16-DIRECT CITY MANAGER TO DEFINE AND CLARIFY CITY'S ASSOCIATION FROM THE HEALTH DEPARTMENT

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STAFF REPORT The Paris-Lamar County Health Department was established originally as a support to the Camp Maxey military base. With the end of World War II and the downsizing of Camp Maxey, its purpose morphed into its current civilian usage. The site itself remained the property of the federal government until December 1947 when it was deeded to the City and the County for a price of $1,339.00. Employees of the Health Department were employees of the State at one time. In a cost cutting measure, the State eliminated these positions and instead started awarding grants to partially fund the operations. While the County and the city jointly appointed members to the Health Board, the Health Department kept its own books, bank accounts, and otherwise operated independently. The City and the County were contributing to the funding of the department in the same way the City contributes to the Red Cross and other non-profit agencies currently. Problems arose from time to time because of lack of oversight of the daily operations. The City and th m ke up thle result ng mtoney short fallt For inappropriate action had been taken yet were expected to example, one year the employees received an unauthorized pay increase in the middle of the year. In 1987, the City administratively decided to start kee D~egthe lemployees1were allowed to jo nphe C ty such surprises. Over the course of time, the Health partment retirement plan and insurance plans. tself se, the The Health Department has been sued twice over personnel SThe'County was able to first Health Department, City, and County were named defendants dismissed from the suit because their sole connection to the Health Department was its financial contribution. The City tried to do the same thingt emu to be services nsurance (including payroll) and allowed the Health Departmen ployes plans, the Court said the Health Department employees Was fact" eethey had this how they were treated. In the second lawsuit, the Coun y the strategy is to run up the defense costs defense available to them. With such nuisance lawsuits, through discovery, depositions, attorney fees, staff time, and other costs to the point that the insurance carrier wants to settle the suit to avoid further costs. This strategy worked in both cases to the tune of $127,314.93 paid out by TML on the City's behalf. Thisd0 ff consider doby unnecessary lit gation staff time required to help in preparing the defense. Cly ta nts were not made matters are not available to do the real work of the City. While it is true these payme directly out of City funds, these payments do have a negative impact on City insurance premiums for at least three years. It would only be prudent risk management for the City to cease providing the services which allow us to be drawn into such lawsuits. The City does not control the operations of the Health Department and is powerless to take steps that would otherwise help reduce liability. It is only a matter of time before another such suit arises. All of the services the City has been providing can be easily outsourced. 1. Medical Insurance-TML will provide medical ins ~~ent employees wou d increase $10,312 if the group. The cost for the 14 full time Health Dep Health Department chose to fund 100% of the p~ also ontrol its insuorance costs by copy ng the currently in place. The Health Department co