financial coaching and well-being. depending how that goes, we would consider expanding it. we have the physical capacity to do it within our offices. we think we could launch this later i this summer. the other area i didn't write about the report is how we approach the student loan challenges that are out there. it is true that many student loans for people that work in government, there's some distinct advantages for being able to get some of that loan forgiven. it's very complicated. there's a lot of vendors out there. we'll with the treasure tax collector look how would consider about going about vetting these type of services.

other area is government alliance that was kicked off by the human rights commission. our offices is participating in this. what this allows us to do as i wrote in the director's report, really have a framework for how we consider race and equity in our case of how it manifest days disparities amongst membership. this training will help us deepen our learning and understanding how we'll consider approaching recent equities and help disparities. we do the board elections under way. applications -- nominations

forms are due today by 4:00. we will be working with the department of elections shortly on proceeding with the next steps with the election. we do -- matters that are before the board, several of our health plans are here that will speak during their time to some of the follow-up questions from prior board meetings. i think the other thing that i wanted to point out here is that as you know we had very successful expansion of the self-service online e-benefits last october. we're working very closely with the controllers office to get the programming systems upgrades in place rapidly. they have huge need to do a code

freeze so they can fix of the things in the financial system. we're working super closely with them to see if we can get everything we need done before they freeze that code. it's a real aggressive timeline. i've been calling out michael several times here today. he really stepped up and helped the comptrollers office with the contract development. that cut is several weeks off the timeline that allow us to get this done. it's a really important goal for us to be able to go full on with self-service for new hires and qualifying events. that will complete this whole fleet of e-benefits. that's the highlights of my director's report. >> president breslin: i wanted to -- second opinion report. i look back at the report,

united healthcare -- blue shield did not do well. they need to step up as far as i'm concerned to get second opinion available. i think that needs to be looked at closely. i don't see why they're not doing it. kaiser i know does provide second opinions. but it's little harder than it is for united healthcare too. since we're talking about best doctors and lot of this should be done with their own plans. i like to see emphasis on that with blue shield especially.

also nutrition counts. same issue. i think we also have that with united healthcare and kaiser has it. blue shield does not. she should definitely step up and provide that. why it would be more economic to go to a primary care doctor than nutritionist, i don't know. it seem we save money and it would help people with their health. >> we'll take that under

advisement. >> president breslin: thank you. >> commissioner lim: i want to thank pamela and her team for the presentation this morning and the work you have done on the general fund budget and healthcare budget and working with the mayor's office. the past few years, she was able to restore all the costs. i'm hoping they'll do it again this year. so thank you to her team for the great work. >> president breslin: any public comment? seeing none. item number 13. >> financial report as of december 31, 2018. presented by pamela levin, chief

financial officer. >> thank you. pamela levin chief financial officer. the report provided to you summarizes the actual revenues and expenses of the employee benefit trust fund and general fund administration budget through december 31, 2018 as well as fiscal year age projections through june 30, 2019. i will briefly go through this report. in terms of the trust, the fund balance as of june 30, 2018 was $77.4 million based on activity through december 2018, the fund balance projected to be $80.7 million. on june 30, 2019 which is

$3.3 million increase. we're seeing unfavorable for city plan, blue shield. they continue to be favorable claim experience for the dental plan. why we haven't received any pharmacy rebate through december, the year to date amount received is $1.8 million we're still projecting $7.9 million. a year-end is project for the healthcare sustain the fund. knoll performance guaranteed have been received as of end of december. a total of $47,000 has been paid out for fiscal year and the adoption assistant plan and the amount of forfeitures for unused won't be known until june. we have augmented, introduced new graph into the report.

i wanted to spend couple of minutes going through those. there are several lines within the graphs and there's summary underneath the graphs that explain what the graph is saying. i wanted to point out it is expected the total expenses for the plan will be approximately equal to the revenues when you exclude the rate stabilization reserve. this is the could for city plan and trio.

thithis is the case with city pn and blue shield trio. as i mentioned before, the delta dental expenses continue to run lower than expected. in terms of the general fund administration budget, based on the financial results for the first six months, we project

balance of $300,000. the mayor's office has offered an hopefully are come through with sharing some of that savings in the current year for one-time items that we would have budgeted in the next fiscal year. these include radios for our continuation of operations plan, books for the e.a.p. training, the training that are provided by e.a.p. few other requests were submitted the status of that won't be known probably for another month or so. i'm happy to respond to any questions. >> president breslin: any

questions? thank you. any public comment on this item? good afternoon. >> i wanted -- i got here just in time. -- i went through the agenda yesterday. i noticed new charge in the financial report. i wanted to comment on that for minute. it's the first significant change in the financial report i've seen in the time i was here even before i became a commissioner. it's easy to do same financial report every month. these particular charts really give a pretty good high-level

view of all the actuarial work was done. there can be issues claims that might include high dollar amount claims or differences in the rate on pharmacy or inpatient claims. overall, it gives a pretty clear picture that the work that was done was quite good. i wanted to commend pamela for adding that. it's nice it see everyone and nice to be down here. >> president breslin: thank you. any other public comment?

