Financial News

San Jose Mayor Chuck Reed on Friday asked county leaders to delay picking an ambulance service provider, saying the county has offered few details on how the two companies vying for the five-year, $375 million contract can afford to deliver their promised services.

Reed issued the warning in a letter to the Santa Clara County Board of Supervisors, whose members appear ready to pick Rural Rural/Metro Corp. as its new provider on Tuesday and drop its longtime ambulance company, American Medical Response Inc.

In his letter, Reed asked the supervisors to delay any decisions until a more “detailed analysis” of the two companies’ bids can take place.

Among other things, Rural/Metro (NASDAQ:RURL) has offered to pay the paramedic training costs for 15 members of the Sunnyvale Department of Public Safety within the first two years of its ambulance contract, according to a recent county government staff report. Sunnyvale, the report noted, is the only city in the county without first response paramedic services.

Meanwhile, AMR or its predecessors have contracted with the county since 1979. According to its website, AMR employs 480 paramedics and emergency medical technicians in the county and responds to an average of 115,000 calls annually.

“I urge you to take more time to ensure that the proposals are fiscally viable,” Reed wrote, adding there is too much “at stake” to do otherwise.

According to the recent county staff report, Rural/Metro and AMR were the only two companies to respond to the county’s request for ambulance service proposals. The RFP was issued in mid-April.

An evaluation committee scored their proposals. The staff report said Rural/Metro won in six of nine categories, including clinical care, ambulance deployment plan and price. For instance, Rural/Metro proposed charging $35 per mile for each transport, far less than AMR’s $90 per mileproposal saving account payday loan.

AMR, however, scored 90 out of 90 possible points in the “finance” category. Rural/Metro scored 67.5.

Rural/Metro is a nationwide ambulance contractor based in Scottsdale, Ariz.

In January, for instance, its longtime CEO abruptly resigned, and in April, the Arizona Republic reported the company “ousted” two high-ranking executives. One of those executives was fired over alleged expense-reimbursement violations, according to the news report.

Metro reportedly took on a heavy debt load in the 1990s during a nationwide, acquisition-fueled expansion but appears to have since righted itself. In 2006, the company’s credit rating with Moody’s Investors Service stood at B2, a “junk” quality that is five levels below investment-grade. Moody’s later upgraded the rating after the company improved financially.

In its most recent earnings report, Rural/Metro recorded a $4.4 million profit for the three months ending March 31, nearly three times higher than the $1.6 million profit during the same period a year earlier.

Liz Merritt, a company spokeswoman, could not immediately be reached for comment Friday night.

Santa Clara County Executive Jeff Smith is seeking approval from the Board of Supervisors next week to negotiate a first response and paramedic ambulance transportation contract with Rural/Metro. The board is slated in December to vote on approving a contract.

The county’s existing contract with AMR expires on June 30 of next year. AMR, which operates in 37 states and Washington, D.C, is owned by Greenwood Village, Colo.-based Emergency Medical Services Corporation (NYSE:EMS).

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Bank of America’s stock fell 9 percent Friday after the bank posted a 3 percent drop in earnings and said that new financial regulations could cost California’s largest bank as much as much as $4.3 billion a year.

The Charlotte, N.C., bank also told investors that it will take a third-quarter charge of $7 billion to $10 billion due to a drop in the value of its credit card business once financial reform becomes law.

BofA is also getting slammed as the nation’s largest issuer of debit cards, which has been one of the most lucrative areas of retail banking. New restrictions on what the bank can collect every time a merchant swipes a customer’s debit card will hit the bank’s bottom line by $1.8 billion to $2 no fax pay day loan.3 billion annually. The bank also said its decision to not allow overdrafts on debit cards, doing away with the infamous $40 cup of coffee, will cost BofA another billion dollars.

The bank’s second-quarter performance failed to lift investors’ spirits. BofA saw profit decline among several units, including Merrill Lynch and its residential mortgage business.

The bank’s second-quarter provision for loan losses fell to $8.11 billion from $9.81 billion in this year’s first quarter. BofA’s pace of charge-offs fell to 3.98 percent from 4.44 percent in this year’s first quarter.

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The former Jean LaFitte Hotel in Galveston has been acquired for redevelopment into a mixed-income apartment complex.

Itex Partners, the real estate investment arm of Port Arthur-based Itex Group LLC, has acquired the historic building at 2101 Church St. that has stood vacant for a long time in downtown Galveston.

State and federal disaster recovery funds will be used to renovate the 1927 building, with half of the units earmarked for low and moderate income housing no teletrack payday loans.

Cathay Bank sold the property to Itex for an undisclosed amount.

Derek Hargrove and Christopher Dray of Moody Rambin Investment Services represented the seller.

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The former downtown-area Wonder Bread plant being developed into an artists’ haven is getting $597,000 in historic preservation funding from the state.

