HomeMy WebLinkAboutAgenda Report - July 21, 1982 (36)4ff-\\� C',
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To: Honorable Mayor and City Council
From: Assistant City Manager
Subject: Lodi Ambulance Service
Date: March 26,"1982
r 8
In accordance with Council direction at its regular,meeting
held February 24, 1932, the following informati6n':�,,,,:-`,i
submitted regarding the operation of Lodi Ambulance Service
Inc.
SUMMARY
not".
The services provided by L(x4i Ambulance Service is. not
unlike the services provided by the Fire Department. They
must be able to provide immediate emergency response to the
Northern San Joaquin County. The Lodi Ambulance Service has
at least 4 people and 4 pieces of equipment ready to respond
at all times. The Ambulance Service averages less than 14
emergency calls per day within the Northern San Joaquin
Cotanty; of these, 6 to 7 are within the city limits of Lodi.
The financial statement provided snows a cash flow deficit
of over $8,000; however, the increase in accounts receivable
is significantly more than $8,0010. The change in fee
schedule proposed by the Lodi Ambulance Service will result
in bills over 30• higher than before. The combined charges
are not an industry standard at this time.
SERVICE LEVELS
In evaluating ambulance service, it is important to note
this. is a 24-hour per day, 7 -day per week operation. The
ambulance operation is manned by 4 persons at all times. in
addition to the emergency ambulance service, Lodi Ambulance
Service also operates a "medicab" which is used to transport
wheelchair patients on a non -emergency basis. This latter
service is provided from 8 a.m. to 5 p.m., Monday through
Friday, or on a pre -scheduled basis. They also maintain 4
ambulances in an "on-line" capacity. An ambulance service
doing business in California and billing Medicare patients
is a very closely regulated operation in that rules,
regulations and guidelines from at least 25 Federal, State
and local agencies effect the operation.
-2-
46
U
In 1981, the Ambulance Service responded to 3447 calls, an
average of 9.4 calls per day. Approximately 70% of the
calls were in the city limits of the City of Lodi.
The owners of Lodi Ambulance Service also own and operate
Stockton Ambulance Service. The business operations of both
Companies do operate from the same headquarters. The office
is divided and functions separately with joint use of
certain equipment. Four persons work in the offices and it
was explained that two persons are employees of Lodi
Ambulance Service and two are employees of Stockton
Ambulance Service. No effort was made to review the
operations as they pertained to Stockton Ambulance Service.
STAFFING
The staffing of the Lodi Ambulance Service is:
2 Owner Operators
9 Certified Paramedics
1 Wheelchair Driver
2 Clerical Staff
These personnel are supplemented by a number of part time
personnel to assure that minimum staffing levels are
provided.
-3-
The certified paramedics are highly trained and skilled
personnel. Certification is made by San Joaquin County and
is granted only after completing an extensive course of
study of 1060 hours including a field internship. To
qualify for this program, an individual must have had 2
years' previous experience.
The hourly salary paid the paramedic staff is $3.40 per hour
which is $.05 per hour over minimum wage. Lodi Ambulance
_Service operates under the Fair Labor Standards Act and
therefore can pay no less than $3.35 per hour and must pay
cash overtime ($5.10) per hour over 40 hours in a given
7 --day period. The paramedics work a -72 -hour week.
The ,only way in which salary costs can be controlled is not
through salary rate reductions, but through reduction in
staff.
-4-
EQUIPMENT;
The equipment owned by the Lodi Ambulance Service is:
1 1978 Dodge paramedic van
1 1979 Dodge paramedic van
1 1982 Dodge paramedic van
1 1971 Cadillac ambulance
1 1979 Dodge wheelchair van
1 1981 Buick Riviera Sedan
All -equipment is in good operating order and 'properly
maintained, For the service area, the number of_pieces does
not seem to be out of line.
OPERATING COSTS AND OVERHEAD
An unaudited- cash basis statement was submittedµ -,for: T
analysis. The' operating statement provided, does show a
"net" loss for 1981 of $8,312.90 on a cash basis. It must
be noted that the recaivables increased by $54,024:68=for
the period March 27, 1981 to February 19, 1982. Some of the
receivables are uncollectible as patients are either
Medicare/Medical patients, or indigents, however, it was not
determined what portion could be collected. This does,
-5-
xV _
howevert'" point ,,out the effect that uncollectibles has on
,cash.' flow.
