another version of that same medication cost over $4,000 per prescription. and then the brand version of that medication, called gl lumetzglumetza cost $6,500. if you look at the medication by population that only cost $7 per prescription. so we really want to drivualization towardif lent medication but at a lower cost. >> we've had these discussions in the past over drugs and many times the members would say that i guess there are different binders and many have different drugs. they claim they are the same but they are not, i guess. >> we are just following the fda

guidelines on approved medications. on further illustration of this slide on slide 1, the agents where doxopene hydro chloride would be moving from tier 1 to tier 3 where the cros cross crotozome. these are examples and commissioner scott i heard your request. and we will get back to you. >> thank you. >> moving on to slide 8. so based on the utilization of hss in calendar year 2017 for the impacted prescriptions on the very left there, would be 117hmo members would be impacted. during calendar year 2017,

27,000hss members had prescriptions filled. so of those 27,000 members, 117 members would be impacted. which represents 0.4% or in other words, less than half of 1% of membership. in the middle graph there, there were over 400 prescriptions filled and the impact was 675. so the percentage was at 0.2%. and moving over to the right during calendar year 2017 there were 1700 different drugs that were -- had prescriptions filled by sfhss medicals and 15 drugs were impacted and were being

taken by hss members which was 0.9% of types of medications filled. so when our analyst evaluated the data and made the shift assumptions for the hss plan, the estimated savings to hss is about 360,000 but that really depends on changes in utilization, shifts and so forth. so that was just the estimation based on what the analyst predicted would be marketplace changes for the marketplace. >> can i ask a question? >> randy scott: shae. please. >> you look at this -- what i'm take away from the design of this particular slide -- it doesn't really effect very many people and not very many drugs. so it probably doesn't mean anything. what i see from this, a small

handful of people for whatever reason are being predescribed these drug drugs and they may have unique circumstances that require them is. there's a pattern here for the most part people are driving toward lower cost drugs but as we know in medicine there are unique circumstances. every human being is different. so i guess given that there isn't a lot of cost here, that -- this is just a small sliver it. lead me to suspect that we are trying to extract cost savings from people who may be getting predescribed medications that they uniquely need. for whatever particular reason happens to exist within that individual. so if there was a pattern of people predescribing medications that were very expensive. but i see a reverse pattern am i see exceptions to the rule rather than creating a new rule. so i guess i'm trying to determine why we are trying to

get this deeply into the details of a relationship between a patient and a doctor where they may have -- you know have had to workfarely hard to find a medication that -- for whatever reason was tolerable and effective for that particular patient. >> good point. the strategy behind this is because the drug tiering we had -- as illustrated as well, the tiers were based on generic preferred brands and non-preferred brand. the strategy is the same strategy we had used for bran medications and where we had preferred brands and non-preferred bands to the same amount of tears as the brands. o times when physicians predescribe medications they may not know the cost of the

medication. however i think this is a good tool to use not only for savings in a point of time but also to help manage a trend in future years. >> we are asking patients to bear this cost. there are people who will pay more. and we don't have any data on effectiveness and tollable of these medications and we will just assign them a higher cost. >> well that hasn't happened yet. according to what i'm seeing here in the next few slide you are planning to give 60-day notice and all of that. so my question to the director is when is this supposed to be going into effect? >> the plan is january of 2019. >> so this will be bart of a blue shield renewal review. when we get to that point for active and early le retirement

renewal. the reason we asked for blue shield to present on this is because it is a planned design change in the sense that the tiers have traditionally been tier 1 generic. tier 2, preferred, et cetera. so that's changed ha little bi. part of blue shield and trend we heard that generics are increasing a lot and for the most cases it's because they can. they are looking at some of the other ones and again back to the preferred and non-preferred tiers that we have for some of the same reasons. we typically every year for our insured plans can change. that is not -- since it's an assured plan, that is not something we necessarily review. but if they -- i think two years ago, i believe it was, they added another tier for specialty

drugs. and that went up to $100 for a co-pay. and for city plan, the health plan since it's a self funded plan we do review the changes every year. and it's a similar type of things. some particular drug may no longer be covered. their pharmacy review or applying the fda rules when they see another drug that is as effective we see the same communication process that you are go to hear about. as well as -- we can discuss this with blue shield but there are grandfatherrings in circumstances too. >> so i get the letters that are shown on 11 and 12 and the enclear sures at the end of the presentation. so i would have a keen interest before this starts to kind of go from cement to concrete.

