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 * * * * * *