Ryneal's nonprofit status debated in ambulance trial

June 12, 2003|by CANDICE BOSELY

MARTINSBURG, W.Va. - More than 17 years ago, Martinsburg City Council members had a choice. They could either allow Ryneal Fire Co. No. 1, a private corporation, to collect the fees that are charged when someone needs an ambulance, or the city could collect those fees itself.

Council members chose to involve Ryneal, never imagining that a problem might arise, former Councilman Rick Wachtel testified Wednesday in the second day of the civil trial of the City of Martinsburg v. Ryneal.

Wachtel, a councilman from 1972 to 1996, made the motion in August 1985 that Ryneal collect fees charged to ambulance users. In return, Ryneal would buy an ambulance for the fire department as soon as possible, according to the minutes from that meeting.


Wachtel said city officials had maintained a long, positive relationship with Ryneal and would not have continued the relationship had they imagined any future problems.

Wachtel was one of seven witnesses who testified Wednesday.

The city filed the lawsuit against Ryneal in March after Ryneal refused to hand over all of the money in its account, three ambulances and a rescue fire truck. Although titled to Ryneal, the city paid for gasoline, insurance and personnel to use the vehicles.

Ryneal bought the vehicles using the fees charged to ambulance patients. Earlier this year, city officials obtained their own ambulances and a license to perform emergency medical services. Ryneal then took the ambulances.

Michael Lorensen, attorney for the city, asked nearly every witness who testified whether Ryneal is a for-profit or nonprofit organization. Most said they believed it was nonprofit.

That status could affect how Ryneal's assets are distributed should the company dissolve.

David Decker, an accountant and manager with the Martinsburg-based firm Cox Hollida, said that status also would determine whether Ryneal is a "component unit" of the city. To be a component unit, an agency must be nonprofit and have assets that are almost entirely tied to the government in question - or in this case, Martinsburg.

Barbara Pichot, a Cox Hollida accountant who has handled the city's account for years, said she believed Ryneal to be a nonprofit. A letter sent in October 2002 on Ryneal letterhead sought donations for door prizes for a banquet. In the letter, Ryneal President Mary Helmick said the group was nonprofit.

To clear up the matter, Pichot scheduled two meetings with Helmick. Helmick rescheduled the first and then canceled the second, citing advice from her attorney, Pichot said.

Under cross-examination by Ryneal's attorney, Michael Scales, Pichot said she never attempted to find out through the IRS whether Ryneal was nonprofit. Helmick said the group was nonprofit and told Pichot that she would find the group's tax-exempt documentation, Pichot said.

If a for-profit company dissolves, Pichot said, its assets are divided among its stockholders. Those affiliated with Ryneal describe themselves not as stockholders, but as members, which is a common term used by nonprofit groups, Pichot testified.

Also called to the stand was former Ryneal president Ron Grove. Helmick is his sister-in-law, he said.

"We weren't there to make a profit," Grove said.

When Lorensen asked Grove who owns Ryneal, Grove paused a moment and then seemed surprised.

"I never knew there was an owner," he said. "I never considered Ryneal a business."

For the last few months, Grove said, his relationship with Helmick has been rocky. He said he and his wife received letters indicating they could no longer be members of Ryneal because of poor attendance at the group's meetings.

Although the three ambulances in question are mostly "collecting dust" now, Grove said he has seen them in his neighborhood. He said he was not sure whether they had been repainted.

Ryneal plans to open a private medical transport business on W.Va. 45 at the Berkeley/Jefferson County line, according to a wooden sign that has been there for a couple of weeks.

The trial is set to resume today at 8 a.m. and will most likely continue Friday. A six-person jury is hearing the case.

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