to have an interim step in terms of reporting back to the board about the kind of magnitude of the impact in a reflective basis. so that we are able to see what it is that you are talking about. which drugs, how many folks are using them. how have they been used over the past couple of years? has this been an increasing utilization, that sort o of thing. for me, when we are dealing with a drug bill that i think is $27 million, total, if i recall correctly. $360,000 -- you know, it's not chump change. but it's in the magnitude of what we doing here. and more importantly it's not about the money. that's a level deve tail bu -- that's a level of detail but

really the impact on members. so that's where i want to be sure we are getting a broader pick rather than just an illustration. and i think that will be critical before you to say automatically, this is what we want to do. and here are the rates. there need to be this interim initial step. >> thank you. >> randy scott: are there any other comments from the board? >> those 36 drugs. we should be able to see those. but also i remember in the past when we had issues like this, sometimes with a doctor's note or something, that it could be a special drug and it wouldn't be charged at this higher rate s that still possible? >> not with the current plan. >> yeah. at one time -- >> but the director is saying that there are exceptions that

have been made. >> we have made exceptions on the self-plan because technically we are paying directly. so insured plans, typically no. and blue shield is a hybrid plan. it's flex funned so that's a discussion that i certainly can have with blue shield. >> randy scott: are there any other questions, comments? -- >> is this only specific to health services? or are you doing it -- >> it's for the commercial arts group book. >> your book of business for commercials? and are you doing that for everybody for 2019? >> we are trying to make it a standard form of commission book for business. >> randy scott: other questions from the board. >> the prescription per tier. what is written right now, is that what we are doing currently? just a change in tiers. >> the change in co-pays for that particular tier. >> thank you. >> randy scott: thank you for

the presentation. any other comments? if not, is there any public comment on this discussion item? thank you for coming today. >> thank you. >> good afternoon, commissioner, representing rhss. >> thank you. i find this presentation extremely disturbing and difficult to understand. i think our members are going to have a great deal of difficulty understanding -- what do you mean my generic is going to cost me 50 bucks or 100 bucks or isn't in the generic category. when i sat on this board one of the thing we did was we defined the benefits across the board so that gender i object was one cost for all plans and each of the tiers then were pretty much

the same and told to each of our vendors this is how we have defined our benefits. now you go put together the plan and tell us how much it cost and we negotiate from there. what i see with this -- i believe blue shield overrates their premium costs, and i would like to know what percentage of their premium is pharmacy. i think this is another example of trying to actually charge more. and i think it will impact early retirees and retirees more than any other group. if will also impact a number of active employees with specific kinds of diseases and conditions that put them into those specialized categories where they need very specific kind of drugs because some of the regular gender i object i genderrics -- gender rics can't

help them. it seems there's a lot of movement from people and it will confuse members of the system and overall it doesn't seem like a lot of money. i understand the point of what they are trying to do but i think the point of what we are trying to do is offer the best for our members. and when you've got generic in all four tiers i think you confuse the heck out of every member who will take a look at their benefittings and it's hard enough when formularies change and we all get the call and how can we get this and how can we get that? and saying thank you, when the doctors would override that, because there's some special reason that an individual can't take a particular drug. there have been exceptions made. and we really need to look at our membership and what this means overall. but again i would like to know what the percentage of the farmsy cross is out of the premium of blue shield. thanks very much. >> randy scott: thank you for your comment r. there any other public comments on this item? if not we are going to take a

bit of a recess to get focused on the next item as a committee. which is finance and our budget for the ensuing year. so i'm going to declare a 5-minute recess at this >> president scott: here we are. we are reconvening we have moved out of the rates and benefits section of the meeting and moving into the finance committee matters and as chair and finance committee i will be chairing it one item. delain any would be introduce this item 9? >> clerk: yes, item 9. action item approval fiscal year 2018/19 and fiscal year 2019/20. general fund administration budget and health care sustainability fund budget. committee chair staff. >> president scott: thank you. in preparing for this item in the interest of time and obviously because there's a great deal of material included

in here, i've asked our cfo to make more of an overview presentation and a highlight of the changes that have been made to the various budgets and on the theory that all of the premises here have read the material that was sent to them, and certainly may have questions and we will move into the question section but hopefully we will be prepared for a higher level of overview. so if our cfo panel can come to the podium. you can take over. >> pmo11 chief executive officer, financial director. the first item i between ask is to respond to the questions that occurred last meeting on the health care stainability. i did a brief memo for you that was an overview of the sores and uses of the health care sustainability fund.

