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Serving Northern St. Louis County, Minnesota

New city policy could rein in Tower ambulance spending

Marshall Helmberger
Posted 11/13/19

TOWER— City officials are working to develop a new purchasing policy that is intended to bring a greater level of accountability and control to city spending here. The new policy is likely to …

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New city policy could rein in Tower ambulance spending

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TOWER— City officials are working to develop a new purchasing policy that is intended to bring a greater level of accountability and control to city spending here. The new policy is likely to rein in spending, in particular, by the Tower Area Ambulance Service (TAAS), which has spent thousands of dollars a year on unusual purchases for a public agency, such as groceries, frequent meals at restaurants, cases of soft drinks, and high-end queen-sized mattresses, apparently for its ambulance quarters.
A Timberjay review of TAAS vouchers over the past two years suggest that the vast majority of the department’s spending is for legitimate purposes, such as purchases of equipment and supplies, and salaries and wages for its emergency responders.
But the extent of spending on groceries, dining out, and equipping ambulance crew quarters came as a surprise to some city council members and interim clerk-treasurer Ann Lamppa after the suspension of former clerk-treasurer Linda Keith in June. It appears that some of the spending, particularly the thousands of dollars spent to equip and furnish the TAAS employee quarters, may not have been properly authorized by the city council.
The TAAS often spends hundreds of dollars each month on meals at restaurants, mostly when ambulance staff transfer non-emergency patients to medical facilities in Duluth. The amounts spent can vary considerably depending on the number of transfers and the destination of those patients, but the amounts do add up. This past August, for example, the TAAS spent $558.21 on meals at Duluth-area establishments like the Texas Roadhouse, The Olive Garden, and the Outback Steak House. In September, the TAAS spent $515.02 on meals at places like Buffalo Wild Wings, Tavern on the Hill, and Grandma’s Saloon and Grill. In July, when the TAAS staff was busy with a record volume of emergency calls, crews spent less, a total of $294.46 for meals at many of the same locations.
The purchasing of meals for crews undertaking transfers is a longstanding practice for the TAAS, although it started at a time when non-emergency transfers were relatively rare, so the costs associated were not as high as they are today. And Lamppa notes that in those earlier years, the limited wages “paid” to ambulance crews went toward their pensions and were not paid directly, as they are today, which made a meal a relatively modest incentive for what were essentially volunteers.
Incentive or not, most other ambulance services in the area do not pay for meals for their staff while on the road, and none allow their crews the use of a city debit card to make such purchases. The TAAS maintains a separate “petty cash” account at a local financial institution to pay mostly for meals and fuel for the ambulances through the use of a debit card. The account has been maintained by regular transfers of city funds to the account, which vary from a few hundred dollars a month to as much as $2,000.
City officials in Orr shut down a similar account, that the Orr Area Ambulance had established for the purchase of various supplies, after the city’s auditor raised questions about the legality of such a fund.
Orr Clerk-Treasurer Cheri Carter said the city council there also rejected a request from ambulance personnel in 2016 for meal reimbursement for longer distance travel. While some on the council were concerned about the legitimate public purpose of such expenditures, Carter said the council had other concerns as well with allowing ambulance crews to stop in Duluth or elsewhere for sit-down meals after transfers. “That just puts the ambulance out of commission that much longer,” noted Carter. “I don’t know how you can justify that. That’s our ambulance and we want it back in our coverage area as quickly as possible.”
The city of Cook takes a similar approach toward meals for its ambulance staff, according to city administrator Theresa Martinson.
The Ely Area Ambulance Service, which is run as a private non-profit entity, used to allow a food stipend up to $15, but director Geoff Galaski said the practice was discontinued after crews rarely applied for reimbursement. Instead, he said, the EAAS added $15 to the rate of pay for transfers to Duluth, which raised the average wage to $24.16 per hour.
The Virginia Ambulance Service does allow ambulance staff to submit reimbursement requests for meals if they are involved in transfers over 90 miles, which is a practice governed by a collective bargaining agreement. Fire chief and ambulance director Allen Lewis said he has no problem providing reimbursement in such cases. “I would never begrudge a crew a meal when the city could be making thousands of dollars on a transfer,” he said.
At the same time, however, Lewis said it has to be done on a reimbursement basis, with proper receipts and other documentation, or else the meals would likely qualify as taxable income.
