Officials of a St. Tammany Parish fire district who last week endured nearly two hours of scolding from the Parish Council over a budget shortfall voted Tuesday to get rid of their financially underperforming ambulance service.
That had been the strong recommendation of Parish Council members who chided Fire District 12 leaders for getting into the ambulance business a little over a year ago.
Steve Krentel, chief of administration for Fire District 12, said his five-member board voted to end the service as of Nov. 1, a decision that will cut five full-time and 20 part-time paramedic positions from the payroll.
The district also will sell the five used ambulances it had bought for $25,000 each, Krentel said. He thinks the district will be able to recover most of that cost.
Krentel said the service proved a drain on the district in part because the Affordable Care Act of 2010 resulted in smaller payments for each ambulance trip than officials expected. The district anticipated getting $700 per trip, but the actual figure was closer to $500.
Krentel said cutting the ambulance service will save the fire district about $135,000, which he said could eliminate this year’s deficit. However, the district will not have any cushion to tide it over until property tax revenue begins arriving in January. The district, which serves unincorporated areas around Covington, Abita Springs and Folsom, receives a 25-mill tax.
The fire district had to get permission from the Parish Council to pursue two additional steps to shore up its finances: seeking an $800,000 line of credit and restructuring other debt. The council reluctantly voted to allow the board to do so.
The $800,000 must be repaid by March 1, Krentel said.
As for the other debt, the district wants to pay off $1.1 million it owes on a loan from Whitney Bank several years early, saving money in interest. The bank has waived the early payoff penalties, Krentel said. The district will use $1.5 million it had borrowed for construction projects but never spent to pay off the Whitney debt.
Finally, the board wants to restructure a $3.2 million debt to extend the repayment period, reducing the monthly payment but adding about $345,000 in long-term interest costs.
The Parish Council voted last week to ask the 22nd Judicial District Attorney’s Office and the state Legislative Auditor’s Office to investigate the board for malfeasance.
DA Warren Montgomery said in a written statement that his office already sent a letter requesting detailed information from all of the parish’s fire districts after a recent WWL-TV report about District 12’s woes.
“So, we’re on a fact-finding mission right now, and based on the results of the information we receive, we will take the appropriate action,’’ he said.
Some other groups also have looked at the district’s books, Krentel said, including Concerned Citizens of St. Tammany.
Four of the district’s five board members are appointed by Parish Council members whose council districts fall within the fire district’s boundaries, and the fifth is appointed by the parish president. Their terms run concurrently with those of the appointing officials.
Follow Sara Pagones on Twitter, @spagonesadvocat.