The Strange Case of the Ambulance Bonds

Back in March 2025 the Fullerton City Council decided to fire the City’s ambulance contractor and take the responsibility in-house. Why? Well, naturally there’s the official story, which is that there will be some sort of saving, which is nonsense, since it means adding 20 new public employees on the payroll, and was all based on wishful thinking. So instead of shopping out the paramedic business like Placentia did, Fullerton did the opposite, requiring acquisition of ambulance rolling stock and the various other appurtenances like gurneys, etc.

On this Tuesday’s Council meeting Agenda Item #10 proposes a payment plan for this nonsense. Guess what? It looks desperate. City staff is still proposing to finance the acquisition of all the ambulance stuff through acquiring debt, via a master agreement with Bank of America to buy City bonds at a coupon rate of 3.5%, and then use the proceeds to lease ambulances.

Yes, you read that right. We’re paying for Fire Department empire creation with $2,000,000 credit. The capital repayment and interest on the bonds would amount to $2,175,000 by the time the last bond matures in November 2031. And let’s not forget the dough paid to bond counsel and financial consultants (UFI) who are selling this deal. And oh, yeah, let’s consider there’s now insurance, maintenance, fuel, etc., of vehicles owned by the lessor (BofA), which was all glossed over last April 1st, as was the cost of financing which is over $200,000.

The single Agenda Item #10 staff report sentence justifying the financing is laconic, and notable for what it doesn’t say; that the City still plans to finance the purchase orders for this equipment supposedly issued in April. Here’s all we are told:

“Urban Futures, Inc. (UFI), the City financial advisor, and staff determined private placement financing offers the most beneficial and cost-effective solution for the City.

But there is no explanation why. None at all. Zip. Is the City borrowing $2,000,000 at a lower interest rate that it is making in an investment pool? Who knows? The City Council and the public aren’t informed, just as they weren’t informed when financing was proposed back in April.

The fun aspect of this is that the lease of these ambulances would be rent-to-own, a little con – making the credit-risk-uninformed think they are getting something great. I mean, who doesn’t want to own stuff, right? What good is a owning a six year old old ambulance? I don’t know, but my guess is they depreciate really fast. Maybe even faster than rent-to-own toasters.

I really don’t know what to say about this completely unnecessary move. If the Council had just voted no on the unsolicited plan from the FFD we wouldn’t be looking at having to cover any loan vig at all. Neither the Councilmembers who voted for this – Zahra, Charles, Jung and Valencia had much if anything to say about this bond/lease back in April.

Of course Zahra and Charles don’t give a rat’s ass about wasting money, especially when they script some sort of feel-good performance. Hopefully, Jung and Valencia will change their minds about this resistible offer, but I’m not optimistic. Maybe Dunlap can talk some sense into them.

With Fullerton tottering on the edge of financial meltdown the Council’s behavior towards the fire department (and its union employees) has been highly irresponsible. In October they accepted a one-time FEMA grant to hire a platoon of new “fire fighters” that we will become completely responsible for in 3 three short years, pensions and all.

No, I’m not optimistic at all. The financial leveraging is bound to be used as a pretext to pass a sales tax increase next year. And what if that fails?