pinpointed the number. and that number became known end of may at 3.2, which is what we have here between the two ordinances. so the intent here is really to buy us enough time to do a better deep dive and understand the drivers of that 3.2. and to do that we proposed to engage independent analysis, financial analysis, that helps to develop findings that can be addressed in the long-term sustainability plan. the grants are structured in such that the second and third 60% of the grant budget will not be awarded until the city has accepted the sustainability plan that addresses the findings of the independent analysis. we recognize that this is an extraordinary measure that we're asking here today. and it really is critical for the services that we are hoping to continue. we want to make sure that we are addressing what the circumstances are that led to this.

and i'll hand it over to brett, c.e.o. >> thank you. good afternoon, supervisors, president walton. again, i want to thank you for the opportunity to share a little more about what is going on at p.r.c. internally. and just wanted to thank d.p.h. and its representatives for being a partner throughout this. i do want to bring a little bit more clarity on the timeline of where we were. this really started in 2019 and we engaged the many folks who actually weren't necessarily part of d.p.h. at the time. -- engaged the behavioral health team around joe healy detox which was running a deficit. in 2019, 12, 13 of us came together to recognize that it did run a deficit. it converted to a drug medi-cal model. it was a fee-for-service.

we recognized it wasn't paying for the cost of providing the full services. we converted from fee-for-service to cost reimbursement, which was in many ways a first good step, but then also identified for us, even if you pulled down the fullness of the contract, it would not pay for the fullness of the services. that started -- the first meeting was plate 2019 and then comes march of 2020. we had committed to continuing to meet. everything was unfortunately put on hold through covid. fast-forward, the early part of 2020, we reengaged with a community vision which was formerly the northern california community loan fund through the mayor's office of housing and development. did an analysis on p.r.c. specifically. we wanted to understand if indeed our programs that are both funded by the city and by contributed revenue, if they still are running at a deficit. indeed, a report did come out.

we can send this to you in july of 2020 that did bear that out. the scope of the contract was only for p.r.c. community vision did present that to our board of directors. we all agreed we needed to see a more comprehensive look at the organization in preparation for a merger. we wanted to make sure that both entities, frankly, were standing on their own and no one organization would take the other organization down. that formal submission went in september of 2021 -- i'm sorry, 2020. again, we were still in covid, so not a lot of work happened around that time. but recognize that if, indeed, if p.r.c.'s programs were running a deficit, it was a good chance that baker places which is heavily city-funded would be running that same sort of deficit. we're continuing to provide the service. not to get wonky, we were in the

continuity of payment through the controller office, so we were pulling down the fullness of the contract yet still recognizing that it wasn't paying for the fullness of providing the service. so by mid 2021, it was very clear, joe healy, which was our incredible program had the heaviest drag on the organization. it reason between 750,000 and million dollar deficit every year. we have a consolidated audit that shows there was a drag over the last three years that hovers around there. it was very clear there was a reduction in our net assets year over year. so what would we do about that? we came to d.p.h., picked up the conversation where we left off, look, the numbers are still the same, haven't changed, we need to figure out what we can do together to stop the negative flow and drag on the organization. that was mid 2021. and we've been in conversation

and activity in order to figure out what to do with joe healy and in that again did reveal that our program still ran a deficit both on the p.r.c. side and the d.p.h. side. so that has been over the past year of us doing this work together. our independent financial consultant did confirm indeed it was the truth that we were running deficits. our deficits were a little higher this year simply because of covid. we have 24-hour care, so i'm believing and knowing this to be true because i wasn't able to make the hearing last week, but i know that a lot of us who provided 24-hour care struggled with overtime and our overtime numbers were huge because we didn't have the staff to do the standard full-time work so that added and contributed to the deficit. so the long-term sort of analysis of it and the engagement that we've had has

reached back all the way to 2019. and obviously we find ourselves here. and have done all that we can within the structures that we have and the authorities that we have in order to move money, maximize the contracts and still we would have ended this year as we did last year and two years and many years before that in a deficit. >> supervisor ronen: through the president, i'm still -- i'm still confused. so, you noticed in 2019 that joe healy was operating at a significant deficit, but there -- and you tried to fix it by changing from the fee-for-service to reimbursement, but even though you were reimbursed for all your expenses, it still didn't cover the program costs? can you explain why that was and why that wasn't fixed before 11th hour? >> you know, supervisor, that speaks to the larger issue that was brought up quite a few times

in the hearings which simply is, if indeed you're providing services in san francisco year over year, the inflationary costs are higher than doing business, we have all passed that 3% on to the staff. that really doesn't cover the cost. so every year you're in business and every year that indeed there is a cost of doing business or cola that is passed on directly to the staff, that does not cover the increased costs. so your insurance it up, your occupancy is up. many things are up. where you can find cost savings -- and i will say firsthand, this is no way to manage a business -- you look for cost savings in other places. so if indeed there is a vacancy, we would hold that empty in order to have a cost savings there and move the dollars in order to support other parts of the organization. but the fact is year over year the contracts have not and every year that you're in business you slowly slip further behind and further behind.

>> supervisor ronen: okay, i'm going to -- i still am just not getting the level of information that i need, but i'll let my colleagues ask some questions. one last question. so the $3 million. what does that get us? how much time does that buy us before you can't make payroll and 200 people lose their program? >> i can tell you what it will do. we have accounts payable that is equal close to that. $2.5 million on contractors, landlords. we've been in constant communication with them asking for their patience while we're busy figuring this out. so this is not $3.2 million in order to move forward. it really is to take care of the many obligations that we have not taken care of up to this point. and folks who have been incredibly kind to be with us as longstanding partners are willing to continue to be a partner with us as we figure this out. so i just wanted to let you know first thing, that's what the

$3.2 million would do. we're taking the month of july with d.p.h. and the consultant to look through each one of the programs to find out what are the drivers of the deficits. we know that the two largest line items that are your expense are obviously salaries and occupancy and human services, so i suspect it won't be remarkable what we find, but it will have proven what we know, but not to the level of detail which is overall the cost is greater than the contract value. >> supervisor ronen: and have you blown through all the reserves of your organization? >> yes. >> supervisor ronen: i might have more questions, but i'm going to wait. >> president walton: thank you, supervisor ronen. supervisor peskin. >> supervisor peskin: thank you, president walton. obviously, we can't have 200 folks on the street, so we're damned if we do, damned if we don't.

so, the deficit's been running in various places, healy, baker places for three years it sounds like. so at some point you guys had to tap into your reserve funds. when did that start? >> i would say -- from 2017 when we brought the organizations together and recognizing that p.r.c. as a parent organization was financially more stable. it was stronger. it had contributed revenue. and that also exacerbated it, because covid really took fundraising to a whole new low and what typically we would be doing is moving money, using fungible dollars that are for general operating to shore up the programs that aren't fully covered by any contract and for a year and a half we were decimated in private fundraising. that magnified the issue

incredibly. and then limited our ability to manage cash flow. so that was the greatest contributor i would say from a private reserve -- verve and private contributed revenue point of view. but that was our commitment to the programs. we were having conversations with the city. we were, you know, being as creative and innovative with our funding across government contracts and private and contributed revenue as much as we could, but ultimately it was a perfect storm with covid given that p.r.c. is about 40% funded by private -- private funds. >> supervisor peskin: so, as you, in 2017-18, 19, as part of your kind of sort of business model or spending reserves and relying on fundraising which was reduced or dried up during

covid, was your board aware that you were spending the reserve funds? >> they were aware. we were also in constant conversation with d.p.h. so, it wasn't that we were spending the reserves and thinking we would not be able to address the issues. it wasn't an or. it was an and. we would have liked to address this issue sooner, certainly within a contract year, in another way of addressing what the deficit is, other than the ways we're discussing it today. but our board meets monthly for the finance meeting and we were all very aware. >> supervisor peskin: okay. i am under a very different impression based on my conversations with d.p.h. as a matter of fact, i'm under the opposite impression, because when something like this happens -- i don't want to say never

happens, but rarely happens in my 15 of the last 22 years on this board of supervisors, you go, oh, yeah, this is really bad and what can we learn from this lesson so that it doesn't happen again, early warning systems, you know, across the, you know, archipelago of non-profit service providers in this and other departments. and how do we know that we get an early read so we can stem this and help earlier on and stabilize earlier on, or part company earlier on or figure out transition plans earlier on. so the conversation i have with d.p.h. is exactly the opposite of what you just represented, which was about six months ago they realized that you guys were in trouble and started doing cost recovery and you have a very different -- i mean, you have a very different -- >> i don't have a different

view. i mean i have -- we have e-mails and reports that speak to such. >> supervisor peskin: i would -- >> i would say that we started -- again, i started specifically with joe healy in the latter part of 2019 with a formal meeting with the department of public health. which we all agreed we would move from fee-for-service to cost reimbursement. this isn't -- i would respectfully say, this isn't a new conversation. this is an old conversation that arguably has taken probably longer than it should or could and i understand that people have thoughts about that, but we've been in constant communication with the city since 2019 either through the joe healy program for through p.r.c.'s programs and have reports that speak to such. i have a formal report that i was -- produced by the northern california community loan fund paid by the mayor's office of

housing community and development specifically looking at p.r.c. programs. we all took active steps in order to identify what these issues were. >> supervisor peskin: all right, let's hear d.p.h.'s side of that story. very general conversation i had with them last week. >> good afternoon. deputy finance officer for d.p.h. i think it's a true statement that there have been ongoing conversations and findings from our fiscal monitoring of baker contracts, particularly joe healy, that there has been a slow erosion of the cash position over the years since 14-15. as i recall they went from a position of 39 days of cash reserves in 14-15, to five days in 18-19. that was a slow erosion. the difference we noted that kicked off this conversation was a $1.3 million gross deficit

that was offset by $1.1 million loan forgiveness. that came to us as a precipitating factor. a deficit of that size and magnitude had not been noted. but there two conversations to our mind. one is the scale of the $2.4 million deficit. the other is the erosion of cash position and that was an ongoing conversation since at least 14-15. >> supervisor peskin: so, drew -- oh -- i mean, look, if we knew about this, normally the way this would work is there would be contract renegotiation, it would be rolled into the 22-23 budget. i mean, this is beyond abnormal. i mean this is an emergency,

right? they've got $2.5 million of accounts payable. sounds like they're about to shut their doors -- am i being -- >> that's our understanding from meeting with them and from the controller's analysis, yeah. >> supervisor peskin: and slow erosion, i mean i guess, you slowly erode and then you fall off the cliff, but it doesn't sound like the emergency became apparent to them or to you until recently. like i mean they haven't been walking the halls of city hall saying we're about to close our doors. it wasn't until you said, hey, will you have emergency meeting and appropriation. i mean, this almost never happens. >> the quality of the emergency, the quality of the situation changed in our mind after the report from 2021, which really was a different conversation. >> supervisor peskin: and the report from 2021 ended up in the

hands of d.p.h. finance staff when? >> i'd have to get the exact date, but it was after the close, so sometime in the fall of 2021. >> supervisor peskin: okay. so you guys have kind of sort of should have known since more than six months ago? >> we knew there was a problem six months ago absolutely. and i don't know that we could have known the scale and whether it was addressable within our control or within other contract measures we could take. but at this point it's clear, it's beyond what we can address within d.p.h. authority. >> supervisor peskin: not to make too fine a point of it, but am i recalling in our conversation last week it was your sense that mr. andrews' board was not aware of the reserve fund spending. am i making that up? >> i think we were not aware or

unaware whether his board knew of it. it was clear in their financials and presumably there would be some reporting of the financials, but whether it was explicitly discussed was not something i knew at the time. >> supervisor peskin: and then to get into the painful subject insofar as past behavior, which past behavior now seems to be getting on half a decade of erosion is a predictor of future behavior often, what are d.p.h.'s plans for finding other providers if we're dealing with an organization that provides critical services and is teetering on bankruptcy? >> so i will defer to the doctor to talk to the planning that we have around triaging and looking at emergency options for these service, but i would say our first order of business is trying to shore up the organization so that we have enough time to do that if it's

