director of health to execute an amendment to the annual MAST contract for service to indigent residents approved by Ordinance 010631 to provide for an additional subsidy in the form of one or more loan or other financial guarantees of up to a total of $2.0 million, including interest, for the current fiscal year, and to include these provisions in annual contracts through April 30, 2004; authorizing the director of finance to execute documents necessary to accomplish this guarantee; permitting the payment of funds to be made from health levy funds unless legally prohibited from making such payments; and requiring repayment of the City within two years of any payment.

Legislation History
DateMinutesDescription
1/16/2002

Do Pass as a Committee Substitute

1/11/2002

Prepare to Introduce

1/11/2002

Referred Finance and Audit Committee

1/10/2002

Referred Finance & Administration Committee

1/17/2002

Assigned to Third Read Calendar

1/24/2002

Passed as Substituted


View Attachments
FileTypeSizeDescription
020061.pdf Other 440K Authenticated and Additional Documents

Printer Friendly Version

 

COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 020061

 

Authorizing the director of health to execute an amendment to the annual MAST contract for service to indigent residents approved by Ordinance 010631 to provide for an additional subsidy in the form of one or more loan or other financial guarantees of up to a total of $2.0 million, including interest, for the current fiscal year, and to include these provisions in annual contracts through April 30, 2004; authorizing the director of finance to execute documents necessary to accomplish this guarantee; permitting the payment of funds to be made from health levy funds unless legally prohibited from making such payments; and requiring repayment of the City within two years of any payment.

 

WHEREAS, the Metropolitan Ambulance Services Trust is the sole provider of ambulance services in the City as a result of the Citys establishment of MAST as a public trust and the Citys enactment of Chapter 34, Article IX Code of Ordinances, entitled Prehospital Emergency Medical Services System authorizing only one ambulance service to operate; and

 

WHEREAS, over the last year MAST has made projections of revenue and cash balances, and formulated its budget, with frequent explicit warnings that certain assumptions must hold true in order for the budget projections to be met; and

 

WHEREAS, several of those key assumptions recently are not holding true; and

 

WHEREAS, MAST is experiencing financial difficulties arising from a combination of unrelated events, including

 

- change in payment of the ambulance contractor to eliminate a 45-day delay in payment;

- Medicare payment reimbursement policy changes reducing the payment for non-emergency transports;

- reduced number of ambulance runs;

- institution of new billing practices recommended by MASTs outside auditor;

- reduced current collections;

 

thus impacting current cash available; and

 

WHEREAS, MAST has taken steps to fully integrate into its system necessary changes to reflect these events; and

 

WHEREAS, even by taking necessary steps to adjust to current circumstances, MAST has been required to use, for the first time, its available $1 million line of credit from its current bank; and

 

WHEREAS, the banking industry is unlikely to grant MAST an enlarged line of credit absent the Citys guarantee; and

 

WHEREAS, the prehospital emergency medical services system cannot operate without its major component, MAST, providing ambulance services through its ambulance contractor, Emergency Providers, Inc.; and

 

WHEREAS, there exists a health levy that produces property tax revenues specifically pledged for health care purposes in the City; and

 

WHEREAS, it is the intention of the Council to exhaust those funds for the purpose of acting upon the financial guarantee contemplated by this ordinance before utilizing any other source of City revenue; and

 

WHEREAS, contractual agreements may prevent the City from committing only health levy funds to the financial guarantee contemplated by this ordinance; and

 

WHEREAS, the provision of prehospital emergency medical services is necessary for the protection of the health and general welfare of the people of the City; NOW, THEREFORE

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section A. Authorization to amend the current subsidy agreement. That the director of health is authorized to enter into an amendment of the annual MAST contract for service to indigent residents approved by Ordinance 010631 to provide for an additional subsidy in the form of one or more loan or other financial guarantees of up to $2.0 million total, including interest, for MASTs Kansas City, Missouri, operations.

 

Section B. Form of the amendment. The amendment authorized by Section A will be in substantially the terms as follow:

 

AMENDMENT NO. 1

ANNUAL MAST SUBSIDY

 

The agreement authorized by Ordinance 010631 is amended to include the following provision:

 

Section 1. Loan Guarantee.

 

(a) Purpose. In recognition of the essential nature of prehospital emergency medical services to the people of Kansas City, Missouri, the City has made annual payments to MAST since the inception of the MAST system almost 20 years ago. The payments made in fiscal year 2001-2002 and the collection of revenue by MAST is insufficient to pay for the necessary services. Because of the unique character of MAST as a public trust established by the City for the benefit of the citizens of Kansas City, it is appropriate that the City assist MAST in obtaining necessary financial assistance until the operation of the system is returned to its historic normality.

 

(b) Guarantee authorization. If MAST seeks financial assistance from any financial institution and is denied that assistance without the provision of a guaranty by the City, the City, acting through the director of finance, may execute such documents as are required by such financial institution and agreed to by the City, acting through the director of finance, to provide the Citys guarantee of payment of the loan, draw on a line of credit, or other financial assistance.

 

(c) Maximum liability. The director of finance may commit the City to an amount not to exceed, in the aggregate, $2.0 million including interest, through April 30, 2004 to support the Kansas City, Missouri, operations of MAST.

(d) Financial guarantee. Any guarantee executed by the City will include the following, or substantially similar, language:

 

The City currently intends to provide the ambulance services component of the prehospital emergency medical services system through MAST. The City reasonably believes that legally available funds in an amount sufficient to make the payments that might be required as a guarantor of certain of MASTs financial obligations through the current fiscal year (May 1, 2001 - April 30, 2002), and the ensuing two fiscal years (May 1, 2002 April 30, 2003; May 1, 2003 April 30, 2004) can be obtained. The City has funds, such as the unappropriated General Fund balance, and the financial wherewithal to make payment upon default or shortfall. Notwithstanding the foregoing, the decision whether or not to budget or appropriate funds or to extend this commitment for any ensuing fiscal year beyond (May 1, 2003 - April 30, 2004) is solely within the discretion of the then current governing body of the City.

 

(e) Fiscal years 2002-2003 and 2003-2004 MAST subsidy. The City agrees to include the provisions of this Amendment in the MAST 2002-2003 and 2003-2004 subsidy ordinances if MAST agrees to continue to provide indigent care pursuant to the 2002-2003 and 2003-2004 contracts.

 

Section 2. Remaining terms.

 

All remaining terms of the agreement between the City and MAST approved by Ordinance 010631 shall remain in effect.

 

Section C. Director of finance authority. The director of finance is authorized to execute the documents required by the lender or lenders, and agreed to by the director, to make the City a guarantor of MASTs financial obligations as provided in Section B.

 

Section D. Limitation of funding sources. It is the intention of the City to use health levy funds prior to accessing other sources of revenue for making payments required by any guarantee made by the City for the payment of MASTs financial obligations. It is recognized that health levy funds may be the subject of other contracts. If prior contractual commitments preclude the use of the health levy for this purpose, then and only then, may other sources of revenue be considered for the payment of the guarantee.

 

Section E. Repayment by MAST. Any payment by the City made pursuant to this financial guarantee will be repaid by MAST within two years of the date of the Citys payment.

 

________________________________________________________

 

Approved as to form and legality:

 

 

___________________________________

Assistant City Attorney