>> health service board meeting is now in session. all stand for the pledge. >> i pledge allegiance to the flag to the united states of

america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. >> all right madam secretary roll call please. >> roll california. president breslin. >> here. >> vice president lim. >> present. >> >> excused. >> commissioner. >> expected. >> commissioner fraser. >> here. >> commissioner scott. >> present. >> commissioner excused for shlain we. >> thank you item one. >> item one is the meeting minutes for the meeting below.

>> are there any corrections to the minutes? >> move for approval. >> second. >> okay. is there any public comment on this item all those in favor? >> aye. >> those opposed? >> mouse. >> item two please. >> item two president's president. president breslin. >> i have nothing -- oh there will be public comment on this item too. is there any public comment? all right. item three. >> item three discussion item discussion report, lisa ghotbi

how about now lisa? no? >> thank you. lisa ghotbi acting director of the health system. starting with personnel we have updates. we are relationship to announce we have hired a administrator manager. this is a new position for the system and joined us as of monday. she is 12 years of experience working in the payroll -- a similar roll supporting our payroll department in the controller's office and we're lucking to have her with us and lanie is happy to join us. lanie can dedicate her time to the board as the board secretary and we are happy to welcome her to our team. we have a offer pending for the 0923 contract manager. that candidate did not accept the position. it is always a

challenge in this city to meet the salary requires of external candidates especially when it comes to health plan contracting which is very highly desired position across the industry right now so we're back to scare one and working to reassess the classification of that position. it is critical for us to get that one filled and we're sorry that we didn't successfully close that deal but we will work on that one and in the meantime our ceo pam pamela levin will play that roll. we have a new technician that starts next week. that leaves us -- well, five -- six open positions at the moment. three benefit analyst positions we're working to fill. we have two wellness positions we will post soon and we still have a finance position. this is the same position that we got approved

with funding with blue shield. incredible difficult time filling this position as well. we had to use outside services to fill in for the finance requirement in the meantime and we are still struggling to get this position filled, and then the last item on personnel is that our director katherine dodd has made it true treatment and in a speedy recovery. i think i mentioned at the last meeting very tough in the first weeks of december and does two was the highest call volume in the history of hss. this resulted from -- we sent confirmation letters for enrollment out to every member of the health system and there were a lot of people i mentioned last time didn't have the enrollment they thought they had. some of it was errors on our part of but many was -- i think i mentioned -- oh i divorced my wife six

years ago why is she on the plan? it's a good effort and taxing fur the team and the first weeks blew the month of the goals and statisticses and our rate was 3.8 for the month and less than the 2% and the answer much higher so the hss handled over 50,000 years over the year and 13,000 in house visits in support of our membership. communications has been busy. the hss website is updated with all of the 2014 materials. we worked on the planning for the health sustainable plan which is item seven today. we working on a video for open role. as you know we -- i'm sorry for new hire. we had the video for

open enrollment and well received by the membership and rosemary is working on a video for the new hire people that come on to the plan and we're working on the communications rfq that will come to review in the next month. the finance team, we're on track with contracting requirements for the new year continue negotiations with kaiser, uhc and working on the agreements under the blue shield agreement and we will begin work on the kosh rafsa vendor ffp that you will see next month and for this year it's on kosh raservices and wage services and they're the vendor and it's time for a rfp on this service so we will launch that in february. data an littics for hss is

active making sure everyone's w2's are accurate and their tax information as it comes to benefits is corrected so we have been working on that the last month of december and we just finished the testing on that today and that is very good and we're working on the other one for the data base which i think will be ready to launch next month and then on the wellness side with staff nee fisher joining our team we're finishing up the work with the control r controller's office and should be coming forward and working on the kaiser on the roll for researchs proximates and the firefighter study will have and an important cancer study we're interested in seeing the results of and staff is working on a plan for extended

services. i think that -- with that i will conclude my report with a note of recent new england journal medicine study health care spending and the "regardless of cost trends spend suggest far higher than needed and needs continued effort and continuing the implementation of the aca provision." any questions? >> i just have a question. do you plan to send that? is this going to be an ongoing thing sending out the letter of confirmation every year? >> we're certain torn. it was a lot of work but it cleaned up a lot of accounts so i think we will continue to do so. it was financially worth the work and i think we will be online with

benefits within a couple of years so i would personally recommend that we continue it until we go on line and people then can get the confirmation electronically and smoother and less costly intervention communication to our members. >> okay. and a second thing, expanding eap services -- the retirees don't have anything -- well, they do have through the health plans. they have social workers or psychologists, but i was wondering if there is something in eap when you expand it for the retirees? >>i think that's a really good question and certainly one of the topics we are evaluating as we look at the fact that the services are really under resourced and insufficient to meet the needs of the employee

