Pierce County Executive Pat McCarthy is voicing support for the idea of making the Tacoma-Pierce County Health Department an arm of county government, saying the Health Department could cut costs by using county services in a proposed new administration building.
The Health Department is currently an independent agency with Pierce County and the city of Tacoma as partners.
McCarthy said her goal isn’t to control the public health agency.
“It’s more about efficiencies; it’s more about delivery of services,” McCarthy said. “Whenever we can reduce (administrative) costs, we should be doing that.”
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Other officials, including Tacoma Mayor Marilyn Strickland and Health Department Director Anthony L-T Chen, aren’t sold on the idea.
“I still think it’s important for it to be separate and not a part of the county,” Strickland said.
“I’m perfectly happy how we are,” Chen said, noting that his department’s independent structure has enabled it to adapt and be innovative.
Deputy County Executive Kevin Phelps said the Health Department could save enough money by joining the county to add public services and pay for the department’s lease costs in a proposed new county building.
Phelps said the county has identified as many as 40 areas where county and Health Department programs duplicate, from inspecting septic tanks to water management.
“We think there’s a huge opportunity,” Phelps said.
Phelps and McCarthy made their comments in a meeting last week with The News Tribune’s editorial board.
Phelps said the county could use its resources — such as information technology, budget and finance, and human resources — to reduce the Health Department’s administrative costs.
He explained one savings scenario: The Health Department has a manager and nearly six full-time-equivalent positions in human resources for about 250 budgeted positions. The county has 22 human resources workers for 3,000 employees.
By adding two or three more employees, the county could handle human resources for the Health Department, Phelps said. That could save up to $300,000 a year, he said.
Chen reacted with caution to that scenario, saying it wouldn’t produce an “absolute cut.”
“If they take over some of our services, they have to hire more people,” Chen said in an interview.
Strickland also questioned why the Health Department must become a county department “to realize these savings.”
All sides agree on one thing: The Health Department needs to move. The Board of Health voted in early August to commit to relocating the department to the proposed county building.
The 38-year-old Health Department building — which the county owns — needs $15 million of deferred maintenance that the county would have to pay for.
“We’re not going to stay in that bad building,” McCarthy said. “That’s not an option.”
The building at 3629 S. D St. is about a block away from where the new county administration building would be built on a site that includes the former Puget Sound Hospital.
Chen said relocating to that proposed building is “a great opportunity that the county is offering us.”
“We 100 percent share the same vision that the county executive has for improving efficiency, and above all, for improving customer service,” Chen said. “We’ve already been implementing that.”
The Health Department’s relocation would add about 55,000 square feet to the originally proposed 235,000-square-foot project. The cost of the building would increase from $70.5 million to $87 million.
The Pierce County Council won’t decide whether to go ahead with the project until November or December.
The county already funds a significant share of the Health Department’s annual budget — for 2015, it would pay $3.3 million, or 11 percent, of the proposed $30.5 million budget.
The city of Tacoma would fund $1.19 million, or 4 percent.
If it becomes part of county government, McCarthy said she wants the Health Department to continue having a federated board that includes representatives from the county, the city of Tacoma, and smaller cities and towns.
That’s the type of arrangement Seattle and King County have with their health department.
McCarthy said the Tacoma-Pierce County Health Department has three options:
• Ask the county and city for more money to pay its lease costs for the new building.
• Downsize overhead costs so the health agency could afford to pay lease costs for the new building.
• Become part of county government with a federated board. A legal agreement between the county and the city would have to rewritten, most likely with Tacoma’s approval.
Chen said it will cost the Health Department about $800,000 in added maintenance and operation costs — including a lease — to be in the new building.
He said the department has developed a plan to generate that money through a combination of increased fees, shared services and cost savings through innovation. That plan would allow his agency to remain independent, he said.
“We will not have any trouble getting to that number,” Chen said. “As far as I understand from Pat and Kevin, if we close the gap, then it’s done.”
After meeting with Chen last week, McCarthy said she wants to keep all options open. (Her meeting with Chen took place a day after her meeting with The News Tribune.)
She said she’s not sure increasing fees is the best approach. And she wants to know the Health Department’s total plan for making up the $800,000 gap.
Ultimately, McCarthy said, “I want the most efficient model.”
To reach that goal, the county is analyzing the costs of the three options. That report is due in mid-September.