needed. and the plan really is contingent or tied into these grants, hoping that we can develop in partnership with baker-p.r.c. and in response to the financial analysis, a concrete sustainability plan with measurable goals. and the grants are structured so that the money will not be given to baker-p.r.c. until the city has accepted those sustainability goals. and if you want to... >> hi, supervisor peskin. in answer to your other question about the procedures for potentially transferring services in order to maintain those continuity for clients, as well as continuity for the city in amount of services, we have a parallel plan as this is happening to plan for what -- whether and which providers in the city or newer providers

could take over services. so we see that as absolutely part of our work over the next coming months. >> supervisor peskin: thank you. >> president walton: thank you, supervisor peskin. supervisor melgar. >> supervisor melgar: thank you, president walton. so, like my colleagues, i'm having a really hard time with this. before i became supervisor, i was executive director of a non-profit that had a contract with d.p.h. that was medicare reimbursement, it never covered our costs. and it never occurred to me that we were to get in trouble not meeting that 30-40%, that the costs didn't cover that i could go to d.p.h. to get, you know, bailed out. i mean, i'm just having a really hard time that a structural deficit -- this is a structural deficit that goes back years, would just be covered like that

through an action of the board of supervisors without ensuring there is a sound business plan. so, you know -- and i'm also, like, wondering how is that going to happen? so, you know, you guys are the experts on the compliance requirements for the medicare reimbursement. i'm not sure that that's necessarily the case for like a non-profit business plan. so if the income that has been, you know, comprised is the -- compromised is what i understand from mr. andrews, is the, you know, contribution -- individual contribution donors sort of non-compliance, you know, with free money, then what's the plan for building that development capacity back up? you know, now post pandemic. or are there other sources of program income that are going to make up for that 40% deficit? and i don't know what this plan is.

so, you know, to me, as with supervisor ronen, we can talk about, you know, making the organization whole so that we don't lose the beds and i just like -- i want to maintain that capacity and have folks be taken care of, but it really gives me pause because i don't understand how we're not going to be the same situation six months from now. the pandemic is not going away. are we hiring a new development person? is there a plan for making up the short fall in donations? is there an alternative plan to increase income? and as the result of the merger, which i have also done as an executive director, it's really tricky. what is the plan going forward? i just don't understand it. so before i vote for this, i would really need to understand that, you know, we are making this exceptional thing to make this organization whole because we believe there is an 80%

chance, 90% chance they're going to make it in two years, three years, five years. i don't think i have enough information to do that. i have a lot of experience to raise these questions and i i don't understand it. >> i'll try to address your question and call up colleagues. i want to reiterate the extent to which we also think this is extraordinary and exceptional. and not okay. so, we also believe that the organization has a long history of important services in the city and in this community and we believe that they can be successful. at the same time, we are planning for other possibilities of transfer of services, so we want to move forward with those things in mind. i think as my colleague mr.

moral, maybe i'll just have him come talk, said is looking at the financial structure, looking at all sources of medi-cal and other revenue as well as the way contracts are constructed as well as the structural deficit that has now become quite clear we want to move forward. and i'm going to let you have the mic. >> thank you. i would agree. i think, one, again, we recognize this is an extraordinary request. and we recognize, too, that it's hard to say from here, from the vantage point right now that we can say with certainty that the organization would sustain itself for two years, even with this emergency infusion of funding. what we want is to make sure there is stability and time for us to both do planning and to allow the agency to do planning. what's clear is that the nature

of the problem is not certain right now. i would not say that we know that it's a structural deficit. we can see that what happened was particularly acute in 2021. there was an existing slow erosion, but what happened in 2021 was different. and it does seem like fundraising changed that year. we want the six months to really do a deep dive with an independent financial analysis and planning to develop goals and really be able to come back with confidence and say, with these goals, they will be sound. or without these goals or without -- this is our plan to move the services, but right now we really need more analysis, more sound financial numbers and some planning to be able to give an answer to say two to three years from now this is how they'll be sound -- in our view.

>> president walton: thank you, supervisor melgar. supervisor mandelman. >> supervisor mandelman: thank you, president walton. i guess i have a few questions. i think they're mostly for d.p.h. so, and i guess the question is like what this may say about other parts -- other contractors that we have. to what extent are we heading into a covid hangover where organizations that were able to sort of figure out a way to survive the pandemic are now going to hit a hard wall and need help? i mean, we've heard for years from non-profits about how our -- our financial relationship with them does not actually keep

them sustainable prior to the pandemic. somehow they -- they kept doing their work during the pandemic. are we doing like a sort of stress-test analysis across our partners to see what is going on and what we need to do kind of sector-wide? >> thank you for the question, supervisor. i would start by pointing at some of the measures that were taken during covid in partnership with the controller's office to ensure continuity of payments. during 19-20 and 20-21 continuity of payments allowed us to pay contracts that were previously fee-for-service at the cost reimbursement level, so make sure that up to the value

of the contract we would be able to reimburse cbos provided that they have costs consistent with the budget and the contract. the 2021 cycle also allowed us to increase the rate that we paid, if they preferred, depending on how their budget is structured. there were a lot of dramatic steps taken during covid to shore up problems -- not like this, but cash flow for cbos. that said, this situation makes it clear that there are lurking risks. i think we haven't yet digested what the circumstances are here and we don't know enough yet. we know that something unusual happened. [please stand by] [please stand by]

-- and we know that they're in trouble, they have been saying they're in trouble for a while. we didn't think that they were in catastrophic problem until over the last year and the board of supervisors didn't realize that we'd ask for a bailout until a couple weeks ago. so we know and we also -- i

mean, the response that you gave to my question of how we know that we don't have a sector problem was to tell the things that we have done for the sector. but that's not an analysis or a look at, like, where's progress, where's health rights, where are the other providers that are, you know, that have for a long time saying, you are not being a good partner with us, you are asking us to do more things and we are doing more things for you but we don't actually have the money to do it -- help us out. and i presume all of them are saying that. okay, anyways, how do we know that doesn't lead to, you know, catastrophe? i mean, across the sector. >> absolutely. and as we can see from the controller's report, wage pressures, staff turnover, and cross pressures faced by cbos are extraordinary and we appreciate that. the way that i feel confident that this isn't a sector-wide

problem or the scale of problem is unique at baker pearcey is that ultimately the contracted amounts when we do settlements each year we don't see deficits at this scale. we see some deficits and certainly those wage pressures are real and there's as much service pressure as there are for the finances, but there are no other agencies that i have come across for cost settlement purposes when we look at the contract services delivered against paid, and their trial balance. we have not seen a deficit at that level for the 2021, 2022 or 2021 cycle. that's not to say that there are no other ones out there. there are no other ones that have begun the conversation with dph at this point? >> so you think that this is a unique case? >> i do. >> two other questions. i mean, to what extent was any of this driven at all? as i was saying that we have

been asking these providers to scale up in a significant way. do we think that has played any role in this case? and, does -- how does -- we're touting our plans for beds expansion and we're going to have a conversation about catastrophic bed loss potentially, you know, this afternoon, but to what extent -- to what extent it's related to the expansion in the organization that we asked for and to what extent does this impact our ability to get beds open that we want to get open? >> so for the first question to what extent does this stem from requested expansion of beds. the -- we need the financial analysis to know for certain. i would say though the nature of the -- just how the numbers arise in 2021-2022, 2021 -- excuse me -- there was no

dramatic expansion of serviceses that were requested at baker. i stand to be corrected. but i believe that there's no dramatic expansion of services. so i don't think that it's tied to any requested expansion. and then as to how it would potentially affect future expansion of beds, i would have to defer that to brett. >> supervisor, i would say -- and i hope that the board of supervisors finds some amount of comfort and assurance here. we have success along the way and i dare say that what you would find in answering your question, the challenges are around our legacy contracts. not around the new contracts and so to the second part of your question, if you treat the new contracts like you treat the legacy contracts you'll end up having the same scenario where you don't look at the full cost of what it is to provide the service, and we can see that across city departments. we have success in the fact that

we have brought on leeland house and cop be instructed a contract that is neutral so we than it can happen. and we worked with dph to have the detox center so that it no longer will run a deficit and is poised to be net neutral. so we have that well down the road and they're in contract and they're getting ready to move into that new model of service provision july the 1st. so it isn't -- that the work isn't being done, and it isn't that there isn't success, and success had along the way. in your district, we opened up hummingbird. it is a relatively -- >> that is supervisor ronen's district. >> yeah, yeah -- on the edge, on the edge. that is generally net neutral and so are both hummingbirds. so, again, we have a model of what a program can look like and running that neutral or manageable deficits. it's just that you have to take a deeper dive. so when we're talking about program analysis that drew is mentioning and dph is mentioning, it's looking at each

one of those programs and looking at its revenue sources and understanding what are the drivers of those revenue sources, are there restrictions to them? are there caps along the way that don't allow for the fullness of us to provide the service? and indirects where i will tell you that the indirect of 15% is not what prc is running at. we run at more at 20%, and i argue that pretty much every non-profit that is here in san francisco runs about 15%. so looking at ways in which indirects -- among many other strategy it's -- more flexible and in support of the fullness of providing the service. >> thank you. >> president walton: thank you, supervisor mandelman. supervisor chan. >> supervisor chan: thank you, president walton. and my question, i just kind of wanted to confirm the earlier questions that supervisor ronen had, with the $3.21 million. basically over -- they are projected to overspend. so is the $3.22 million just to

make them whole for this fiscal year of 2021-2022? >> correct. the $3.22 is the result of an analysis connected by controller's office consultant, identifying spending overages from current year dph contracts at baker and brc. >> supervisor chan: and moving forward though, what exactly -- or how much are we looking at to maintain -- i guess -- i think that you mentioned earlier you're not even sure that we can maintain this for more than two years, or even two years. so can you just elaborate and help me understand what that means? >> i would say that the hope with these grants is that we develop a sustainability plan that moves us out of the brink of insolvency, or helps to move the agency and dph as its contractor out of the brink of

insolvency. so the intent to push us into a longer term, two years, three years, picture -- we really want to find -- we want to do the independent financial analysis that gets us real findings. we started it and, certainly these $3.2 million, that amount is a result of a financial analysis. the hope now is to look more in terms of drivers of the deficit. is it related to changes in fundraising? is it related to changes in financial staff at the agencies? right now we have a lot of different stories and the hope with the analysis is that we really pinpoint the drivers of the causes of it, that the sustainability plan can speak to. >> supervisor chan: could you talk a little bit about the consultant that the controller's office hire, the community vision, i guess that report just came out. it did actually talk about, you know, the spending exceeds the

budget costs for unit service is because of higher than budgeted staff and costs as well as turnover and low staffing levels in the financial divisions of each organization. so, could you elaborate on the low staffing levels and the financial divisions of each organization just for this one fiscal year, or has it been quite some time? >> i wouldn't be able to say if it's past this financial year but i would say that one of the findings that were preliminary but that were in the report that changeover in the financial staff and limited staffing levels, as you point out, supervisor, um, limited the administrative financial capacity of both agencies to produce and manage finance budget numbers as well as really the status of the merger between the two agencies.

