on moving this forward and we have a dual pathway like now for how we are looking at our community choice aggregation programs and clean power programs and looking at the build-out assessment of local jobs that we are doing here today. and the other is also looking at studying how we could perhaps join marin clean energy as well. so those present various options for us or two options for us to move forward and i'm thinking that we might need more, but two is good for right now. appreciate your work. >> thank you. >> thank you. >> i will just say quickly thank you to the staff for working really hard to get this done in a really timely manner. i'm really excited about this possibility and how we're going to be looking into this program and looking forward to the outcomes. i know we already voted on the matter, but thank you eric brooks and some of the other advocates who have been working on this and full-speed ahead. let's get it going. >> okay.

very good. let's go on to our next item. >> item no. 7, consideration and approval of the proposed lafco budget for fiscal year 2014-2015. >> jason fried lafco staff. in your package you have the proposed budget to do -- just as a reminder within lafco statute we pass a draft budget by may 1st and final budget by july -- middle of july, if i am not mistaken, june, i'm sorry. this is our chance to pass our draft budget and come back, unless there are changes that are suggested today drom come back with this budget for final approval at our may meeting next month. the budget itself you will not see very many changes within it

you will see minor changes, like non-personnel services a different line item that used to be under "other services and other departments." that they separate out now. so we have separated out in our budget to be more in line with the clerk of board office and how they do their budgeting. you will see an increase in the clerk of board salaris and benefits, because the contracts that the city and county has with the clerk staff last year did not have any increases. this upcoming fiscal year will have increases and so we'll have to increase our budget for that line item to pay for the great work that we get from the clerk of the board's office and all of the services that they provide for us in this purpose. so you have seen an increase there. we did decrease the department of technology quite a bit. as it turned out we had a line item a lot higher than what we have spent on that in quite some time and what we'll need to spend on it next year. so we lowered that amount to

mainly offset the increase in costs to that. so that is the thing that we have in front of you. we have been living our reserve budget for the past seven years or this is the 7th year that we have lived off our reserve budget. we had a hefty reserve with the mou with the sf puc and that is the bill that actually pays for that work. if you want, we will have enough in riche our reserve in our one-year budget. some lafcos have a policy of what the reserve amount should be at minimum? and in some cases maximum. so we might

want to in the future have that discussion, but the mou with the sfpuc will expire at the end of this upcoming fiscal year. so we won't have access to that money necessarily unless there is is an extension of that mou. but we should be planning and preparing ourselvess for it not to happen just to be on the safe side. so if that is at the discretion of this commission if it wants to give back allocated amount that is given to lafco or that the city and county and gives to lafco. under state statute once an estimate has been established the city and county or in this case the city and county of san francisco needs to give the exact same amount it gave in the previous year for the next year. they cannot reduce the lafco itself is the only body to reduce the amount. we have accepted the money and then realizing the budget issue that we give the money back. i know that you serve on the board of supervisors and you are well aware of budget for the city and county and it's up

to you that we continue that practice for this final year. one of the things i was talking with miss miller about, maybe we keep some of the money this year and not return all of it. we tend to spend $100,000 to $120,000 overall paying for the clerk's office and paying for other things that are done. like some of miss miller's time and this coming year, now that i am allowed to work on things outside of cca, i pick up costs with putting agendas together and adding up to $100,000 to $125,000 a year for staff and clerk to do this work. so we could keep our reserve where it's at for i year. the choice is really up to the commission what it wants to do on that front. >> thank you. budget recommendation is that

we approve the same amount as last year? >> yes. i would always recommend that we approve the same amount. the question is do you want return the same amount? as along as we are accepting the full amount we have that going into the future. if you said we're going to only accept $200,000 this year, our amount would be set and in the future we would have to go and ask for a raise from the city and county. i would recommend that we keep our minimum amount, but the question is do we return this year? >> okay. miss miller, do you have anything to add? >> just what the impact of that would be. because by returning it, we have no impact on your general fund. if you don't return it, then there would be potentially a portion of the general fund paying for lafco's services. so that is the question for your budget committee members