Frost ..the ;statement provided ,,,it ;is impossible to determine
_.
thb-�'exact costs of particular functions or items. For
s ' instance, the-,statement has. salaries . Adeffi'd as take home
pad#. and; payroll taxes (both employee,_ ., and .
employer
contributions), asseparate i l:ems. Determining..-total •.labor
costs�Astfurther complicated because:employeeainsurance :is
groupe& with all'other types of insurance.
- f
A few expense items deserve special consideration as.dirent;
questiona,have been posed: �r-
.:, _.
r .
rMedical• .Supplies ;The owners YI.odi_� Ambulakce
a
-
Sery ce, are the' owners of. another:; business ,which distributes
and :.sells medical:- :supplies in ,- _the 'San ..`Joaquin;, Valley ,and
foothills. This; Company sells G, supplies Airectly
Ambulance.. Service at- cost, ; or -15• , above cost at a:: maximum.
` This is . less than the cost to other. customers. The .;total> H�,y
cost. .unrecoverable- medical, supplies :for, ;x.1981 was z �_
53,026.68 for: over 3, 000 patient trips: which figures to less "
than $1.00 per trip. The hospital replaces much 'of the
bandages and supplies and then bills the patient,or includes
Rent -The owners of
Lodi Ambulance Service own.the
`.
3 building and property used
by the Company.. The -rent .is
$1200 per month.. The, owner,
stated that .the -rent: at their
t tiL
x previous location was $1, 000
'per Mg ,nthover 3 years agoe �
' s... � -.. ,. x>_
..,�,y+. •sr:: .: Fri :-s...: �is; . .c+rr-u...s a '�
Officers'.rC ensation
-, The.:wives of 'the 'owners are
r;. officers of the Corporation.. As, ;they are g3,ven
nor
;such,
monthly:- stipend -.draw of
$100. :.They �` are paid no 'other
i Y ;salary, ;however; - they are reimbursed
-16k: travel expenses an r T4 kf
,t
eA
y
F Company.: business.
r.
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s
_
a
H
FX STRVCTUR$
` .. -
r ,, .h v, i4 bH s*t. iFe -. ��`PF r�.a.i� u, 'P:.
,� y•'9'� „ttkPq`rx.'r`�;
•` 9 Y y'�
IN
t t a ., f r{ ti ` i 5.: " :.:.:
t
d' t - `' "' . ,& " K ly l 4!` r t d L'-
�Y+[
rave als:an:;.average increase., in ; bills of over 303.
Piv,x`
Ten: -:billings were selected at random and the proposed.rates
serer -~applied; to . those . billings.. ,.The;,,,, results of� that
Y sas►plirrq.is, summarized:
°a
—7—
AV
Bill Amount
264.50
137.50
213.50
397.75
183.50
116.25
107.25
242.00
- 150.75
156.75
$1,969.75
oft
Amount of
New Procedure
$ 398.25
188.00
226.25
518.60
202.50
165.75
155.25
337.75
216.75
188.00
$2,597.10
Additional
Cost
50.5
36.7
5.9
30.3
10.3
42.5
44.7
39.5
43.7
19.9
31.8
The Ambulance Service points out that only 37% of their
customers pay the entire bill as charged; that over 50$ are
Medicare or Medical patients; and that 10• of the bills are
uncollectible. The Federal Government (Medicare) pays only
80% of recognized charges which today _means that $64 is paid
for the base rate. A State program for the elderly di& pay
the other 201%; however, AB 251 which recently passed the
Legislature ras eliminated this program. The State welfare
program will only pay $57.61 for the base rate and that is
scheduled to be reduced to $51.85.
It is the Ambulance Company's contention that because of the
previously -mentioned factors that rates must be increased by
32•.in order to generate a cash flow increase of 12%.
-8-
RATES OF OTHER AMBULANCE SERVICES
Appendix A attached hereto is a comparison of rates..charged
by other ambulance services in the area. In most cases, the
charges are greater than those of the other, ambulance
services in the comparison. There seems to be little effort.,.
on thefees.of government to regulate fees. Contra ,Coate
County, for; instance,, grants exclusive franchises and then
lets the --'ambulance charge what the market will bear. San
Joaquin,County makes no effort to regulate fees. The City
s <r.
of Stockton does regulate the ambulance fees char within."..
_.
that City on. an annual basis.
