City News Service
The city of San Diego will not file a lawsuit against its partner in a joint venture for emergency medical services if an arrangement to investigate questionable financial transactions moves forward, City Attorney Jan Goldsmith said Monday.
At a meeting of the City Council's Audit Committee, Goldsmith said the
city and Rural/Metro of San Diego are setting up a system in which the company hands over financial records for forensic examination.
The city and the firm, which according to its website serves 440 communities nationally, operate San Diego Medical Services to provide paramedics at emergency scenes.
Last week, a report released by the City Auditor identified millions of dollars worth of questionable transactions, and criticized the city for lax oversight which may have cost the city nearly $11 million in reimbursements annually. The company handles all the finances in the joint venture, which has been in place for nearly 14 years.
Separately, the audit called two SDMS transactions worth a combined $10
million questionable, and found that various fees and overhead costs paid to
Rural/Metro "may be invalid, inflated, potentially duplicative in nature or
not properly substantiated."
Under an arrangement being developed with Rural/Metro, the company will hire a retired federal judge to oversee the investigation; provide the records;
and put up a $7.5 million bond, Goldsmith said.
Rural/Metro's Michael Simonsen said the company was prepared to take out
the bond and was confident that its records would support the transactions that have been questioned.
"If they're wrong, they owe us a lot of money,'' Goldsmith said.
The audit rose out of a whistleblower lawsuit filed against Rural/Metro by a former employee. The city attorney said the city and company have to finalize the arrangement by May 15.
"We hope that this agreement goes forward," Goldsmith said.
He said he's been authorized by city leaders to file a lawsuit if necessary, but he'd rather take this approach to research the company's documents, since a court case would be costly.
City officials said they are restructuring the partnership into a more traditional city-contractor relationship and that many of the recommendations in the audit report will be implemented.
Rural/Metro also provides ambulance services to Del Mar, Encinitas, Rancho Santa Fe, Solana Beach and the county of San Diego.