seeing none. item number 14. >> item 14, presentation of audited financial statements from june 30, 2018 and year of 2017. presentation by lisa avis from kpmg and pamela levin as well as our chief financial officer. >> thank you. again, my name is lisa avis. i'm managing director with kpmg. i will be presenting the audit results today. i want to thank you for the opportunity. our audit standards require that we present our audit results at the end of each audit either in writing or in a form of presentation like this. so we appreciate this

opportunity to have a formal presentation to you. as you can see on slide 1, we issued two reports for this audit. the first one an audit over the financial statements on the numbers presented to us for the year ended june 30, 2018. happy to report that the financial statements received an unqualifiedtor clean opinion. we also issued a report on interim control over financial reporting. they are happy to report there are no deficiencies or noncompliance. if you have the financial statements, our opinion is wordy. it says a lot but ultimately it did get a clean bill of health. if there's ever a paragraph that's different from the clean opinion, we call that out to you and the only difference we had in our opinion if we do make reference to the city a few

times, this paragraph is saying we're opining on sfhss financial statement. users will see that once he look at the numbers. we are required to call that out. on slide 3, we had no corrected or incorrected audit misstatements. what happen that mean -- what that means, we come up with any significant differences. those are presented to management and management has the opportunity to correct them and the numbers they presented to us or they can pass on those. we disclose those to you as incorrected differences. in our audit we did not identify corrected or incorrected misstatements. in the financial statements, they discussed some significant accounting policies. nothing unique or unusual.

those policies are consistent what we see in the industry. there are some very largest mates if these financial statements. the reserves being the main estimate. because it's very subjective, there are procedures that we have to conduct to make sure there was no bias or misstatement relating to those estimates. blue shield being one of the larger carriers, they get a report on controls. we review that. and we test the detail. the estimates that h.h.s. came up was similar what we were able to confirm as well. it next side, the nature of how it reads, it raises few

eyebrows. the management present in every entity. there was nothing unique that came to our attention. because management has access to the books and records, lot of underlying detail, we are rared to consider if there's control. we do have audit procedures to address that risk. no reportable conditions there. on slide 7 here, as it relates to internal control because we report in with government auditing standard, we are required to report control. definitions here on slade 7 are of material weaknesses. i'm going to read them here. as i stated earlier ands you can see on the next slide, there were no control deficiencies

that rose to the level of significant or material weakness or no control deficiencies. slide 9 here, there's a lot of no matters to report. which is a very good thing. these are things that we are rared to communicate to you in these conversations here. we did not identify any issues if related party transaction. there was no instance of fraud, no subsequent events and no difficultieser disagreement with management. i say no difficulties, this was probably one of the most challenging years for audits. we're meeting a few months later than we typically could. we are here today thanks to pamela and her team. there are rot -- there are lot of hours that went into this

audit to get to the numbers. it was a true team effort. there's other entities to rely on h.h.s. to get their reports out. on slide 10 here, these responsibilities management signs representation letter to you outlining what they are taking responsible for. those responsibilities are listed here and your board as

well as management are also responsible for setting the tone at the top. these public meetings emphasizing the importance of these financial statements is part of that process. our responsibility is to audit these financials. we have standards that we follow. our responsibilities are outlined here to make sure that those numbers are fairly presented based on the bookses d record provided to us. on slide 12 here, last but not least, our responsibility is to you. we report to you. we work with management throughout the audit. we are required to communicate anything we find to you. no issues that rose to the level of reporting that needs to be reported. i want to open it up to questions on the audit before i turn it over. >> i have one question, what have you learned out of the

audit process this year? we normally the report earlier. you've acknowledged that. i know there was a major change iin the city. is there any learning or should we expect you to be back in the regular order next year. >> that's an excellent question. the plan is to be back in regular order next year. we knew that this was going to be a challenging year. we were able to plan around it. we could have pushed to tray to get this done earlier but the books and records needed to be accurate. we as auditors and management had to be comfortable that everything came over from the gl system into the new g.l. system. the time that was taken to get to that process is what it took. not a day late or earlier.