None' of these ambulance services have combined charges such
}
rend �: f
as ---is now being, made by Lodi Ambulance Service. The tFA
may be to this combined billing since Medicare. has recently
recognized a charge for Advanced Life Support.
c
EFFECT OF COUNTY OPERATION ON THE CITY OF LODI
S S '
Lodi Ambulance Service is geared to provide service to an
area thatis at least 10 times the size of Lodi but contains.
one-half the population. The bottom-line effect is the nee8
for additional manpower and equipment to be available. If
the need to provide service to such a large area did not,
exist,, the need for manpower and equipment could be.reduced.
-9-
,may'
COMMENTS
f
The #; fewL, people, who`- did contact me `were. most concerned_ about
w y: r
the `.;cos,t,of. services that were". pe4, formed, especially the
emergency, response and ._paramedic fee: The comments made
were that in all cases in the City of Lodi, the ambulance is
no. more.. than 4 or 5 minutes from the hospital and that it
would be preferable to transport the patient immediately
rather than provide on -the -spot treatmefitt for a period of
time longer -thin the trip to the hospital. Each person did
admit that when the distance) was,, lotlg, �,-such: as V actor,:
Lockeford, or Clements, there is justification fo
"paramedic service", but ce-rtainly inot when the trip is
across the street,or around the cornet.
it certainly has that prerogative. As a matter,of fact, the.;
city's present ordinance does spell. out a►inimum:.:
qualifications of the operators and drivers of the Ambulance
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Service. In 1976, the Council authorized paramedic services
with the understanding that the paramedic service would only
be used on an as -needed basis. The past year indicates that
paramedic service (advanced life support) is used
approximately 20 percent of the time.
If the City Council is desirous of becoming more involved,
the following are available alternatives:
1. Contract with the Ambulance Service on a
flat -rate basis for all emergency care provided
in the City of Lodi.
2. Establish an ambulance service within the City
service.
3. The City become involved with the management of
the service and set the maximum fees which the
Ambulance Service may charge.
Each of these are filled with pitfalls as the City
does not have the expertise nor the money to properly
implement either one. The present policy allows the
Ambulance Service to set service levels and method of
operation. The City has taken the approach of monitoring
the rates the Company has deemed appropriate to charge. To
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this point, there is no recollection of the City exercising
its right to modify the posted rates.
The present ordinance places the City in a very difficult
position. The Ambulance Service is not under the management
control of the City either by contract or franchise. The
City does not have the authority to become involved in the
day-to-day management of the Ambulance Service. The City -
does, however, have the right to establish rates to be =
charged. 5
The Ambulance Service is caught in a price squeeze: on one
hand, their costs are going up, the amount of money to pay
for services is being reduced and business is declining. :,Lf
these factors do not change, their only recourse is to:
increase rates to the extent the people who pay the full..
bill will pay for all the additional costs; the level.;of.-
service be decreased; or operating costs reduced. It; is.,�
obvious that Lodi Ambulance Service has chosen the first.;
alternative. n;==
-12-
APPENDIX "A"
a-
AMBLILTIN Rh= COMPARISON
Stockton
Lodi Ambulance
Ambulance
Superior
Michaels
Description of Service
3/1/82
4/1/82
Antioch
Service _
Sacramento
Concord
Mx1esto
Base Rats
85.00
90.00
°5.00
80.00
80.00
110.00
107.00-
s
Mileage
4.50
5.25
5.00
4.00
5.00
6.00
6.50 1
Night
17.75
35.00
20.00
12.00
15.00
25.00
28.00
C�
E�
17.75
60.00
20.00
12.00
15.00
25_00
35.00
oxygen
21.25
21.25
20.00
15.00
12.50
25.00
29.60
Paramedic
49.50
100.00
N.A.
N.A.
N.A.
25.00
45.00.
IIEG.
35.50
50.00
-
N.A.
35.00
50.00
60.00
Def il7rillatian
14.25
-
N.A.
35.00
25.00
30.00.
ipsuscitator
35.50
-
15.00
35.00
N. C.
30.00
N. C.
Suction
14.25
-
15.00
12.00
N. C.
20.00
35.00
Emergency OB
35.50
-
N. C.
25.00
50.00
50.00
N. C.
OB Pack
14.25
-
15.00
15.00
20.00
20.00
N. C.
Oral Airway
4.25
-
4.00
tb Fee
4.50
5.00
Spinal Board
14.25
-
15.00
"
N. C.
20.00
34.00
action Splint
14.25
-
15.00
N. C.
20:.00
40.00
Inflation Splint
10.75
-
15.00
N. C.
15.00
20-.00
Bum Pack - Large
35.50
-
15.00
11.00
18.00
13.00
Cold - Pack
11.25
-
3.50
3.00
6.00
--5-0 i
Anti -Shock Trousers
28.50
-
N.A.
