ADMINISTRATIVE REPORT


                                                 Date:  May 24, 1995


   TO:       Vancouver City Council

   FROM:     General Manager of Community Services

   SUBJECT:  Transfer  of  the  Vancouver Health  Department  to the
             Vancouver Health Board


   RECOMMENDATION

        A.   THAT  the  General  Manager  of Community  Services  be
             authorized to  negotiate terms for the  transfer of the
             Vancouver Health Department from the City  of Vancouver
             to  the Vancouver Health Board; and THAT these terms be
             reported  back  to  Council  for  its  approval  before
             entering into a transfer agreement;

        B.   THAT  the  Mayor,  on  behalf  of  Council,  write  the
             Minister  of  Health  and  request  that  the  Ministry
             provide  100  percent  funding  for   municipal  health
             services effective with  the establishment of  Regional
             Health   Boards,  as   the   Minister  had   apparently
             committed;  or,  if  this  is not  possible,  that  the
             Minister at least clarify the schedule and criteria for
             implementing 100 percent Provincial funding;

        C.   THAT the Metropolitan Board  of Health be provided with
             a copy of this report and Council's actions.


   COUNCIL POLICY

   On September 13, 1994, Council resolved:

        THAT Council advise the Minister  of Health that the  health
        regionalization model  prescribed by the  Ministry does  not
        fit  the   City  of  Vancouver  or   the  Greater  Vancouver
        Metropolitan Area; and THAT  Council request the Minister to
        commission an  open planning  process to develop  a results-
        oriented health plan which will work for Greater Vancouver.

   On November 1, 1994,  Council took no action on an  invitation to
   submit  names   of  potential  Council   representatives  to  the
   Vancouver Health Board.

   BACKGROUND

   In  spite of  the  objections of  Council  and others  to  health
   regionalization as it is  being implemented in Greater Vancouver,
   the  Ministry  of Health  has moved  rapidly  to put  a Vancouver
   Health Board in place and to give it significant powers.

   On May  3, 1995, the Chair of the Vancouver Health Board, Mr. Ron
   Yuen,  wrote Mayor  Owen and announced  the Board s  intention to
   "assume direct operating responsibility for the  Vancouver Health
   Department by  November 1, 1995".  A copy of Mr. Yuen s letter is
   attached to this report as Appendix A.

   The Ministry of Health  currently funds 70 percent of  the Health

                                   2

   Department s general preventive health  budget and 100 percent of
   Continuing Care.   When it transferred authority to the Vancouver
   Health Board,  the Ministry  was apparently committed  to funding
   100  percent of  all Health  Department costs.   On  February 28,
   1994, when speaking at the Minister's Health Forum:  Implementing
   New Directions, the Minister of Health said the following:

        Unlike most health unit  programs which are funded  fully by
        the   Ministry   of  Health,   there   are   six  metro-area
        municipalities that  raise funds for public health programs.
        I am pleased to  announce that, with the formation  of local
        governance structures, the Ministry  will assume 100 percent
        responsibility for these municipal costs.

   However,  even  though  the  Vancouver  Health  Board  and  other
   regional  health boards  have been  formed since  late 1994,  100
   percent  Provincial  funding has  yet to  arrive.   It  now seems
   contingent,  in Vancouver at least, on  the Health Board assuming
   direct  operating authority  over the  Health Department.   Other
   municipalities   seem  to   be  experiencing   similar  problems,
   prompting  the Chair of Metropolitan Board of Health to write the
   Minister requesting  that  he stand  by his  1994 commitment  and
   implement 100  percent Provincial funding now (Appendix  B).  The
   Metropolitan Board  of Health is a consortium of municipal public
   health  providers  which  predates  the  present  regionalization
   scheme.

   DISCUSSION

   While separation of the Vancouver Health Department from the City
   of  Vancouver  works  against  many  of  the  integrated  service
   concepts  the  City  is  pursuing,  it  does  have  some   fiscal
   advantages.  Principal among  these is the assured implementation
   of 100 percent Provincial funding, as in most of the remainder of
   the  Province.   We  estimate  that full  provincial  funding and
   separation of the  Health Department is  worth a  net $2 to  $2.5
   million annually to  the City.  As well, the  City could  receive
   additional revenue  by putting  properties currently used  by the
   Health Department  back on the tax rolls, and there could be some
   one-time revenue  from  the sale  of capital  assets assigned  to
   Health.  In addition, the City  might benefit from  not having to
   administer  a B.C.  Nurses' Union  contract, which may  be better
   managed  exclusively in  the  health sector  rather  than in  the
   municipal sector.

   However, there  are a  number of  major issues  which need  to be
   worked out for the transfer to be  successful.  At minimum, these
   include the following:


   1.   Role and placement of Environmental Health

   The Environmental  Health Division  of the Health  Department, in
   addition  to its Provincial health role,  plays an important City
   function.  It  enforces many  City by-laws (e.g.,  noise) and  is
   heavily  involved  in  the   City s  development  regulation  and
   licensing operations.   It chairs  the City's Special  Office for
   the  Environment and  leads  many City  initiatives (e.g.,  anti-
   smoking  by-law).   In its  efforts, it  works closely  with many
   other  City  departments and  is a  major  player in  many inter-
   departmental efforts (e.g., the FEST Committee).

