This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
AMBULANCE SERVICE -- Fees (retention of by service provider)
CONSTITUTIONAL LAW -- Gifts and Loans (collection of unpaid ambulance fees)
GENERAL MUNICIPAL LAW §122-b; STATE CONSTITUTION, ARTICLE VIII, §1: Towns may fix fees for ambulance services, to be paid by persons requesting the use of such services. Although the town, by rules and regulations, may provide for the collection of such fees by the entity providing services under contract, the fees collected belong to the town and may not be retained by the service provider for its own use. The town, by modification of the contract, may pay an additional amount to the service provider above the amount set forth in the service contract, but only in exchange for additional consideration to be provided by the service provider. To avoid contravening the constitutional gift prohibition, it is incumbent upon the town to take reasonable steps to collect unpaid ambulance fees.
This is in response to your inquiry concerning the provision of emergency medical service in a town. You indicate that the town currently contracts with a not-for profit organization for the provision of emergency medical service to town residents. Pursuant to the contract, the town pays a fixed consideration to the not-for-profit organization. The town is considering charging a fee to users for this service.
You ask: (1) whether the emergency medical services provider (the “provider”) may retain as its own monies the user fees imposed by the town for the emergency medical services; (2) if the provider is not permitted to retain the fees charged, whether the town may pay additional amounts to the provider above the amount of consideration stated in the contract; and (3) assuming the fees belong to the town, whether the town is obligated to pursue the collection of unpaid fees from users who fail to pay for ambulance services.
Section 122-b of the General Municipal Law authorizes towns to provide emergency medical service, general ambulance service or a combination of such services for the purpose of providing prehospital emergency medical treatment, or transporting sick or injured persons found within the boundaries of the town to a hospital, clinic, sanatorium or other place for treatment (General Municipal Law §122-b). Under section 122-b, towns, inter alia, may contract with one or more organizations to supply, staff and equip emergency medical service or ambulance vehicles suitable for such purposes and operate such vehicles for the furnishing of prehospital emergency treatment (General Municipal Law §122-b[c]). Towns may fix a schedule of fees or charges to be paid by persons requesting the use of apparatus and equipment in the provision of emergency medical services or ambulance service (General Municipal Law §122-b).
Further, towns may provide for the collection of the fees and charges or may formulate rules and regulations for the collection thereof by the organization furnishing services under contract (General Municipal Law §122-b). Although section 122-b authorizes the town to provide, in rules and regulations, for the collection of the fees and charges by the contracting service provider, the fees, as noted, are imposed by the town and, therefore, in the absence of anything to the contrary in section 122-b, constitute town monies (see 1998 Opens St Comp No. 98-9, p 22; 34 Opens St Comp, 1978, p 204; 1975 Opens St Comp No. 75-49, unreported; 25 Opns St Comp 1969, p 90).1
With respect to the payment by the town of additional monies to the service provider above the amount stated in the contract, we note that article VIII, §1 of the State Constitution prohibits gifts and loans of monies by towns to or in aid of any individual, or private corporation, association or undertaking. If the town were to unilaterally pay the service provider additional monies, whether derived from the user fees or otherwise, above the agreed upon amount stated in the contract, such payment, in our opinion, would constitute a mere gratuity and gift in contravention of article VIII, §1 (see, e.g., 1988 Opns St Comp No. 88-69, p 137). On the other hand, if the contract were modified so that, in exchange for paying the provider an additional amount, the town were to receive additional consideration, such as enhanced services beyond those already required under the current contract and with a value commensurate with the additional payment, the payment would not constitute a gift (see Opn 88-69, supra).
As to pursuing the collection of unpaid user fees, there is case law indicating that the failure to seek recoupment of monies owed to a municipality may constitute a gift in contravention of article VIII, §1 (see, e.g. Oneida County v Estate of John A. Kennedy, 189 Misc 2d 689, 734 NYS2d 402; Nance v Town of Oyster Bay, 41 Misc 2d 446, 244 NYS2d 916, mod on other grounds, 23 AD2d 9, 258 NYS2d 156; see also 1978 Opns St Comp No. 78-684, unreported). Therefore, to avoid contravening the constitutional gift prohibition, we believe it is incumbent upon the town to take reasonable steps to seek recoupment of unpaid ambulance fees. What constitutes a reasonable step may vary from case to case. In general, however, collection efforts may include, as appropriate, sending dunning letters2, imposition of a lien on real property (see Municipal Home Rule Law §10 [a][ii][9-a])3 and commencement of civil actions. We also believe that in determining how to proceed, the town may take into consideration an analysis of the costs involved, as well as whether a given claim may be uncollectible as a practical or legal matter, such as when a claim is barred by the statute of limitations, or in the case of bankruptcy or lack of attachable assets (see Opn No. 78-684, supra).
Accordingly, towns may fix fees for ambulance services, to be paid by persons requesting the use of such services. Although the town, by rules and regulations, may provide for the collection of such fees by the entity providing services under contract, the fees collected belong to the town and may not be retained by the service provider for its own use. The town, by modification of the contract, may pay an additional amount to the service provider above the amount set forth in the service contract, but only in exchange for additional consideration to be provided by the service provider. To avoid contravening the constitutional gift prohibition, it is incumbent upon the town to take reasonable steps to collect unpaid ambulance fees.
February 15, 2005
Jeffrey A. Siegel, Esq., Town Attorney
Town of Duanesburg
1 Since the fees are town monies, the town, in its rules and regulations, should require that there is proper record keeping and accounting by the provider (see, e.g., Opn Nos. 98-9, supra), as well as periodic remittance of the monies to the town supervisor, in a manner similar to that required with respect to monies received by town officers and employees (see Town Law §§27, 29).
2 The letters may be sent directly by the town or, if the town has so provided in rules and regulations (see General Municipal Law §122-b), it is our view that they may be sent on behalf of the town by the service provider as part of the service provider’s collection role.
3 A lien imposed pursuant to Municipal Home Rule Law §10(1)(a)(ii)(9-a) may not, absent express statutory authority, be enforced with annual real property taxes (1986 Opns St Comp No. 86-76, p 120 superseding 1983 Opns St Comp No. 83-132, p 167, to the extent inconsistent; see also 2004 Opns St Comp No. 2004-7).