September 2, 1998

To:Board of Health

From:Dr. Sheela Basrur, Medical Officer of Health

Subject:1999 Budget Process

Purpose:

To outline the process and principles by which a needs-based 1999 Operating Budget for Public Health will be developed.

Recommendation:

It is recommended that the Board of Health receive this report for information.

Background:

At its March 24, 1998 meeting, the Board of Health directed the Medical Officer of Health to prepare a "needs-based budget" for 1999 and beyond, in consultation with the community, which would reflect both provincial requirements and unmet local needs. Due to management restructuring, it has not been possible to develop this concept in full and apply it to the 1999 budget cycle. However, budget development will be an early priority for the new Public Health Management Team, and a full report on this will be submitted to the Board of Health in October following its review at the Board of Health's Budget Subcommittee.

At its May 12, 1998 meeting, the Board of Health struck a Budget Subcommittee with a mandate to develop a process for planning and setting a needs-based 1999 Public Health Operating Budget. While no quorum was obtained at the Subcommittee's first meeting date, staff did engage in a productive discussion on this matter with the Board's Vice-Chair, upon which this report is based.

Budget Process and Reduction Targets

This year's needs-based budget planning must first and foremost take into account the serious and growing public health needs across the City. Many of these needs, such as homelessness, mental health needs and environmental health concerns, are currently not being met or are being met unevenly across the former six municipalities. In addition, we have an obligation to meet Ontario Ministry of Health's Mandatory Health Programs and Service Guidelines which require Boards of Health to ensure broad access to public health programs. Reinvesting savings achieved through program efficiencies in addition to new funding will be necessary in order to achieve equitable health outcomes for all in the new City.

According to preliminary information, the 1999 Operating Budget submission must be submitted to the Commissioner in early November and to the City's Budget Committee in early December. The City expects a 10% budget reduction over two years from all amalgamating divisions, including Public Health, which is to be achieved without service cuts. This has been an important principle for the amalgamated City and also reflects the need for Public Health to respond to services that are increasing. The City's overall savings target over two years is $150million (or 2,500 FTE's), of which $70 million was achieved in 1998. The Finance Department is apportioning the balance of $80 million to individual divisions, and the specific targets for each division will be adjusted to reflect the savings each one achieved in 1998. It must be emphasized that a Public Health budget reduction as high as 10% or more cannot be achieved without service cuts.

Overall, the combined Public Health budget rose by 3.2% between 1997 and 1998. However, when new program funding (e.g. provincial Healthy Babies, Healthy Children funds, municipal child health funds) and Animal Services are netted out, the Public Health budget fell by 1.8%. The Animal Services budget fell by 2.6%.

The CAO is also examining service level harmonization and the financial impacts thereof. The main criterion by which services will be considered for harmonization is the opportunity for major cost savings or efficiencies. It is also possible that regulatory programs may be considered for harmonization. The CAO's report will be presented to Strategic Policies and Priorities Committee on September 24, 1998, and Council's policy decisions on this matter will help guide the subsequent budget process.

The 1999 operating budget submission for Public Health is generally expected to reflect the following:

(1)Additional Cost Savings

There will be limited opportunities in this arena, as such savings are best identified through program rationalization and re-design, which will begin in the fall of 1998 and extend throughout 1999 and beyond. Examples of current initiatives include: centralization of communicable diseases notification; rationalization of by-law enforcement; and centralization of community health status, policy and advocacy functions.

(2)Council/Board-Directed Program Changes

These include programs and other initiatives undertaken at the request of Council, including: a harmonized ETS by-law; a harmonized animal control by-law and its degree of enforcement; rationalization of dental services; extension of AIDS and DAPP grants across the City; a hot weather response; strategies directed at poor air quality, pesticides use, etc. Some of these cannot be costed until ongoing studies are complete; for example, the Public Health response to homelessness awaits the recommendations of the Golden Task Force.

(3)Equal Access to Disease Prevention

Some service changes will be recommended where continuation of unequal service levels cannot be sustained for health reasons. These will include: TB control; HIV prevention; food safety, and mental health services. Initiatives such as the extreme cold weather response will need to be dealt with before the budget cycle is completed due to the onset of cold weather by January. There is also a need to consider a process and time frame for harmonization of by-laws that regulate personal care rooming houses (former Toronto) and lodging houses (former Etobicoke), such legislation being absent in other areas of the City despite the high vulnerability of residents in these premises.

Finally, as in 1998, there is no corporate mechanism to "re-invest amalgamation savings" back into the originating division. Instead, "new program proposals" should be submitted for Budget Committee's consideration, recognizing that overall budget pressures may make their approval unlikely. In any event, all proposals will show the health implications of leveling up, leveling down, or dilution (extending existing resources across the City), and may propose a multi-year or phased implementation to ease the financial impact.

Conclusions:

Corporate budget pressures in 1999 will exceed those experienced in 1998. Significant savings in the short term cannot be achieved without service cuts, while at the same time there is growing pressure to extend services more equitably across the City, especially in areas related to disease prevention and harm reduction.

The new Public Health Management Team will consider these issues as an early priority and report back to the next meeting of the Board.

Contact:

Dr. Sheela Basrur

Medical Officer of Health

392-7402 (w)

392-0713 (f)

sbasrur@city.toronto.on.ca

Dr. Sheela V. Basrur

Medical Officer of Health