the challenge of merging them was really pretty immense in that i think baker operated on a fiscal year and prc operated on a calendar year and they both continued to use different financial software. so it's really a challenge right now to get meaningful, reliable numbers, and i think that their staff is working as partners with us but that certainly was one of the findings in the analysis done by community division. >> supervisor chan: that means -- i mean, i think that you already talked about it, but it sounds to me that dph has actually identified some financial problems since 2014. you noticed that their reserve, you know, has been significantly decreasing over the years and to a point where there's no more reserve. i mean, my assumption is a trigger for merger in 2017,

again, seems to have a lot to do with how can we -- you know, have some soft savings from h.r. and the administrative costs. so it sounds to me though that we do as a city, the department of public health, knows that there is -- i don't know whether it's structural deficits, but we're aware that there's some financial issues for quite some time? >> i would say, yes, there is clearly -- from our financial monitoring, a noted deterioration, particularly at baker of their cash position. that in and of itself would never lead us here today to ask for this scale of intervention. >> supervisor chan: and, in fact, your audit -- you are saying that you're now going back for all of these organizations and you want their payments all the way back to 2017-2018? >> for the financial statement. >> supervisor chan: for the financial statements, right. so now you're trying to, like, trace back your steps. in the event that, you know, in

the unfortunate event, you know, that they just can't sustain and we say, you know what, we're going to say we cut our losses at $3.2 million and we want to make you whole for this one fiscal year. and i think that they have already talked about transfer of service. could you elaborate on transfer of service? >> i defer to dr. bennett. >> supervisor chan: sure, thank you. the steps to transfers of service. >> i'm going to enlist my colleague, mr. max rogga. >> good afternoon, i am max rogga, with systems of care. in terms of transfer of services we do have to look it's our current pool of providers that are in contract with us and looking at their scope of work, their specialty, and then determine transfer from that point. we do have to plan ahead and engage in conversations with them about their capability to step in and step up. so we will require some time to

motion through that. >> supervisor chan: how much time? >> easily six months. i say easily six months. >> supervisor chan: six months? >> that's a guesstimate. >> supervisor chan: so six months where determined to say, we are done and we need to transfer. but what happened to bakers and -- what happened to all of these organizations, or to these beds during that six-month period? >> i think you're looking at the overlapse, and the exit in agency can continue to provide services and in what ways can a new agencies pick up services. that's the part that we need to sort out in the next six months. really hard to gauge. we might have to ramp up some current providers and say here are some funding capability. or funding opportunity for them to step in and step up. >> supervisor chan: how much would it cost us to buy the six months for transfer of service, meaning, if we pay the $3.2 million from this point on, and then we need additional six months assisting us, how much

would it cost us? >> i'm sorry, i don't have that information. we would have to look that up and do some planning and gauge it out. >> supervisor chan: i think in order for me to make a decision on this i really need that transfer of service and the cost of it, thank you. >> president walton: thank you, supervisor chan. supervisor safai. >> supervisor safai: thank you. so let me say right off the bat as somebody very similar to supervisor melgar that has worked with a number of non-profits, and worked with a number of different agencies, this is shocking to me. i don't know -- i've had multiple non-profits over the years that have faced fiscal disaster, and the city has not stepped up and said we're going to bail out your organization. i understand the urgency of needing to provide the service, but at the same time you're coming to this body at the 11th hour after knowing about this

for over a year. i mean, you said this was something going on since 2021, and then asking us with, you know, with a devil's choice -- if we say no you're telling us that these folks will be out on the street. i don't believe that they'll be out on the street. i actually don't think that people are going to get evicted and the services -- well, you may not be able to pay people to do the work. but at the end of the day this is government at its worst. you've also had an organization sign leases and then tell us that this particular organization is one that holds the lease. that again is bad government. you should not be signing contracts with an organization that holds the lease for the service you provide. because at the end of the day, if there is -- if the clauses are written in such a way that you can swap out service providers, that should be what happens. i'm fine with the non-profit signing the lease but you all should approve that lease and

you all should have an approval of that lease in case the non-profit goes under. because at the end of the day our hands are tied because you're telling us that non-profit is the one that holds the lease, and you're handing them the money to pay that lease. you know, a number of these buildings and services are in my district. i did not find out about this until a week ago. i mean, that is, again, that is -- that is bad communication. and i have to tell you that coming to us at the last minute for a sole source contract to bail out an organization that you can't even tell us that you will survive after six months, is also another bad choice. i would ask -- are there any plans to give this contract or additional contracts from dph? >> currently, no. >> supervisor safai: i would hope not. i would say that you should not be giving this contract to anymore contracts, given the fact that we're being asked to bail them out without any

certainty that there would be any future of this organization. i know in the past they do incredible and important work. so i don't want to -- i don't want to diminish the work that's being done by this organization, but there is a massive fiscal mismanagement that we are being asked to bail out. and that's not fair to the taxpayers of san francisco. in fact, some of the biggest criticisms that we get for these types of services is that we're constantly handing out money. this -- this is half the amount that it would pay -- that part of the request that we're bringing to the budget process -- this is half the amount to pay our educators to do work in the public schools and give them an additional stipend. we're being asked some very tough decisions in this budget and yet you're coming to us and asking to us bail them out at the last minute, and yet we'll be asked to tell a lot of people no in this context -- the budget

chair, and myself as the vice chair and all of the committee members, we'll be telling them that we can't give you money and yet we're being asked to do this on a sole source basis. i feel very uncomfortable about this today. i want to see individuals that are living in these -- and getting these services, to get these services, but i feel very uncomfortable giving an organization without any certainty that they're going to survive in six months. thank you, mr. chair. >> president walton: thank you, supervisor safai. just real quick, supervisor ronen, if i may. you know, i allowed for this committee to hold this because our budget chair made the motion for us to bring this conversation before the full board and, you know, obviously, you know, from my standpoint organizations like prc organizations and organizations like baker place is a big part of our system of care here in san francisco and most certainly

we can't end up with people in the streets. but i'm a very, very simplistic person. like, i'm so simple. and this is -- you know, math was never my best subject in school, but this seems like an energy issue and so -- explain to me why the department of public health would -- with over a billion dollar budget -- can't fund the program at cost? >> thank you, president walton. >> president walton: before you say because out of the federal reimbursements and all of that works, you have other money in dollars that comes to your city department. >> i don't think that it's a simple issue of a decision that we make to not fund it, the program at cost. in these cases, in every case, that we're here today, we have a signed contract with the agency at a service model and with

numbers. and in each of these cases for all of the $3.2 million, the amounts are in excess of the contract that we signed and entered into with the agency. >> president walton: so walk me through, because i assume that you had an rfp process. i assume that you know how much the services cost. was that a wrong assumption? >> no, correct. >> president walton: so, again, i'm not understanding why you don't fund a program at cost, why your rfp doesn't say that we need this much money to operate this program? >> i think that's what we're struggling with, candidly. that we thought that we had said that in the rfp and in the contracting process. >> president walton: and when we discovered that we didn't do that, why wasn't there an adjustment, a limit made, that provided additional resources? because you have done that before, correct? >> that's correct. >> president walton: so why wasn't there an adjustment or increased dollars given to address the deficit that you saw, at least -- we know that at

least it was six months ago. >> that's correct. and that was the path that we started with. we started particularly at joe healey and found about $800,000 of additional funding that we added to the joe healey contract, that budget. so the $3.2 million that you have before you today is actually net of that $800,000, without the $800,000, it would have been closer to $4 million. and we also took all of the contracts and switched them from fee-for-service reimbursement to cost reimbursement, which meant paying every last dollar of budget that was agreed to. and, finally, we identified additional savings from programs within single contracts and optimized them to really encourage any sort of cash flow that we could. we're here today because we reached the end of those administrative options that dph has. >> president walton: right. thank you. but you forecasted this, it seems like, because it's a whole

bunch of people making a lot of money in your department that could have seen being in this place and you waited until last week. >> i think -- >> president walton: making a whole bunch of money. >> we didn't know the scale of the problem until the controller's analysis was completed. before then, we thought with the best of intentions that we could sustain cash flow through our administrative measures. on may 31st, the controller's report concluded, and really brought the numbers to us. >> president walton: so one could take it as -- let me do everything that i can to make sure that the board of supervisors doesn't know that this problem exists, rather than, let me find out how we can work together with the board of supervisors as soon as we identify issues so we don't possibly end up here. but making an organization have that level of accounts, payables, making -- putting us in a position to put people in

the street, and this is something that, you know, i mean, make me understand that. >> i would say, supervisor, we appreciate the partnership and realized that the only reason that we're here today is your willingness to call this extraordinary session. the options that we employed for six months through december, through may, were what we thought were sufficient to the scale of the problem. we were wrong. we're here today because it's a fork in the road and we feel like this $3.2 million is what we need to ensure that the services can continue for the six months. and that we could put planning in place to make it last for longer. >> president walton: supervisor ronen? >> supervisor ronen: thank you. on may 18th you came to the budget and finance committee asking for a five-year extension to the baker place contract. and that included the joe healey

medical detox. did you ask for more money for joe healey less than a month ago? >> i think that the budget that joe healey reflected in that extension was the long-standing contract budget. the current amount of the deficit, the $800,000 that we added, is something that we added as an emergency stop-gap for this year's deficit. the program model and the costs in the budget is something that needs to speak with the financial sustainability plan. >> supervisor ronen: okay. we just ok'd less than a month ago at the budget and finance committee a five-year extension to baker place's contracts for the assisted independent living, odyssey house and baker street house and robertson place and san jose place, acceptance

place, joe healey medical detox, and an overall cost of doing business increase to be allocated. so, we ok'd an annual amount of $4,869,295 for joe healey. what were we paying them prior to this contract? so what was that contract for annually prior to this contract? and if you don't know, that's a problem, and i'm not going to okay this today if you don't know that information. i made it crystal clear when i agreed with strictly no information to have a motion for this committee of the whole that you need to come prepared to answer detailed questions to this board of supervisors. and we have gotten hardly any information additional to what you told us in all of our independent meetings. so don't tell me you don't know how much the joe healey contract was per year annually before we

ok'd less than a month ago this contract. >> so the question is what was the annual value of the joe healey -- >> supervisor ronen: yes. >> so that's a program within the larger 9940 contract. the baker regular contract. >> supervisor ronen: it's the one that you have been telling us now for over an hour that you have known since 2019 was operating beyond the amount that you were funding it to operate. it's -- it's a major subject of this hearing that we have been talking about for an hour. >> well, i just want to confirm that the dollar amount is flat and we'll do that while we're talking, but i want to be clear that we -- with our team, my team, and prc baker, we changed the model of the joe healey

detox starting july 1st in order for it to be revenue neutral. so our approach with the joe healey program was to change the format to recoup maximum net account dollars, and to adjust some of the programmatic elements in order to prevent further deficit from occurring this coming fiscal year. so, when we came to -- let me -- and i hear what you are saying -- when we came to the may 18th -- i think as my colleague mr. morales is describing, we were still not fully aware of the extent of that deficit until the release of the controller's report, which came subsequent to that may 18th contracting process, unfortunately. >> supervisor ronen: so here's -- here's the situation.

this committee -- your department came to the board of supervisors less than a month ago to approve -- almost double the contract to baker places. let's see -- it was from $65 million to $120 million. so almost a doubling of that contract. you did not mention to the bla and you did not mention to the budget committee any of these problems. the problems with the merger. the problems that the -- that the joe healey was operating at a deficit since 2019. it's still unclear to me whether or not you knew that prc and baker place were using their reserves to make regular payroll. i mean, it's still -- i don't -- did you understand the answer to that question, supervisor peskin? it's still unclear to me because

i was told that dph didn't know and now it's unclear to me whether dph didn't know or knew. but there's red flags screaming and you came and asked us to double the contracts without telling us a thing and then less than a month later are asking us to do an emergency $3 million -- it's extraordinary. and never -- now i have been at this board for 12 years and i have never seen anything like this, not anything close. and i have asked for detailed information time and time again and i have not gotten a coherent explanation yet on how we got to this place. and it really appears to me -- and i will say this -- that dph doesn't know. i don't think that dph would not tell us if they knew. mr. andrews, i -- prc needs to know how this has been happening. you have a sophisticated board. you have a -- you know, you have

an organization that has been operating these programs for years. how did we -- how did this doubling of this contract get to us less than a month ago and none of these issues were brought to our attention? you know that i work literally 50% of my time on behavioral health issues on this board. i have worked with you for decades. i have placed, you know, new acquisition funds with your partnership to get new residential facilities. this is the first i've heard of anything. how is -- how does that happen? >> well, i'll just say this -- and i have had conversations -- not only -- well, certainly with dph, but i've had conversations with the mayor's office as well, and met with them to raise this particular issue as early as january of this year. this is an ongoing conversation that i was having with the city. i'll just say that. it's an ongoing conversation.

