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Rural/Metro: Secret Memos, Campaign Donations, and An Alleged $5.8 Million Excess Withdrawal

Last week, city auditor Eduardo Luna released a report that strongly criticized the City’s management of its paramedic contractor, Scottsdale, Arizona–based Rural/Metro Corporation, finding that “the City has not adequately managed or monitored the financial activities of Rural/Metro.” The auditor concluded, “Rural/Metro appears to have withdrawn approximately $5.8 million” from a joint bank account with the City “in excess of its entitled expense reimbursement amounts.” And, according to Luna, “based on the lack of adequate financial controls and oversight over related activities, there is a significant risk that the City has not maximized its revenue from [San Diego Medical Services]. There is also a potential risk that Rural/Metro has underreported revenues or submitted unsupported or inappropriate expenses.”

Luna noted that since mid-2009, the office of city attorney Jan Goldsmith has sent a series of secret memos to Mayor Jerry Sanders and the city council regarding problems with Rural/Metro and its “public-private” joint venture partnership with the City, known as San Diego Medical Services Enterprise, LLC. “In July 2010, the City Attorney’s Office issued another confidential memo to the Mayor and City Council raising additional concerns regarding the structure, as well as financial terms of [San Diego Medical Services]; In September 2010, during the course of the audit, the City Attorney’s Office issued an additional confidential memo to the Mayor and City Council related to [San Diego Medical Services]; Finally, in December 2010, the City Attorney’s Office issued another confidential memo related to [San Diego Medical Services].”

The findings represented a sharp turn of events for Rural/Metro, which has long been a darling of Sanders, due in part to the generous campaign contributions the company and its employees have regularly doled out to the local powers that be. For instance, according to City financial disclosure records, in June 2006, the company gave $5000 for San Diegans for City Hall Reform, the committee backing a successful “managed competition” measure to outsource the performance of City services to private firms. In June 2008, Rural/Metro gave $5000 to the campaign for Props A, B, and C, which set up the extension of the so-called strong mayor initiative. Then in February 2009, there was $1000 for Safe Beaches, Yes on D committee, the beach booze ban. In March of last year, Rural/Metro gave $1000 to San Diegans for Accountability at City Hall, which ran the successful campaign to make the strong mayor arrangement permanent. And in November of last year, there came $4000 for Proposition D, the mayor’s failed bid to boost sales taxes.

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Last week, city auditor Eduardo Luna released a report that strongly criticized the City’s management of its paramedic contractor, Scottsdale, Arizona–based Rural/Metro Corporation, finding that “the City has not adequately managed or monitored the financial activities of Rural/Metro.” The auditor concluded, “Rural/Metro appears to have withdrawn approximately $5.8 million” from a joint bank account with the City “in excess of its entitled expense reimbursement amounts.” And, according to Luna, “based on the lack of adequate financial controls and oversight over related activities, there is a significant risk that the City has not maximized its revenue from [San Diego Medical Services]. There is also a potential risk that Rural/Metro has underreported revenues or submitted unsupported or inappropriate expenses.”

Luna noted that since mid-2009, the office of city attorney Jan Goldsmith has sent a series of secret memos to Mayor Jerry Sanders and the city council regarding problems with Rural/Metro and its “public-private” joint venture partnership with the City, known as San Diego Medical Services Enterprise, LLC. “In July 2010, the City Attorney’s Office issued another confidential memo to the Mayor and City Council raising additional concerns regarding the structure, as well as financial terms of [San Diego Medical Services]; In September 2010, during the course of the audit, the City Attorney’s Office issued an additional confidential memo to the Mayor and City Council related to [San Diego Medical Services]; Finally, in December 2010, the City Attorney’s Office issued another confidential memo related to [San Diego Medical Services].”

The findings represented a sharp turn of events for Rural/Metro, which has long been a darling of Sanders, due in part to the generous campaign contributions the company and its employees have regularly doled out to the local powers that be. For instance, according to City financial disclosure records, in June 2006, the company gave $5000 for San Diegans for City Hall Reform, the committee backing a successful “managed competition” measure to outsource the performance of City services to private firms. In June 2008, Rural/Metro gave $5000 to the campaign for Props A, B, and C, which set up the extension of the so-called strong mayor initiative. Then in February 2009, there was $1000 for Safe Beaches, Yes on D committee, the beach booze ban. In March of last year, Rural/Metro gave $1000 to San Diegans for Accountability at City Hall, which ran the successful campaign to make the strong mayor arrangement permanent. And in November of last year, there came $4000 for Proposition D, the mayor’s failed bid to boost sales taxes.

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Comments
6

Anyone surprised at any of this? Just your everyday "go along and get along" low-level SD corruption. If such a thing is possible, this is even stomach-turning for Goldsmith, and he's complaining. Wonders never cease.

May 4, 2011

And the City is still doing business with them? Just another example of San Diego corruption leading all the way to the top.

May 5, 2011

Wow, why not get the DA to file charges???? Oh, these people are connected. My bad.

May 5, 2011

Ghost_Medic here, from twitter of course! The Rural Metro story is from a reliable source. An original medic in California - I swear, now a C-Level Exec running EMS care.

Healthcare Fraud occurring is all they desire. Hospitals, Nursing homes, privates or fire. SD EMS problems are not really new... Brands H, A and B are all guilty too.

But where we go now is all upto you. Maybe if we take out of the mix... the big tax susidy? I know that would fix! If RM pulls out, we just change the law... you have 22 EMS providers here that could do it all!

Eliminate the need for politics and power, services I assure you will never suffer. There are plenty of studies for the assertions in support of a City without subsidy - where our local HOMETOWN providers support.

You all set this up... you allowed them to come! EVERY out-of-town provider... Has given it to San Diego Residents in the bum!

"FIX IT OR OUT !" a NEW CAMPAIGN begins. If the city council don't fix it,

The voters will do it VERY SOON my friends.

May 7, 2011

It appears these folks have been delivered some of the same water that Ed Brand and the Sweetwater board have been guzzling.

Campaign donations being used to influence votes? Well I never!!!!!!!!!!!!!!!!

Jan. 26, 2013

Outsourcing is outpouring. Solution: Don't outsource. Too many layers; too many places to hide. Bureaucracy, with all its problems, is far better.

Jan. 29, 2013

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