Aug. 02--City officials in a handful of Central Florida cities, including Orlando, are closely monitoring the performance of Rural/Metro Corp. amid reports of financial turmoil and a possible bankruptcy.
Rural/Metro is the largest private ambulance company in the country, serving about 700 communities. That includes transporting about 30 percent of sick and injured patients to the hospital in Orlando, and handling all emergency medical calls in Winter Garden, Ocoee, Windermere, Eatonville and Sumter County.
Orlando fire Chief John Miller said he has met with a local Rural/Metro executive to discuss the company's financial outlook.
The private-equity firm Warburg Pincus bought Rural/Metro in 2011 in a transaction that left the company with a heavy debt load. In late May, Moody's Investor Services downgraded a portion of the company's bonds to junk status, citing the company's "highly leveraged capital structure," reduced earnings and negative cash flow.
The company missed a $15.6 million bond-interest payment July 15, and it risks default on its debt if the payment isn't made within a 30-day grace period.
On Wednesday, The Wall Street Journal reported the company may file for bankruptcy protection.
The company contracts with local governments, billing patients, private insurers, Medicare and Medicaid for its ambulance services.
The Scottsdale, Ariz.-based company offered only a written statement: "Rural/Metro continues to take action to align our operations and capital structure with the realities of our business.... From an operational perspective, it is business as usual at Rural/Metro. We remain committed, as always, to providing lifesaving services to our customers and communities."
Even so, "we've made sure we have a backup plan," Chief Miller said.
The company's Central Florida subsidiary handled all 911 medical calls in Orlando until two years ago, when city officials opted to take over the majority of ambulance transports to preserve Fire Department jobs.
Firefighters now handle the most serious medical calls.
If Rural/Metro were to declare bankruptcy, reduce the number of ambulances on Orlando streets or allow its response times to lag, city officials could find the company in breach of contract.
The city would then have the authority to exercise an "emergency takeover" of Rural/Metro's local operations.
The city could run Rural/Metro's ambulances, either with its own firefighters, the company's workers or a competitor.
Windermere Mayor Gary Bruhn said his town is monitoring the company's operations as well.
Even if Rural/Metro files for bankruptcy, it would likely continue operating while it reorganizes, he said.
"But there are other companies out there, other options," Bruhn said. "Our residents' safety is not going to be compromised."
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