Travis County Commissioners Court
February 16, 2010,
Item 10
Since we have you there, ten is to consider and take appropriate action regarding star flight business plan options and recommendations.
and we'll go to 1 1 next.
>> notice how they all left.
i appreciate the opportunity to have discussion with you in regards to two items.
somewhat related but they are independent.
so I'll begin with the first one.
that is consider and take appropriate action regarding star flight business plan options and recommendations.
you should have received as backup material a memo from me as well as some information regarding options as well as some information regarding our financial forecast mold.
if you remember almost two years ago now, I was here with staff to discuss with you future steps for the star flight program.
as a result of that effort, we were looking at next steps.
what is it that we need to provide to our community that will provide the services that are necessary for our population growth, for the age of of our population, and for the basic medical needs of our residents.
of course, when we look at star flight, we don't simply look at star flight as strictly medical.
because we established, I'll go through this short history with you in a few moments, about the fact that it was decided long ago that we would not just serve Travis County, but we would also serve other counties.
we wouldn't just serve medical needs, but we would also serve search and residue needs.
we would also serve fire suppression needs and also serve law enforcement knees.
it became a regional provider much the same as the medical examiners where we also serve our central Texas community.
it has proved to be quite beneficial for the program and for our residents.
because as a result of being regional, then we are able to keep the program at a cost to our residents that is very reasonable.
i'll go through some of that with you today.
i would like to, if I could, kind of introduce all of this, though, by trying to, if I can, give you my perspective.
now, perspective is kind of an interesting word.
it can be interpreted different ways.
but for this presentation and this discussion today, I would like for us to use perspective for looking at something not just simply looking through or something trying to see clearly, but also something that is a distant view.
it's much like a mother with small children changing diapers.
they try to use perspective.
it's not just changing diapers, it's what that child is going to become.
same thing with a struggling businessman.
same thing with a teacher in a classroom that is overcrowded, you look at perspective, and that is you see beyond what you are currently doing today.
that is what I would like do with the star flight program.
we must look at it that way because if we don't then we are going to lose out.
i once had a roommate for some reason always beat me in pool.
and I didn't play much because I wasn't good at it.
but one day he was setting there one evening, clearing the table, and I just had enough of it.
and I said, what in the world is it that you have that you can set here and beat me every time we play pool?
he wouldn't play me in tennis.
but what is it that you would do in pool that is, what is the secret here?
i'm getting tired of seeing you clear a table.
and he said well, all right, I'll let you in on my secret.
my see yet is --secret is in pool you don't simply look at shots before you, you look at next shot and you are always setting up for the neck shot.
that taught me an available lesson not only in pool, he still beat me, but taught me a life lesson.
that is that even though we sometimes stay focused on what we are whan we are doing, we have always got to be prepared for the next place, the next step in order to be able to provide for our citizens.
so far as a court, emergency services, we have always been able to do that.
so today I would like to present to you several plan options in regards to the star flight program.
then choose one that I would recommend for you that I think would be best for our residents.
as you know, in October 1, 2008, we did began our business plan effort with your approval.
what that did an it allowed our second aircraft, now for those listening, we have two aircraft.
of course you say why do you need two aircraft.
you need two in order to be able the fly one 24 x 7.
and that is due to scheduled maintenance and other situations that arise.
and so as a result we have two aircraft.
you have approved, the court approved us to go ahead and staff that second aircraft for 12 hours.
and so we basically are now providing service for one and a half.
and we came in and went through a lot of presentations and slides and all this stuff.
and I apologize to the public that I don't have slides.
i realize something this past weekend too, that I was reading this thing on listening.
it was a doctor that said the human mind, we have a tendency to actually think five times faster than we speak.
so that was rather intriguing knowing I'm going do this discussion with you, knowing that you are thinking five times faster than I'm speaking.
so if I speak a little faster today, it's only trying to keep up with you.
but it's also more important, I think, that we also want to be slow enough so that we really have an understanding of what we are talking about today.
we went to the other services in the second aircraft because we are missing calls.
because our demand was such to where we needed something to provide service.
so we took off.
and we took off with a program.
we ended up making the program Travis County only because it was split out between city and county so many years.
we ended up having to do total transition of not only just people but software, i.t.
configurations billing, numerous things that were part of that transition.
