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Ambulance company troubles prompt fears over local service 

The corporate parent of the company that contracts El Paso County's ambulance, public transit and hazardous waste disposal services is in the throes of a financial and legal quagmire that critics warn could have dire consequences.

Over the past 36 months, Canada-based Laidlaw's stock, once as high as $27 a share, has dropped from just under $17 share to its current price of about $1.25 a share.

Laidlaw is the parent company of American Medical Response (AMR), the exclusive provider of ambulance service to El Paso County. The company also contracts the city's bus service and owns Safety-Kleen, which provides hazardous waste disposal for the county.

"Laidlaw is in serious financial trouble, and getting worse," said Ted Robertson, a public safety activist who has been a critic of the city's relationship with AMR. "If they go down, we think AMR has to go down, too, and the city will be left in the lurch."

Robertson has accused city and county officials of being "blatantly unresponsive to our warnings." Robertson, along with attorney Tim Pleasant and former mayoral candidate Sallie Clark believes a solid backup plan needs to be formulated in case the company goes belly up and the county is faced with potential disruptions in the region's ambulance service.


Difficulties documented

Last week, City Council members Lionel Rivera and Jim Null initially downplayed Laidlaw's difficulties, and said companies have financial problems all the time.

When he was told the extent of Laidlaw's recent difficulties, however, Null was taken aback. "It may be worth my while to raise this issue with Council again," he said.

Laidlaw's AMR division, headquartered in Aurora, is the nation's largest ambulance service, operating in 37 states with 23,000 employees, including 600 in this state.

AMR has a history of pulling out of communities it deems unprofitable. In Colorado, AMR pulled out of or lost contracts in Aurora -- its national headquarters -- Boulder, Denver and Littleton, and the company lost $100 million in 911 emergency contracts in 1999. Also last year, AMR closed its office in Philadelphia, pulled out of large parts of the Northeast and South, and laid off 2,200 workers.

However, Null claimed that El Paso County has proven to be a money-maker for the company.

And Cheryl Kezziah, public information officer for AMR in Colorado Springs, claimed Laidlaw's problems "wouldn't affect AMR at all, at least not locally."

"We have a financially profitable operation in Colorado Springs," she said. "We have a contract to honor. We're not going anywhere."

Laidlaw's business practices and financial woes have been well-documented, including an extensive 20/20 investigation that aired last year and numerous reports that have been published in American and Canadian newspapers and business trade magazines.

Industry analysts say that Laidlaw's legal and financial woes, combined with its stock market difficulties, make it vulnerable to a hostile takeover, which could lead to a dismantling of the company.


Under investigation

Safety-Kleen and AMR figure prominently in Laidlaw's legal and financial problems. Safety-Kleen, the company's hazardous waste division, is facing a string of pollution-related court actions and is currently under investigation by the Securities and Exchange Commission for fraud. The company has admitted to "accounting irregularities" dating back to 1998.

Last year, Laidlaw restructured its AMR management at a cost of $300 million. In addition, the company lost more than $1.1 billion in revenues and was dropped from the Standard & Poor's 500 index in November. Furious stockholders called for the resignation of the top management and board of directors at the company's annual meeting on Jan. 12.

Stockholders have also filed two class-action lawsuits against the company, charging it with malfeasance, misfeasance, mismanagement of company's assets, and securities fraud.

In September, Laidlaw announced plans to divest itself of Safety-Kleen and AMR, putting the latter up for sale for $1.6 billion. The parent company further distanced itself from AMR through an accounting maneuver that classified AMR as a "discontinued" operation. Both Safety-Kleen and AMR are currently on the market.


Non-action plan

AMR holds the exclusive, five-year, renewable contract for ambulance service in El Paso County. The contract is overseen by the Emergency Services Agency, a joint city/county board established as an intergovernmental body in 1998. Chaired by Colorado Springs fire chief Manuel Navarro, the ESA is an independent entity that answers neither to the city nor the county.

Last April, Councilman Jim Null asked ESA to formulate a contingency plan to ensure continued ambulance service should AMR pull out or disaster strike Laidlaw.

The contingency plan stipulates little more than that, should the county suddenly find itself without ambulance service, the Emergency Services Agency board would call an emergency meeting to consider possible responses.

No other concrete measures are in place. However, Navarro and Eric Schmidt, the ESA emergency services administrator, defended the lack of concrete action plans.

"If [the plan] were more specific, it would have to be changed to fit circumstances anyway," Navarro said.

The nonaction contingency plan has left Clark, Robertson and Tim Pleasant calling the plan ridiculously vague. Over the past two years, the three have been active in city public safety issues, including efforts to keep Fire Station 3 open.

"The ESA board is set up to oversee the ambulance contract, not run an ambulance service," said Clark. "Who is going to do all the internal business things like billing, dispatch, collecting Medicaid and Medicare?"

Specifically, Clark would like the plan to specify exactly who would be providing ambulance service in the event that AMR pulls out of Colorado Springs, and how it would be installed in the event of an emergency.

"I'd like to see the Colorado Springs Fire Department step up to the plate with a plan that spells out who would do x, y and z," she said.

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