is we can take it all out of reserve? so there is no impact on the general fund. or do you want to allocate some of the general fund? i think our recommendation was this year to just do it like we have always done and take it out of the reserve and deal with the budget issues next year. >> okay. i would not want to have an impact on the general fund. >> right. >> we're hoping next year is a better year. >> that would affect the clerk of the board aspects of the general fund, correct? >> right. and quite frankly, i haven't had a conversation with the clerk's office with that impact and i would hate for you to do smidge on anything on that score without me talking to them first. >> if we gave back a portion of the reserve, what would that enable us to do? >> we're not giving back a portion of the reserve, but giving back a portion that is

set aside each year. our reserve account is our reserve account and i don't think staff is recommending that we give that back. >> right. >> the money that is allocated within the budget process, we have it down as $344,445 a year. we reserve the right to it in the future, but we're going to give that money back to the city and county, because we can continue to operate another year without having to accept the money. but that gives us the right next fiscal year or the fiscal year after this one to go and say we now need this money and we're accepting the money and unfortunately not giving it back because our reserve is depleted from a lafco perspective. >> i'm fine to approve as-is? >> thank you. >> colleagues have a preference? >> i am fine with not accepting the general fund allocation and utilizing the

reserve for another year as along as we have the ability to access those funds in the future. because it appears that the money that we have in reserve is enough to get us through this particular process for the coming fiscal year. so i am content with that. >> i just want to make one technical correction. you are accepting the money and then returning it rather than -- the way that you described it would mean that we actually lose our ability to have that right to the money in the future and we need to make sure that we protect those rights. so accepting the money from the city and county and immediately returning it to them for that. so that way we protect our rights to the money going into the future. >> yes. that is fine. >> i support that as well. >> great. we can open this item up for public comment. any member of the public wishing to comment, please come forward. >> good afternoon again, commissioners, eric brooks san francisco clean energy advocates and grassroots our

city and first on the mou on cleanpowersf with the sfpuc it's vital that we keep that money in play after next fiscal year ends. as i recall you have to check on this, that mou was done as sort of a thing to clarify, what the relationship was? so whatever the board of supervisors needs to do or staff, or the departments need to do, we need to make sure that that money has been allocated to cleanpowersf and we need to make sure that we continue to be able to spend it after the end of next fiscal year. also on the budget not really to do with the reserve or general fund question, but actually making sure that you maintain in some flexibility, if we continue to get resistance from the commissioners of the sfpuc, we may find ourselves in a spot where we need to do some more expensive work, like site-selection and more

detailed work that staff was saying that they did not contract enernex to do. if we're forced into a position that that planning work needs to be done, it's going to be more expensive and we need to be prepared for that. one other item that i will speak for on the green party and our city and also public net -- public net was the coalition that helped stop the earth link/google takeover. if that happens san francisco internet customers are going to be in a very bad place and it's definitely conceivable that public net will come to you and ask to do a broadband study to create a public broadband system in san francisco. so please allow yourself a little budget flexibility in case we ask for that. we're hoping that you can figure that in. >> thank you.

colleagues we have a suggestion on moving the budget forward, should we take that without objection? >> yes. >> without objection the item carries. okay. can you call the next item, please. >> item no. 8 executive officer's report. >> no report. >> okay. next item, please. >> item no. 9, public comment. >> okay, no members of the public wishing to speak on this item. public comment is closed. okay. colleagues, any future agenda items? >> madame chair i need to call item no. 10 >> okay. >> item no. 10. >> no future agenda items? >> public comment on future agenda items? >> just to recap on future agenda items we talked today

about coming back on the legislative issue. >> yes. >> and also with an update approximately halfway through this contract with a briefing on where things are. >> miss miller, if you could provide us with a copy of the letter that is being submitted and review it with the chair before it is submitted to state legislature. >> i will review it with the chair and vice-chair and send a draft. >> great. >> thank you. >> thank you. any members of the public wishing to speak on future agenda items? >> eric brooks again, san francisco clean energy advocates and i'm wondering on the last item that you discussed, is it possible four you to authorize the chair to sign off on that communication rather than have another meeting about it because this is moving very quickly through the capitol? >> we are. thank you. >> all right, public comment is closed. adjourn. thank you for being here today.

