Lenoir City Council at a special called meeting Monday approved an ordinance authorizing the city’s one-year agreement with Priority — which was established as a company in early January and is snagging service contracts across East Tennessee — as the preferred ambulance provider in the city for E-911 dispatch calls.
Jim Scott, Lenoir City attorney, said the ordinance simply solidifies the city’s defense on the agreement.
“The ordinance we passed today was proactive in nature,” Scott said. “... As a precautionary measure, if we did it the way they said we should have did it it could nullify their lawsuit to begin with even though we have defenses that are stacked in front of that, so it was basically putting up what would have been a fifth line of defense to defeat the lawsuit.”
The city approved in mid-April an agreement with Priority to provide emergency and nonemergency services within Lenoir City limits at no cost to the city.
Public Safety Director Don White said previously that the decision to go with Priority was a “no-brainer.” Services inside the city had previously been dispatched from Loudon County Rural/Metro stations outside city limits, either from the Loudon County Justice Center, the Greenback Volunteer Fire Department or in Philadelphia, which added to response time.
White said having ambulances stationed inside city limits cuts response time, which could make the difference between life and death.
“They approached us with this offer, which we’ve never had before. We’ve never had an actual ambulance service inside the city limits. We’ve always piggybacked off the county contract, which has been Rural/Metro for quite some time, many years,” White said. “We felt like this was a win for the citizens and the visitors because of the quicker response time.”
The lawsuit, filed May 20 in Loudon County Chancery Court, said the city should pay “an amount not to exceed $1 million,” and terminate its contract with Priority.
Rural/Metro claimed that in January 2011 the company entered into a five-year agreement with Loudon County to provide exclusive emergency and nonemergency ambulance transportation within county limits. Rural/Metro also claimed that in August 2011 it entered into a service agreement with Fort Loudoun Medical Center, where Rural/Metro would provide emergency and nonemergency medical transportation of services for the hospital.
“... Officials of Lenoir City had knowledge of the contracts between Rural/Metro and Loudon County and between Rural/Metro and Fort (Loudoun) Medical Center,” according to the lawsuit. “... Officials of Lenoir City acted with the improper motive of preventing Rural/Metro from transporting patients from Fort (Loudoun) Medical Center to destinations outside Lenoir City in order to allow Priority Ambulance Service to gain additional revenue from such transportation of patients.”
In a letter to FLMC noting the service change, White said Priority will be the sole provider within Lenoir City limits for patient pickup and delivery.
“No patient pickup within the Lenoir City jurisdiction will be permitted unless an ambulance service response is requested by the E-911 center in conjunction with the Lenoir City Public Safety Director,” White said in the letter.
Scott said the Lenoir City charter also backs powers of city council, quoting the city’s charter in Article II, Section 10.
“This provision expressly authorizes the City to control its streets, avenues, alleys, and all thoroughfares for the well being, health, and safety of its citizens without a requisite passage for ordinance in this instance,” Scott said in a faxed statement. “This is simply a lawful exercise in power the City was authorized to engage in that cost ... the City of Lenoir City no money.
“Further it is denied that Article XI, Section 14 was violated as this was a matter that did not involve purchasing, bidding, or money,” Scott continued. “This action by the City was simply taken to protect the health, safety, and welfare of its Citizens at no cost to the taxpayers, based upon the previously referenced problems of Rural/Metro.”
Rural/Metro, one of Priority’s main competitors, filed for Chapter 11 protection in August, and on Dec. 31 the company emerged from bankruptcy. Bondholders drummed up about $135 million to pay for Rural/Metro’s exit from bankruptcy, and the restructuring slashed the company’s debt in half, according to a press release issued by the Scottsdale, Ariz.-based company.
Priority recruited some staff based out of the Loudon County Rural/Metro office, having offered those personnel $5,000 signing bonuses and higher wages.
“I am not permitted to discuss anything because it’s ongoing litigation,” Bryan Howard, Rural/Metro general manager in Loudon, said.
Scott said the litigation has now been turned over to attorneys with the Tennessee Municipal League.
“... But I do think that it is without merit, and I think that there are a number of defenses,” Scott said. “Well, I think the city acted completely proper, but I think that based upon that fact and many others there are a number of defenses to the lawsuit, and I expect it at some point to either be dismissed or the proceedings stand quickly.”
Rob Webb, Priority vice president of operations, said services have gone “well” in Lenoir City.
“We are very excited about being in Lenoir City,” Webb said. “It’s a great community, and it’s truly an honor that they have chosen us to serve their citizens.”
The city of Loudon recently approved a contract with Priority, which began Tuesday. Rural/Metro has not contacted Loudon officials, City Manager Lynn Mills said.