Suppose you are the Budget Director for a city. You have been provided with the following information about the city's ambulance service:

The city currently uses tax revenues to finance the provision of ambulance services to city residents.

Currently, ambulance services are provided utilizing city staff.

The direct cost of providing ambulance services is $300,000 per year.

Approximately 2,000 people utilize the ambulance services per year (assume one trip per user).

If the city decided to charge residents who utilize city ambulance services, it would cost $210/trip in order to recover the full cost of providing the ambulance services

- What factors other than revenue generation and cost should the city council consider when evaluating whether to charge residents the full cost of an ambulance trip?

- A private contractor has submitted a proposal to provide ambulance services to city residents at a cost of $180 per trip. From a cost perspective, would it be cheaper for the city to continue to provide ambulance services using city staff or to contract for this service? Explain. (Do not need to address whether residents would be charged for the use of an ambulance.)

- What factors other than cost should the city council consider when evaluating whether to contract with a private firm to provide ambulance services instead of relying on city staff?