Leader Blues

Wednesday, March 09, 2005

TOP STORY>> Franchise tax hike to pay ambulance

By JOAN MCCOY
Leader staff writer

Cabot aldermen meeting as the finance committee Saturday morning discussed raising franchise fees to pay for building an ambulance service for the city.

The matter is now in the hands of City Attorney Ken Williams who is researching whether it is legal to raise the fees of all five companies doing business in Cabot from the current level to the proposed 5 percent that would be needed.

Franchise fees are added to customers’ bills, collected by the company and turned over to the city.

Finance Director Dale Walker says if the fees are raised to 5 percent, the increase in city revenue would be $165,000 a year.
The current fees are as follows: Entergy 4.25 percent, First Electric Coop. 4.5 percent, Centurytel 2 percent, Classic Cable 3 percent and Centerpoint Energy Arkla 4.25 percent.

Alderman David Polantz proposed increasing the franchise fees. Polantz said with the growing tax base from new businesses moving in and increasing the franchise fees, Cabot will be positioned within the next few years to offer better services than any other city in central Arkansas.

But for now, the franchise fee is the only stable funding stream available to pay for building a city-run ambulance service, he said.
Alderman Patrick Hutton said the discussion is a little premature. The council’s public safety committee needs to first decide exactly what sort of emergency program the city needs to build.

He also wants to know exactly how much the increase in fees would generate.

“Write it down,” he said.

Since the full council will eventually have to deal with the issues discussed in committee meetings, Hutton says all the questions need to be answered before any decisions are made.

“What we’re doing here is increasing taxes,” Hutton said of the proposal to raise franchise fees.

Polantz didn’t disagree, but he said the extra money would enable the city to build “the premier ambulance service in the area,” the kind of service city residents expect.

“Yes, we’re increasing taxes. I won’t make any bones about that,” Polantz said.

But while Polantz was drawing the big picture, complete with training the city’s firefighters as paramedics to eventually staff the ambulances and Hutton was concerned about the unanswered questions, Alderman Eddie Cook, wanted to talk about the here and now.

Where is the money coming from to subsidize MEMS?

An increase in the franchise fee would not provide the money needed now to pay the subsidy.

A city-owned and operated ambulance service is at least three years away and until that time a private company will have to provide the service.

MEMS is temporarily providing the service while Cabot puts the contract out to bid, but the city must pay a subsidy to MEMS of $8,000 a month, about half the amount MEMS officials say they are losing in Cabot each month because of low run volume.

The 2005 budget includes $15,000 to pay the firefighters’ tuition for paramedic classes.

Fire Chief Gary Meadows told the committee that he has tentatively selected the program at ASU-Searcy because it is nearby and night courses are available so firefighters could continue working their regular shifts and attend classes during off-hours.

Cook pointed out that the money won’t be needed until fall and could be used to help subsidize MEMS until a new contract is awarded.

Arkansas Emergency Transport held a three-year contract with the city but the council took it away earlier this year following disputes over response times and the number of ambulances AET would keep in the city.

MEMS officials have implied that no subsidy would be required if MEMS is given the three-year contract.

Southern Paramedic Service also wants the contract and its executive director has said no subsidy would be required.