   The legal and practical implications of separation from  the rest
   of the City need to be articulated and tested against a number of

                                   3

   alternatives.   Options  include  keeping  all  or  part  of  the
   function within the City, contracting all or part of the function
   with   the   Vancouver   Health   Board,   creating   cooperative
   arrangements, or  implementing a  new parallel City  structure to
   deal with City concerns which fall outside the responsibility  of
   the Health Board.


   2.   Disposition of City real estate

   The  Health Department currently  occupies three  buildings which
   are  owned by the City.   Other Health  Department activities are
   housed  in  facilities  which  the City  leases  from  landlords.
   Arrangements  will have to be made for the Vancouver Health Board
   to purchase or lease the City buildings and to  assume the leases
   in the other private and public buildings.


   3.   Disposition of other City assets

   Most  of the  Health Department s  non-property capital  assets -
   from desks, to computers, to stethoscopes and baby scales are the
   City's property, and  many were purchased at a time when the City
   bore an  even higher proportion  of health  costs than now.   The
   City and Vancouver Health Board will have to agree on a price for
   these assets and a mechanism for purchase.

   4.   Continuation or  replacement of City services  to the Health
        Department                                                

   Other City Departments currently provide a number  of services to
   the  Health Department.    These include  payroll, budgeting  and
   accounting,  purchasing, building  maintenance,  real estate  and
   facility management,  computer  services, legal  services,  human
   resource services, and parking  exemptions.  These are  valued at
   nearly a million dollars a year, and the Health Board will either
   have to  contract with the  City for  all or a  portion of  these
   services or find replacements.



   5.   Status of other City health services

   The  City operates  a limited  number of  health-related services
   outside the Health Department (e.g., the Taylor Manor and Cordova
   House continuing care facilities).  If the City is being asked to
   get out of the health business, it likely makes sense to consider
   the  future of these services  and facilities.   We believe these
   could  logically be  part  of  the  package  taken  over  by  the
   Vancouver Health Board.   As  the two care  facilities are  fully
   integrated into City services,  the details of any transfer  will
   need to be considered together with those of the Vancouver Health
   Department.    Arrangements  to  sell  or  lease  Taylor  Manor s
   building and land would  need to be negotiated; and  the existing
   tripartite operating agreement for the shelter portion of Cordova
   House  would need to be reviewed with the B.C. Housing Management
   Commission,   the  active   partner  in   the  Federal/Provincial
   operating agreement.

   Similarly,  it may  be timely  to question the  City s continuing
   role  in  Mountain View  Cemetery,  which  has been  historically
   justified  on  a public-health  basis.    Another Council  report
   recommends  a request  for  proposals for  the  operation of  the
   cemetery.

                                   4




   6.   Clarification of Community Health Council roles

   We understand that the Vancouver Health Board intends to delegate
   responsibility for many public  health functions to six Community
   Health Councils.  The present terms of reference for these Health
   Councils  are vague.    As the  Community  Health Councils  cover
   geographic areas within  the City  of Vancouver and  do not  have
   clearly defined  responsibilities,  members of  the public  could
   become confused  about the respective  roles of City  Council and
   Community Health Councils.   This could be counter-productive and
   wasteful.    It is,  therefore,  essential  to clarify  Community
   Health  Council  functions  before  the  Health  Board  transfers
   tangible responsibilities  to these entities and  before the City
   transfers  the  Health  Department  to  the Health  Board.    The
   division of the Health  Department into six mini-departments does
   not  seem in the best  interest of Vancouver  taxpayers or health
   consumers.


   7.   Capital funding for hospitals and other health facilities

   Although it promised a  revised formula, the Province has  yet to
   modify its  proposal to charge Vancouver  property taxpayers with
   40  percent of  the cost  of  new hospital  capital in  the city,
   regardless of whether the  facilities principally serve Vancouver
   residents or not.   Charging provincial health care costs against
   the  municipal property tax base continues to defy logic, as does
   the  separation  of  responsibility  for  capital  and  operating
   budgets.  Capital and operating expenditures should be integrated
   so sensible trade-offs can  be made between the two,  so that the
   operating implications of capital  are clear,  and so  that those
   who  make capital  decisions  are responsible  for the  operating
   consequences.   Part of the  health transfer package  should be a
   more  sensible capital  financing  scheme which  leaves the  City
   property  taxpayer out of the  equation and which  does not place
   additional demands  on an  already overcrowded City  property tax
   base.


   CONCLUSION

   The Province funds most public health services in  Vancouver, and
   the Province is apparently intent on  transferring responsibility
   for the Vancouver Health Department from the City of Vancouver to
   the  Vancouver Health Board.  In spite of its historic opposition
   to  the ill-conceived  health  regionalization  scheme, there  is
   little  that  the  City can  do  to  prevent  this transfer  from
   happening.  And,  while  the  efficient provision  of  integrated
   community services will  be impeded, the City  will likely derive
   some moderate financial  benefit from getting  out of the  health
   business.    However,  sensitive  negotiations  are  required  to
   protect  the City's and the community s interest. While it may be
   possible to complete these negotiations before the Health Board's
   arbitrary November  1 deadline,  the public interest  should take
   precedence over expediency

   In the interim,  the City  and the Metropolitan  Board of  Health
   should continue to remind  the Minister of Health of  his earlier
   commitment to fund 100 percent of  municipal health services upon
   the establishment of regional health boards.

                                   5

                            *  *  *  *  *  *