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HomeMy WebLinkAboutItem 11f - Budget Appropriation for Paramedic Supplies DATE: April 16, 2024 TO: Honorable Mayor and City Council FROM: Chen Suen, Fire Chief By: Richard Oishi, Battalion Chief Maria Lourdes Taylor, Sr. Management Analyst SUBJECT: RESOLUTION NO. 7555 AMENDING THE FISCAL YEAR 2023-24 GENERAL FUND BUDGET, AUTHORIZING A SUPPLEMENTAL BUDGET APPROPRIATION FOR THE PURCHASE OF PARAMEDIC SUPPLIES IN THE AMOUNT OF $25,000, OFFSET BY A REDUCTION IN THE GENERAL FUND RESERVE; AND APPROVING A CHANGE ORDER TO THE PURCHASE ORDER WITH LIFE-ASSIST INC., INCREASING THE THRESHOLD LIMIT OF THE PURCHASE ORDER AMOUNT OVERALL CEQA: Not a Project Recommendation: Adopt and Approve SUMMARY The Arcadia Fire Department has been providing paramedic ambulance service to the Arcadia community since the early 1970s, with quality pre-hospital care for medical and trauma related emergency calls. An imperative function of providing this service is ensuring that the inventory of essential paramedic supplies is well stocked for emergency use. On September 6, 2022, the City Council approved a purchase order with Life-Assist Inc. (“Life-Assist”) in the amount of $80,000 for the purchase of paramedic field supplies. The Purchase Order term was for three years, with an option for two additional one-year extensions. Since 2022, there has been an ongoing increase in both the emergency medical services (“EMS”) call volume and the cost of purchasing paramedic supplies. Due to these increases, it has become necessary to adjust the Purchase Order’s annual threshold limit, and to request additional budget in Fiscal Year 2023-24 to sufficiently fund the increased cost. It is recommended that the City Council adopt Resolution No. 7555 amending the Fiscal Year 2023-24 General Fund Budget and authorizing a supplemental budget appropriation for the purchase of paramedic supplies in the amount of $25,000, offset by a reduction in the General Fund Reserve; and approving a Change Order to the Purchase Order with Life-Assist Inc., increasing the threshold limit of the Purchase Order overall. Resolution No. 7555 Purchase Order Increase for Paramedic Supplies April 16, 2024 Page 2 of 4 BACKGROUND From 2021 to 2023, the Fire Department’s emergency calls for service have increased by 20% (from 5,167 to 6,179), with approximately 70% of calls being medical and trauma- related. Based on this increase in calls for service, it is vital that the Fire Department maintain an inventory of essential EMS supplies. The Fire Department maintains an inventory of paramedic field supplies including medications, intravenous fluids, assorted needles, bandages, splints, tape, gloves, oxygen masks, EKG paper, electrodes, and other miscellaneous medical supplies. These items are used regularly during medical treatment of a patient and standard emergency operations. The Fire Department also maintains field supplies to mitigate larger-scale incidents in the event of a disaster. Traditionally, paramedic field supplies utilized by the Fire Department are re-stocked using multiple private suppliers. Given their ability to deliver a large and varied supply of EMS products since the 1970s, Life-Assist has become the Department’s largest supplier of medical supplies. In FY 2022-23, the City Council approved a purchase order with Life-Assist for three years, with an option to renew for two additional, one-year contract extensions, up through FY 2026-27. For the past two years, the notable increases in both call volume for EMS and the use of paramedic supplies have caused the Fire Department to seek the City Council’s approval to increase Life-Assist’s Purchase Order limit and request additional funding for the year’s paramedic supply purchases. For reference, there have been a 42% increase in intravenous procedures, 30% increase in Oxygen procedures, and 28% increase in cardiac arrest supplies in the past year alone. Additionally, there have also been multiple national backorders of commonly ordered medications for the past three years. These backorders have forced the Department to order similar medications at much higher prices. For instance, the Department has experienced backorders of critical lifesaving medications such as epinephrine, sodium bicarbonate, calcium chloride, dextrose 10, and normal saline. Moreover, recent changes in EMS equipment requirements mandated by the Los Angeles County Department of Health Services (DHS) have necessitated having more EMS supplies on-hand. Finally, with last month’s addition of the City’s Basic Life Support (BLS) Ambulance, the Fire Department will respond to even more EMS calls, requiring a purchase of proportionally more EMS supplies. DISCUSSION To meet the increased demand, it is necessary to amend the current Purchase Order for Life-Assist by $25,000, increasing from $80,000 to $105,000, or by 31%. To fund this much-needed expense, an additional budget appropriation is being requested for FY 2023-24. Resolution No. 7555 Purchase Order Increase for Paramedic Supplies April 16, 2024 Page 3 of 4 To realistically plan for a sustained demand of rising EMS calls and cost of paramedic supplies, it is requested that Life-Assist’s annual Purchase Order be increased by 10% per year, for the remainder of the term. The table below summarizes the proposed increases to Life-Assist’s Purchase Order by year: Fiscal Year Current PO Amount Proposed PO Amount Annual Increase 2023-24 $ 80,000 $ 105,000 32% 2024-25 $ 105,000 $ 115,500 10% 2025-26* $ 115,500 $ 127,050 10% 2026-27* $ 127,050 $ 139,755 10% Note: Amended Purchase Order amounts shown for FY2025-26 and FY2026-27 will only