lot of lessons learned. there's a lot of lessons learned. there's a year of experience under everyone felt. the system still has kinks to work through. our goal is to be back here in october of next year. >> commissioner scott: i like to raise that same point with the c.f.o. sitting next it you. panel ratpamela you have anythiu like to add? >> i do want to recognize marina coleridge and her team for lot of hours helping the calculations for the rest of the department so that ecan meet

their covens. we need modify our process of renewing memberships with blue shield prior to the time that ann starts the calculations. i worked with ann about coming up with some way to do things little earlier and more often and hope that will mitigate some of the time and frustration that we had. all the other types of sampling went math -- smoothly. the financial system, we had a difficult time from the beginning and i reported lot of steps that we're taking and continue to be taking. i anticipate that and hope that

the budget will be here. >> commissioner scott: thank you. limb i.d >> commissioner lim: it's whole issue with the city, it is done by october. [indiscernible]

as far as the audit, it's all been audited. thank you. >> i also have a quick report that i do every year that looks at the financial statements. as you know from the representative kpmg, they did an

examination of this financial statement, comparisons between 17, 18 and 16, 17. the trust began 17-18 with a balance of $72.5 million and ended the year with $7.4 million. the $4.9 million increase is due $6.1 million decrease in the city health plan due to clean stabilization reserve. $5.6 million increase in the blue shield flex funded plan. due to excess premium in claim costs $1.2 million in use of the claim stabilization funding

totaling $4.4 million. there's $2.2 million if dental plan acquisitions. offset by claims destabilization reserve application of $2.8 million. there's a 900,000 increase in blue kaiser plan. which is based on premiums agreements for new enrollees, members eligible for medicare and members with changing contribution schedule. there's $800,000 increase in savings in the healthcare sustainability fund. $200,000 increase in flexible spending account account employee contributions for claim reimbursement to participants and $.8 million increase in the

net position for income performance guaranteed. the obligations and reserves against that fund balance total $43.4 million this consist of $23 million in contingency reserves, $18.3 million in stabilization reserves, $900,000 for the healthcare sustainability fund. i did provide a graph that i have not provided in the past. it shows the obligations and reserves against net positions by fiscal year. you can see that there is a consistent decrease in the obligations and reserves.

this is due to use of the stabilization reserve. there's a change in the net position which is expected. other information that we present at this time, at the end of calendar year 2017 combined total $14.4 million within the stabilization reserve city plan delta dental. total $5.9 million was used for the 2019 rate. balance for the future is $8.8 million for delta dental. the dental rates were billed that we will start drawing down on that, that balance. in comparison of investment earnings performance guarantees and forfeitures is presented in

the report. total decrease from $1.12 million to $824,000 in 18-19. in terms of performance guarantees, in 17-18, total of $107,000 in performance guarantee penalties is $25,000 less than what was received in 16-17. other things in terms of the adoption assistance program, the total amount reimbursed to members since inception of the program in january 2017 is $186,000 for eight adoptions. we continue do -- to get applications and scrutinize the paperwork. in terms of the next steps, the

financial statement were issued february 5th. hard copies are available at s.f. h.h.s. office. soft copies are online in the report section. i believe that is new rebranded in terms of what the name of the website is. i apologize if i didn't get that. the comprehensive annual financial report, which is citywide, will be issued i in te near future. any questions. i like to thank in terms of financial statements elizabeth salazar, alan yantz. they worked on the closing year

and the financials. which is very large. as i mentioned, marina coleridge, and mitchell's group was essential to enter some of the financial statements. >> president breslin: i have question on this. on the third page. medical benefits during the fiscal year provided to members of the systems, three-plan choices. i don't see united healthcare on there. >> this is --

>> president breslin: we have four choices. >> thank you. >> president breslin: i saw somewhere in else. >> i appreciate your dedication to reviewing this. >> president breslin: it stood out at me. obviously we have another client. that would need to be corrected. >> i will definitely get that right next year. >> president breslin: are there any other comments? this is an action item. did you have something further? okay, thank you. thank you very much. we need an action item on this. that will be to accept the audit and financial statement with corrections as mentioned.

any public comment on this item? no public comment. all those in favor say aye. any opposed? it's unanimous. it's passed. we're getting near that time where people like it take a break. we will be on break for five

>> we're convened in open session. we have, i'll turn it back over to the president. >> we're now in open session. item number 26. >> possible report on action taken in closed session regarding the employee evaluation. presented by president breslin. >> any motion? >> i move that we not report on the action taken in closed session regarding the employee valuation. >> second. >> it's been moved and second. there isn't any public to comment here so all those in favor. >> aye. >> those opposed.