N. A.
25.00
r 56.00- -
Fsopnogeal Airway
35.00
-
N.A.
15.00
40:00
30. CO
{
j
i
.. Lodi.
-Ambulance
Service, Inc.
1709 SOUTH STOCKTON STREET
LODI. CALIFORNIA 95240
(209) 334-0830
Lodi City Council
221 W. Pine St.
Lodi, CA 95240
Gentleman:
C-0.1) -.
February 10, 1382
In accordance to the City of Lodi Cade Section 2A-3, we
are filing a 30 day notice to change and modification of our rates.
We are submitting this letter for a change in the way we
bill for our services In todays mannor, we must change with the
requirement of the government programs so we are able to serve
the people in our community.
In revamping the way we charge for services, dropping 32 now
charged items, and adding three new charges that the government
programs understand. Haring each area of service recover the
cost of that service. Only the patient receiving such service
would be charged for that service.
As you know, the State of California in their Medical Program
greatly reduced the revenue to the Hospital. We also received cuts
from the State payments that equal 20% of the bill; as of 1/1/82,
we no longer receive those funds from the State. Also, we have
indications that there is a 10% across the board reduction on all
Payments from the State in the near future.
Medl-Cab Lodi Medical Products
1709 SOUTH STOCKTON STREET
LODI. CALIFORNIA 95240
(209) 1340830
PROPOSED RATES
z
.;;:-DESCRIPTION
Base hate
Sit -Up patient
Mileage (one way)
Night 7Pm to 7AM
Emergency
Oxygen - per tank
Waiting time - per 15min.
Paramedic Stand-by per 15min
IPPB respirator
Paramedic Service
Clinical spec - per hour
Defibrillator use
Emergency EKG
Heart/lung resuscitator
_Suction
%P.esuscitator elder
Infant .ambu
Adult`.. ambu
Emergencyy child birth
O.B. Pack
�JOrai airway
.Reactose
Flat stretcher
Orthopedic stretcher
Spinal board - short
Spinal board - long,
Traction splint
-Ladder splint
Cardboard splint
Inflation splint
_> Cold Pak
Burn pak - lare
Burn pak - smail
Sandbags
Anti -shock trousers
Multi-trauma dressing
ET tube
Esophogeal airway
Needle thoracotomy
Cricothyroid stick
Immediate Responce (Emergency)
Spinial Care
Advance Life Support
CURRENT
85.00
85.00
4.50
17.75
17.75
21.25
10.75
14.25
42.50
49.50
21.25
14.25
35.50
35.50
14.25
14.25
14.25
14.25
35,50
14.25
4.25
10.75
21.25
21.25
14.25
14.25
14.25
14.25
10.75
10.75
11.25
35:50=
14.25
3.00
28.50E
7.25
3 5.00'-
35.00
75.00
75.00
60.00
50.00
100.00
Modl-Cab Lodl Medical Products
r ORNIA AMBULANCE ASSOCIATION'_ ?
RATE' SURVEY
JANUARY 1982
County Base Mileage Night Fmergency Oxygen
Alameda
85.00
4.50
20.00
15.00
14.50
Amador
85.00
5.00
15.00
20.00
15.00
Butte
105.00
6.00
35.00
35.00
20.00
Contra Costa
105.00
6.00
25.00
25.00
17.00
Fresno
97.50
5.00
25.00
25.00
15.00
Numbolt
118.50
7.00
30.00
30.00
20.00
Kern
110.00
7.00
35.00
15.00
.15.00
Kings
85.00
4.00
20.00
20.00
15.00
Los Angeles
75.00
5.00
12.00
12.00
12.00
Madera
80.00
4.00
15.00
15.00
15.00
Mendocino
65.00
3.00
10.00
10.00
10.00
Monterey
81.00
4.00
15.50
18.50
13.00
Napa
87.50
4.50
15.00
20.00
13.00,
Orange
75.00
5.00
15.00
15.00
15.00
Placer-
110:00
6.00
30.00
35.00
30.00
Plumas
70.00
4.00
24.00
15.00
15-.00
Riverside
105.00
5.50
40.00
50.00
30.00
Sacramento
80.00
5.00
15.00
15.00
15.00
San Benito
75.00
3.50
12.50
12.50
12.50