population and we're looking at different options to bring to the board to look at what the costs are, what the benefit might be to broth -- to all of the members of the services that don't have eap either under the current offering or current union agreements. we certainly have divisions of the city that have access to one and some of the other employers that we work with under the system have eap independent of ours so there are options that we can look at to expand the services for the city and count i and also for our retirees. >> good. >> commissioner scott. >> yes, i just wanted to raise a question about the wellness report. will the board see it at some point? i understand the controller requested it and he would have first quack at it

but we will get a copy or discussed in this forum? >> it will come to the health service board. they're asked to lead the program for the entire city and you may recall there are budget dollars including the funding of stephanie's position from the general fund and two additional positions we're looking to fund from the general fund as a result of the city and the controller's office of economic and workforce development for the wellness of the employers and hss is asked to run it and the board is responsible for that as well so i expect it would be march or april. >> thank you. >> any public comment on this item? seeing none item number four please. >> item four discussion item update on financial reports as of november 30, 2013 and budget

update. pamela levin. >> pamela levin, deputy director chief financial officer. these are really two different items so i'm going to do one -- first i'm going to talk about the financial report through november 30. this is five -- we had five months now to use for our projections. first i want to talk about the trust fund. we are projecting an increase in net assets of 18.6 million. this is 1.5 million less than last months report so that is kind of expected when you do a projection with only a little bit of data you will be bumping around a little bit. the 18.6 consists of 11. 1 million the city plan assets, and working on the recommendation from the disposition of these assets based on the health service

policies and they will come back to you next month. we have been talking about this for a while but february is a big month in terms of writing any types of reserves that we need to have or any types -- according to the health service policies. 1.6 in favorable [inaudible] blue shield flex fund and incurred but not reported. we continued to look at the success of the flex fund and we will incorporate that information into the rates and rate settings. 4.7 increase in estimated claims experience in the civil insured dental plan. reduction of a million of hmo insurance revenue after the

application of the retiree insurance credit. these are similar items we had on for each month, and 1.1 million increase to account for the time of their contribution and filling of claims. there was a discussion last time for people to carry forward up to $500 to the next year and following. 1.1 million increase for interest assuming nor significant changes in the fair market value of the investments. we have not heard that is going to be a problem and $300,000 for performance guarantees that were placed by blue shield for the short plan year and then just minor adjustment for 200,000 for transfers to the fortfittures

of of the general fund and with the balance it will add to the net assets and bring it up to 96 million. as we discussed we do have a list of obligations that we need to keep in our minds when we talk about our net -- our net assets, and that's still around 68.6 million so we're really looking at a balance of 27.4 million in the trust fund. then in terms of the general fund administrative budget we're still looking at projected balance of 170,000. we as acting director lisa ghotbi mentioned we are seeing -- because we are savings -- because it's taking longer to fill positions than anticipated we are seeing some of the

professional services are greater than we thought, but we are still showing savings because we still have some positions unfilled. i think next month when we bring the budget we're going to hone in -- we will have six months of expenditures and hone in exactly where we will be at the in the general fund at the end of the year. are there any questions on this? so now we get to the 14-15 budget update. february as you know is a big month. we have to submit our budget to the mayor's office february 21, so what i am doing is going over what the instructions we have been given, how they impact our budget in terms of reduction targets, what kinds of things we need to focus on, and just a real quick incaps laigz of what

the budget schedule is so in december the mayor released the 20-- 2014, 15 and 16 instructions and we went to a two year budget so i will talk to you about the way that process works to start our numbers when we come to you in february, so these instructions only apply to the general fund administrative budget because the trust fund budget is your purview and doesn't have to be approved by the mayor's office or the board of supervisors. the mayor's office has put out a report that says they're projecting a deficit of 1.7 million in 2014-15 and --

118 million in 15-16. these projections change as we go through the year. they have different reports. we get the results what they're doing in the state and the federal government so they bounce the deficit around this amount. this by the way is a lot lower than what we were looking at several years ago. i remember the days of the 200 million-dollar problems but again a lot of things are that used to balance the budget is gone and you can't use a trick more than once. this deficit doesn't include things about the negotiations with the unions except police and fire and 40 are up for it now.

