First Step in Dissolution of Partnership
THE CITY OF SAN DIEGO AND RURAL/METRO have taken the first step in dissolving their legal relationship. Following the disclosure of a whistle-blower lawsuit that suggested some fraudulent billing practices by the ambulance firm, the city council decided to sell their share of the emergency ambulance franchise to Rural/Metro in exchange for an agreement to continue their services for two more years while the city prepares a bidding process for open offers to take over the service. (See the Firegeezer report HERE that explains the background of this situation.)
Today it was announced that Rural/Metro has signed a contract with the city to be the exclusive emergency ambulance provider through June 2013. In a press release issued Monday morning, Rural/Metro states:
The two-year agreement begins July 1, 2011 and is expected to generate annualized net revenue of approximately $55 million.
The contract reflects the City's new service delivery model, which involves the City no longer being an equity partner in a joint venture with Rural/Metro. Instead, the Company has entered into a definitive agreement to acquire the City's interest in San Diego Medical Services Enterprise L.L.C. (SDMSE) for $5.5 million, following a vote last week by the San Diego City Council authorizing the sale. Upon completion of the purchase, which is scheduled to occur on June 30, 2011, Rural/Metro will own 100% of the interest in the former joint venture and will retain all operating assets and contracts currently served by SDMSE.
Rural/Metro and the City continue to work toward a resolution of matters raised in a City Auditor's report issued on April 25, 2011 regarding Rural/Metro's role in SDMSE. To facilitate a timely process, Rural/Metro and the City are working with the assistance of a neutral mediator and third-party auditor.
Read the entire press release HERE.
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Also on FireGeezer…
- Santa Clara Fed Up With Rural / Metro – April 29, 2013
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