Indeed, according to rules promulgated by the Internal Revenue Service, meals purchased by the employer while an employee is traveling are considered taxable unless the trip is considered overnight travel, where an employee is required to be away from home for at least one night, typically at a hotel. Employers are allowed to provide meals to employees on the employer’s premises, but only if doing so is for the employer’s convenience, rather than as an incentive or perk for employees.
Tower’s new city clerk-treasurer Victoria Ranua confirmed that, to date, the city has not tracked meal allowances for ambulance staff as a taxable fringe benefit, which may put the city out of compliance with federal tax laws.
Other spending
questioned
The TAAS isn’t only spending money on restaurant meals. According to city records, the grocery bill for the fire and ambulance department has run hundreds of dollars a month over the past year at the local Zup’s grocery store alone. Council member Sheldon Majerle said a manager at Zup’s had even questioned him about the unusual amount of grocery spending by members of the department.
In October, TAAS members spent hundreds of dollars on a wide range of grocery items. On Oct. 2, a TAAS member spent $53.53 on a variety of cookies, licorice, a 138-ounce box of Tide detergent, M&Ms and assorted toffee. On Oct. 7, a TAAS member spent $77.13 on more cookies, crackers, granola bars, beef sticks, chips, fancy grapes at a cost of $4.99 a pound, and a 12-pack of cherry Coke. The receipt claims the items were purchased for an ambulance commission meeting.
On Oct. 21, a fire and ambulance staff member spent $84.82 for packs of meatballs, bacon, potatoes, onions, chili sauce, grape jelly, brown sugar, a family-sized pack of Oreos, ground mustard, pumpkin pie spice, sour cream, cheese, a pound of butter, and a 38-ounce package of peanut M&Ms. The receipt states that the groceries were purchased for “fire training.”
On Oct. 24, a TAAS staff member spent $18.60 for kitchen bags, air freshener and a pumpkin for the ambulance quarters. Other spending ahead of the fire department’s Halloween party pushed the total spending, at Zup’s alone, to $745 for the month.
In recent years, city officials have increasingly used almost any gathering as justification for purchasing significant amounts of food.
Fire or ambulance trainings now include elaborate meals for members. Until recently, city hall meetings during regular business hours routinely included large plates full of fresh-baked cookies from the local coffee and pastry shop, few of which were typically eaten during the meetings. At a meeting of the Ambulance Commission earlier this month, Altenburg provided a meat and cheese tray to the half dozen attendees, although the event was used to justify a number of other grocery purchases that did not appear to be available at the meeting. In the end, commission members largely ignored the offerings that Altenburg did provide.
Where all the leftover cookies, meats, and cheeses from such events end up isn’t clear. Ambulance director Steve Altenburg declined to respond to a number of questions about TAAS spending posed by the Timberjay. He also failed to respond to a request for the service’s purchasing policy.
While any one example isn’t large on its own, Lamppa, during her tenure as interim clerk-treasurer, described a consistent pattern of unnecessary spending on things that appeared to lack a public purpose.
The department under Altenburg has also spent lavishly to equip a local residence which serves as quarters for the ambulance service’s paid duty staff. When purchasing beds for the staff, Altenburg ordered high-end mattresses from a company called Purple, in Utah, which manufactures the trendy beds. Rather than purchasing single-size beds, which would be typical for one person in such quarters, Altenburg bought queen-sized mattresses for $1,000 apiece. Special platforms manufactured by the company pushed the price of the beds to just under $1,300 each. When the ambulance service purchased a television for the house, Altenburg purchased a 50-inch Samsung flat-screen television, for $481 with tax. This past January, the TAAS spent $107.36 for a Sony product, ostensibly for the ambulance quarters. The device, which was purchased from Target, was classified under “Entertainment-Electronics.”
Altenburg, again, did not respond to questions posed by the Timberjay about these purchases.
It’s not clear that such purchases were ever authorized by the city council, as required. Under the city charter, the clerk-treasurer’s spending authority is limited to $1,000, so the purchase of the mattresses and beds at a total cost in excess of $2,500 certainly exceeded that spending level. Under the city’s charter, neither the ambulance director nor the fire chief has any identified spending authority. The city council did approve the rental agreement for the private residence that the TAAS uses for staff quarters, but that agreement is silent on whether the premises would need furnishing.
The Timberjay did request that Altenburg provide documentation of the council motion or resolution that authorized such expenditures, but he did not respond.

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