we submitted -- we have a cash flow statement that we submitted at the beginning of this fiscal year that showed a $4 million deficit and that cash flow remains generally true with the $4 million deficit between the $800,000 that dph identified and the $3.2 million that we find ourselves talking about. that is a crash flow statement that didn't even have all of the correct information that was in there. we just basically straight line took the value of the contracts and understood what our expenses were and recognized that there was going to be a deficit. now, i will say certainly to mre submitted that to our board of directors and dph and they made a commitment to work with us to address the $4 million deficit. it was not an unknown, it was to get an understanding of the why of it. it has taken time in order for that to get here and i think that possibly we've run out of time. but it is -- it isn't that the

city was unaware of what we were operating in. and as i said earlier, we're able -- because we generally are a large organization -- we can manage cash flow with small deficits that go from here and here and certainly covid did a number on us with contributive revenue and that contributive revenue is coming back, but in the loss of that contributing revenue and us managing the deficits that were in the organization, ultimately magnified the situation. but we had agreed -- dph and myself and the city -- all of uo address the issue through all of the means that we had and that were previously discussed. and, obviously, it didn't get all the way there. so the analysis -- and, you know, i just had a conversation with the controller and he's right. we had a turnover in our finance department, for sure. the controller and the cfo, unfortunately, retired. and we weren't able to bring them in, replace them as quickly as possible. but the fact is that we have a cash flow statement and a series of cash flow statements that i

can submit to you monthly that show a $4 million deficit. it's one in which we all understood that we were going to get to and did all that we could in terms of delaying i.p. payments and figuring out other ways in which we could leverage the contracts that were there, and that the dollar amount remained the same. so this is where we are. so when you're asking -- yes, do we have a sophisticated board and we meet on a regular basis and we have a conversation about it? that number was $4 million in july, and that number is $4 million now. of which some aspects of it have been addressed. >> supervisor ronen: so then to dph again, how did this not come out in talking to the budget and legislative analysts and this board of supervisors literally three weeks ago in budget committee when we were looking at this doubling of the contract for baker place? >> so i think that the doubling of the contract was intended an

an extension and not an increase in the annual amount. and -- >> supervisor ronen: no, i'm -- i'm aware of that. but, i mean, three weeks later you're coming to us for a $3 million no bid bailout and you're telling us that if we don't do it, that the doors will be closed. how is that not relevant three weeks ago when -- when mr. andrews is saying that for months they've been showing dph a $4 million deficit in their payroll. how does that not come up? and how does the budget and legislative analyst not get this information -- i mean, this is a complete systemic failure. i -- we doubled this contract without any knowledge that any of this was happening. >> so, i think that the numbers became clear with the controller's analysis.

the numbers that we had seen and worked through prior to the completion of the controller's analysis, we had trouble reconciling between cash flow statements and balance statements. they didn't agree. and i think that it's tied to the difficult -- the limited financial staff available as well as the financial reporting that was available from the agency. with the completion of the controller's analysis, it became clear the scale of the problem. >> supervisor ronen: okay. so did you find out -- did -- so i guess what what was said is that we didn't increase the amount of -- the joe healey contract because we -- we did how we were charging that account to make it revenue neutral. so am i to believe that in this current fiscal year that we were giving baker place $4,869,000

and some change contract? >> that's post -- starting in december we took some extraordinary measures that we could. so the $4.8 million is after we added $600,000 to the contract. >> supervisor ronen: so we did increase the contract? >> we did for joe healey in particular. >> supervisor ronen: can i ask the budget and finance analysts if we knew that? like, do we know that the contract was being increased and do we know the reasons why? >> through the president, nick ménard from the budget analyst. the contract that was extended a couple of weeks ago was for the residential programs. it's flat for the budget. going forward it is consistent with the existing contract that now needs this additional funding. does that understand your question? >> supervisor ronen: well, i guess with the joe healey -- that's not a residential, that's a detox program. >> um-hmm. >> supervisor ronen: so we had,

i guess that there was an increase to that annual contract of $600,000 a year is what we're just learning. and did you -- do we know -- did we get any information about why that increase was happening? >> no, i mean, i will say that overall the contract level for all of the programs within the contract, which include joe healey, was flat. and i just think that is an important data point here because, you know, this organization is overspent its contract this year, that's what this $3.2 million is for. we don't know if the overspending is reasonable. to the extent that it is, this contract that you just approved will need to be increased so it's going to have to go up from $12.9 million to however much more they need to cover their costs. so i think that the sort of -- the fiscal impact of this decision is actually going to be much larger than $3.2 million.

number one. and then just kind of zooming out a little bit, if every non-profit overspent its budget to the extent that this contractor did, which is 13%, it would cost the city $156 million a year. so i do think that this is setting a very dangerous precedent. >> supervisor ronen: yeah, thank you. i have -- i have -- yes, dr. cummins? >> yeah, and i -- i appreciate the gravity of the moment and all of your collective or important questions. i guess that i just want to say that very clearly that the reason for the financial distress are not fully understood. >> supervisor ronen: clearly. >> and whose collective responsibility -- both at baker pearcey and fiscal management

difficulties, very real ones, and whatever dph part in being able to predict things where we didn't have full information is just important to acknowledge. and i want to just say very clearly that the plan -- what is central is getting to the bottom of this in order to do the auditing that i think that mr. morales described, in order to get past this. and describe for all of you in with the transparency that you are asking for and that the city deserves to get to fix this. >> supervisor ronen: i guess -- i guess -- i can't -- i -- i -- as much as i want to support this today, i can't. there are so many unanswered questions. for example, what programs are going to close the door? i mean, they have -- you know,

they have 20 properties and programs. you say 200 people will end up in the street. what 200 people? what programs? what staff will be laid off? what -- what -- what interventions were taken between figuring this out and now other than asking the city for $3.2 million bailout? what -- what -- what is the monthly payroll? and how much of this money is going to go to payroll to stop laying off workers? i mean, i have so many questions. already we are in the middle of budget as supervisor safai said and we have a $1.5 billion dollar list. it's the highest add back list in the history of the city and county of san francisco. in that $1.5 billion of asks,

there's very little fluff. i look at it daily and i can't sleep at night because of the list. it is life-and-death asks for seniors getting food, for parents -- mothers and their children that are homeless getting kicked out of their housing to -- that helps them avoid jail. i mean, these are sophie's choices and every single department is going to come and tell us that we can't possibly cut a single thing from the department because all hell will break loose and then all of a sudden being asked right before this literally tomorrow those hearings start, that we have to give $3 million immediately without very much -- i have more information about all of the asks on my add back sheet than i do about this ask. literally more information about

what it means if we don't fund it. >> i would just report to the supervisors our payroll, monthly payroll is $1.5 million. i know that it is $750,000 every two weeks. the challenge here -- and this is the work that we were going to do through the month of july, is to do exactly what we did with joe healey which is to basically look at -- again, not just legacy contracts but the legacy programs. is it serving the community? are people actually accessing the services? do we need better control of ways in which the city will refer to the contractor? does the contractor need to do what it needs to do to make sure that people stay in care and in treatment. so joe healey being the most critical of it at this moment because it runs a deficit, also the most critical because it's a detoxification center, right. and the other piece of it is that we were going to take that same analysis that we did with

joe healey where we gained success in that program and we modified the program to make sure that there was an emergent community need -- and, supervisor, you know this to be true because this happens in your district -- folks are assessed for services and ready for progress services and are in the middle -- through that assessment of tb and covid we released them to the street and then the folks don't make it back to the program. so we turned a portion of the beds at joe healey detox into a way station so they don't have to leave while they're being assessed for services and when put into the appropriate level of care across the system of care. so that's one way in which a program was able to sort of look at itself and say it's running a deficit and fiscally it's not right and there's an emerging need in the community and how strategic and thoughtful were we in order to make sure that we could address both of those things at the same time. i think that is exactly the strategy that we autobiography using in acceptance place, robertson place, and san jose

place and all of the programs that are under community licensed care. these are licensed facilities. these are clinics and are super important and run under strict regulations. so to close the program or to just believe that it can be transferred, you work with the state of california in order to make sure that there's a continuity of care. so there's a critical nature to this that i want to make sure that we all appreciate as we think about this. i know this is a difficult situation and at the same time i look at it daily and recognize the critical nature of the clients that we serve and what impact it would have if we closed any one of these programs. frankly, we know that there are service providers -- you know this to be the truth because it was testified over last week -- where some of our programs are just closed because we don't even have the staff to keep them open. so what does it mean on a more comprehensive basis to figure out what does the partnership look like in order to strengthen it so that we can avail ourselves of creating ongoing

on-demand access to behavioral health and primary care treatment. >> supervisor ronen: so can you specify -- so assuming that the board doesn't support this, what happens? what happens over the next month? >> well, it would -- i think that it speaks to the other supervisor's question of -- if, indeed, you don't, and then there's an amount of money that you would responsibly need to put forward in order to close down a program or transfer a program, and licenses can't be transferred and you would have to reapply and it's a long, long process. it's like transferring a hospital. and we would get into that discussion. then we would talk with the department of public health to figure out what services do you believe that you need, what services do you think could completely go away. and i think that is a real conversation that one would have outside of any budget process. which is this system of care meeting the needs of their community. so there's a real likelihood that a service could be closed and we see services and programs close all the time.

sometimes for the right reasons and many other reasons that go into that. so we would look at each one of those programs and say what is it that is important for the city and county of san francisco and its community. and if there is need, we would -- we would target and have resources in order to figure out best way to keep the program going or just decide to bring that program to a close. >> supervisor ronen: but in terms of the organization, how many employees do you have? >> over 260 employees. >> supervisor ronen: what would happen with those employees? would any be laid out if this doesn't happen? >> absolutely. we would need -- and a portion are siu represented and of course there's a process for that and notification as well, so we would meet with our representative employees to let them know. we would look at the programs that we believe that we can possibly run on our own without city funding. prc has a portion of programs that have other funding from state and -- and federal contributions along with private

contributions. but, i mean, it really is looking at each one of those programs as a cost center to get a very clear understanding of its own respective sustainability, and then looking at that and making those adjustments so that in the aggregate of them, the whole organization is sustainable. but we already have gone through that process with joe healey and made what i would consider some pretty significant changes in what is, frankly, really the only program of its type in san francisco. and it's super complex. so i know that there's a roadmap there that can be and should be followed. >> supervisor ronen: okay, many of my colleagues have questions and i don't want to take this on, but i just have one last question for dph, actually. why didn't you just ask the mayor to do a technical budget amendment and do this? like, why -- why do this literally a day before the budget hearing start? why didn't we go through the

regular budget process? >> so the funding for these two grants would both be available from current year contract savings at dph. so the ask really here today is about purchasing authority. we don't have existing contract authority for these two grants to award budgets, both for the services which are essentially fiscal rescue services, no rfp solicitation, we don't have authority to issue that and we don't -- the funding would be sourced from existing savings. >> supervisor ronen: so is this -- i mean, there's a place to look in the budget to cut and add to the -- add back funds bly attorney. >> i was just going to add that i think that the legislation that is before you is not asking for funding but approval to enter into a grant. and there's a 21g is the new

chapter of the administrative code that requires a competitive solicitation so this ordinance would waive that requirement. >> supervisor ronen: got it, got it, that's all. >> president walton: thank you, supervisor ronen. supervisor peskin. >> supervisor peskin: thank you, president walton, which was first presented to me i expressed my displeasure and indicated what i said at the beginning of this meeting is that we're between a rock and a hard place and i felt that i had no choice but to call this a learning experience and vote for it. but, during the course of this hearing i think that i am no longer there. and i am no longer there because of what i think is failure to disclose to this body in a timely fashion, maybe in 2019, certainly, in january of this year, certainly when the final draft of the controller's report had been disseminated.

