GARDINER — Three years ago, the Gardiner Ambulance Service was struggling to pay its bills.

“We were facing a financial situation where we just weren’t taking in enough cash each year,” Scott Morelli, Gardiner city manager, said.

The Gardiner Ambulance Service, staffed by the Gardiner Fire Department, provides emergency medical transportation services to Gardiner and its surrounding towns, and the towns pay to support the service.

By 2014, the deficit between what was billed for the ambulance and what was collected had reached a critical point.

Faced with the prospect of bridging a gap of more than $400,000, city officials knew they were risking losing some of the neighboring towns if they hiked ambulance fees to meet the shortfall. And if any of the partner towns had opted to contract with a private ambulance service instead of Gardiner, it’s not clear the service could have survived.

“Once a service is gone in a municipality, it’s hard to start it back up again,” Morelli said.

As of the end of this month, only three years later, the debt is slated to be paid in full, and city officials are contemplating establishing a reserve fund to set aside money to pay for ambulances and equipment in the future.

“That’s when you know you have turned the corner,” Denise Brown, city finance director, said. “When it can support itself and even the capital purchases.”

City officials started to understand the scope of the problem in early 2014, when the consultant they hired, Municipal Resources Inc., found that revenue projections for the ambulance service had been too optimistic for several years running. At the same time, poor billing and collection processes compounded the problem.

Morelli said the fire chief at the time, Mike Minkowski, had said on several occasions that he didn’t understand the numbers and they didn’t seem to be adding up.

At the same time, Gardiner city officials sat down with officials from Chelsea, Farmingdale, Litchfield, Randolph, Pittston and West Gardiner, including those who serve on Gardiner’s Ambulance Advisory Board, to explain what had happened and what they proposed to do about it.

Morelli characterized the steps Gardiner officials took as bold and drastic.

The Gardiner Ambulance Service is set up as an enterprise fund, which is a mechanism that cities and towns use for services they charge fees for. Traditionally, Gardiner taxpayers, through the city’s general fund, have footed 20 percent of the service’s cost. The remaining 80 percent was generated by billing ambulance customers. As part of the plan to fix the financial drain, ambulance fees were increased as the consultants recommended; that would bring in $40,000 a year more.

Even so, the towns were facing a 144 percent increase in what they would be asked to pay that year, and Gardiner officials knew that could drive some of them away. If that happened, the remaining towns would be asked to pay more to cover that cost as well as to preserve the level of ambulance service they were getting. Gardiner officials agreed to increase taxpayer support from 20 percent to 35 percent, make some cuts and defer some purchases.

“It was quite a bit of money,” Jason Farris said. Farris is the Pittston fire chief and an advisory committee member who attended that meeting and others to hear what Gardiner proposed.

“(The plan) would all work,” he said, “but everyone would have to dig in deeper.”

At the time, Pittston was one of the towns that started to look at private ambulance services, but they didn’t always offer a comparable service. Gardiner’s ambulances are staffed with medics, while not all private ambulance staff have that level of training.

“I don’t know if we have been good at explaining the difference,” Farris said of emergency services. Emergency medical technicians can be trained in three months. Paramedics require years of training, and they are able to perform some surgical procedures. They also have stringent license renewal requirements.

“You get what you pay for,” he said.

The Gardiner Ambulance’s billing practices at that time left all the towns vulnerable to swings in costs, depending on the success of collections. To bring more certainty, Gardiner devised bundled rates and pursued more accurate and timely billing by securing insurance information from patients as much as possible and more aggressive collection practices.

“There’s only a certain amount of time when a bill gets paid,” Brown said. “If a patient gets a bill for an ambulance ride a year later, what’s the chance it’s going to be paid?”

City officials also changed the way they projected ambulance revenue.

It was, Morelli said, an act of faith on the part of the towns the Gardiner Ambulance serves to stick with it.

And it has paid off. When ambulance bills went out earlier this year, all the towns saw a decrease in what they were asked to pay thanks to changes that were made as well as two more towns — Richmond and Dresden — joining the service area and spreading costs out even more.

“Now,” Farris said, “we’re reaping the benefits. We were able to see a decrease in fees. We have a new ambulance and two extra towns so the rates have gone down.”

For Nelson, who started as Gardiner’s fire chief in September 2014, having the ambulance service is a good thing.

“As corny as it sounds, it’s protecting life and property,” he said.

This year, Gardiner’s fire and ambulance staff will respond to about 2,750 calls. Of those, about one-third of them will have been in Gardiner. The department would not be able to maintain its current level of staffing and service if it did not serve the neighboring towns and receive revenue for that, Nelson said. Gardiner taxpayers would see a large increase in what they pay.

Morelli and Brown say they knew the general fund would be repaid, but they didn’t know it would be this soon.

“This is what we planned for and strategized,” Morelli said. If voters in any of the partner towns had swung the Town Meeting votes, he said, the ambulance service would have been ruined.

In Gardiner, the burden is also shifting.

Morelli said Gardiner’s support of the ambulance service is still at 35 percent, but the goal is to move closer to 20 percent.

And Nelson said that with the ambulance service paying its debt to the city’s coffers, the service can work on other debt it has on its ambulances.

“We can save money for the partner communities, and it puts us in a better position for next year and the year after because we are not carrying that debt,” he said.

Jessica Lowell — 621-5632

[email protected]

Twitter: @JLowellKJ