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Whistle Blower Alleges Ambulance Partnership Shortchanged San Diego

A partnership created to provide emergency medical services to San Diego shortchanged the city by as much as $12 million, according to a whistle-blower lawsuit, the San Diego Union-Tribune reports.

Background

In 1997, San Diego partnered with the private firm Rural/Metro to form an ambulance service called San Diego Medical Services Enterprise, or SDMS. The city and Rural/Metro planned to share costs and revenue in the public-private venture.

In August 2010, Robert Heffner -- who oversaw SDMS for Rural/Metro -- filed a whistle-blower lawsuit alleging that the company did not repay debt collection money owed to the city. A month later, the City Attorney's Office began investigating SDMS' finances.

A local judge had sealed the whistle-blower lawsuit until earlier this month.

Whistle Blower's Claims

In the lawsuit, Heffner claimed that Rural/Metro accumulated between $1.5 million and $2.5 million annually in debt collection revenue between 1997 and 2007, but kept those funds instead of splitting them evenly between the company and the city.

Dan Kalish, Heffner's attorney, said Heffner agreed to dismiss his lawsuit as the city works to resolve its financial issues with Rural/Metro.

As part of the deal to dismiss the lawsuit, Rural/Metro agreed to pay for forensic accounting of its finances over the past 13 years and put up a $7.5 million surety bond to secure any future claims by the city.

Auditor's Report

On Monday, City Auditor Eduardo Luna released an audit raising issues similar to those included in the whistle-blower lawsuit.

The audit found that the city had not maintained sufficient oversight of SDMS' finances. It also identified several improper financial practices used by Rural/Metro.

Rural/Metro Response

Officials at Rural/Metro said funds that the company used from SDMS went toward providing emergency services to the city.

Chris Kevane, attorney for the company, said Rural/Metro believes that San Diego received all of the revenue it was owed under the partnership and that a comprehensive investigation would find no wrongdoing (Gustafson, San Diego Union-Tribune, 4/25).

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