i will call that the $3 budget. as you know the authorizing language is in the city charter and it says that it can be used for spends in connection with obtaining and disseminating information to members with regard to planned benefits and costs. the second investment of such fund are fund that are maybe established included travel and transportation costs. next is member wellness programs. and act wear spends and finally spends incurred to reduce health care costs. the charter also requires the board to approve the $3 budget by resolution. the health care sustainability fund is part of the overall trust fund. i don't really know the origin of the name but it's not at separate fund. it's part of the trust fund and the source of the funding is a

3-dollar per member per month charge that is inn corps rated to medical premiums for all members. we call it -- often refer to it as to the four employers but it's to all hss members. the charges reflected in the rate card under expense. so when you go through that you will see that, when we present the rate cards and both. employer an pretirery -- based on the insurance moll so i gave the example of the 1993 and 83 and the 100100% for the employee only to show you how much the

division is between the employee and the employer. alternative members pay into the health care sustainability funds and benefits from the $3 are available to all of those who paid into the fund. and in the 1819 and 1920 budget that we will be discussing, we categorize it into the following categories, personnel, communications, well-being and initiatives that reduce the cost of health care for all members. are there any questions? >> you say the employees -- microphone. >> you say the employees share. what about retirees? because they are not picked up by the unions. >> right. they are based on whatever the formula is. so for instance if it's tim county, then they have a different formula. >> right, so they would be

paying obviously a lot more than -- what this shows for the employees. >> right. >> thank you. >> are there any other questions from the committee before we move on? >> i just make the note that the fun has not been used for actual rather spends to date. >> would they be in the contract? >> the way you look at the structure, if you look at the budget in front of you, it wouldn't be enough to be able to shoe-horn that in. we would have to shoe-horn that

out. >> okay. >> in the second item in the january board meeting i presented the instructions which called for the department to propose ongoing reject rerejects equal to 84,000 in 1819. and then we would maintain the pro in 1819 and an additional of 84,000. so i will be presenting how we went through and the considers we looked at and how we met those two targets. i wanted to give you a comp significant of what the budget looks like so you can tell why there are certain thing that are not available to cut. as you look at that you can see that the size make up approximately 7% of the budget in typical years. this is the typical number throughout the last five years. and i expect that to continue.

the budget instructions included a provision that departments should not layoff employs. therefore in order to meet the reduction targets the focus of the balancing efforts were on the remaining 30%. and just as an aside, 18% of that remaining 30% is in work orders and those are primarily negotiated through the mayor's fees of the budget. so those are also -- with the exception of a couple. and we will talk about what my proposal is -- what the proposal is. they are not available to cut because they wouldn't be counted as meeting our target. >> could you just cite an example of a work order? >> an example is a work order of a city attorney in the outside

council. we work order to the controllers office for maintaining the financial system and the benefit admin system. we work order to the department of technology for the whole range of city-wide services provided there. and then workers comp is another really large one -- not just the claims but also the administration of the workers comp claim. so those are the larger ones. >> alright. thank you. >> so we looked at three different large groups of strategies in order to balance the budget. and i will discuss each of these separately. but they are funding -- first and for most to fund our structural issues whilie talk about. second is to i a just our budget to actuals, and third is to look at what we can transfer over to the $3 budget that would serve

all members of the sfhss. so first i'm going to talk about the structural issues. we have discovered -- although -- you know they built -- structural issues tend to build up over the years, hence why any are called structural and they get to a point where you actually have to take care of them, and you can't assume you have to bounce around them. and there are two that are problematic for us. the first is for the expenditures related to the administration of the flexible spending accounts. these are for health care and dependent care. and we had a growth in the number of employs participating in the program since -- especially since it was implemented. at this point if you don't spend -- whatever you don't spend at the end of the year, if there is between 10 and $500, you can carry that forward and that then also adds to the