(please stand by)

while we work this out over the next month and to the point about opening the door, this happening across the entire contracts totaling hundreds of millions of dollars that is concerning to me which is why i'm hoping dph and other departments are taking a broad look at the contracts they have with nonprofits that have been asked to operate perhaps legally over some period of time so we can honestly assess

are the entities we are using todeliver servicesactually able to do it ? maybe not so much . we're seeing here i think in the public health contextmaybe not so much or maybe it's just prc but i don't think we know that right now . anyway, that's kind of where i am >> thank you supervisor mandelman, supervisor melgar class i wanted to ask a couple of questions. what happens if we continue this item for 2 more weeks, i wanted to be clear on that and something about what mister andrewsjust said . seems like there has tobe , the department. you have several contracts with theapartments. they're giving you a cash advance from one of your contracts, they have the authority to do that . while everyone was talking and asking questions i tried to look up your financials. i cannot find financial

statements either on your website or anywhere after that 2017 and 2018. after the merger there's no financial statement so i would the very least like to see what's going on for myself before we vote on this. >> our financials areposted on guidestar . >> i couldn't find them . >> and then the city system as well's last month the ones uploadedare from 2017 . >> all of our, up to 2020 is, should be in the city system. >> wedon't have access to the city system . i think just when we come back and hopefully instead of voting this down maybe we can continue it for a couple of weeks it would be great to have that information. i have no idea how much. piecing together from what was

available online from 2017 and 2018, you have a $28 million. >> it's a $30 million budget. >> i would like to understand the relationship between your budget and your cash flow and what the department can do for you in terms of advancing some cash from your contract to make sure that you meet payroll because i don't have enough information . sit as supervisor ronen said this is$1 million and everyone has lost income during the pandemic . i just in good context it's hardfor me to make the decision with the information i have . >> i'm going to let the department talk about the measures they've taken to this point and what's left in terms of letters. >> and what happens if we continue this for 2 weeks . >> supervisor melgar.

i think the initial payment, the advance from the 2223 is thenext advanced that is remaining budget , the contract cycle. that would first be available after the first week of july at the earliest so that leaves a gap for july 6 and that's really the critical path here. i thinkrealistically , that would first go out and available for the allied 20th payroll . >> tank you supervisor melgar. supervisor chan. >> i think i've said that earlier iwould like to understand transfer of service but i think you've talked about just what the possibilities are .either transfer of service or maybe service that could no longer continue.i am down today to continue until we have

all that information or more of that. i am also open to the conversation about you know, understanding that this grant agreement is going to looks like not to exceed a one-year period to commence. so you supposedly have one year. i am open to thepossibility of seeing this to scale down for a six-month period . since you mentioned six months is what protects for transfer of serviceor having, you know, a conversation inearnest what that looks like . that's where i met . it is like supervisor peskin has said you place us in a difficult position.between a rock and a hard place and damned if we do, damned if we don't like i think that because

we are here now, i think the only right thing to do is actually makesure you do have a plan and be before we vote on it . at least that's for me before i can support it in any way. i just don't think i can move forward with it. in the event i must vote it down, i probably will have to because i don't have any information about how we can move things forward and to ensure that the organization can really continue to provide service in many ways that we can afford as a city. i think kind of reference back to what president walton had said. if we know the cost of providing a service has increased,maybe not expanding the service but cost of doing business has increased we should have had this conversation a while back . i'm not in a space taking the organization hasdone anything wrong in the sense of the way

you manage your finances . perhaps it is the cost of doing business whenit comes to legacy contracts . those were a good example. if some other contracts for maintaining but it's the legacy contracts that we're somehow facing significant deficits. i think that's a worthwhile conversation to be had but we need to have rightnow, not a year from now because then we're kicking the can down the road . i am in a place where i'm in support of a continuance so we can have more information. in the event my colleagues disagreei'm afraid i have to vote against it . >> thank you supervisor chan. supervisor safai. >> i think all of us are in the same place. i'm deeply frustrated. needing and wanting more information. the thing i have not been convinced about today other than a lack of information to give us, to allow us to move

forward. i haven't been convinced you need this entire amounttoday. i thinkthat there's another solution . i think i'm going to hand it over to supervisor ronen . i think there's a middle ground that will force you to come back with a tremendous amount of information to us but at the same time i'm sure these people are not out on the street. >> thank you supervisor. supervisor ronen. >> in talking to supervisor peskin. sorry. and supervisor mandelman and supervisorsafai, we're just brainstorming because we're in a rock and a hard place . revisor peskin has asked the controller's office to calculate what it would mean to keep payroll for a few more months where we can get the

answers that we need to feel comfortable moving forward given that were going into a blackout period. i agree with supervisor mandelman the work is almost a extension of the city . if we could continue this item till later in the agenda as the controlleris working on this . >> the controller has the numbers . >> do you want to make a motion? >> 700,000 payroll. 4 million a month. >> but there's twodifferent items . >> we can sliced that were dice ithowever we want . >> maybe i'll ask controller rosenfeld. if what, i'll make a motion to do this and we'll see how the board feelsabout it . but if we made a motion to basically allow, to extend payroll a few months. i know that dph is doing the

work to get to thebottom of what's going on here . but we need just enough information to feel comfortable continuing to fund the organization as we're figuring this out and we just really, i'm not there. so what would you, do you have some suggested numbers where we can amend both of these resolutions or bothof these grant agreements down to give that time for both the answers we need and for the organization to make payroll a couple of more months ? >> thank you mister president. if you can pass over this item or come back to it shortly i can develop a very quick estimate of what each payroll for calendar would look like and report back . >> that sounds good. >> quick question to madame clerk. even if you want to move forward and come back to this

do we need to hear from, right now? >> you can continue this until later in the meeting and at that time have public comment or do it the other way around. you couldtake public comment now . >> if i may, maybe public comments would give us time. >> let's go ahead and move forward with public comment. >> when miss rosenfeld is crunching the numbers, what i don't understand. if the burn rate on staff is $1.4 million a month and then that we have to in the two items is $3 million in change, i just don't understand nor have iunderstood from the beginning how 3.2 at a burn rate of 1.4 a month buys you six months . can somebody explain that while we're at it ? >> supervisor peskin. i think the 3.2 is tied only to the deficit identified for 21, 22 contracts.

the solvency relies upon an assumption that to 23 contracts wouldbe available by the time the 3.2 is spent through . >> this gets me to this thing you guys knew and didn't disclose the board meeting before last when you kept it flat but as the budget and legislative analyst said it's 13 percent higher andi'm going wow . ijust can't. this is just too messed up . >> while we grapple, supervisor peskin melgar. >> i want to make sure what we're asking for. obviously the organization has income and you just talked about how the new fiscal year will bring the 2223 contracts online which you can start paying on in july. what we need to give them is

the difference between what they are getting in their contracts and what they no longer have to because they're not spending the reserves because they spent it all and i don't knowwhat that number is because i don't have financials in front of me . idon't know what that is. even the department of public health says that they haven't been able to analyze their books . if we want to approve some amount to make sure that they meet that july payroll i'm okay with that. it will be a small amount. it's not going to be 3 million but i don't have enough information to act on the information that's been presented to us . >> thank you supervisor melgar, supervisor ronen. >> i appreciate that. i literally could ask questions four days. there are so many unanswered questions here it's extraordinary. i've never and this is my sixth year. i literally went and said i don't know how to vote on this.

i've never felt that way in my entire time because you're putting us in a literally impossiblesituation right now. what i'm trying to do because i recognize what you're saying . and what supervisor mandelman is saying that we don't have a board meetingnext week. >> we do on wednesday . >> we have a special. >> we do. >> we have a special next week. >> i like the idea that you ha . controller, come back with an amount and see how supervisor melgar and the rest of us feel about that. >> but it'sready for a budget. >> we don't have to do that, i don't think we're there yet . >> so let mejust finish . what i'm trying to do supervisor melgar through the

chair is if we're in the middle of budget we're about to be in hearings all day every day for 2weeks . and wedon't have a board meeting next week .so what mister andrews is telling us is if he can make payroll through the other revenue coming in, not the reserves which are spent down until the july 6 payroll. i agree with supervisor peskin. the numbers don't make sense but not a lot of this makes sense that's another question to add to this entire inquiry. when i like to do is get us past this july 6 payroll because we just don't have the time between the meetings that are here so it doesn't have to be, that's why we're tying it to payroll. none of this mix sense and that's why we're not going to vote for this today. even though this is the issue nearest and dearest to my heart as i've been working on it for

years. but i can't okay this as is. it's not fiscally responsible. our job, we have toprotect the taxpayer here and there are so many questions that we have . to extend payroll for a couple of months while you guys get us the very specificinformation that we've been asking for . and after this hearing that list of questions have gotten astronomically long and we expect very specific answers to all of those questions . perhaps before it comes back to the board on the 28th because i'm going to beg the president not to schedule it during the specialmeeting . >> youdon't have to worry . >> when it comes back on the 28th for the second reading maybe you will inspire a little

bit more confidence in us but at least we would have something aswe pursue this inquiry. this is me trying to have it both ways . i'm trying here. we are being put in an impossible situation. justtrying to find a way out today . but maybe we should hear what the public thinks about this. >> thank you so much. and all my colleaguesfor the discussion.madame clerk can we go ahead and call for public comment on the hearing ? >> at this time the board welcomes your testimony as a public hearing for items before and 65 to authorize the department of public health to award one time limited term grant without a competitive solicitation process to maintain the solvency of two organizations, positive resource center and baker

places. those present willaddress the board first if you'll line up on your right-hand side against the curtain . after that we will tend to the remote system. note once the remote system has completed its q the first time we will not reopen the queue but we will hear from any other members of the public who did answer into thechamber. the best practice to use the remote system is to call in early . the number is styling on your screen . it is 415-655-0001. when you hear the prompt mentor enter the meeting id, 2485 268 5765. you'll be in the listening queue because you will join the discussion. once you areready to provide your comment that is when you should press start 3 and the system willindicate you have raised your hand . listen carefully , that is your cue to begin speaking your

comments . we are joined by our good partners from the office of civic engagement and immigrant affairs who will each introduce themselves in language instruction on how to access this remote meeting. we will begin with raymond borges and agnes lee for chinese. welcome. >>. >> speaker: [speaking filipino] >>. [speaking spanish]

>>. [speaking chinese]

>> thank you forbeing with us. let's start with those physically here in the chamber. i don't see anyone getting up too quick. line up on your right-hand side if you'd like to address the board or on either ofthese two issues it's issue four and 65. seeing no one mister atkins from the clerk's office let's go to the remote system . let's welcome our first caller. we have three colors in the queue. welcome . welcome, caller. >> speaker: hello.