Gov. Ted Strickland’s office on Friday announced $28.3 million in Ohio Historic Preservation Tax Credit awards to 13 projects, one of which is the Wonder Bread building. The latest announcement is the fourth and final preservation award under the state’s $1.57 billion job creation stimulus package, which set aside $120 million for such credits.

The plant, which Wonder Bread owner Interstate Bakeries Corp. shut down last year after to deciding to shift operations out of state, is under development as a mix of arts-oriented retail, exhibition, office and rehearsal space. Arts entrepreneur Adam Brouillette formed Wonderland Columbus to serve as the master tenant that will go about filling the 64,600-square-foot building.

The state said the project in applying for the tax credit pledged to preserve the industrial heritage of the building along with the Wonder Bread sign that has become a visual landmark in Italian Village. The tax credits fund up to a quarter of qualified rehabilitation spending.

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A heated battle between two of the nation’s largest drug chains came to an end Friday after a compromise under which Walgreens will continue participate in CVS Caremark’s pharmacy benefit management network.

The drugstores did not disclose financial terms of the new contract. Shares Walgreens (WAG, Fortune 500) were up about 8% in pre-market trading, and CVS’ (CVS, Fortune 500) stock was 5% higher.

"The agreement makes good business sense, provides the framework we need to operate our business going forward, and assures choice and convenience for the many consumers who look to us for quality pharmacy care," said Walgreens executive vice president of pharmacy Kermit Crawford in a statement.

CVS’s president Per Lofberg added that his company is also "pleased" to have reached a solution.

Earlier this month, Walgreens said it was no longer willing to participate in a new or renewed benefits plan from its rival’s drug benefits unit, citing a list of criticisms including unpredictable drug reimbursement rates.

Another complaint was related to CVS Caremark’s Maintenance Choice plan, which requires patients with chronic conditions to fill prescriptions at CVS or through Caremark mail services, instead of at Walgreens or other pharmacies.

Drug benefits provider Caremark merged with retail pharmacy CVS in 2007, and CVS CEO Tom Ryan promised at the time that the Caremark business would not favor one pharmacy over another. But Walgreens’ gripe about Caremark’s preferential treatment of CVS stores was echoed by other drugstores.

In response to the Walgreens announcement, CVS dropped the rival from its pharmacy benefits plan last week.  

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MINNEAPOLIS — United Airlines plans to demonstrate new fuel-saving methods on two flights between the U.S. and Europe on Saturday.

The airline says it expects to save about 940 gallons, about 3 percent of the fuel it would usually burn, on the flights. The testing includes a trip from Frankfurt to Chicago on a United 777, and a return trip on the same plane. Both are regular flights with paying passengers.

Several airlines have been testing ways to cut their fuel bills. United and its regional partners burned 564 million gallons of jet fuel last year, costing almost $1.19 billion.

Commercial flights usually stay at a precise altitude. But this flight will drift up and down as much as 3,000 feet. That way the pilots won’t need to burn extra fuel maintaining a precise altitude. It also lets them choose the best altitude depending on wind and other conditions, said Joe Burns, a United captain and managing director of technology and flight tests.

He said those small adjustments wouldn’t make much difference on a short domestic flight, but they add up on an eight- or 10-hour overseas flight.

The flight has clearance from the Federal Aviation Administration as well as air traffic authorities in Canada and Europe. One issue that keeps airlines from using some of those fuel-saving practices all the time is that they can make it harder for air traffic controllers to keep the required minimum distances between planes.

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State and federal officials have brokered a deal with CSX Corp. to build a high-speed rail line running from Buffalo to Albany, ending months of negotiations.

The breakthrough removes a major obstacle confronting the state as it continues to try to develop high-speed rail.

"This is welcome news and helps give us confidence that high-speed rail will be coming to Upstate New York," said said U.S. Rep. Louise Slaughter, D-Fairport, who announced the deal.

Back in January, the state was awarded $153 million in federal funding for high-speed rail improvements.

The state and CSX, however, had fought over what the speed limit would be set at on the new high-speed rail line. The state wanted 110 mph as the maximum speed, while CSX wanted 90 mph.

In negotiations, CSX agreed to the 110 mph speed limit. More details of the agreement were not immediately released.

“I appreciate CSX’s readiness to do their part to make the promise of high-speed rail in New York a reality,” said Slaughter savings account payday advance.

Currently, trains traveling in the Buffalo-Albany corridor average less than 60 mph, and hit max speeds of close to 80 mph in certain stretches.

The trains will run on a right-of-way owned by CSX, a freight shipping giant.

To date, New York state has received $151 million of stimulus money for high-speed rail—a fraction of what was awarded to other states much farther along in the planning and development process.

Advocates have touted it as a key economic development tool for the state. For years, the state has studied and pursued high-speed railways, but made little progress.