[ gavel ]

[ gavel ] >> >> the health service board meeting is now in session. all stand for the pledge. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all. >> >>

>> i want to say hello to dr. dodd. thank you for being here. [ applause ] . roll call, please. city clerk: president breslin, lim, farrell, scott, fraser, shlain. item no. 1. regular meeting of march 13, 2014, approving of minutes. >> are there any corrections to the minutes? motion to

approve? >> i move the minutes be adopted. >> second. >> any public comment on this item? all in favor say, "aye". >> aye. >> opposed say no. it's unanimous. now we'll go into our rates and benefits committee section. commissioner scott you want to take that over. >> we are now in a regular session of the rates and benefits committee and i will call for action item 2. city clerk: item 2, action item review and approval of kaiser renewal option for actives and early retirees for the 2015 premium contributions, fully insured, flex funded or self funded renewal. >> your contract. good afternoon, everyone. it's a

pleasure to be here. i'm going to review with you the proposed rate action for 2015 for the kaiser permanente plan members. you have in front of you your packet under 2, >> rate -- restate your name for the record. >> hewitt. turn to executive summary on page 26789 on january 9th, we discussed the possibility of reviewing this in three different forms of fundings. fully insured, flex funded and self funded. i got all of your information from kaiser and given the variance in cost from period to period our analysis and our interpretation of the data and what they are offering on a

fully insured basis, we recommend not pursuing either funding alternative where the hss trust would take risk as they do under flex funded. that's our opinion. at this time, i'm going to review the fully insured options that kaiser has put together and are part of this analysis and review on your behalf to decide which one of these two options you prefer. okay the two options are: for 2015 as is with no benefit changes for the actives and early retirees because this is jointly pulled when it's rated. the active data indicates less of a decrease. the early retiree data says i want even more. so when we blend that for 1 year the

answer is 1.277 which is different than a plus. it's a minus. the next one is they have multiple year option and what they are offering is minus 2 and we'll review some of the caveats. minus 2 for 2015. so if the rates a hundred, it's going to be 98 and it will stay at 98. it's a 24-month break. i don't know if there is any questions. i want to review and i won't be labor this because we have kaiser who would like to address the board given the path last year, i think we are on much firmer ground now and they want to talk to you and we have only so much time to go through materials. they presented data that runs from december 12th through november 2013. they always give you a comparison of the prior 12

months. so that would be the 12 months starting in 11 and going through november of 12. so if you go into your page 5 of this document i outlined for you all the different increases that we were demonstrated in their package for the period of time comparison. you can see inpatient cost is up and outpatient cost is up. the other cost or other medical is 2.3. in that which goes up according to this 14.8. at this point i want to make a correction to my document. we got this a week 1/2 ago. we looked at this data and because of the fact that they have changed the 12 some of the ratios are bigger than

they truly are. i don't think it's necessary except to say that this is not anywhere near as far apart because they went from a low rate to a $70 rate in 126789 . if you look at that period it's overlapping. not to complicate the discussion, but those numbers overlap. >> just to anticipate what i think to be a generic question if we have increase shoesz across the page but yet the quote is citing a decrease, i think we have to take into account other information that would probably be provided at a later point. is that correct? >> to clarify, the nature of the quoting and how it was built one of the things and we'll just move along is that they have heard and they have positioned themselves as the champions of affordability in the marketplace. this is