hello. >> hello, welcome. i'm setting the timer. >> speaker: what i see here is that we have several organizations who do not have the same software. and we don't have a solid operating procedure on these matters for the city . and one of the city is encouraging bygiving these contracts , no-bid contracts is corruption. that's all i've gotto say . it's a shame. we have urban alchemy. we have 360, westside community services. bayview. hunters point foundation. each doing their own thing. and you board of supervisors

need to have standard operatin procedures . and the controllershould have thought of this a long time ago . and it's like a joke seeing all the supervisors out there talking to the budget legislative all trying to figureout in the chambers how best to solve this problem . that we are not afirst-class city . >> thank you mister dacosta. misteratkins let's hear from our next caller . >> speaker: hello. on an sbi you 1021 member and i'm also a public health worker. so my only concern is that yes,

i agree that people need to be paid. if you can do something to hel with that but i also agree and jason has heard from this from me to that a lot of public health workers have some sort of issue with some of these nonprofits that are doing our work . i will say i think that payroll should be done. i think you guys need to do way more oversight.on how this money is being spent. i know dbh is in the middle of hiringright now . i wouldn't want to do anything to takemoney away from them to stop the hiring . i just hope you look at it in the big picture way and not so much focus on these individuals and overall the things that's happening with public sector work being contractedout . >> you brenda for your comments

to theboard. mister atkins let's hear from our next caller please . >> my name is cheryl thornton, a resident of district 10. and the first thing i want to say is i am in shock. this is a catastrophic failure and i don't understand about this this goal management, how this all went down but i think people should not suffer. they should be paid until this mess is figured out but number three i've always said that public works should not be contracted out to you know, these nonprofits. and if it is there's got to be way more oversight . this is not fair to the taxpayers of san francisco. this is not fair to anybody to, the last minute like this and

with this huge emergency. i work down in the tenderloin. i know we use some of these services so there needed but it's outrageous the way this has been mismanaged and i think the board of supervisors needs to look into giving this work back to public workers so that there will be more oversight and not wastefulspending. >> thatyou cheryl for your comments this afternoon . mister atkins can we hear from our next caller please ? >> dear san francisco board of supervisors. this is a very can smoke. i understand but i need you to know that at the lowest point in my life after suffering to adult onset psychotic breaks, positive resourcecenter was there for me throughout my ordeal .

positive resource center found benefit lawyers to assist hiv-positive people to qualify them for disability benefits that they're entitled to. to shut down this operation would have far reaching and negative impacts on the many individuals living with hiv in san francisco who remain disconnected to benefits. the are three positive resource center helps us living with hiv to qualify for the benefits that were are often denied to us. they stay with us through appeal after appeal after appeal. so please i hope you can work something out. positive resource center and sister and brother organizations really do need to survive. thank you. >> thank you foryour comments

to the board. mister atkins let's hear from our next caller please . >> hello. >> welcome this is louise whitmore.resident of d7 and i'm just turned on the tv and started watching this and it looks to me like you all are over a barrel. i think you know thatyou've been saying it . the best thing you can do is to get moreinformation . i think you're going to have to fund these folks for some time but you've got to get a new service provider. this is ridiculous it looks to me like you been played somehow and it is the taxpayers money at work and as a voter there's already a lot ofconcern about the outsourcing of so many city services to nonprofits . looks like the oversight is not

there. needs to be put in place so i think you've got to do some work on this. probably fund them and find yourself a new service provider because i don't think these people can be trusted, that's what itlooks like to me so good luck . >> thank you for justturning on the television and watching the meeting and calling in with your comments . mister atkins do we haveanother caller in the queue ? >> madam clerk there are no furthercolors . >> misterpresident . >> seeing no other speakers, public comment is now closed . madam clerk i believe we can file and come back to item 64 and 65. >> if you want to return to it later in the meeting it should be fine. >> we will hide file this meeting and come back to 64 and 65 later in the meeting so item 63 is now filed. madam clerk, please call item special order number 62.

>> item 62 board of supervisors is convening a committee of the whole for a public meeting on the laguna honda hospital strategy for recertification and submission of a closure and patient transfer and relocation plan and to request the department of public health to present this earring with pursuant to a motion file number 220618 approved on may 24. >> thank you madam clerk. colleagues we have before us another committee of the whole in laguna honda hospital strategy for recertification and a submission of a closure of patient transfer and read certification. supervisor melgar i believe you have remarks. >> thank you president walton and colleagues forsupporting this hearing today . for over 150 years the hospital has been a refuge for people of all walks of life in our city

received life-saving healthcare, particularly for those experiencing extraordinary circumstances of complicated health issues. laguna honda hospital and rehabilitation center is a 62 acre campus located in district 7. it is a prizedinstitution that serves all the city and county of san francisco . it is one of the largest nursing facilities in the country and one of the only publicly owned ones. i'm not going to mince words. running an institution with specialized healthservices for such a diverse and vulnerable population comes with its triumphs and its downfalls. laguna honda has been through it all . through the expressway, through the hiv aids epidemic, during the peak of the pandemic, laguna honda hospital showed the country how skilled nursing

facilities could prevent outbreaks along with frail residents. however it's far from perfect and it has been on the path to improvement. like many of you i was floored and shocked when they use the centers for medicare and medicaid decided to terminate its participation in the program. we have a daunting but doable task ahead of us to get laguna honda hospital back into compliance so we can serve this beautiful and unique institution. it isup fatima unfathomable to pursue any other outcome . for the lives that depend on laguna honda for care. unfortunately part of the process requires a closure of patient relocation and transfer plans while we work towards recertification . sadly this plan must rectify how we plan to locate and transition our most vulnerable

residents which may be hundreds of if not thousands of miles away and as we all know laguna honda makes up 30 percent of all the beds in san francisco. what i want us to take away from this hearing is a better understanding of the work that'sunderway to support that 700 residents and their families during this transition . to be clear on what options are available to them and to correcttransparency about our plans for the public . i want us to have clarity on the strategies and plans in place to get laguna honda back on track and be get recertified once again continuing to provide crucial services to existing and future residents . we areunified as a city .the mayor's administration and our congressional delegation implored our labor unions to make surewe're all working towards certification . today we will be hearing from

laguna honda hospital leadership team about the recertification strategy and updated timeline and status update on the patient transfer relocation plan. we will also be hearing from sdi you 1021 leaders who been working hand-in-hand with hospital leadership and the consultants hired to ensure that residents receive seamless care but also upping the efforts to meet all compliance requirements of through the recertification process. with that mister president if we could go to ourfirst presentation . i see doctor brent colfax here .thank you so much for making the timeand i will turn it over to you . >> thank you and good afternoon president walton and members of the board and thank you supervisor melgar for your support of laguna honda which

is in your district. so we can update the public about laguna honda and efforts to be recertified with the centers for medicare and medicaid services and continue tocare for some of the communities vulnerable patients . this is a key priority for the department of public health and we're making sure that laguna honda hospital leadership has the support it needs to be successful. laguna honda represents the largest commitment any city or county in the country to a publicly skilled run nursing facility. the hospital ensures a safety net for patients with complex medical needs for low or very low income in essence thathave no other options for care. it plays a vital role in our healthcare safety net in san francisco . laguna honda has a long histor serving our city's most in need

patience and it is our intention to make sure that it continues . we appreciate the leadership and support of mayor breed, her office, board of supervisors and our union partners for this effort. ithink our staff for their work during this time and thank our patients and their families for their understanding and patience . i would like to introduce mister roland pickens who will brief you onour certification initiative as well as the details of the required proposal and patient transfer and relocation . as you know mister pickens is currently serving as interim chief executive officer of laguna honda in addition to his role as chief executive officer .with the hospitalseeking recertificationthere has never been a more important time to continue to have experience , just past leadership at the

helm of laguna honda . mister pickens will leave the hospital through its current challenge and see the necessary reforms are made toensure the hospital continues to serve san francisco's most vulnerable patients now and for future generations . we are all committed to seeing this effort succeed . we are in a challenging situation now and laguna honda remains open andcontinues to be an excellent place to receive care . mister pickens, will you pleas join me at the podium to take over and leave thepresentation withthe board ? >> thank you . >> thank you mister pickens . >> tank you supervisor melgar's good evening supervisors. as doctor colfax said i am roland pickens and and the interim ceo at laguna honda hospital, a position i've held for the last 12 days but prior to that and continuing my

regular job is that of director of the sanfrancisco health network which is the integrated delivery system for the department . that's any part of dph that provides direct patient care services including san francisco general, laguna honda, our various primary care clinics, childadolescent health and jail health . we have a very large organization.i often tell people we are like integrated one-stop shop for health care for san francisco's most vulnerable. i'd like to introduce two of my team members who are here to support me. they are mister troy williams who in his regular job is my director of quality in san francisco health network. he alone with me was deployed to laguna honda a few weeks ago to stand up and incident command system very similar to what the city set up during

covid. troy serves as co-incident commander in this process. he's joined also by mister tsonga, he in his regular job is mike the operating officer he also has been redeployed to laguna and it serves as coincidentcommander . i think it's important to a knowledge dph took the decertification of laguna as a serious matter and thus established the incident command system to make sure we're harnessing all the resources available not only from dph but fromour sister city departments and agencies . again thank you for this opportunity to provide you with an update on the laguna honda

recertificationprocess and also an update on the cns required closure transfer and relocation . next slide. so briefly, in today's presentation we will talk a little bit about laguna honda. you've heard from supervisor melgar much of the risk rich history of the organization and we will go over the timeline for the recertificationprocess sharing with you some of those critical milestones . then we will talk about cns required closure, patient transfer and relocation plans. then finally we will share with you some of the most recent data in terms of where we are in complying with that cms patient closure plan. next slide. so the supervisor mentioned laguna honda has a rich history. we provide care to some of the most vulnerable citizens in san

francisco. many of whom were not able to be placed at otherskilled nursing facilities . laguna has award-winning programs like one of the few hiv aids units in the bay area. we also provide units for patients who are monolingual, spanish and cantonese. we also have the distinction of having one of the most robust health services in a skilled nursing facility in the country so there's much to be proud about in the history of laguna honda. next slide. here we are sharing with you some of the demographics of the patients that we take care of at laguna and as you can see it mirrors the citizen population

of san francisco. with approximately 26 percent of the patients identifying as african-american and 18 percent as latino and 20 percent as asian. next slide. so in this slide it provides a visual of how did we get to where we are today? if you start at the bottom of the stairwell itinvolves , it begins in july 2021. when there were two patients at laguna honda hospital who by right of being in a skilled nursing facility have the right of autonomy to come and go because the skilled nursing facility essentially serves as their home they gone out on day pass which our patients often do many times with family

members or sometimes with daycare. both patients then came back and upon being back suffered a nonfatal drug overdose . luckily staff has been trained and had narcan availableand were able to reduce those drug overdoses . then as a licensed hospital laguna honda is obligated to report any unusual occurrences or what's known as facility related incidents. these are things that anything that's unusual that happens in an institution we are obligated to notify the california department of public health which is the regulatory agency thatmonitors care at skilled nursing facilities . that notification was made to city ph. they in turn came out to laguna a few weekslater. did their investigation . made findings that these

patients did indeed have those drug overdoses but were appropriately treated. laguna honda developed a correction action plan which is a normal process whenever the state makes a finding. seeing that this and accepting that action plan, that corrective action plan involve taking additional steps for example to do clinical safety searches of patients when they go out and come back in then the staff will actually do a safety search to make sure they don't have anything inappropriate with them. part of that corrective action plan involves the state coming back to make sure you're following that plan. when the state came back anddid

his investigation to see if laguna was following its approved plan they interviewed many different staff . in the case of one particular staff member the state interview that person and they found that person didn't really follow the procedure and it comes to notifying , particularly if an item like a contraband was found. so from the states perspective laguna did not follow the recommended action plan so thus they said laguna was out of compliance and that's important because that then started the clockticking . the clock really beganin october of last year . at thatpoint , the state came out and said laguna is still not back into full compliance with all regulations and they

have this period of sixmonths where once an institution has been found to be out of what they call substantial compliance , the institution must make all the changes needed to come back to the compliance with all the regulations. thus the clock started in october and in november december there were follow-up visits by california department of public health. laguna was able to correct many of those issuesrelated to illicit substances . they put in new security procedures. new searches bythe sheriff's department of people coming in and out . and then the cd ph came back for one final review to hopefully clear up all those issues. when they came back, they did not find any deficits related to illicit substances or contraband or cigarette lighters but they actually found new findings related to hand hygiene. they observed staff were not