>> it's unanimous. item number 27, please. >> item 27 vote to elect whether to disclose any or all discussion held in closed session regarding the public employee evaluation presented by president breslin. >> motion. >> i move that we not disclose any of this discussion held in closed session regarding the public employee performance evaluation. >> i second the motion. >> all those in favor. >> aye. >> any opposed. >> it's unanimous. in favor. >> with that, we will adjourn. >> happy valentine's day. >> happy valentine's day.

>> president breslin: we're back in session. item number 15 plaza. >> item 15, demographics report presented by marina coleridge, the enterprise system analytics manager. >> marina coleridge enterprise analytics manager. here to deliver to you 2019 demographics report for our membership.

this report is 40 pages. there's no expectation that will go into detail today. you can find it at s.f. h.h.s..org. go about us section and underneath there is a report.

looking at page 3, we've made refinements over the previous years. the bigger change that we implemented this year is doing lot more breakouts of our nonmedicare retirees in previous years, lot of that population was just lumped in with retirees. we're trying it give them little bit more visibility. we continue to grow in terms of the medically enrolled lives that we support up another 2164 on the table there on page 3. we have 122,547 covered lives. we've get about 5959 additional

members that waived coverage. we're up to 128,506. pretty significant. you'll see the breakout i was talking about. >> president breslin: excuse me, 128,000? >> yes. you don't see it here. i just know these things. it takes 122,000 plus. what you're seeing here, there's a new line in here for kaiser permanente advantage. when we look across our plans, we know access plus and trio are for nonmedicare population. you know it the united

healthcare advantage p.p.o. are medicare population. we we looked at kaiser, that was asking where the divide was for making things more comparative. moven omovingen toingen to sli o slide 4. dental enrollment is upward trend. we increased lives there. another 1861. we only administered dental for the city and county. the sphere yor -- superior courd

our retirees. flexible spend, we do that for the city and county of san francisco. that continues as well. that upward trend, 7135 different enrollments between the healthcare. some people enroll one or other. some people enroll in both. on page 5 is a quick snapshot of the voluntary benefits. we had instituted those couple of years back now. interestingly enough, the biggest growth this year was short-term disability with 27.33% increase. legal shield almost 24% increase in enrollment.

and the accident insurance about 24% increase in enrollment. the other benefit that was introduced last year, you'll see in the graph on the bottom part that's our v.s.p. vision premier. this current plan year, we had an increase 4585 members enrolled in that. 14,742 taking advantage of that benefit. that graphic down there just breaks it out across our various employers. all right, we're now just high-level comments here. on page 7, what looks different here, little maps that breaks out visually how many are employees, how much are dependents. bottom restrict there with the little orange components. that's now break out of the

nonmedicare retirees. we used to have them lumped together with the other retirees. the ratio of employees to dependents that stayed the same. about 25% of medicare retiree have dependents enrolled. we've get an increase in 651 lives in that population over previous year. page 8, just calling out that graphicking is there -- graphic there on the left looks different. we've taken the kaiser h.m.o. for our active population. you're seeing all the kaiser plans together all of the blue shield plans together.

kaiser continues to be the plan with the highest percentage of our lives enrolled. i think it's trending up almost 60%. we have got the breakout by down of where our people live on page 9. major in san francisco county at 38%. lives in all the counties increased except for napa and riverside. we saw slight decreases in our population in those counties. everywhere else we're growing. looking on page 10, just calling out here the lives by medical plan that you see, kaiser

permanente senior advantage. this is a 5-year trend. [please stand by]

on slide 12 is a view of our enroll ment by the retiree members, not dependents, just members. here we have done a better job of giving you average age by medicare and non-medicare. you can see the further breakout on the charts on page 13. many of those are pretty static, however, again, majority of our enrollments are living here in san francisco county and high 90 plus percentages in th the 8 bay

area counties when we look at our members. it is hard to read. might be time for a new pair of glasses. >> this is very clear and wonderful. i wonder if you will comment. something to go back to when we have questions or concerns how this can be used because you have a lot of detail here. we do 10 county reviews for, you know, rates. how do you envision we can take this and not refine it to more detail, but use it in terms of our own deliberations? >> that is a good question. sometimes over the years questions are not in here maybe disability retirement what are we talking about with the retiree population? we don't have that in here. knowing a lot of our decisions are based where the hmos are