the general drivers are we have improvements in the local tax revenues in both years. there is the loss of the fund balance in 14-15 compared to the budget but projected gains. there are differences in the outlook for public health due to the affordable care act. they basically have to look at rebranding themselves and coming up with providing services differently and because they are general fund most -- a lot of their budget is impacted by the general fund. that goes for all of us and as i mentioned there are one time solutions to balance the budget. other uncertainties is the long-term impact of the economy. we have all heard on the radio all the time about how we maybe up, we maybe down, we maybe in a steady state. there's a large uncertainty of that. the increase in benefits -- they

have already -- they're factoring in the fact that our retirement goes up in -- well, what happens is that when the financial downfall hit the retirement fund the city had to pick up more -- it was spread out over five years that. five years is ending so our retirement, the contribution that the city has to give to the retirement is -- you're going to see some changes. there's open labor contracts just to give you an idea a 1% salary increase in the general fund city wide is $20 million so obviously the people who are negotiating the contracts are going to be kind of solid and try not to get salary increases, and i also mentioned that there still is

the affordable care act and other state and federal impacts that the governor's proposed budget comes out in may. we never know what it is -- no, the revise is in may. the original one is in february i believe so that can also impact the general fund and it's whatever else departments are doing for the general fund in terms what they need for supplemental appropriation leaves less for the rest of the departments so we're all in this big family is affected by what each other does. the mayor's budget instructions -- the two year instructions are as follows. reduce the general fund support by 2% over two years qha. that means to us in 14-15 is that we are to propose ongoing

reductions and revenues equal to 1.5% of this support and that reduction targ set 41,000 and in 15-16 we have to propose on going reductions and revenues equal to 1% of the general fund support and reduction of 69,000 and on the side put together another contingency reduction equal to 1% and that is equal to $28,000, so what the mayor's office asked us to do when thinking of the reductions -- every year they want us to focus on things. it's always to prioritize functions, minimize impacts, look at department fees if there are any, engage with stakeholders, and then they're areas that we need to focus our

requests -- not only the reductions but any requests that we have for additional funding on government efficiency, affordability of services and programs, government innovations, and particularly to use data to support both reductions and augmentation requests. now, with a two year budget we have to start somewhere, so where we start is from the current year which is 13-14 and what they do is they back out any one time programs, any one time equipment. unfortunately you will see when we come here they also backed out money for an election that we need to get back and the mayor's office knows that we need that money. then they

annualize new positions that have been added in 13-14 so that's the base budget and that's what we budget off of. that is equal to what we actually -- what we requested when we went for the second year last year, so remember when you were year last year was somebody else and i hope i am here next year so it's me but when we were here with someone else what you did was put together a proposal for 12-13 -- no, 13-14, and 14-15 and now doing 14 and 15 and rearrange things on what we proposed and we propose a new 15-16 so it's a little different than i think the approach that was done last year. so the

next steps is that we will propose a budget to the board that satisfies the reduction targets either by increasing revenues if we can, or by reductions in expenditures. we are looking carefully on any opportunities we have to not have to make cuts in the budget. we're going to focus on the areas that need augmentation so we will come back, not only with a list of reductions. we will come to you with recommended augmentations that are critical to the department to continue with our operations and that look at the efficiencies and providing savings in health costs and that sort of thing, and of course we will look at the areas that are

traditionally ignored and need augmentations to deal with changes in our vendor's funding models and then we need to propose a realistic contingency reduction because the departments that have flaky ones end up in a worse case than departments that have -- that look at it seriously; if the general revenues don't come in, if there is a major problem in their projections they may need additional cuts. the key milestones in terms of the budget process so on the 13th you will be considering the budget, and we will need to approve it. the department's budget is due to the mayor's office based on charter mandate on the 21st of february. by

the charter mandate or by admin code the labor contracts have to come to the supervisors in may, and then the mayor proposes the budget in june, june 2. so when all is said and done there's changes. they're maybe changes due to the negotiations. there maybe changes due to the state. i dent expect that we will see a big change in the local economy. i think it's very strong and maybe it get better. and then we have the budget hearings in june. we have the budget considered by the board of supervisors in july and then the board of supervisors actually approves the budget in by the end of july so this calendar only includes our actual budget

activities. there will be a discussion later on the schedule for the rest of the rates and budgets so it's a busy time. this is a lot of information in a short period of time they wanted to make sure that we started the discussion of the budget early. do you have any questions? >> commissioner scott. >> just a clarification question on page three, item three under next steps you cite funds or areas that are ignored or augmentation and in the vendors requirements. can you give me an illustration of what that is or an example? i think i could guess but i don't want to do that. >> so when we went to flex funding one of the things we

requested was additional accounting staff. >> okay. >> and as lisa mentioned it's very difficult to fill these kind of positions, but depending upon what the recommendation on some of the other contracts, large contracts, it may require having more data analytics staff with the changes that are planned, long-term changes of the city having do to with emerge we may need more staff, so it's those kinds of things. >> well, i only cite that because as we go through the processes i think we think they're administratively impacting in a neutral way, and i think it needs to be highlighted that the more complexity that we bring to plan design, plan administration and