so everything was going pretty good.
then all of a sudden certain things started happening.
that is that we were not able to meet the number of tran sports in our financial mold that --model that we had anticipated.
as a result phase two of the business plan was not recommended last year.
and phase two would have been, that was the next step, the was perspective was that we would have enough service demand to bring in another aircraft and have 24 x 7 available to the public.
because of the fact that revenues, as you just got the report earlier about how revenues are down, not only star flight, it's all over the country in every type of business.
so as a result, the business plan did not go forward.
and so we health off on that but the man was, and I want you to remember as far as perspective, we were going to to with one and a half, realizing we couldn't stay there forever, any then a third aircraft.
that is why we are today.
we are now needing to see our perspective for the future for star flight.
we have today two options we would like for you to consider.
there are others and we can discuss those but we think there are two primary options we would like for you to consider.
and before I get to them there is a bit of information you need to have.
i'll try to go quickly through this.
number one, remember what the service is, what star flight is all about and what it provides.
the other is is that when you try to look at purchasing an aircraft, sometimes it takes between 18-24 months.
now, one of the things that we did last year to prepare for the third aircraft, you approved a letter with american helicopter that would allow us to purchase and be able to maintain 2009 pricing.
if we did it by October 1 of last year.
we did that as a protection.
when we didn't recommend, we held off on that.
we would like to reconsider that because they wish to reconsider that.
so that is part of what we want to talk about today, is aircraft availability.
so if we decide not to prove forward with purchase of a third aircraft, then we must realize that we have to wait a long time to get et.
we also want to recommend today we are not going to go with the original phase two recommendation.
and that is that we would ask for a third aircraft along with staffing.
but what we would recommend as one of the options is that we are only talking about aircraft, not bringing additional staffing.
that would even on come into play when you showed the increase in volume and did e manned.
>> that is option two?
>> that is option two.
of course we also want to have the situation of maintenance.
that is what we will show in option one.
let's go to one.
it is to continue to operate one aircraft 24 x 7 and one 12 x 7.
of course what I have broken out for you is broken out by year, fiscal year 11 through 16, and that is these are the scheduled maintenance costs that would need to take place if we stay as we are.
of course, as you see in fiscal year 11 for those who can't see by television, $one million, approximately, through fiscal year 16, 1.3 million.
again, these are scheduled maintenance items.
this does not include things that happened that need repairs, this is that happened that we hit a lim or things like that.
also in year one you have some operational impact.
you will see days because of scheduled maintenance in fiscal year 10, 85, you would not be able to use a second aircraft to provide service.
then also the reason we brought in the second crew was missed missions.
you would also with this scheduled maintenance of course be able to not make certain calls.
>> I was just trying to recall when we dealt with that last purchase of the copter 45, one thing that we wanted to make sure that we did do, that was to make sure that there was enough sufficient warranty aspects into these things because when you see maintenance, of course, some of that may be covered under warranty and just may be regular maintenance stuff that you need to do to make sure that these operational vehicles are still serviceable.
but within this particular helicopter scheme of things as far as expenditures are concerned, is there a slot made available for warranty?
is it all inclusive as far as cost is concerned?
warranty of course is always included and was included in purchase of these aircraft, Commissioner.
>> I recall.
>> the decision that the court had to make at that particular time, we offered what we called an extended warranty or power by the hour.
>> right.
>> it was to expensive that the court decided not to go forward with a that.
>> right.
>> instead we have is our basic warrant tis as well as repairs that need to be made, as well as scheduled maintenance.
so based upon the number of hours on the aircraft, scheduled maintenance comes into play.
that is what I was reflecting here in those years.
>> okay.
>> yes, sir.
>> I wanted to make sure we were still in the same row as we dealt with in the past.
>> we have been very fortunate with the folks that we work with.
when we have had to do a certain repairs, we have gotten real good benefit from that.
and they have worked real well with us in if regards to cost.
>> okay.
>> option two is to continue to operate one aircraft 24 x 7 and the second 12 x 7 and purchase the third aircraft in fiscal year ten.
that is the aircraft will be delivered approximately in may of this year.
again, we, this is a big benefit to us.
if we decide to do this because the aircraft is industry, --ready.
which means we will be able to row --rotate between the aircraft.
what you are doing is extending maintenance because you have a third aircraft in the rotation.
instead of facing the maintenance hit in 11, you will now face it in fiscal year 13, and fiscal year 14, 15 and 16.
