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Clifton Heights council to consider $300,000 loan to cover ambulance startup costs as STAT Medical steps in
Summary
Council members discussed a plan for STAT Medical to take over ambulance staffing and for the borough to front $300,000 to Clifton Heights Fire Company to cover startup payroll and operating costs while billing revenues begin to flow.
Clifton Heights Borough officials said they will ask council to authorize a $300,000 loan to the Clifton Heights Fire Company to cover startup and payroll costs as STAT Medical assumes local ambulance staffing.
The Borough Manager told council, “we're asking council to lend the fire company $300,000 in exchange for when the money comes in, they'll be reimbursing us back.” John McLean, the borough solicitor, described the loan as a temporary advance secured by future billing revenue: “we would be granting money on a loan basically, a loan condition to the to the fire company,” and the borough would take a security interest in reimbursements until the advance is repaid.
Why it matters: Prospect Medical’s exit and other provider changes left a potential coverage gap that borough leaders said could be minimized if STAT Medical hires local personnel and continues service. Borough officials said billing and insurance reimbursements typically lag by about three months, creating a cash-flow need for the fire company while revenue streams stabilize.
What officials discussed: The Fire Chief summarized the operational plan as a short-term staffing bridge: “That's that's what the game plan is. Give them money for the start up so they can hire the necessary people.” Council members and staff raised questions about protecting borough funds, the mechanics of releasing the money incrementally, and how reimbursements will be collected and applied to the loan.
Legal and financial safeguards: McLean said the contract will include provisions that the borough will withhold a portion of the fire company’s ambulance revenues until the loan is repaid and that the borough will require documentation and security interest in those revenues. The solicitor also said payments to insurers and Medicare/Medicaid will continue to be routed through the fire company, which will then forward agreed percentages to the staffing provider and the borough per the contract terms.
Operational details and risks: Officials estimated the local station might require roughly 20 staff to cover shifts at one base, while a regional staffing rollout could mean tens of full-time equivalents countywide. Council members noted uncertainty in Medicare and Medicaid reimbursement rates and the risk that a staffing provider could fail to meet expectations; the solicitor said protections will be written into the contract to limit the borough’s exposure.
Next steps: Council will be asked at a forthcoming meeting to authorize the emergency spending mechanism and to ratify a contract that would allow the borough to provide the advance in stages. No formal loan was approved during the meeting; council action was described as pending formal contract review and placement on the council agenda for ratification.
