Pharr reaches ‘agreement in principle’ to acquire Hidalgo County EMS

The city of Pharr apparently plans to acquire the assets of Hidalgo County EMS and start a city-owned ambulance service.

The city submitted a bid for Hidalgo County EMS — a privately owned ambulance company that responds to emergency calls in Pharr, Edinburg and rural parts of South Texas — during a bankruptcy auction that concluded Friday morning.

After negotiations, Hidalgo County EMS and Pharr reached an “agreement in principle,” said attorney Nathaniel Peter Holzer of Corpus Christi, who represents the company. Pharr would acquire “substantially all” Hidalgo County EMS assets and “a large majority” of Hidalgo County EMS ambulance contracts.

“As for the auction and bidding, the city of Pharr was the only qualifying bidder, other than one secured lender that put in a credit bid for only its own collateral,” Holzer said Friday during a hearing in the bankruptcy case. “The city’s initial bid was not acceptable. However, they and we have worked diligently, in good faith, to improve the bid. And thanks to the city’s flexibility and good efforts, we now have this agreement in principle.”

Details about the bid, including the purchase price, weren’t disclosed Friday.

Pharr and Hidalgo County EMS plan to present the contract to U.S. Bankruptcy Judge David R. Jones on April 9.

“In the meantime, the debtor remains in operation. We’re servicing all the customers,” Holzer said. “We intend to do so until a handoff to the city of Pharr that we contemplate will occur sometime in the next three to six weeks. And, also, possibly in phases, not all at once.”

Two attorneys who represent the city, Dean W. Greer of San Antonio and Christopher Franz of McAllen, attended the hearing Friday but didn’t address the court.

Mayor Ambrosio “Amos” Hernandez confirmed that Pharr submitted a bid, but he deferred to City Manager Edward M. Wylie for details. Several attempts to schedule an interview with Wylie were unsuccessful.

City Commissioner Roberto “Bobby” Carrillo said Pharr discussed the idea, which would allow the city to provide better emergency services.

“We’ve got the facility. We’ve got the space for it,” Carrillo said. “Especially with our new communications center.”

Along with improving emergency services, the Hidalgo County EMS deal could become a moneymaker for Pharr.

“Doing it right, it could be profitable,” Carrillo said.

Mercedes, Weslaco and Palmview also own ambulances. The majority of cities in Hidalgo County, though, contract with privately owned ambulance companies.

McAllen and Mission contract with Med-Care EMS. Edinburg and Pharr contract with Hidalgo County EMS.

Both ambulance providers had major financial problems during the past few years.

Med-Care EMS filed for bankruptcy in November 2018. After submitting a reorganization plan, Med-Care exited bankruptcy in April 2019.

Less than six months later, Hidalgo County EMS filed for bankruptcy. Hidalgo County EMS, however, never filed a restructuring plan.

Government Asset Services, a company owned by Peñitas City Manager Omar Romero, initially served as chief restructuring officer for Hidalgo County EMS. He was replaced by Richard S. Schmidt, a retired bankruptcy judge from Corpus Christi, in September.

Schmidt concluded that Hidalgo County EMS simply couldn’t reorganize. With court approval, he started preparing for a bankruptcy auction.

Pharr submitted the only bid.

Holzer, the attorney for Hidalgo County EMS, provided an update to the bankruptcy court on Friday afternoon.

“The city has announced that it intends to conduct a job fair for the debtor’s employees within a week after your honor approves the transaction, if you do,” Holzer said. “They’re going to need qualified people. They’ve also informed us that they likely will be offering on-the-spot employment to those folks that qualify and that they accept.”

Pharr would be “well advised to hire 100% of our highly qualified, dedicated and loyal workforce,” Holzer said.

While the city would buy “substantially all” Hidalgo County EMS assets, Holzer said Pharr wouldn’t acquire every Hidalgo County EMS ambulance contract.

Hidalgo County EMS responds to emergency calls in Pharr, Edinburg, Peñitas, Sullivan City, rural parts of Hidalgo County, the city of Taft, Jim Hogg County, Jim Wells County and Kleberg County, according to bankruptcy court records. It also provides ambulance service to local hospitals.

“We’re not settled yet on which contracts will be assigned and which will not,” Holzer said. “But for all of the contracts that are in flux, we understand that those customers have viable contingency plans in place.”

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