kaiser's approach. so generally they have had a book specific trend that's run approximately 7 percent. if you look at that and have to trend it forward and the materials i was provided they have cut their trend to 3.72 percent. so they are giving you a fully insured quote based on this data set and they have trended it, increased it 3.72 percent per year. i actually have and that's a book trend. that's kaiser's basic trend for this case and other cases of that size. it's a very low number. the argument has always been why do you apply across the board 7 percent trend when my utilitization is coming down. this addresses that. this is a positive thing. i have their case specific data. my colleague, mr. brigs and i ran that data through my

regression models and i want to say that i can't match their number which would be coincidence because it's only specific to them. but i'm very close to their number. so my combined trend over the last 12 months is very similar to that. i think that their 3.72 is taking the data and actually applying what is true as far as kaiser for hss. is that helpful? >> it is. >> okay. with that i would like to continue and we go through page 7. what we have on page 7 is this same kind of information but it's for early retirees. so we go through all of that. i will just let you, you can review that at your discretion if there is any questions and as we go through this whole thing we have another piece which is southern california, which is very small. the pieces are

active early retirees in southern california and the answer is minus 2.77. that being said we have a certain amount of dollars, we adjust for large planes, we trim the data forward, we add our fees, our retention is approximately $24.97. on page on the document. we applied the retention and as you all know which has been an on going discussion under accountable care act there are fees the federal government assesses and there is an insurance fee and before fee and hit tax fee. kaiser is a benefactor than a much lower hit tax fee because of their status because the way they are registered. after all that is added at the end of the day, minus 2 and minus 2 at the

end of 24 months. any questions? >> yes, commissioner? >> thank you. i just want to make sure i understood in particular the pharmacy cost. so it doesn't matter which one you look at. they are all the same. we do have increases in both across for prescription and both brand formally medication and brand non-form larry which is interesting to me that it seems to be driven by an increase in the generic uses. >> say that again, the generic piece. >> why don't we go to a specific page. page 5. >> okay. >> the pharmacy cost

increased by four. presumably the reason this occurred is because of the generic rate went up by 3 percentage point. >> absolutely correct. >> so what i think is important for our audience to understand this is why generic uses really really matters. because we pull down the cost over all just by using generic. that was true. i noticed it was true for every single group. >> well-spoken, commissioner fraser. >> i'm curious as you know kaiser is slightly over 90, where does that stand in relationship to the regular hmo industry for brand? >> they would love to be at 80. kaiser is extremely high in proficiency and that's why they are generic and competitor in this situation is so much lower because they are so highly generic. just

as a matter of information i read the data before i came over. roughly it's like $30 for generic, the non-generic is a couple hundred bucks. it's really great to get as much out of generic as you can. >> the other question that i had was thinking about the difference between the 2 percent for 24 months, 2.77 for 12 just so i say out loud to make sure my assumption is correct. what that says is kaiser takes both the risk in the upside for year two. they are essentially equivalent from a financial perspective assuming the trends continue at the trend rate that is predicted here. if cost go down, kaiser makes the difference, if cost go up, kaiser has to eat the difference. just to make it clear, we are buying ourselves certainty but we are also

potentially don't get any up sides if utilization continues to remain so low, but we also avoid the down side of it? >> yeah. i would say that is basically true. so the amount of money if you took $298 in terms of 100 $100 and $97.23 to add those numbers, they are going to increase that. i think our risk is to be not -- locke it in now. >> are there other questions from commissioners? all right. >> okay. this could take a very long time -- >> let's not do that. >> thank you. okay. i have all the rate cards here. the basic message i have done for the 9010, 9383 which are the two

sets if a certain segment of the population will move away from the 9010 and people who took the subsidy and took the rate at $3.96 cents blue shield have agreed to take the 9383. all of that said, that's why there is two of these. >> i might say on behalf of the board we are taking no position in collective bargaining. we are doing due diligence here. we know what the realities are that these are options that are being addressed in other forms, we think it's a prudent thing we clearly understand the impact on our members. this is not a suggestion of direction in anyway, but rather an analysis of it so we have a full understanding of what the options are. >> yes, sir. >> thank you. >> so all of that material is there and the big message