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Gary City Council Investigative Committee members (l-r) LaVetta Sparks-Wade, Michael Protho, Herb Smith, Mary Brown, and Linda Barnes-Caldwell.

Fund 224 hasn't always been the City of Gary's cash cow

Contributed By:The 411 News

Expansion of health care insurance pumped up ambulance revenues

Fund 224 hasn’t always been the City of Gary's cash cow as it is today, providing $2 to $3 million a year to help pay city salaries and other expenses. The fund gets its monies from fees paid by users of the city’s ambulance services.

When certified emergency medical technicians and paramedics personnel provided ambulance services as a division of the fire department, Fund 224 paid for maintaining and repairing ambulances.

Under the new Freeman-Wilson administration in 2012, the city merged its fire and emergency ambulance services, laying off about 40 EMTs and paramedics, and giving the jobs to firefighters with paramedic training. The mayor said it was a better solution than contracting out ambulance services to a private company.

Back then, the EMS Division was not cost effective during a time of cost-cutting, the mayor said. The city’s finances were under supervision of a state appointed fiscal monitor that had recommended the outsourcing. The fiscal monitor reported the EMS Division collected less than half of the fees billed for ambulance services and the division was subsidized from the city’s General Fund by about $2 million annually.

The fiscal monitor concluded that about one-third of the uncollected fees were provided for services to those without insurance. It also faulted the department for not taking more aggressive actions on the remaining uncollected bills.

Jumping forward to 2018, the implementation of the Affordable Care Act, aka ObamaCare and the expansion of Medicaid have helped to double and triple the receipts of Fund 224 as more people have insurance coverage that pays for ambulance services. In turn, the fire department has improved its billing and collection practices.

During its last meeting, the Gary City Council approved a motion to issue a subpoena to its mayor to turn over to the council’s investigative committee all financial records her administration has relating to the fire department’s emergency ambulance services.

The city council committee wants a record of the fund’s use going back to January 2012, when Karen Freeman-Wilson took office.

As it turned out, a subpoena to get records of the fund wasn’t necessary.

When the investigative committee met Thursday evening, its chairman Herb Smith said all documents had been received from the mayor. “All we have to do today is set up a schedule to review the documents and come up with specific questions we have for the administration,” Smith said.

The committee set October 9 as the deadline for members to review the documents and formulate their questions to the mayor, and will request a response by October 23, the date of the next committee meeting.

In late August, the mayor released an accounting analysis of deposits and withdrawals from Fund 224, the city’s general ledger account for ambulance services. That analysis covered January 1, 2015 through March 31, 2018 and was presented to satisfy questions about the administration’s use of those funds.

Whittaker & Co. performed the analysis, finding $8,160,403.37 had been transferred from Fund 224 during the 2015-18 timeframe. The analysis found that all funds went for city payrolls and other city expenses, except for $131,850.49 which remains unexplained.

Councilwoman LaVetta Sparks-Wade, chair of the council’s committee on emergency ambulance services initiated the inquiry in April when she found that a discrepancy of nearly $5 million existed in Fund 224. Sparks-Wade said $5.2 million was the balance in the city’s general ledger accounting system – RDS – for ambulance services. But the checking account balance for ambulance services showed only $377,000.

The fund is restricted for use only by the Fire Department. City council approval is needed for other departments to access the funds. And the city council hadn’t received any requests to transfer funds.

Sparks-Wade also introduced last week’s motion to subpoena the administration for the records.

Whittaker found the only allowable expenses from Fund 224 went to Fire/EMS salaries each pay period in the amount of $25,000.

The committee notified Mayor Freeman-Wilson, her chief of staff Dayna Bennett, City Controller Angelia Hayes, Corporation Counsel Niquelle Allen, Fire Chief Paul Bradley, and Shanita Starks, Business Manager of the Fire Dept. of its first meeting. Chief Bradley and Starks attended. They weren’t asked nor did they volunteer to participate in the committee’s discussions.

Story Posted:09/30/2018

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