appropriately washing their hands. they sought nursing units were parked in the hallway where they should not have been clutter amongthe units . these are things that normally in normal circumstances would not result in an institution becoming decertified but the clock had started so the clock ran out on laguna. normally they would havebeen able to submit a corrective action plan . move those parts to an appropriate place. we will reorient staff on hand washing. that's the kind of thing that goes into a corrective action plan but the clock had stopped and there was no time for laguna to correct those things before that six-month ended on april 14 2022. i hope that provides just an overview of how we got to where

we are now. but we're here now and we're going to meet these challenges and get back into cms regulations. next slide. so our highest priority is making sure laguna honda stays open both for our patients, their families and our staff. anyone who comes including surveyors, they often comment you have some of the most dedicated staff to perceive and i think it's because the tenure at laguna honda is long. staffers have worked at least 11 years so it's a pretty long tenure so they develop relationships withpatients and their families . but again in order to make sure thatwe're able to get recertified back into the program , we brought on to expert consultantfirms . the first firm is called health services advisory. hs ag. this particular consulting firm is the premier consulting firm

in the country who focuses solely on pms skilled nursing facility relations.they go around the country advising nursing facilities on how they can optimally comply with cms regulations. the second consultant group is hm a health management associates. hna has worked for the city on various projects over the last 20 years including advising the city on how it needs to prepare for the affordable care act which actually created in san francisco health networks which i lead today hna specializes in publicly funded healthcare institutions. many of their principals and staff came out of the cook county system in chicago 20 years ago so they are rooted in

public self sector healthcare in civil service and a highly unionized environment so they bring that expertise with them. i want to assure you when it comes to the expert consultant expertise that we've got the best of the best working with us and advising on this process. next slide. so this slide shows of visual of the timeline that we're on right now. and it started in step one on april 14 when that last cms survey occurred and those findings in terms of hygiene and control were found and laguna was deemed to be decertified in cns programs. almost immediately we began to do our usual. whenever there are findings of

lapses in compliance we develop a corrective actionplan. we did that.at the same time we realized this is highly unusual situation . it's very rare for an organization to lose its cms certification so we knew we needed help. we worked through the city process, did an emergency contracting process and were able tobring on both consultants within three weeks . both consultants groups have been on the ground at laguna since early may . they've been there a little over a month. and they have actively gone over every inch of laguna. met with staff on every shift, dayshift, eveningshifts, makeshift, weekends . if on through laguna with a fine tooth comb and issued theirassessment of the current state in terms of what they observed . that information has been shared with you and your staff

and also with our union partners who i want to thank because they have been right with us side-by-side as we're tackling this and have been true partners in this monumental effort to make sure we give get laguna recertified. both findings that and an assessment that was shared yesterday, we now have we will be working with the consultants to actually develop some action steps to begin to close some of the gaps that they found in that assessment.we will then have the consultants do what's called a mock survey and this is common within the hospital industry. basically the consultants will

emulate the process that cms will use when they come out to recertify laguna honda. no go through all the regulations and assess whether or not laguna when they do the mock survey does laguna meet the requirements? we expect there to be findings. in fact we want there to be findings because we want to make sure that with the consultants help we've identified any and all ongoing gaps in cms regulations and compliance. just to make sure that we've notmissed anything we will do a second mark survey . that will happen at the end of august. between the mock surveys it will betime to implement additional corrective actions . we the retraining staff, doing some reconfiguration of responsibilities and duties among staff. all the things the consultants are telling us that our high functioning, highly reliable

skilled nursing facility does in order to meet cms regulations. that second mock survey will occur in august. we at that point expect to have identified all areas of noncompliance and have corrected them. part of our engagement with the consultants is that we have put the requirements in their contract that they actually certified that at the end of the consulting negotiations that they believe laguna is in the best position to successfully pass the cms recertification survey. based upon this plan we expect to submit the applications to get resurveyed at the end of august. that's step number five. when you look at the chart,

step number six is september. that's when we submit the form to cms to apply for accreditation and survey and at that point the timeline is on our end and it's solely in the hands of cns. cms will determine when they come to conduct the actual first part of a two-part surve process . there's an initial cms survey where we expect they will be on the ground in 7 to 10 days probably with 10 to 20 or so surveys again going over laguna with a fine tooth comb. we expect to successfully pass step one of the survey and then begin what cms calls a period of reasonable assurance. it's a 90 to 120 day timeframe that cms requires. many institutions when becoming

certified they must be able to prove that they are able to maintain compliance over 90 to 120 day period. at that point cms will come back for the second and final survey which we anticipate with our september application at the second survey would probably happen in the december time frame. so again i wanted to share with you the timeline that we're on and to show thatwe've got a lot of work to do butwe've got great consultants on board . working with our staff , our union partners and working together to make sure we can set laguna up for success for the survey. next slide. so at this point in the presentation i'm going to move into the cns required closure

transfer and relocation plan. next slide. and as i mentioned, earlier we've got two separate but related processes. we got all the work we're doing to get laguna honda recertified, making sure we need all the regulations but then we have this closure plan . cms requires that when any skilled nursing facility becomes decertified the facility must develop a patient closure transfer and relocation plan which essentially says the facility must begin to transfer patients to other facilities that are cms certified. this is a process that is not voluntary. it's a mandatory process. in fact, in the case of a

typical skilled nursing facility cms usually provides funding for an additional 30 days to allowthat skilled nursing facility to transfer patients to other licensed and accredited facilities . obviously cms knows laguna is not the average skilled nursing facility. it's the largest in the country. so cms extended payments to laguna beyond thatadditional 30 days.cms has extended payments for an additional four months . initially with the option of an additional two months so up to six months of additional funding recognizing the challenge laguna would have trying to discharge and relocate 600, almost 700 patients. it's also important to note cms has made it very clear that our ability to continue to get that

forward and two months of additional fundingis contingent upon our ability to fulfill the obligations of that closure plan and actually refer and transfer patients to other facilities or to community places . next slide. this slide shows the six central parts of the closure plan and just briefly it started with notification to our patients and their families and to our staff thatlaguna had becomedecertified but then the second step , assess patients safe transfer and discharge . that may sound like an easy process but it's not. as you know healthcare is a team sport. for each of the six, almost 700 patients we have at laguna each of those patientshas to undergo a very thorough

multidisciplinaryassessment . so the nurses , thesocial workers, the dietitians , the activity therapists , the physicians, everyone who's involved in each ofthose patients care have to come together , meet collectively and assess what is the current level of functioning ofeach of those residents , do they have any particularcare needs ? do they have problems with swallowing or do they have an hiv diagnosis and need essential care in that regard? what they do is then they compiled this assessment each of those 600 patients and then those assessments are used to refer patients to other facilities. next slide. so with this slide beginning to show you some of the data in terms of implementing this cms

required closure plan. i start off this chart at the bottom with a daily census. this chart shows a 4 week period in may going through till june 6 last friday. and you see what the patient census was during each of those weeks. the roughly last week we had675 patients . the way to read this chart is you goback up to the top row community , you'll see in the total column number two. that means that of the675 , 670-ish patients in laguna to have been discharged. be that home or some other non-skilled nursing facility location. then you see on the road for facility the number four. that means last week there were

four laguna patientsthat were discharged to other skilled nursing facilities . so in some we had six discharges over the last 4 weeks that we are beginning to implement this closure plan. as you can imagine six out of 670 is not a big number. and thus the challenge that we have i had of us. next slide.here's some additional information in terms of where we are with the closure plan. ifyou look at the far right column , the blue line represents the number of those patient assessments. those multidisciplinary assessments i mentioned that have to be done for each patient . we've done a little over 300 of those meaning that already half of the patients at laguna have had a completed assessment done.

we've had meetings with about 180 individual patients and their families. and we've also referred to other facilities and destinations three, almost 400 laguna honda patients. just because we refer doesn't mean someone moves because it's a match game. not every skilled nursing facility has a comprehensive probe that laguna does so while those three people have been referred we have, we don't have any matches on the books right now. there are about 20 in process that look preliminarily like they will make the match. but again this is an interim process were often times they will ask laguna for more information and then the patient has a voice in this. the patients can say i don't like that referral or i'm not

going to take it. and that's their right.the medical and cms programs have a patient appealright and they canappeal that discharge and go before a hearing officer who will adjudicate that process and make a final determination . next slide . so again, just sharing with you some of the data regarding our progress with implementing the closure plan. the top row references skilled nursing facilitiesin san francisco county so there are15 facilities in san francisco . we call each of them multiple times a week . the middle rows represent skilled nursingfacilities throughout the state of california. there are approximately 2000 skilled nursing facilities

throughout the state . and we make about 13 to 1500 calls per week to all of these facilities. you might askwhy are we callin facilities throughout the state of california? because we only have 15 in san francisco and they have very few beds available . what you'll see in thenext slide . next slide. so in this slide , this is what i described as the rubber hits the road. this shows the number of skilled nursing facility beds that are available. again, if you look at the top three rows that represent skilled nursingfacilities in san francisco . laguna honda must contact each facility to ascertain whether

or not they have to empty beds that might be available for laguna patients . if you look at this information when calling the facilities in san francisco we're finding that they have an average of 3 to 5 open beds at any one time and in one week they had no open beds and then when you look at the rest of the state of california, the bottom rows you'll see that throughout those 2000 skilled nursing facilities you'll see about 14 to 1500 beds available on any, during any given week. however, it's important to note the vast majority of the patients have medical, the medi-cal as patients coverage. when you look above the roads that say how many of those beds available or are medicare or medical it's zero in service of the beds in san francisco then

you'll see angle to low double digits across the state. that's because for many skilled nursing facility suppliers, they limit the number of beds that they have by financial class.so there are few beds available for patients with medical, medicareand thus our dilemma . we have a responsibility by virtue of the closure plan that cms approved that we must make every effort and we must begin to transfer and refer patients to other facilities. cns has made it very clear that our funding is contingent upon our ability to make this. they are also and they should be very clear about the beds that are available because we provide the same data to cms every week so they cansee what we're finding as we tried to find available beds . so that concludes my

presentation . but myself and my team, we are happy to try and addressany questions you have for us . thank you so much, supervisor mandelman. >> this is some kafkaesque nonsense. the state and federal government arecoming after san francisco providing beds that the state and federal government have abandoned . this is mind-boggling to me. can you talk about the structure of cms? how they get todo this nonsense ? >> the centers for medicaid and medicare services are part of thedepartment of health and human services . the secretary of the air

becerra. she receives the program for the entire period. >> i think everybody has lots of questions and wedo have another presenter . and i'm wondering if it's okay is that okay, interim presiden . >> ic supervisor mar was on the wrong line so perhaps we can waiton the presentation . >> we do have teresarutherford here . sci u 2201 who represents the vast majority of essential workers at laguna honda andshe will make a presentation about

their efforts as well . >>. >> first of all good afternoon everyone . i want to acknowledge board of supervisors, president walton and i want to also appreciate you, supervisor melgar for holding this hearing. i think everyone hasalready heard the history . and the fact that it has been aroundfor more than a century . and has played major and consequential rules in a lot of our healthcare history and just to also give a quick highlight on that, they were first ofall let me state this . in looking at thehistory ,

laguna honda was built around let's see. 1866. so you know, early 19th century. and the purpose, the fundamental purpose was it was known as an almost house. other word for that, poor house. place where disenfranchised people warehouse . desperate. vulnerable. it was there to take care of the poor in our community. persons who had worked hard but didn't have the resources to take care of themselves.