available the breakout who is in the county, who is in other countries makes sense. we have had considerable conversations that talked at times about especially leading up to diva and domestic partners anspouses, who was that population. you know the majority of domestic partners are opposite sex and not same sex. it dispels some beliefs we have. it is a good reminder, too, because we tend to have a bias or i have observed that to exist for thinking through the lens of city and county of san francisco our most dominant group. we administrator benefits for four employers. who is our average age. who is the benefit. who is taking on like if you

look at usd, they will hire percentage of their population are taking kaiser, and they are the ones that tend to be more of an e only or older age by employertends to come from city college. what does that mean if we talk about age and gender and implications to risk scores? those are some of the things we consider. right now, i have had this question. we tend to really just align our rates by our ee only or e plus one or retire reonly or retire replus one. one of the rating out there and i will refer to mike, might look at where the first dependent is just the adult dependent versus

a child dependent. it is worthwhile to consider changes to look at that with the distribution there. we definitely tend to be static. if you look at the percentages year over year, yo you don't see huge swings, where they are living, distribution of male to female, the average age is slightly dipping. is that meaningful in terms of stability of population against the backdrop of other changes. i think that is meaningful. i would love the day when i could keep this more dynamic and update this more regularly to act for enrollment changes as the year moves on. it is heavy to get this one out we are not there yet. >> it is great. i like you divided up the medicare tir -- retirees.

>> at the board meetings with the recognition of the decisions you might weigh. what needs to be in the report to help you as you go to the next year? >> i recall discussion last month about looking at new districts for healthcare costs. encourage everyone to move to riverside county where the health costs are very low. you can see our demographics and how that does impact or bottom line in terms of the programs we offer, plans we offer. this is useful. not just pretty pictures. >> we do like the pretty pictures. >> pretty pictures, too. >> any other comments on this? >> all right. moving on. i won't take up too much of your time on this.

let's focus on page 18 on the employee members and their dependents. here again, i had alluded to the fact on page 19 where we see the breakout of the age that our average age is slightly dipping. what we know is th the age of dependents is increasing, age of member is slightly decreasing. you can see distribution of members and dependents in our plans. you will notice it is more members on the lower number on dependents. in terms of the ratio of that contract there. moving on on page 20. again, same thing. with or without dependents. san francisco's most populated

county. we hear about migration out of families, san francisco is expensive. those are all considerations as you think about employees and access and engagement of healthcare. of all employees that do not have dependents. 54.62% of those are in san francisco. that is a 2% drop. looking at all employees with dependents, 38.37% live in san francisco. 97% of our employees live in the top area counties on page 20. again page 21 is a lot of data. if you look at the trend lines, ratio of employees to depen debts 49 to 51 is the same year-over-year. enrollment by coverage level

same year-over-year except for slight rounding, close to the same numbers. not a lot of changes. we are increasing in our population. for our retiree members, and we saw this for all of the lives, but our enrollment in city plan did increase. retiree lives on the whole increased. we see some of that as we moved forward in the pages here. i will say as you know as we look at the retiree population, and move on page 24 here. in these little circles on the bottom left graphic there. you can take a look at members to dependents to our children dependents that are in those plans, and members, of course, for blue shield are smaller

against the kaiser and united ud healthcare. if you take all of the employees it is 10% in blue shield. bump it up against the comparison looking at non-medicare retirees 41% are in blue shield. again, san francisco being the more dominant county, there are enrollment on page 26. 93% of the retirees are in california. the next highest number is in the distribution. we have a number of individuals who live out of the country. 93% in the state. 90% of those in bay area. 36% of those in san francisco. the influences of what happens here and the northern california

market have a huge impact on our retiree population. we are not disbursed widely. we have people everywhere, but not in huge numbers. >> we can wrap this up. >> distribution on page 27. retiree members versus dependents stays the same. five year trend is the same for the last six years. page 28 here is where you see the statistic on survivors, bottom row of the table. if you want to know where the surviving spouses are and the kinds of numbers for the population and their children that is where you find that. 891 surviving spouses are enrolled in our retiree plan. dental. page 30 for the retirees. this was quite popular for the

2019 plan year. again, maybe it was the benefit changes with the orthodontic lifetime increase. 1246 lives increase which is over the previous two years. definitely an increase there in the dental. final section of the report looks at the same metrics. it looks by employer. aggregating the active and retired population from that particular employee. both of their active and retired populations. no surprise. city and county largest proportion 81.26% followed by unified school district 14.07. 3.48 city college. court 1.1%. looking at page 32 on the graphics there. i just give you the percentages.