San Bernardino
81.50
5.25
16.50
16.50
8.00
San Diego '
85.00
5.00
20.00
20.00
20.00
San Francisco-
100.00
4.75
16.50
16.50
14.00
Sart Joaquin (Tracy)
130.00
6.50
28.00
35.00
29.00
--San Luis Obispo
117.50
5.50
35.00
45.00
25.00
San Mateo •
125.00
5.00
25.00
25.00
25.00
Santa Barbara
96.00
5.00
25.00
72.00
26.00
Santa Clara
115.00
4.00
20.00
25.00
15.00
Santa,Cruz
95.00
4.00
13.50
13.50
13.50
Shasta
95.00
5.25
15.00
15.00
20.00
Sskiyou
95.00
5.25
15.00
15.00
20.00
Solano
90.00
5.00
20.00
20.00
15.00
Sonoma
125.00
7.00
40.00
40.00
30.00
Stanislous
107.00
6.50
28.00
35.00
29.00
Tulare
85.00
4.00
20.00
20.00
15.00
Tubltar ne
90.00
4.50
15.00
15.00
15.00
Vantura
95.00
6.00
25.00
30.00
30.00
Yolo
115.00
5.50
20.00
25.00
26.00
Yuba
87.50
5.25
20.00
20.00
20.00
Lodi
Percentage Break Downs
37% Private Pay & Insurance
18% Medicare --Medical
34% Medical
1X County
10% Uncollectable
100% Totals
6.5% Dry Runs
Total
Calls
1976 - --
2960
1977 ---
3487
3978 ---'3259'
1979 ---
3629 ,
1980 -=-'
3657
1981 ---
3447,,
PARAMEDIC CALLS
1977 ---
553
1978 ---
535
1979 ---
566
1980 ---
757
1981
654
BASE RATE
MILIAGE
NIGHT
EKG
OXYGEN
STAND BY
ADD
ADVANCE LIFE
SUPPORT
IMMEDIATE RESPON ZE
EMERGENCY'
SPINIAL CARE
"Drop 32 now charged qems" -
.Stockton
31.5%
1903
19.5%
1178
38 %
2263.
2%
117
9%
583
1001".
6044
K
177.
1029
90.00
6%
5.25,
17%
35.00
50.00
40% ,
A
21.25
-NONE
14.25
NONE
100.00
New
60.00
New
50.00
New
"Drop 32 now charged qems" -
INCOME
EXPENCE:
.� • - ... � tip.
LODI AMBULANEE SERVICE, INC.
1980 1981
$372,252.48 $416,777.18
Salaries
Insurance
Interest
Rent
Advertising & Promotion
Telephone & Utilities
Leaggal & Accounting
Radio& Medical Equipt.
Medical:Supplies.
Taxes. & Licences
Payroll. Taxes
Lausidry' & Cleaning
Of face;.. Expence.
Auta`Maintenance
Gas h' Oil
Refunds
Deprecittion Expence
Officers ` Expence
Misc. Expence.
NET INCOME OR LOSS
1982
$475,000.00
133,649.87
162,604.00
180,500.00
35,881.89
43,651.60
47,500.00
37,643.88
18,666.67
21,375.00
14,400.00
14,400.00
16,625.00
5,157.02
7,317.60
9,500.00
8,247.65
12,971.52
14,250..00
2,239.70
9,651.80
9,500.00,
5,531.27
9,139.96
9,500.00
2,289.61
3,026.68
3.562._50
957.00
2,133.10
2,375.00
61,245.42
74,638.80
80,750.00
3.,201.56 >
3,619.88
4,750.00
9,661.74
7,074.28
8,312`.50
7,970.06
7.369.24
9,500.00
15,882.27
18,525.28
21,375.00
8,892.91
9,077.00
9,500.00
8,403.00
9,663.45
11,875.00
12,727.00
10,944.48.
14,250._,00
614.74
366,558.85
425,090.08
475;000.00
5,693.53
-8,312.90
0.00
LODI A14BULANCE SERVICE, INC.
A CALIFORNIA CORPORTION
Income Statement (Cash Basis)
For the 12 month Period Ending Dec. 31,1981
INCOME:
Total Cash Basis Income
from Ambulance Services:
OPERATING EXPENCES:
Salaries
$162,604.00
Insurance
43,651.60
Interest
18,666.67
Rent
149400.00
Advertising &- Promotion
7,317.60
Telephone & Utilities
12,971.52
Legal & Accounting
9,651.80
Radio & Medical Equipment
9,139.96
Medical Supplies
3,026.68
& Licenses
2,133.10
--Taxes
Payroll Taxes
74,638.80
Laundry & Cleaning
3,619.88
Office Expence
7,074.28
Auto Expence
7,369.24
Gas & Oil
18.525.28
Refunds
9,077.00
Depreciation Expence
9,663.45
Officers- Operating Expence
10,944.48
Disc. Expence
614.74
Total Operating Expence
Net Income or Loss
The AccompanyinLetter is an
integral part of this statement.
