budget and finance committee meeting for june 20, 2013. we are continuing with items two and three and we have our department of public health and i see greg wagner. thanks for being here. come on up. >> i wanted to give you a overview of our budget. it's 1.$9 billion for this existing year jeer and increasing and as you know san francisco general hospital, laguna hospital primary care, jail health services, mental

health, substance abuse and public health are our major services and just please note in substance abuse and mental health is where the majority of the services are and that is almost $260 million. the question of equity. most of our services are focused on equity and access. about five years ago the department supported three major equity groups,an african-american leadership group, and chicana group and api equity group. these were organized to help us with advice and direction in meeting the needs of those populations and we have many other advocate groups that work with us. internally and on site we have telephonic and language

services that supports over 80 languages including american sign language at san francisco general hospital, clinics and laguna honda and jail health. internally we are looking at programs and trying to really bring them together to leverage as much of the services we can, particularly around african-american health and populations, and so one i wanted to highlight is our trauma and mental health system. we are really looking how to ensure that our entire mental health system looks at trauma for the clients and ensure that the provider is educated on mental health health status. other programs that address disparity are the women programs and the nurse partnership focused on the most vulnerable families and

our new comers program that really looks at immigrants that come into the city. the major drivers of our change in dph's budget is our need to invest into the affordable care act. we have had a historical structural short fall and that is also corrected in this budget. the furniture and fixtures for the new san francisco general hospital and negotiated salary increases per the labor agreements have really created a need for a change in our budget. just a quick overview of our -- what the impact of affordable care act on our department. on insurance status what we will see is the number of insured will go up. the majority will get medi-cal and some will get cover california which is the new insurance program that the state is developing, and the number

of insured would go down. that would reduce enrollment in healthy san francisco and [inaudible] in the past but we will keep healthy san francisco for those that don't qualify for aca primarily for the undocumented so healthy san francisco will continue to stay within the department. one of the challenges that we do have and we were at the hearing this week is that our state revenues are going up and down. from health insurance they will of course go up but large leer our uninsured moving to insurance through medi-cal but because of that the revenues that support the uninsured will go down so the waiver dollars will be reduced. our dish dollars, which are dollars that we are given for the hospitals will go down because now the federal government is providing more access, and realignment dollars

that the state has given us for many years to serve the uninsured are going to be taken back by the state due to the fact that we have insured community members. one of the most important things for the future is the way we're reimbursed for health care. we will be getting capped payments and part of the medi-cal expansion it provides a fixed number amount to manage the patients regard regardless how frequent or infrequently they use the service and we are starting in january and we have a group of seniors and those with disabilities who are already on this type of payment. we are seeing that they get one payment per month to manage the care of individuals. that is making us reorganize the way that we provide care. the affordable care act is really focused on

the capacity of primary care to provide medical homes. i think we did an incredible job of that through healthy san francisco. all of the uninsured are already in networks -- at least the majority of those, and they already have health care homes, so we will have to continue to look at expansion of primary care to insure that we are able to meet the financial future of the department and we have some of those initiatives within the budget including insuring that we are able to provide more access as an example during nights and weekends. to continue to invest in our delivery system we now will be required to have contracts with some of our providers and we will continue to have contracts with our health plan, so we must create an office of managed care to enhance our data collection and improve outcomes. we are

strengthening our care through management and access to clinics. we will increase staff to reduce wait times. the federal government is requiring a certain length of wait times that we have to meet so we have to increase specialty care and we have requirements from the government and the funding, but not the entire funding that we need to incorporate electronic health records and those are going to be required by the federal government in the next few years. with those challenges on one side of our department, particularly on the delivery system, we do have to look at services that have not created enough revenue for their service, and we i think we're doing a good job of reprogramming our behavioral health center for the potential 8.1 annual savings and go into a skilled nursing facility and 24 beds in the facility to psychiatric respite beds. we

find many people are going into the psychiatric services that don't meet the level of acuity but there is no other place for them to go at that moment and with the new beds the psychiatric emergency system can use these beds as a way to help people reduce their anxiety and not have to be hospitalized. this realignment of our health care services at the behavioral health center will allow the department to better utilize the beds and create beds that are in short supply in san francisco. through this initiative staff will be reassigned and there is no loss of employment expected from this realignment. one of the difficult and also i think important processes that we will have to look at is our community program services. we're looking to try to reduce in that area by $17.6 million in this two year

budget. we're already currently looking at the service delivery system. this is the time for us to reorganize and prioritize services. the change will be effective in fiscal year 14-15. we hope to maximize coordination across the department. although we haven't totally created the focus of where we're going to put the rfp although we have a focus for the services not being able to create a revenue source for themselves. they will be focused on the behavioral health services, housing and urban health, hiv services and prevention and other programs and those that will come through a rfp process. and we will now have our chief financial officer talk a little more about our restructure. >> may i also read item five.

