Health committee moves Denver Health operating agreement to full Council after budget briefing
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Summary
Denver City Council’s Health & Safety Committee reviewed the annual Denver Health operating agreement and heard that the city requested roughly $5 million in reductions for 2026; Denver Health said it will absorb the cuts without layoffs and the committee voted to move the agreement to the full Council.
The Denver City Council Health & Safety Committee on Tuesday reviewed the annual operating agreement between the city and Denver Health and advanced the item to the full Council.
During the presentation, Megan Perizzo of the Department of Public Health and Environment (DDPHE) said the operating-agreement portion of the DDPHE budget is about $38 million and that the overall operating-agreement funding was roughly $74 million in 2025 and is budgeted at about $69 million for 2026 after the city requested approximately $5 million in reductions.
Why it matters: the operating agreement outlines services Denver Health provides to city residents and the annual funding and metrics that accompany those services. Council members and Denver Health leaders framed the 2026 changes as a short-term response to the city’s broader budget picture, with both sides signaling that the funding mix and service continuity will require renewed negotiations for 2027.
Perizzo said several language and metric updates were modest and administrative in nature. She highlighted one removal tied to an ended capital repayment for the Park Hill Clinic and described line‑by‑line changes that affect several service buckets, including emergency-medical transport, the Denver Cares program, poison‑center funding, jail medical administrative cleanup, and a “treatment on demand” line.
Denver Health CEO Donna Lynn described the $5 million adjustment as "a one‑time reduction" and said it will not result in layoffs for 2026. "There are no layoffs or workforce reductions associated with these," Lynn said, adding that Denver Health will "absorb" certain costs for the coming year. Lynn also flagged outstanding concerns about malpractice costs and the lack of city-provided indirect support tied to jail medical operations and said the mayor’s office has agreed to continue discussions on those issues.
On specific lines, Perizzo told the committee the city-preserved the Denver Cares service in name by leaving $1 in the operating-agreement line while removing the city’s larger contribution from that slice of the contract; both Perizzo and Lynn said Denver Cares services will continue in 2026. Perizzo said the emergency services patrol line saw a budget reduction of roughly $558,000 on paper but that the van and transport service will continue to operate.
Council members asked for clarity on retirement-plan catch‑up payments to the Denver Employee Retirement Plan (DIRP), grant-funded positions tied to medication-assisted treatment (MAT) in the jail, and longer-term funding implications. April O'Dain, Denver Health’s chief financial officer, said the organization is on track with DIRP payments and anticipates an additional payment of about $3 million this year based on margins.
What happened procedurally: after questions and brief back-and-forths, the committee indicated support and moved the operating agreement to the full Council for consideration.
What’s next: Council staff said they will work with the Council President’s office to determine whether the committee should receive an interim briefing next year about the status of services the city has asked Denver Health to fund or absorb.
Sources: Presentation by Megan Perizzo (DDPHE) and Donna Lynn (CEO, Denver Health); comments during committee Q&A.