(unaudited)
$416,777.18
5425,090.08
-8,312.90
--------------
> at�xner� ear�YeBosssble time <folloaing hnt:�ate �oCoonciY d A
5
ri "A eservesrighVx.ta ~make . apossibe; eY
r
AAl jur►ent totheY`ulsject rates at., that timed follo�rinq, its
review of rFthe DeL` ' Statement •
ember =31 Profit and Loss
Should you have,an uestions r
y .q egarding esti►r,*
.,.
th s it t�se f
do not hesitatg to': call,' this office.
r r
r
rl.
Very truly yours,, > K. Y s
:.;
rt ,
1
Alio .. -Re islohe
Eg
t �.•. �, �ti. a; 4��x;
`LODT AKBULANCE SERVICE, INC.
Curent Ratio== C.:rrent assets `to current
liabilities.
r
_Measures the abilil- of
a business to
pay its current
ob1 cations.
�
3/82
Current Assets'
$171,099
$127,462
F' rren-•Liabii3ties.
20,333
29,957
i
Working Capital
$150,766
$ 97,505
i }
Current Ratio
841%
4258
�
Ot-
AccountsReceivable -Turnover
-Aids in
evaluating the-
..receivableiiposition-anT
approximate collection_ time..;.-"
f3
82
3/81
Net -Ambulance:Fees
$541x.445
$449x387
Net` Receivables
139, 207
113; 775
Receivables turnover
for-
S ..
:year°
3.9
3
; -
3 9;-
Rato Stockholders'
Fsuit : to. Total
Liabilities - Vindicates j
.of.
c ages. n source of business capitaE
Increases indicates
the�ccmpany is vulnerable
to a decline in business.,
"
.less
Decreases indicate
on equity
tapplying 'Ieverage):
='4f
.trading
which may be a favorable
position to
be in.
i55
3/82
-
' '3181, i y
Stockholders'. Equity
$211,145
$202,249
TotalLiabilities:
62,058
29,957
f
l
Rat io":of'Stockholders
A
h
Equity : to total
°
liabilities
3.6
=:Ratio- of .Stockholders .
uit to Land
`:Buildi s and`
An increase means acquisitions
are. €finance
through_ rete
ned r `
.;;'earnings. A: decrease may suggest.possible overexpansion,
excessive use of credit
-and `greater. vulnerability: to
financial difficulties
if business drops off.
3/82
3/81_
Stockholders' equity
$221,145
$202,249
Ri tio- of "net sales to total 'assets -Indicates
the relative
efect veness>-of asset utilization.
3/82
3 8I
Net sale
580 3
S
Total assets
2830203
;r r _
232,206 r�
a
Ratio sof net sles to
w
ota1 z:assets
1.5
Rate,*earned 'on total assets
y ryi
'•
3/82
3/81 ,
♦
r r' +"
Net Income
$ 18,896
35,531
..
Total assets
283, 203:
232,206 t
Rate
,
earnedon._total
f
assets
- 6.67$
?5.30$ T
Y .0
Rate::. earned on stockholders equity_
3/82.
Net. income
18, 896
3.5, SIX
Stockholders equity221I4S
202,249
Rage on stock-
eerned;
hol-$ers` equity
8.548
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n,bit�r'sce RECEIVED
h rrti N; r
Ernst &Whinney
City Council
City of Lodi
•
SSS Capitol Mall, Suite 650
Sacramento, California 95814
916/447.3237
At your request, we have performed the procedures enumerated below with
respect to the financial information supporting the calculation of the
rates proposed by Lodi Ambulance Services, Inc. for fiscal year 1982-83.
Our review was made solely to assist you in evaluating the reasonableness
of the financial information supporting the calculation of the rates, and
our report is not to be used for any other purposes. The procedures we
performed are summarized as follows:
a. We compared the unaudited cash flow statement for the year ended
December 31, 1981 of Lodi Ambulance Services, Inc. prepared by
Lodi Ambulance Service, Inc. with the unaudited statements of
operations for the year ended March 31, 1982 compiled by the
independent accountants of Lodi Ambulance Services, Inc.
b. We performed ratio analyses using the unaudited financial
statements as of March 31, 1982 and 1981 and for the years then
ende d.