administration because we are continuing to carry forward. so if you decided, oh, i have enough money and i'm not going to sign up again, we still have to carry you through that with the administration. and in addition, the charges for external audit are increasing. that is not something we have a lot of control over. so in 1819, we put $80,000 into contracts for the fsa administration and $4,300 to the auditor. in the second year in 1920, since our cut is so large, we have to cut $167,000. i took out the 80,000. and put that in as an additional request to the mayor's office. >> so are those details found on pages 6 --

5 and 6? >> yes. i will go through that. >> thank you. >> so the second prong in a 3-prong strategy is to adjust the budget to actuals. we always look at this and try to figure out how much really we can cut that would be cut in perso person duety -- perpituity. since there has been a high turnover in staff, they experienced high attrition levels we had a small increase in attrition and this would have been something that the budget analyst, when it gets to them, would have recommended. solve it seems like we do a preemptive cut at this point in time.

i don't want to say there's no impact but this could be reduced impact. the other is training. this still leaves $12,000 for annual board training. the professional service reduction are you seeing is for contracts for well-being and the spending administration which is based on actuals and will not adversely impact the department. tears and supplies is just a small little tuck. and then the

looked at all effects -- the model to be presented what could be done with a $3 budget. this was done to try to minimize the impact on the department's operations. so it was not the first area we looked at. it was basically the last area we looked at. salaries and fringes for personnel with the management of

projects that are funded for $3 and review and revision of planned materials that are provided to all members are transferred over to the $3 budget. this is a minor amount. but it does make a difference. we also did a transfer of the well-being personnel that served all of the members. so that saves us roughly $51,000. the spends that are associated with the enterprise content management system, which is the system that allows us to be able to quickly process applications and documents and make them available for benefit analysts to use in responding to benefit questions, is being proposed to

transfer over to a $3 budget. and finally the replacement of the wellness centre equipment is moved over since that is available to all members. the last slide, slide 6, when the mayor's office cracked me about the reduction targets i mentioned to them that it would be extremely difficult to meet those targets based on the fact that we have cut so much in the last two years, and that we have structural issues. and i let them know that we will be asking for digga -- additional funding. the additional funding we will be asking for in 19-20 is the funding for structural issues to

restore that money in 18-19. sorry we store it in 19-20. and also for equipment that is associated with the disaster preparedness response recovery and resiliency project. this is a city-wide policy that all departments are worked on, and essentially what it does -- we have to come up with a plan on continuity of services in the event of a natural disaster or a nonnatural disaster that either effects of city as a whole or the facilities that we are located in, so we can continue to provide services. and since this is a city-wide issue, i felt very strongly that it's not something we should cut around. instead we should be asking for the money.

along with the other departments who are all in line asking for that money too. and that is only 25,6-up. an,600. and as you can tell it's for primarily related things and a high-speed scanner. we haven't solved the problem of where we would go. but it's a long process of coming one a plan. are there any questions? >> before you maybe ask questions, could we kind of go back to slide 2 for a second? is that possible? is that going to be brought back on the screen by any chance? >> this slide? >> yes, the slide 2. there it is. i just wanted to point out what -- that for the 18-19 year

that the transfers to the health care sustainability fund, the $3 budget greater than 100% of the cut for that year, 18-19 and for 19-20, the additional funding to be paid by that fund, councillor, about 52%. i wanted to number 1, commend you for the work have done to identify eligible expense for that and to -- more fully utilize that fund. i think it's an important thing that we maximize the use of that fund for appropriate uses given that it is -- you know it's an expense that is largely being funded by the employers and it is available for -- you know thing that benefit all members. the other item on here in large part for 18-19 are just the reclassification. are you eliminating adjusting certain items to actuals and

using that savings to fund a structural issue. and in 1920 you are not able to do that to that same degree but you have a request in to essentially accomplish the same things. so i think actually -- from my standpoint a very sensible presentation. but maybe i could take questions from other commissioners? and then we will open it up for public testimony. >> notify questions about the details. it's more about the process. once we take action today, then what happens? >> once you take action, the actual budget documents, which is a lot of different forms and reports, are due to the mayor's office on the 21st. and then the budget goes into what i call the mayor's domain, which is about a 3-month