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Lowe’s Cos. Inc. reports a 2.7 percent increase in earnings to $489 million, or 34 cents per diluted share, in its first fiscal quarter ended April 30.

In the same period last year, the Mooresville-based home-improvement retailer earned $476 million, or 32 cents per diluted share.

The company exceeded analysts’ consensus estimate of 31 cents per share for the latest quarter.

Revenue grew 4.7 percent to $12.4 billion, up from $11.8 billion.

Sales at stores in operation for at least a year increased 2.4 percent.

“Consumers are showing signs of re-engagement in home improvement, including discretionary projects and purchases of bigger-ticket products, which had taken a back seat during the worst of the economic downturn,” says Chief Executive Robert Niblock. “This, combined with the government stimulus programs and favorable weather in March and April, drove solid quarterly sales and earnings that exceeded our guidance.

Lowe’s says it expects to earn 57 cents to 59 cents per diluted share in its second quarter ended July 30, up from 51 cents per diluted share a year ago.

Lowe’s opened 11 stores in the latest quarter. As of April 30, the company (NYSE:LOW) had 1,721 stores in North America.

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Institutional Venture Partners is reportedly raising $600 million to invest in information technology companies.

Dow Jones VentureWire reported that a consultant's due diligence report on the Menlo Park firm revealed it is seeking the money for its 13th fund.

The report said that the fund will be invested throughout the United States, with a focus on Silicon Valley. It will be able to contribute up to 30 percent to investments in public companies.

The report said that IVP's last three funds have generated a 1.6-times investment multiple as of Dec. 31.

These included investments in ArcSight Inc., which went public in 2008 and MySQL AB, which was sold for $1 billion to Sun Microsystems Inc. in 2008. It also has invested in Twitter Inc. and Zynga Game Network Inc.

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ENGINEERING

Barge Waggoner Sumner & Cannon Inc., which has an office in Birmingham, has been ranked No. 195 on the 2010 Engineering News Record list of Top Design Firms based in the U.S. The firm’s 2010 ranking is 24 places higher than its ranking last year.

FINANCIAL

ServisFirst Bank celebrated its five-year anniversary and said it ranks in the top 5 percent of de novo banks founded in 2005 for cumulative profitability, along with an 81 percent compounded annual growth rate in total deposits.

HEALTH CARE

HealthSouth Corp. (NYSE:HLS) will participate in Baird’s 2010 Growth Stock Conference in Chicago on May 18-20. HealthSouth CEO Jay Grinney will speak at 4:15 p.m. May 19.

LEGAL

Burr & Forman LLP, along with the Cornerstone Schools of Alabama, offered three events on April 27 as part of the middle school educational, community service program called “Legal Eagles.” Throughout the school year, Burr & Forman attorneys participate in monthly classroom lessons and that expose the Cornerstone students to the practice of law and to Burr & Forman clients. Sixteen students graduated from the first “Legal Eagles” class this year.

NONPROFITS

The Birmingham Botanical Gardens raise more than $250,000 at the 2010 Spring Plant Sale. More than 7,400 visitors came out and took part in the sale.

Gaining Life Initiative Foundation formed recently as a nonprofit organization to increase the knowledge about brain tumors and raise support for research. It was founded in fall 2009 with a specific focus on Glioblastoma Multiforme Brain Cancer research with the objective of extending life expectancy and finding a cure for the deadly form of cancer. The foundation’s creator is Birmingham native Bill Cash, who was diagnosed with Glioblastoma Multiforme, the most metastatic and fatal type of brain tumor, in spring 2008. He underwent treatment and is now in remission.

POLITICS

The Central Alabama Labor Federation AFL-CIO hosted a political forum featuring Democratic candidates for governor Congressman Artur Davis and Agricultural Commissioner Ron Sparks on April 29 at the Local 3902 Union Hall in Homewood.

RETAIL

The Trussville Area Chamber of Commerce held a ribbon cutting on April 23 to celebrate the grand opening of Great Clips at 445 Main Street near Winn Dixie in Trussville.

Southern Family Markets was awarded the Autism Outstanding Advocate of the Year by Glenwood Autism & Behavioral Health Center for their ongoing support of persons with autism and their families. The award was presented on April 21 during the sixth Glenwood endowed lecture series with UAB’s School of Public Health.

TECHNOLOGY

Birmingham’s Optimal IMX selected and implemented MobileMD’s Health Information Exchange technologies and services.

Birmingham’s ibml and partner EDAC Systems Inc.’s ImageTrac 3e series high-production scanner won the 2010 Best of FOSE Award in the Peripherals category. This is the second Best of FOSE Award that EDAC Systems has won since 2006.

TRANSPORTATION

Boatright Cos. hosted the Samford Business Network Birmingham Source Meeting at its Boatright Railroad Products Inc. in Montevallo on April 22. Guests toured the plant by bus and networked.

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