>> right.
>> the benefit of a third aircraft is to extend current maintenance needs.
and also let's wear and tear on the two kissing aircraft because you are now in rotation with them.
also, operational impact you will see of course you will not be down as much because you have always aircraft available when one is down?
also you are going to be less, it shows here, in her number of busies, be able to make more calls because you have aircraft available for service.
the aircraft purchase costs, I think this is what is really most important too and the reason we are coming today too, is that the purchase price I have broken out for you 2009-2012.
you will see the significance of waiting to purchase a third aircraft versus purchasing aircraft now.
so you will see also a special note.
american eurocopter and in e tro aviation have to hold the 2009 pricing for contracts issued by March 2010.
so what you are seeing is that if you look at the pricing, you're looking at 7.1 million for the total cost both purchase price and completion price.
>> what day in March are we looking at?
>> I'll have to ask about that one.
do we know what day?
>> it says issued by March 2010.
march 1 or March 30?
>> they haven't provided a date, judge, except it will be available in March.
>> okay.
>> now, aircraft con if I ration why do --configuration, this is again the aircraft that we have.
if you remember the last purchase was buying two at one time.
we are simply saying we are purchasing the same identical aircraft.
as far as recommendations, you will see that I mentioned to you the ones I already mentioned but I'll go over them again.
that is our recommendation is that we go ahead and purchase a third aircraft for all the reasons that I outlined earlier.
and for future community needs, the number of days of service that will be available with aircraft, deferred maintenance costs, the aircraft purchase costs itself, aircraft availability, aircraft acquisition time.
(change in captioners)
>> I've attached a financial forecast model sheet which will actually show you the breakout we did before, and we simply did it by year, what the actuals are and the forecast and budgets are through 2016.
it also shows you the subsidy.
that's where we'll have to get to at some point here.
everything is in accordance with what we feel and you feel as a court, is the subsidy that should be the balance in regards to this program.
and we can look at price and collectibles and all of that.
as you can see the financial forecast model.
even though you may have fewer transports, based on your pricing and collectibles, you can still -- and also how you run the program.
because one of the things we were able to do that I didn't mention is we reduced our overtime on additional staffing by changing the scheduling.
so we've done things with the program to cut costs and we'll continue to do that.
in manet we'll show you how we think out of the box and show you what we do with governments by partnerships with hospitals.
yes, sir?
>> we're working in the region and still have the residents of Travis County to serve.
however, outside of travis count, -- county, we serve within the region.
are there any rules and regulations as far as competition within the region that we serve?
because there are other ambulance services.
we're in the same competition, per se.
how is that looked at and how does that really work if we are -- how does it really work because I'm really kind of curious to know if the competition may intervene within the region that we serve.
>> well, we have been fortunate for our residents that there are other aircraft, other companies that provide medical outside of Travis County and that is stationed there.
and, so, that helps when we have the demand problem, and that will help if we have a demand problem in the future.
there's a place for that.
by stab lishing -- by us establishing the program the way we have and developing the partnerships we have with hospitals, Travis County hospitals and also by developing the financial formula that allows us to bring the revenue back into Travis County, we're able to provide a program reasonable as far as cost for the Travis County residents, because now we're charging $34,000 for your -- $3,400 for the Travis County residents and outside $7,500.
for the privates, those are not anywhere near that.
in fact, we feel we're really reasonable when it comes to that.
again, our whole purpose is not to make a profit and to be a business with profit.
our whole purpose is to serve our residents at the best and most efficient cost and high-quality service.
so, we have been able to do that.
had we just stayed a Travis County service, we wouldn't be doing star flight like today.
>> what's the useful life on one of these aircraft?
at some point, do we need to look at replacement?
and is there a curve on maintenance related to the age of the aircraft?
>> there is.
i probably need to go to my expert in regards to -- stan is our maintenance supervisor, and, so, stan, I'm going to -- well, you know what, stan?
i'm not.
get up here.
i would hear from him later if I try to take off on this.