process. they talk to us. we can go back and ask them for a change in the budget. i anticipate time for the director -- if she wants to make any changes, we can request that from the mayor's office. they also know that that is what we are anticipating. the budget will be -- the mayor's office will stuff all the work orders in, and now balance other things. and that will come and be proposed as the mayor proposed a budget on june 1st. and then it goes to the board supervise sores and goes to the budget analyst review. we have budget hearing. and then it's passed in july. >> thank you. >> any other questions from the

commissioners? i will open this item up for public comment. >> dennis krueger, active and retired firefighters and spouses. some of us have been around when this sustainability fund was $1 per person, per month. as i sit here and listen to the commissioner speak about stabilizes rates with excess fund that we, have i would like to submit to this committee -- or excuse me, this commission, that we possibly raise that fund to $5 a month per person. doing quick math on 100,000 people, that would add up to $2.5 million. and that money would be strictly used to stabilize rates. it could also be sold to members as their own private medical savings account. because that money would be used

for nothing other than to stabilize a rate which will be paid the following year. only a suggestion, something to consider. but one time this was $1 a month. now it's $3 a month, given the current rate of medical costs and everything, i think $2 per member, per month that would be used to stabilize their rates, would be something that would be easily acceptable. thank you. >> any other public comment on this item? if not i believe this is an action item. and i would entertain a motion. >> i move that we accept the budget recommendations as presented in the documents before us. >> second. >> the chair: we have a first and a second. any further discussion? seeing none, i would entertain a vote. all in favor.

>> aye. [roll call] the motion passes. >> unanimous ly. >> the chair: unanimously. i thank you very much for your work on this and i appreciate the content in your presentation. this is very well done. we lucky to have you as our cfo. thank you. >> thank you. >> are you going to put us into recess so we can change back? >> we will put you to a 30 second recess so i can move back to my own chair. i was going to adjourn the meeting but i decide i had probably would not do that. >> there is still a $3 bunt that's right has to be approved. >> the chair: there is a $3 budget. it's not time for a recess. >> do you need a motion? >> i have a quick presentation on the $3 budget.

>> alright. di >> the chair: did i miss that. >> the budget has to be approved by the board. i bring these two books together because as you can tell, we look at what can be done during the fiscal years, what can be done in terms of using our. funding, most wisely way we can. on the next slide there's a summary of the revenues and expenditures for the $3 budget. there are annual revenues. there are annual expenditures, and there are use of fun balance and revenues and one-time expenditures and i will discuss these pratt rates. so the annual budget of revenues are relatively constant between the fiscal years. the revenue is reflected as punitive fund balance as a result of underspending the

budget over the last five years. we knew there would be some very large projects that needed to be accomplished. they have long lead times. they have times that require a lot of planning, and outside procurement and design. so we are have accumulated a balance, which, as you can see that balance will be projected to be only 469,000 at the end of 1920. so some of these large one-time projects include the redesign of the website. replacement of the fund system andive and implementation of e-benefits. so the next slide is a summary of the annual expenditures by category. the budget per personnel covers 3.35ftes. that is two communiques

positions. one well-being fte along with the manager and crack analyst who work on the open rollment and other trust related activities that i discussed in the presentation for the general fund. the only category that has any kind of fluctuation is the communications category. and that's due to implementation of e-benefits. the amount of print materials is expected to decrease as more information is available online as we go forward with the implementation of the e-benefits. so as we moved forward to having more guides online and more information online that, is a trajectory of how we are going to go. but we do anticipate small

savings. the next summarizes the one-time expenditures. they are primarily for the e-benefitsiver mentation replacement of the system to voiceover internet protocol voice. that and the website redesign. we hope to beiverments that soon. i will talk about the redesign. the crack is almost executed and we will be able to go forward and have it available. the new website available for open rollment for 2019 that occurs in october. we had registration with a

