Rural/Metro Corp. has little to lose financially in the upcoming election in which voters will decide whether to retain the company's contract with Scottsdale for fire service.
That’s according to Jack Brucker, president and chief executive of the Scottsdale-based company. In a May 20 special election, voters will consider two ballot measures to create a city fire department.
But the company hopes to retain the contract for “emotional and sentimental attachment reasons,” he said.
“It was our first contract and it's our founding contract,” Brucker said. “It's kind of a cornerstone contract and the company has always been identified with the Scottsdale fire contract.”
From a financial perspective, the contract represents less than 3 percent of Rural/Metro's total revenue and less than 1 percent of its total profit, he said.
The revenue from the Scottsdale fire contract is $16.8 million, while the company's total net revenue last year was $497 million.
“We have approximately 10,000 employees and the total Scottsdale work force is less than 200, so it's less than 2 percent of our work force,” Brucker said.
The Scottsdale fire contract limits Rural/Metro to a 2.6 percent profit margin, Brucker said. Because the company is responsible for all overtime, there's usually no profit, he said.
“Just in the past three or four months, the company has renewed or obtained new contracts that will far exceed the revenue of the Scottsdale contract,” Brucker said. “From a profitability perspective, since we've signed a new contract, we've operated at a break even or slight loss.”
Rural/Metro has about 2,500 employees in Arizona, so losing the contract would not significantly reduce its work force and operations in this state, he said. Those who would lose their jobs would likely be hired by Scottsdale to man its new fire department, he said.
Also, losing the contract wouldn't greatly diminish the company’s presence in Scottsdale, Brucker said.
“We have our communications center that supports Southwest Ambulance here, and we have our corporate office here,” he said. “We also do all of our billing and collections for San Diego, Seattle and Denver . . . the Western states billing company employs about 90 people. Our corporate office as such employs around 100 to 125 people. That supports nationwide and would not be affected.”
Southwest Ambulance is owned by Rural/Metro, serves 14 Valley cities and has a big presence in Tucson, Brucker said.
Nationally, Rural/Metro provides emergency and non-emergency medical transportation, fire protection, and other safety services in about 400 communities, including such large metropolitan areas as San Diego, Orlando, Fla., and Atlanta. In the last three years, the company has been growing at an annual rate of 8 percent, Brucker said.
“We just became the sole provider (of ambulance service) for Las Cruces, N.M., and we also just got a six-year renewal we valued at $70 million to continue to provide for Fort Worth, Texas, and the 12 surrounding communities,” he said. “Also, we just were renewed in Jefferson Township, Kentucky, and at Ohio State University Medical Center, which is a huge medical complex in Columbus, Ohio.”
Compared with the Scottsdale contract, the new contracts feature higher profit margins, Brucker said. For example, the Fort Worth contract's profit margin is higher than 10 percent, he said.
“Just in the past three or four months, the company has renewed or obtained new contracts that will far exceed the revenue of the Scottsdale contract,” he said.”
Still, Rural/Metro does want to retain the Scottsdale contract, Brucker said.
“It's important to our corporate culture and it's important to who we are,” he said.