Our findings are presented in the accompanying schedules.
Because the above procedures do not constitute an examination made in
accordance with generally accepted auditing standards, we do not express
an opinion on the financial information supporting the calculation of the
rates proposed by Lodi Ambulance Services, Inc. for fiscal year 1982-83.
This report relates only to the financial information supporting the .
calculation of the rates proposed by Lodi Ambulance Services,. Inc. for
fiscal year 1982-83 and does not extend to any financial statements of
Lodi Ambulance Services, Inc., taken as a whole.
Sacramento, California
April 26, 1982
SCHEDULE A
COMPARISON OF CASH FLAW STATEMENT AND STATEMENT OF OPERATIONS
LODI AMBULANCE SERVICES, INC.
UNAUDITED
1.
2.
3.
4.
425,090 417,312
Net Income (Cash Flow Deficit) $ (8,313) $ 18,895
Cash flow statement properly includes principal and interest payments, while
the statement of operations properly includes interest expense only.
Items are not of a capital nature. Therefore, they are properly included in
both statements.
Depreciation does not require an outlay of cash and should not be included in
the cash flow statement.
Amortization does not require a cash outlay. It Was properly excluded from
the cash f low statement.
Cash Flow
Statement of
Statement For
Operations for
Year Ended
Year Ended
Footnote
December 311 1981
March 31, 1982
Reference
Income
$416,777
$436,207
Expenses
Salaries and benefits
237,20
230,250
Insurance
43,652
34,826
Principal and interest payments
18,667
5,017
1.
Rent
14,400
13,500
Advertising and promotion
7,318
5,697
Telephone and utilities
12,972
13,017
Legal and accounting
9,652
9,982
Radio and medical equipment
9,140
7,883
2.
Medical supplies
3,027
4,1°2
Taxes and licenses
2,133
3,183
Laundry and cleaning
3,620
2,986
Office expense
7,074
4,511
Auto maintenance
7,369
9,100
Gas and oil
18,525
18,709
Refunds
9,077
8, 971
Depreciation
9,663
16,472
3.
Off icers' expense
10,944
12,150
Miscellaneous expense
614
2,736
Amortization of goodwill
4,356
4.
Leases
5,835
Other
3,939
1.
2.
3.
4.
425,090 417,312
Net Income (Cash Flow Deficit) $ (8,313) $ 18,895
Cash flow statement properly includes principal and interest payments, while
the statement of operations properly includes interest expense only.
Items are not of a capital nature. Therefore, they are properly included in
both statements.
Depreciation does not require an outlay of cash and should not be included in
the cash flow statement.
Amortization does not require a cash outlay. It Was properly excluded from
the cash f low statement.
1
SCHEDULE B
RATIO t.NALYSES OF THE UNAUDITED FINANCIAL STATEMENTS OF
LODI AMBULANCE SERVICES, INC.
UNAUDITED
Year Ended March 31
1982 1401
Current Ratio:
Current Assets
Current Liabilities
8.4 to 1
4.3 to 1
Bad Debt Loss Ratio:
Adjustment and Write Downs
Ambulance Fees
19.6%
9.6%
Profit Ma: -gin:
Net Income
Total Income
4.3%
R 7%
Return on Equity:
Net Income
Total Capital
8.5%
17.6%
Return on Capital:
Net Income
Connon Stock
18.0%
33.9%
Return on Total Assets:
Net Income
Total Assets
6.7%
153%
W
LODI AMBULANCE SERVICE, INC.
Current Ratio - Current assets to current liabilities.
Measures the ability of a business to pay its current
obligations.
Accounts Receivable Turnover - Aids in evaluating the
receivable position and approximate collection time.
3/82 3/81
Net Ambulance Fees $541,445 $449,387
Net Receivables 139,207 113,775
Receivables turnover for
year 3.9 3.9
Ratio of Stockholders' E!juity to Total Liabilities - Indicates
changes in source of business capital. Increases indicate
the company is less vulnerable to a decline in business.
Decreases indicate trading on equity (applying leverage)
which may be a favorable position to be in.
3/82 3Z81
Stockholders' Equity $221,145 $202,249
Total Liabilities 62,058 29,957
Ratio of Stockholders
Equity to total
liabilities 3.6 6.8
Ratio of Stockholders Equity to Land, Buildings and Equipment
An increase means acquisitions are financed through retain -3
earnings. A decrease may suggest possible over expansion,
excessive use of credit and greater vulnerability to
financial difficulties if business drops off.