>> please do so. >> item five and the patient rates and other services provided by the department of public health. >> thank you supervisors. greg wagner chief financial officer. a couple of other points about what's included in our budget. a big thing for the department is the issue of our structural deficit and salaries. historically we have operated with a budget that is less than our actual staffing levels in the department. that's happened for a number of historical reasons, but with working with the mayor's office we have been able to get to the point where we're able to correct that in the budget for the coming two years that's an investment to bring our budgeted levels up to our current levels of existing staffing. it's about a little over $50 million per year that is funded partially through

internal reductions, partially through increased revenues and partially through general fund support in our budget, so that won't solve all of our problems going forward by any means, but what it does mean we will not walking into day one of the new fiscal year be starting off with a deficit in the budget so that is a significant positive for the financial stability and management of the department but also for the general fund. other changes, some of which you heard about. we have a significant appropriation in each of the two years for the budget for furniture and fixtures and equipment at the new san francisco general hospital. we are $49 million budgeted in 13-14 and $55 million in 14-15. we are currently in the process of

adding to that number through private philanthropic donations to support that program. that will allow us to have modern functionality at the new hospital. we are approaching that through a combination of cash purchases and financing of certain items in cases where it's appropriate to do so. other items that you heard about at the hearing earlier this week as you know there are significant reductions to hiv health services and prevention services in the federal budget that have worked their way down to the county. the mayor's office did back fill these but new cuts have been added on top of that and have left gaps in both years. in addition to that we have other federal reductions in the budget. a notable one

is to owb tuberculosis programs. we back filled those in part by the budget submission but there is a gap remaining which you saw in the documents earlier this week. lastly just on legislation that will be coming before you. one item that was read today is the patient ordinance and adjust the rates that we charge to commercial health plans predominantly. those rates don't affect our medi-cal or uninsured programs, but what they do do is generate revenue from the commercial payers that use the facility and that a significant item and we

have an annual process that we collect our known and recurring grants and ask for approval for those in the legislation so we don't have to come back for approval for each grant. the last thing i will mention is on overtime since that was mentioned as a topic of interest to the committee. we have worked very hard on overtime at the department. we are currently within our budget for the current year and expect to stay within it for next year on overtime expenditures. those constitute approximately 2% of our total salary budget within the department, so we have worked very hard on keeping that down. the challenges for us are when we have inability to fill positions at 24/7 requirement

our staffing needed to back fill that with overtime but we worked hard to do that and we have programs to minimize the overtime use and thank you and we're happy to answer any questions. >> colleagues any questions? supervisor mar. >> i just wanted to ask if ms. garcia or mr. wagner could respond. i know they submitted a very late request. they emphasize that their physician's pay is so low compared to other hospitals and they're having always have a hard time with high turnover and what they all unfunded non discretionary physician increases -- i believe range adjustments in the salaries that they say is not included and i am wondering what advice do you have for them and it's about 3.1 million dollars amount and lead to increases

and be competitive with other hospitals? >> i think it's an important topic. we've been working with them since i have been the director. we have increased the contribution to them. in this year's budget we couldn't provide the whole amount they were asking for. it is true that they do have some problems in competition but we always can't fulfill every need that they have so we will work closely with them if they don't get additional funds with the impact as we do every year but we had a gradual increase in their costs over the last three years i have been working on the budget with them and we continue to try to meet their needs. this year we couldn't give as much as they needed. >> and i should clarify the physicians at usf general. >> it's for the general hospital the positions in the hospital.

>> okay thank you. >> colleagues any further questions? why don't we go to mr. rosen and the budget analyst report please. >> did the department comment on -- >> no. i was going -- mr. wagner do you want to -- >> we are working on it so with the committee's permission and mr. rosen's agreement we would like to spend more time working through the recommendations. we started working with them but we hope to be able to reach an agreement by next week's hearing. >> okay. mr. rose. >> mr. chairman, members of the committee regarding item five mr. chairman pertaining to the various patient rates we do recommend that you approve that proposed ordinance. again we would note that the dph budget is balanced based on the assumption that the board of supervisors does approve the patient rates. our recommended

reductions, and this is on page 47, total is listed there in 13-14. that amount 2.4 million is on going savings and we have one time savings. those reductions would still allow increase of $228 million or 13.7% in the department in the 14-14 budget. we recommend closing out also prior year unspended fund encumbrances and allow money to be returned to the general fund and result in savings listed. 2.5 million on the city's general fund and our recommended reductions total this amount and $290,000 are on going savings and $117,000 are one time and would still allow

increase here or 2.2% in the 14-15 budget. let me make a comment in general mr. chairman. first of all the department has suggested that they could agree to a lesser amount of reductions than the reductions that we have proposed. we are not in agreement -- a significantly lesser amount. we are not in agreement with the department at this time but are certainly happy to work with the department in the ensuing week but i would note as you look at our recommendations they refer to long-term vacancies. positions that haven't been filled for two years or more and it will be difficult to persuade us to change those recommendations. >> okay. thank you mr. rose. colleagues any further questions for mr. rose at this time? or staff? all right. look forward to see you back in one week.

be in touch. next we have dc yf. i see ms. sue here.