well-being assessment or referred to as a wba. as a followup to the 2014 and 2015 assessments, this data can help us design future well-being programs. the first well-being assessment was a baseline, and now we -- there's a desire to have a followup. and the budget at this point, it seems that the wba is funded entirely by health service system. however to accurately define a cost estimate an rfp will be required so an updated cost estimate will be presented to the board next february when we present the 1920 and 2021 budget. but we needed to have it reflected in this 2-year budget. finally the last slide talks

about the one-time expenditures for e-benefits. on the previous slide it was 1 million -- a little over $1 million of the 1 million and 7 was for this e-benefits project. so that's why i wanted to show you what is involved. so the budget is split between basically two categories. programming of the software to make it more user friendly and reconfiguration of the benefits lobby. and benefits lobby and member area. there's been a significant delay in the programming due to the interdependency between hss and the controller's office. however procurement for a contractor is in process. i know we have talked about this e-benefits for quite a while, and i wanted to bring you up to speed. and then the configuration of the lobby and member area will begin this month.

it's expected to be completed in time for open rollment i enrollment in october. >> the chair: so this is also an action item that would require approval? a guy move we approve the "$3 budget as presented. >> second. >> the chair: is there any public comment? seeing none. we are prepared to vote. all in favor. [roll call] any opposed? it's unanimous. >> i would like to thank our staff. i brought our accounting intern todd. >> todd would you please stand up so we can see you. welcome, and thank you. >> part of his intern ship i ship is to do some budgeting and he has been instrumental in helping me through the last month so i wouldn't go crazy.

i appreciate him and i appreciate all the staff back at the office who have provided input and analysis on the numbers and possibilities. we ran through about five different scenarios and before we came up with this. so i really wanted to thank them. >> the chair: thank you very much. now we will adjourn for 30 second to trade places and go into the next section.

>> president scott: we are now in the regular bore meeting. is that correct? >> clerk: that's correct, yes. >> thank you. >> discussion item number 10. >> president's report. president scott. >> yes it's been a rather active month for me for a variety of reasons, some of which have -- were followup items from the last board meeting and others were new. and i will describe some of them. as i indicated earlier there will be a followup to -- physician to physician discussion on best doctors by commissioner followmans but he is be a september today but i did have to talk to him and we are trying to coordinate date and times and so forth. so that's one thing. i would like to acknowledge the presence of our new executive

director abient. she joined us when we were in the finance discussion. and she and i had an opportunity to meet with the chief of staff, at the mayor's office a few days ago. and it was an interesting visit in light of the anticipated interim mayor changes. so we are going to find another tune, we hope, to visit with the acting mayor as well. we also -- we had tune to meet the entire hss staff during a regular staff meeting that acting director griggs put together and i found it to be very informative from start to finish. and she and i were able to introduce ourselves. and i was able to duties her to the staff as well. and that happened on february 1st. commissioner brezland and i

attended the "first annual appreciation lunch "for city board commissioners" for which we individually paid $40. and i told my wife this is the first time i've had to pay to congratulate myself. it was a very interesting afternoon. i personally found it to be interesting from the standpoint of meeting other commissioners that provide so much of the active volunteer leadership to a wide range of city activities

and operations so i found that to be of interest. i would also like to go on record noting that the vice president, commissioner lin will be sitting this chair next month while i am attending a meeting in denver, colorado. so i didn't want to be shocked. i gave him advance notice i that he would be doing that. but i will be working with the executive director and her team to formulate the agenda and so forth. so those are the items that i have to report on for this monday. we indicated that we would take the item 4 up as an action -- a discussion and possible action item, and i would like to have that introduced at this time. >> clerk: thank you. item 4. discussion of possible action. discussion of possible action to provide guidance to hss staff on board priorities for services and requirements for a request for a proposal for actualarial services. >> as we know we have not done an sp for our actuary services for 7 years.