be effectuated if the City of Pasadena, Arcadia’s contract piggyback, elects to pursue its optional one-year extensions. Because paramedic supplies are essential to have on hand for medical calls, there is no option to avoid these costs. While the City could choose to purchase supplies from other vendors, Life-Assist was awarded the original Purchase Order because they demonstrated that their pricing was superior to other suppliers and that they had a greater ability to deliver on a timely basis. Therefore, it is recommended that the City Council approve the proposed modifications. ENVIRONMENTAL IMPACT The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the environment. FISCAL IMPACT To properly reflect the historical increases in both EMS calls and the cost of paramedic supplies for the past several years, Life-Assist’s original Purchase Order amount of $80,000 is proposed to be increased by $25,000, or 31% during FY 2023-24, with 10% annual increases for the remaining year of the agreement, and the two optional one-year extensions. To cover the additional funding for Life-Assist’s Purchase Order increase in FY 2023-24, an additional appropriation of $25,000 is being requested from the General Fund Reserve. Sufficient funds to accommodate the future Purchase Order increases will be proposed as part of the Department’s annual budget. A substantial percentage of the costs incurred with paramedic supplies are reimbursed through billings to insurance companies and patients; therefore, the net cost to the City will be much lower than the total costs shown above. Resolution No. 7555 Purchase Order Increase for Paramedic Supplies April 16, 2024 Page 4 of 4 RECOMMENDATION It is recommended that the City Council determine that this action does not constitute a project under the California Environmental Quality Act (“CEQA”); and adopt Resolution No. 7555 amending the Fiscal Year 2023-24 General Fund Budget, authorizing a supplemental budget appropriation for the purchase of paramedic supplies in the amount of $25,000, offset by a reduction in the General Fund Reserve; and approving a Change Order to the Purchase Order with Life-Assist Inc., increasing the threshold limit of the Purchase Order amount overall. Attachment: Resolution No. 7555 1 RESOLUTION NO. 7555 RESOLUTION NO. 7555 AMENDING THE FISCAL YEAR 2023-24 GENERAL FUND BUDGET, AUTHORIZING A SUPPLEMENTAL BUDGET APPROPRIATION FOR THE PURCHASE OF PARAMEDIC SUPPLIES IN THE AMOUNT OF $25,000, OFFSET BY A REDUCTION IN THE GENERAL FUND RESERVE; AND APPROVING A CHANGE ORDER TO THE PURCHASE ORDER WITH LIFE-ASSIST INC., INCREASING THE THRESHOLD LIMIT OF THE PURCHASE ORDER AMOUNT OVERALL WHEREAS, Life-Assist Inc. is the present vendor who provides paramedic supplies to the Fire Department, with a current Purchase Order amount of $80,000; and WHEREAS, Life-Assist Inc.’s Purchase Order contract term was for three years, with an option to extend for an additional two one-year extensions or up to five years of purchase order contract term (FY 2022-23 through FY 2026-27). This is the second year of its five-year Purchase Order contract term; and WHEREAS, for several years since the issuance of Life-Assist Inc.’s current Purchase Order, the Fire Department continues to incur additional unforeseen expenditures in purchasing paramedic supplies with Life-Assist Inc. primarily due to the steady increases in medical and trauma-related call volume, paramedic supplies costs, and in the purchase of paramedic supplies; and WHEREAS, in March 2024, with the City of Arcadia’s recently added Basic Life Support (BLS) ambulance vehicle, it is reasonable to conclude that the Fire Department will continue to respond to more EMS calls, requiring the need to purchase more EMS supplies for the Fire Department’s use; and WHEREAS, critical to the paramedic services that the Fire Department provides to the public, is to ensure that the inventory of essential paramedic supplies is readily stocked for emergency and immediate use; and 2 WHEREAS, during Fiscal Year 2023-24, the Fire Department incurred additional unforeseen expenditures to Life-Assist Inc.’s Purchase Order due to the continued increases in medical call volume, costs of paramedic field supplies, and the use and purchase of additional EMS field supplies; and WHEREAS, a change order to increase Life-Assist’s current Purchase Order amount of $80,000 by $25,000 has become necessary; and WHEREAS, to ensure that there is sufficient funding to cover the additional incurred expenses of $25,000 that was not budgeted during Fiscal Year 2023-24, a supplemental budget appropriation to purchase paramedic field supplies from Life-Assist Inc. is being proposed, bringing Life-Assist Inc.’s Purchase Order total to $105,000; and WHEREAS, to properly reflect the historical increases in EMS calls, costs in paramedic supplies, and the use and purchase of these items for the past several years, it has also become requisite to amend Life-Assist Inc.’s current Purchase Order’s threshold limit for the subsequent Fiscal Years: $115,500 for FY 2024-25, $127,050 for FY 2025-26, and $139,755 for FY 2026-27. For each Fiscal Year, sufficient funding will be included as part of the City of Arcadia’s Annual Budget Adoption; and WHEREAS, the City Manager has certified that there are sufficient reserves available in the General Fund Reserve for appropriation. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. The sum of Twenty-Five Thousand Dollars ($25,000) is hereby appropriated in the Fire Department, offset with an equal reduction in the General Fund Reserve for FY 2023-24. SECTION 2. The City Clerk shall certify to the adoption of this Resolution.