3/82 3/81
Stockholders' equity $221,145 $202,249
Land, buildings &
equipment (net) 65,534 53,818
Ratio of stockholders
equity to land, buildings,
and equipment 3.4 3.8
3/82
3/81
Current
Assets
$171,099
$127,462
Current
Liabilities
20,333
29,957
Working
Capital
150,766
$ 97,505
Current
Ratio
8418
425%
Accounts Receivable Turnover - Aids in evaluating the
receivable position and approximate collection time.
3/82 3/81
Net Ambulance Fees $541,445 $449,387
Net Receivables 139,207 113,775
Receivables turnover for
year 3.9 3.9
Ratio of Stockholders' E!juity to Total Liabilities - Indicates
changes in source of business capital. Increases indicate
the company is less vulnerable to a decline in business.
Decreases indicate trading on equity (applying leverage)
which may be a favorable position to be in.
3/82 3Z81
Stockholders' Equity $221,145 $202,249
Total Liabilities 62,058 29,957
Ratio of Stockholders
Equity to total
liabilities 3.6 6.8
Ratio of Stockholders Equity to Land, Buildings and Equipment
An increase means acquisitions are financed through retain -3
earnings. A decrease may suggest possible over expansion,
excessive use of credit and greater vulnerability to
financial difficulties if business drops off.
3/82 3/81
Stockholders' equity $221,145 $202,249
Land, buildings &
equipment (net) 65,534 53,818
Ratio of stockholders
equity to land, buildings,
and equipment 3.4 3.8
Ratio of net sales to total assets - Indicates the relative
effectiveness of asset utilization.
3/82 3/81
Net sales $436,207 $406,580
Total assets 283,203 232,206
Ratio of net sales `o
total assets 1.5 1.8
Rate earned on total apzets
3/82
3Z.81
Net Income
$ 18,896
$ 35,531
Total assets
283,203
232,206
Rate earned
on total
assets
6.678
15.301
Rate earned on
stockholders equity
3/82
X81
Net income
$ 18,896
35,531
Stockholders
equity
221,145
202,249
Rate earned
on stock-
holders
equity
8.548
17.571
MN: bs
June 11, 198?
Encloske 2
•.
RE: Lodi Ambulance Service
Rate Increase
PERCENTAGE RATIO TO
PRIVATE RATE
PERCENTAGE
TYPE OF SERVICE
PRIVATE
MEDICARE
MEDI-CAL
4C
CM
BASE RATE
S 85.00
$ 80.00
$ 57.61
9�%
68%
MILEAGE
4.50
4.75
2.97
0
66
NIGHT CALL
17.75
15.00
9.22
84
61
EMERGENCY
17.75
15.00
9.22
84
61
OXYGEN
21.25
15.00
9.22
70
43
ifAITING TIME
10.50
11.00
9.22
0
87
ADVANCED LIFE SUPPORT
49.50
0.00
0.0O
100
100
EKG
35.50
17.50
18.34
50
52
MN: bs
June 11, 198?
j .,
Enclo�urt
RE: Lodi Ambulance Se .ice
Fate Increase.�a�1�``
PROPOSED RATES- "
BASE RATE
95.00 I'
MILEAGE
5.00
NIGHT CALL
20.00
EMERGENCY
20.00
- OXYGEN
25.00
WAITING TIME
14.25
ADVANCE iIFE SUPPORT
55.00
EKG
40.00
HEART/LUNG RESUSCITATOR
40.00
SUCTION
16.00
RESUSCITATOR
16.00
ORAL AIRWAY
5.00
ENDO TR EACHEA L
40.00
ESOPHOGEAL INTUP.ATION
40.00
CHILD DELIVERY
40.00
FLAT STRETCHED:
21.25
ORTHOPEDIC STRETCHER
25.00
SPINAL BOARD SHORT
16.0
" LONG
16.00
SPL!4TING TRACTION
16.00
If LADDER
16.00
CARDBOARD ARM
12.00
" LEG
12.00
INFLATION ARM
12.00
" LEG
12.00
SPINAL CARE
SAND BAGS
3.50
MED ANTI SHOCK TROUSERS
34.00
MULTI TRARIA DRESSING
7.25
NEEDLE THORACOTOMY
75.00
NEEDLE TREACHYOTOMY
75.00
MN:bs
June 11, 1982