the best practices do this on a 5-day basis and the reasons are rather obvious. one we have been in transition the most recent year. in the year prior to that there were major benefit changes that were going on. and we didn't think it was a prudent thing to do, go out and change actuary service. we are on the verge of this. i have been woring closely with our council to try to be clear about what the role of the executive director and the hss staff is in this process as well as what our responsibilities are as a board as we go forward. so i thought -- with the guidance of council, after going through other it' it's other things i thought we wanted to do. to provide opportunity for the board -- if there are any concerns or

articulated issues that we feel we would like to at least be sure that the staff at the beginning of the process -- and i don't see the board getting diagnosis muddling around in interviews and that sort of things but at the beginning of this process, before the recommendation is brought back, if there are issues and concerned that we wish to at least vocalize and be sure they are made note of as the staff undertakes it work, this would be time to put that on the table. so floor is open for commissioners comments around this particular topic. are there any? commissioner brezland? >> i would like to propose we change the government rules so the board appoints the actual weaactuary instead of the director. it would make it appropriate they report to us in our response to us.

tourial >> i hear the action. that's a starting point but i hear you going further. are there any other comments by commissioners on this topic? >> the only comment i would make is that the processing to hire the director was very constrained and that we could not have any discussions on -- you know as a group expect in board meetings we have to be very careful about the brown act and other thing. we find ourselves -- it is difficult for us to work as a committee or a subcommittee to evaluate our recommendations to the rest and i guess i would prefer we not get overly involved in management issues myself. number one, i don't think we are

structured to be able to do that effectively. but maybe more importantly, i think to the extent that we are able to receive presentations on the rfp process and as long as we can rely on the city processes to review and interview and approve a contract. i'm very comfortable with that myself. >> i would like to see howitt done at the retirement board. i'm sure they may hire somebody. but i think it's important -- >> we can't hear you guys. >> i think it's important considering what happened. some thing that happened last year. is it didn't seem to be clear that the tou actuarial didn't

seem to be clear. >> i hope we are searching for respond environments to the rfp and one of them is that the actuarial is a key resource for that to happen. we do not have the brain power, the expertise, the level of underring of the requirements that actuarial insights and professional services provide. so we rely very heavily on the guidance that is provided by the du actuary. that they have an accountability to the board as well as to the staff of the hss system. and i realize that that accountability may manifest itself in different ways in

different times but there is an accountability to both unities. i also want to be very, very clear that there need to be -- by whoever the responsents are to this, confidence and expertise and it's not to be, in my view, some sort of ad hoc capability that they can go out and get. but rather they have the experience and the resources, the staff, the reach, if you will, to engage in broad matters that would help to shape the strategy for hss as we are going to be facing undoubtedly in the coming years additional issues that we can't even imagine in the health care market. so there's got for a core confidency for strategic support and trying to figure out what is

next. not what happened but what is next and what we august to be thinking about as a board kind of on a longer-term horizon. so that requires research. that requires relationships. that requires an expertise of not only the california market but the national health care market and the issues that attend to. that both in washington as well as in provider communities as well as with the insurance industry and so forth. so that as we are dealing with health care policies and understandings for our members programmaticcally we have the confidence that this respondent would bring. i also feel that the tou actuaries relationship with this board is not just a compliance function, a cracking function with helping us to get to a

better understanding of our claims and experience with providers but also trying to gain an understanding of the best practices as a relates to the accountabilities that this board has. so that too, it should be a core confidence in terms of the actuary they have some awareness and knowledge of what other large, private and public employers are doing, that we would gain a benefit from. and in some ways this system has been a an innovator and we think we need to maintain that type of role going forward. i think this board relies on our board council, currently eric, he does an outstanding job in providing legal guidance and assurance to our acts as we execute our role as a if h

feduciary and then the requirements of what we need to do as being responsible for this trust. but also the actuary in the same component in my mind provides us with program assurance. and that means that we will wind up having quality -- affordable benefits for our members. so those are levels of expertise that are not possessed by this board but we rely on others to provide. and the actuary, if you will, or that group is providing a real strong key component for us to be able to meet our if h

feduciary responsibilities. so the strong contracting manager michael and others get involved in this process, i hope that they will take those matters into account as we go through this rfp, and when we get to the end of the process that these factors will have been taken into account, and they will present us with their best guidance for the recommendation we will be considering. so i shot my mouth off about that. and that's where i would like to stop. so is there any action that we need to take other than the discussion that we had? i don't think so. >> i have one comment. the actuary is a feduciary who has a duty to the members first and for most. i just want to make sure that is clear. >> president scott: and we are here acting on behalf of the members, so the