By DAMIEN FISHER, InDepthNH.org
Cheshire County officials misused millions in federal COVID grants by starting a new ambulance service which is now damaging the already strained existing emergency medical service providers, according to a complaint filed with the United States Treasury.
“It’s been downright dirty,” said Tyler Boucher, a long-time leader in regional EMS companies.
According to the complaint compiled by Boucher and several other regional Fire and EMS leaders, Cheshire County Administrator Chris Coates, County Commissioner Jack Wozmak and others led the effort to use American Rescue Plan Act fund to create the new Cheshire County EMS, and is now unfairly competing for municipal contracts by offering deeply subsidized rates.
“It’s a monstrous, multi-million dollar machine they have used to fracture and destroy the EMS system in Southern New Hampshire,” Boucher said. “We believe the County, as an entity, does not have the statutory authority to even provide EMS.”
Boucher is a former leader at Diluzio Ambulance, and now works at Rescue Inc.
Cheshire County EMS, started last year, is the only county-owned and operated ambulance service in New Hampshire.
According to the National Association of Counties, New Hampshire’s 10 counties have limited authority and are only permitted to act when explicitly empowered by the legislature. New Hampshire Counties do not have the authority to operate ambulance services, according to the NAC.
That did not stop officials from using more than $3 million in ARPA funds to build the Cheshire County EMS. This new service is now undercutting established providers like Keene EMS and non-profit Rescue Inc. using federal funds, according to the complaint.
“These actions both contravene the statutory purpose of ARPA and deny communities the ability to build a strong, resilient, and equitable recovery. Both actions are strictly forbidden in the Final Rule,” the complaint states.
The Cheshire County EMS is targeting Keene Fire’s EMS service to take away contracts it has with other communities, Keene Fire Chief Donald Farquhar said.
“It’s having a dramatic effect on Keene Fire,” Farquhar said.
County Administrator Chris Coates, who has not seen the complaint, dismissed its allegations.
“This complaint is frivolous and full of the same gross misstatements and inaccuracies that we have heard from the City of Keene’s IAFF Local 3265 ever since the county began working with municipalities, our state legislators, our Congressional delegation, and state officials to fill the void created by the collapse of the DiLuzio ambulance service,” Coates told InDepthNH.org in an email.
According to the complaint, Cheshire County officials are illegally using the ARPA funds to subsidize the rates it offers to municipalities, and withholding money from any community that does not sign with the County.
“(Cheshire County) Officials were bold enough to say on the public record multiple times that they would specifically restrict the distribution of ARPA funds to anyone who refused to sign a contract with the newly formed (Cheshire EMS,)” the complaint states.
In February, after County officials had promised not to compete with Keene Fire, Cheshire EMS offered the town of Westmoreland an amazing deal.
Instead of paying Keene about $64,000 per year for the service as it had been doing, Westmoreland went with Cheshire EMS for $8,000. That’s a 166 percent reduction in the regional average for EMS service, according to the complaint.
The reason Cheshire EMS changed its mind about competing with Keene Fire is because Keene Fire was refusing to sign a mutual aid agreement, according to the complaint. County Administrator Chris Coates explained as much to Keene City Manager Elizabeth Dragon in a February letter.
“While the County remains ready to engage in conversations about mutual aid services, we are forced to rescind our previous statement of non-competition with the City as initially envisioned,” Coates wrote.
The complaint alleges this is another example of bad faith actions by Cheshire County.
“The practice of threatening an official so as to prevent them from properly assessing and carrying out their official responsibilities can only be seen as a Coercive Practice,” the complaint states.
Cheshire EMS kept up the pressure, seeking more municipal contracts to push out Rescue Inc. and Keene fire, according to the complaint.
This spring, the town of Swanzey got four bids for a new ambulance contract. Keene Fire was offering a contract starting at $260,000 per year; Rescue Inc.’s bid came in at $358,000 for the first year; Peterborough Fire quoted $440,000 for the first year. But Cheshire EMS won the contract with an offer of $47,000 for the first year, $67,000 for the second year, and $81,500 for the third year.
Swanzey signed a three year contract with Cheshire EMS.
County representatives told Swanzey officials in open meetings these prices were only possible by using the federal ARPA money as “smoothing funds.” They also told Swanzey officials signing an EMS contact with Cheshire is the only way Swanzey would see any of this ARPA money. The county would not hand over any of the federal cash to subsidize any service but its own.
“No, we have obligated our ARPA funds, we have a long-term plan, and it doesn’t include funding every other ambulance service,” Dan Eaton, Chair of the County Delegation, told Swanzey officials in June.
Neither starting an ambulance service with federal funds, nor then using federal funds to compete against existing ambulance services, is allowed, according to the complaint.
“They have been brazen with all of this,” Farquhar said.
When the county got the funding through ARPA it was supposed to go toward making sure local governments “have the resources needed to fight the pandemic, sustain and strengthen the economic recovery, maintain vital public services, and make investments that support long-term growth, opportunity, and equity.”
Instead, the county has built a legally questionable ambulance service that is hurting Keene Fire, according to the complaint. Farquhar said the city is able to spread out the cost of EMS service by contracting with other towns. When one leaves, like Westmoreland, the costs for the remaining towns will go up. This further disadvantages Keene Fire which does not have access to federal money to subsidize its rates.
The lynchpin to the drama is Diluzio Ambulance. The county’s second largest EMS provider had been struggling for years when Cheshire County got the ARPA money. Initially, Cheshire officials explored buying Diluzio. When that deal fell apart last year, the County already spent $3.5 million in federal funds for an ambulance service that wasn’t going to happen.
County officials pushed ahead and got a contract to transport patients at Cheshire Medical Center, effectively getting Diluzio’s hospital contract canceled. At the time, Cheshire EMS had one ambulance fully staffed.
This story is developing and part of continuing coverage. Next Up: What happened to Diluzio.