>> okay. so good afternoon. it's almost evening i was practicing good evening for the past couple of days but good afternoon chair farrell and members of the committee. i am maria sue and the chair of dependent youth and their families and i want to thank the mayor budget director and the budget analyst from the mayor's office and also thank mr. harvey rose office, particularly his staff, katherine short and we're still working with her, so very quickly i want to provide you a background of our department. the department was created in 1991 when san francisco became the first city in the country to guarantee annual funding for children and youth service. when the voters passed the childrens' amendment. this legislation designates a portion of the property tax revenues per year into our department and we

are tasked to administer and manage that. the funds was renewed in 2000 by our voters and it is set to sunset in june 30 of 2016. the provisions of the childrens' amendment states that there has to be a three year planning process that dcyf manages. the cycle has a community assessment, allocation plan, essentially a policy document, and a funding road map, and finally a request for proposal which is the way that we implement the children service allocation plan. the department's goals as stated in the charter are for children and youth to be healthy, to be ready to learn, are succeeding in school and living in a stable, safe supported family

communities and contributing to the development and vitality of san francisco. during the 2010- 2013 funding cycle we initiated a new developmentally based outcomes approach that focuses on tracks progress towards the goals. children are ready to learn and children will succeed in school. we will continue the approaches into the next three year cycle. the strategies that we have developed for the 13-16 grant cycle builds on a strong foundation of work pursued by our department in partnership with other city departments in the school district over the last three years. we remain committed to core outcomes focused on learning and school success while recognizing that a wide range of support services are needed to achieve

educational attainment for all students and youth. the approach described in this slide is intended to be holeistic and addressing the needs of the youth and create healthy families and community environments that enable and promote school success. the strategies work sesubsequently to achieve outcomes from birth to the transition of adulthood. these outcomes are supported through investments in early child education and school time and leadership and development they're bolstered by support strategies and school support and youth community centers and nutrition and balance and intervention services. through our investment we reach over

50,000 children in the city and we reach over 50% of the children in the support and provide service for 250 community based agents. we believe that our. >> >> investments will support all children and youth and recognizing that some of the young people face steeper hurdles than others to successful adulthood. to address this disparity we use an index of need to identify the neighborhoods that the children have the greatest level of needs of services. each of our strategies described here we distinguish between investments that address broad universal need and those to alleviate concentrated needs on the neighborhood level or targeted very specific types of needs such as english language learners, teen parents or

homeless families and lgbt and young people. so our proposed fiscal year budget is $144 million or $20 million more than fiscal year 12-13. the majority of the increase is attributed to the 14. 1 million-dollar increase in the school district fund for the public education and enrichment fund. the mayor this year has made a strong commitment to our public school children to ensure that they will continue to receive high quality education and are ready for college and career. as a result the city will fully fund this part this year. school district transfer funds makes up 43% of the budget. they include the prop h dollars, the baseline, rainy day funds. the revenues from grants that the department receives

equals 4.3 million dollars and makes a 3% of the department's budget. they include state, federal, criminal justice grants as well as a nutrition grant that we get from the state to fund our summer lunch initiative. the decrease from 12-13 includes an elimination of one time funding from a private foundation, and some anticipated one time reductions of a violence prevention grant. the 12-13 budget includes a large -- i'm sorry, the general fund equals $29 million or 21% of our total budget. it makes up 34% of the budget. the total childrens' fund equals $50 million which is a $7 million equal from 12-13. continue children proves has approved the department to maintain and in some instances

increase funding in services. for the fiscal year 14-15 the proposed budget equals 131 million or $12 million less than the 13-14 year and this is primarily attributed to the reduction of the prop h funding. the majority of our funds are directed to grants to community based organizations, or to work orders to other departments who will then grant them out to community based organizations. the work -- we work with other departments to leverage their expertise in monitoring and managing grants in their content area or to streamline and reduce the repeating of work in departments. for example we send funds to first five san francisco and fund all resources centers in the city. this

reduces staff multiple city department working on the same grant. it reduces data entry time for the cbo's. we also send funds to the department of public health and other agencies for mental health services and other services but i wanted to to call your attention to the fact that our administrative and operational expenses makes up only 10% of the entire budget. we are a very small but mighty department of small and dedicated staff who provide support and oversight of the funds much the department has three functions. our budget and fiscal which is self explan tors and process the checks for the cbo's.. the