>> the useful life of an aircraft really depends on how it's maintained.
but you probably won't see many aircraft in the e.m.s.
business that are older than 15 years or so, something like that.
and, obviously, the more time goes by, you know, the maintenance costs will increase.
>> and how old is our oldest aircraft?
>> they're both four years old right now.
>> that's one of the things the court -- Commissioner, you weren't here but judge Biscoe, Commissioner Gomez and Davis, that's one thing they wanted to make sure happened is we didn't come back in five years when we purchased the first aircraft.
so we feel like we have the capabilityt of making the aircraft last as long as they can and the third it extended longer because, again, you're rotating.
>> how confident are we in these revenue proprojections?
>> how confident?
>> yes, sir.
>> due to the weather, we're not confident we're making that revenue today, but we're confident based upon the basic purpose of the business, that, you know, the numbers, as the economy grows, we think our transport numbers are going to grow.
we also have several things that came into play besides all the transitional work that was done.
we had enhancements made to the aircraft, judge.
we know there will be probably a federal mandate coming from the government in regards to safety of aircraft due to so many deaths recorded in 2008.
we just had a recent one in el paso.
but our aircraft now have basically all the recommendations that are now coming out of that particular discussion in congress, and, so, we feel like that's a big advantage.
that could cause us to have a little bit of a stress because, if such things do come down that they're going to require aircraft to have all these things, training awareness, night vision goggles, all the different things we have, it could put a behind, Commissioner Davis, in regards to some of the outside agencies that will have to comply.
but we're ready and setting good in regards to the safety concerns but also being able to handle the demand.
in regards to the revenue, judge, again, that comes back to the subsidy situation again is what's really comfortable for you in regards to subsidy, because I don't anticipate that, again, today, that our transports will be where we'd like for them to be, and that's due to a lot of factors.
weather is one.
we had the severe drought.
people did not go to the lakes.
people did not and are still not spending money for leisure activities.
again, when you look at that it is that we do, we know that we're going to be needed, and we know, as our population continues to grow, we know that, because of our terrain, the way it is, especially on the west side of Travis County, we know the lakes aren't going away.
they're drying up, but they're filling up again.
we know the cliffs aren't doing away, mt.
benel isn't going away so we'll be needed.
>> you assuming the acquisition of a new aircraft in 2010 in the revenue projections?
>> yes, sir.
not in the one before you.
the second part of my presentation will be with the donation actually proposed.
but, yes, sir, that's in there.
>> okay.
i'm looking at the profit subsidy line item increasing dramatically 2011, 2012, then going down dramatically, 13, 14 and 15.
see what I'm looking at?
>> yes, sir.
>> what's that based upon?
>> your maintenance cost -- remember, you have your scheduled maintenance.
also, you will see the number of transports projected as well as the number of fees, and you will see the continuation of increase in the amount of fee, especially for out of county.
i've tried to keep it fairly low for in-county, but it goes up for the out-of-county.
>> okay.
>> so that's the first portion of -- that's the first requested agenda item I have is to consider a third aircraft at this particular time.
also, I've kind of missed out here.
i apologize, casey.
i attached, also, an 18-month plan-update that's attached behind this, which will actually describe in detail some of the things I just kind of flew over and that is all the amount of work that's done in the transition.
it also explains to you the maintenance that I just tried to explain briefly and how that broke out.
it also goes into the transition of the employees, talks about the patient transports.
something of note, if you look at the financial forecast model, if you look on about the fourth page, you will see that, except for the number of transports, you will see we've done well in regards to the other elements of the financial forecast model regarding the nonresident average bill, nongross collection percentage, average resident bill and collection percentage.
so we think the financial forecast model is sound, just tough due to circumstances.
we have a tough economy, people losing their insurance.
you as a court, I'll be discussing settlements shortly.
that's another discussion we have to have.
people are hurting because they don't have insurance, losing their jobs or or are unable to pay.
>> 10 and 11 come together?
>> yes, they do.
>> you expect action from the court at roughly the same time?
>> yes, sir.
>> on 11, I got -- I was contacted and I represented that, in my view, the court should discuss 11 today internally and that, if there were presentations to be made, we'd accept them next week.
should I call Item 11 up?
>> yes, sir.
(The Court continued to discuss Item 10 during the discussion of Item 11.)
Last Modified:
Tuesday, February 16, 2010 6:05 PM