when they became elderly. and that's where weare in the united states right now . we're stillstruggling to have universal healthcare . to make sure ordinary persons work when they getold, when they're sick , when theyneed rehab . they will be ableto access healthcare . so we're not just talking about abuilding. we're not talking about laguna honda as this nice to have place . becausehealth is part of our healthcare process . but it's a necessary part of our community and it's a necessary part to create access to ordinary people in this community right now as we know it played a major part in the

eighth crisis and it has also played a vital part in addressing this pandemic. it had been seen as the flagship in terms of the deliberative service. how it has cared for people during this pandemic with some of the most vulnerable patients six or sevenpatients during this pandemic, outstanding . it's fundamental,it cannot be closed . it must be here to do the purpose that it was built to serve the community and to give access to every member ofthis

public . it is also a very unique institution.it is not just support and care. it is not just some small, smelly, all of that. it is a very outstanding institution also serves people some from san francisco general go to laguna honda. laguna honda is also outstanding in the way it has treated patients over the years. groundbreaking inthe way it cares . i worked at laguna honda as a cna is when you're able to take

care of patients and you see if they can't do anything and get the healthcare advocate for social care that's what we're talking about. that's what laguna honda represents. i want to move forward to say we can find ways to provide affordable access to care. we cannot afford to be removing access to the matching segments of our population particularly the vulnerable patientsat laguna honda so i am asking as part of labor, as ahealthcare

worker, as part of the community , as a woman of color , assomeone who understands that the importance of healthcare . being in to rule our community and create a successful next-generation. i'm asking that the board of supervisors, youinsist that laguna honda remain open .you insist that healthcare is accessible to everyone of us when you get old, when i get old orchildren or grandchildren , the homeless person on the street . no matter the color of your skin you must haveaccess to healthcare. it is not special, it's not for the rich. it's not for the zuckerberg's. it is for all of us . so laguna honda is not a building,it's part of our healthcare process and we must make sure it continues .we cannot allow this hospital to close because what we're doing is closing access to health

care and going backwards and creating a system that says that only certain people have access. patients at laguna honda are individuals. there are individuals whoserved this country, serve this community and deserve to be treated with respect . i agree that we must have oversight . it is necessary but oversight must andhas, oversight must improve quality . oversight must improve access. so as we this, let's not just think of laguna honda as a building. let's remember it's part of what we tried to achieve in this country. universal healthcare. healthcare for all.those patients are part of that healthcare system and must be protected. must be treated with respect.

laguna honda must remain open for the future of california and for the future of healthcare. it is the future as like any institution, like any healthcare facility it will have challenges. it will have to grow and improve. that's what this is about. so i engage you and ask you to commit to making sure laguna honda remains open. to making sure, to hold dph accountable. tohold ourselves accountable . to make this institution continue to be the best it has been and can be. where there are things to be improved let's improve it. cms is there as anoversight by let's work with them . identify what needs to be fixed and let's fix it. bottom line is it's not optional. it'snot an option whether it

stays open . it is onthe mental . it is a must. and so i reach out and ask you board of supervisors to commit to that. i asked our mayor to commit to that. whatever we need to do and that couldinclude funding . let's make sure that we keep that healthcare facility accessible to the citizens of this community. and to california. and let's enhance the health care and progress and ideals that we all in closing i want to also ask you to just remember this. laguna honda is a multidisciplinary institution that provides a 360 degree care process. and so in speaking to that let's remember that it serves

our trauma one hospitals but it's vital and i'm repeating myself here. it's a vital part of our healthcare institution and let's forget institution becausethat could be a bad word for some people . it's a vital part of our healthcare process . let's remember that there may be naysayers who will say you know, it's an institution. we need to get more people in the community. that might be true for a small segment of our population at laguna honda but let's remember not everyone has the ability, the family support or economic means to take care of your family at home . there are cases where it's important to have your family in city like laguna honda where there is the equipment and people who are dedicated to carry caring for those

individuals. ideally when that is said and done hopefully we can bring you to the point where you can go home but we need to remember that not everyone has the resources to have people at home or the resources to be able to take care of your elderly someone who isreally sick . at home. that could become an economic presser for an ordinary mother was a single parent who has to take care of a grandma, take care of thebaby . and take care of work . while we speak about this let's remember let's think broadly and be respectful of the various facets and various situations in our community. it's not a one-size-fits-all but an institution like laguna honda provides a 360 degree

approach. it has the facility to take care of a long-term care person and has the facility to take care of the rehab and the fundamental ability to provide basic fundamental healthcare that we need in this country. let's make it better. handed over to my partner kathleen who will give you more specifics when we fight as we say in our union we win and that istrue let's do it . >> thank you miss rutherford and our last speaker is kathleen masso. welcome. >> thank you very much supervisors for the opportunity to present today and that you to the leadership. thank you teresa for such an inspirational story. of what wedo every day. for our patients . it may be teary-eyed. my role is a registered nurse and geriatric specialist.

andwhat a political nurse specialist isis it's an advancedpractice nurse. i'm in the care of a specialized appellation of older adults . i'm assigned to three particular units . the spanish-language unit , the palliative care end-of-life unit. every day when i go into work i see familiar faces and those are faces of the residents that i help care for. with my care partners on the resident care team. i usually get a smile from the residents because it helps them to see familiar faces. many of our residents have come from underserved areas within san francisco. sometimes outside of san francisco. many of them come after experiencing a trauma or some significant events in their life that has changed their functioning such asa stroke .

we are the healing are in the departmentof public health . this focuses on the continuum of care for san francisco general particularly with trauma, stroke care and other rehabilitation needs. a significant number of our population has behavioral health diagnosis and that's a special population because we can provide them with the care forbehavioral health and their medical needs . we are the mostspecialized long-term care facility across the united states . it's been very difficult and why i start to get emotional when teresa was talking in that we have had patients here for 20 years or longer at laguna honda and this is a huge stressor to them to be faced with a potential transfer to another skillednursing facility .

you know, possibly in san francisco,possibly outside of san francisco . so we're trying to import them through that process but i will say it has been emotional and has been difficult.laguna honda is special for many reasons that teresa talked about and then also the that roland spoke to during his presentation. but i really want to focus on how we're different than other nursing homes . in our community. particularly with our patients that have dementia and other behavioral health diagnosis our rehabilitation is exceptional . we have our hearts with elders program where you can walk down the halls of laguna honda and see residents that may not be able to speak. they may not even be able to use their hands well or move

their arms but our therapists work with them to find adaptable ways for them to participate in these activities that maybe they didn't even know they have skills inand we see those people bloom being beautiful artists .and the most important thing is that it brings them joy and brings them quality of life. we have our patients that like to stroll out to the farm or spend time just out there. visiting with animals. and having companionship with them with the resident cats that we have on the facility, with our resident pigs that we have out in the back and with goats and all the different beautiful animals that we have two provide again quality of care for our residents. our residents can also spend time planting and enjoying the greenery, visiting with their community which is really like a city in itself withpotential for 780 beds . it is againa huge facility .

i really want to see the community come together to support laguna honda through this and to work through the recertification process alongside of this support. i do believe we can get there but we all must work and the city and county of san francisco to save laguna honda. as i sat through free discharge assessments care competency with nine of our residents on the one unit, many who have been there for over 10 years and to have to talk about the very difficult possibility again of discharge to another skilled nursing facility is not only heartbreaking but it's concerning. i really hope that we can get there. i have complete faith in our leadership and in our

consultant groups to get us there andmostly to and the support of our residents and their families . and again i want to say to the board of supervisors for allowing me to provide my story and ask for the support from you and thank you for all your dedication also through the years to the various programs and department of public health, one being laguna honda so thank you thank you, that's it for our speaker.i guess we can go back to questions. >> type you so much supervisor melgar. supervisor mandelman. >> thank you presidentwalton . i still think this is outrageous and infuriating and i am wondering. you've described in your slides your efforts to comply with this mandate to clear up the hospital but how much of the

hospital you feel like you have to clear out or the facility to you feel like you're going to have to clear out or really clear out before november assuming things go well. >> that's a great question and one we have opposed also to cms. we've notgotten a clear answer . from the cms perspective plus the closure plan they approved this september 15 as the date bywhich they would expect a transfer of patients . allpatients . >> 700 patients out of laguna honda by september is what the federal government thinks is a good idea. >> that is correct. >> that's outrageous. the nurse whose name i've forgottenand i apologize . >> kathleen.

>> mentioned the number of folks with behavioral health needs are in laguna honda. can you describe the facility for people with behavioral health needs and whatpercent of the population may have behavioral health needs ? >> 20 percent of the roughly 675 patients havebehavioral health needs . again laguna has probably the most robust behavioral health offering of any skilled nursing facility so we have in-house teams of psychiatrists, psychologists. social workers. that's that provide care on-site and the average skilled nursing facility patient needs behavioral healthcare they have to be transported off-site to therapist or a psychiatry office .what's happening is in-house it's part of the staf

. so we have both mental health component and also the substance abuse disorder treatment also for ourpatients . >> and you have some acute flexibility that needs to be there. >> so you have it sounds like 100 2240 people with pretty significant behavioral health issues right now. >> that's correct. >> and you happen to know how many of the them ? [inaudible] >> i don't have thatnumber here but we can get it for you. it's quite a few .>> i'm going to guess major in san francisco place for people who areunderserved by the county. >> it is .the department of aged services and hsa are both very active at laguna. we are a major site for their conservators. >> so the federal government which maybe has some interest

in san franciscoaddressing health crisis on the streets. are they allowing us to admit new peoplewho need to come in ? >> we have not been any new admissions sincegetting decertified . >> as i said , it's outrageous. i'm in tooinfuriated to go on. i have may have more questions . >> supervisor mark. >> i want to thank supervisor melgar for calling for this hearing. and of course the unions and the workers at laguna honda. we absolutely cannot allow this incredibly important facility for our most vulnerable residents to close and it seems like you with the consultants

have a solid plan towards recertification. later this year. but i didn't really want to express even more concerned about the patient relocation and transfer of plan and that aspect of it caused this requirement by cms that we somehow transfer all the patients out within, by mid-september just seems incredibly punitive and unreasonable and cruel. given the literally zero available medical beds in san francisco and evenstatewide . and cms is aware of so few as well. so i just want to ask what the plan is in dealing with this it looks like i just was looking at what you submitted to cms,

the patient transfer relocation transfer plan where you said we should have to make a good-faith effort to transfer patients and then there's some opportunity fornegotiations . >> negotiations have not been prevented to us. our director is to implement the plan which is to have all the patience moved by septembernow , today is june 14 and we've only discharged six so that gives you a sense of just how successful we might be in meeting that target. the pace is picking up a little bit because the firstcouple of weeksthere only one discharge. there were four discharges . but still , we are way behind in meeting that goal and having

all the patience in place. so thus our dilemma. all we can do is our absolute best to search for the beds. make sure cms is aware of the availability and our efforts. i must also say california department of public health or california department of public health services have partnered with us. they are usingtheir resources to help us identify open beds through the state of california . sometimes we will call skilled nursing facility and they say wedon't have any beds . we ask the state to get involved and use their clock, their authority to try and park the waters to make room for the patience that must move through the cms plan. it's all hands on deck and we are doing everything we can to comply with the plan.

and with the charge that we have while at the same time we are doing all the things we needto do to recertify, make sure we're in regulatory compliance . we are separate but related processes going on and from ou perspective we have to be successful. as teresa and kathleen said , laguna cannot fail.it must succeedand that's the approach we're taking . we've got the right experts involved and they have told us while there's a lot of work to do a feel confident that we can be successful so that's where we're focusing our efforts . >> there is these two sort of separate interrelatedprocesses going on.the recertification and patient transfer . but it seems likethe timeline

don't really align . from what you described we're supposed to transfer everyone out by mid-september and of the recertification will happen in mid-september. >> at the earliest that's the target. i think it's important that you're correct, those are two incongruent ideas. but yet that's where we find ourselves. all we can do is control what we can control so we're making our best effort. we're being very transparent. we're sharing all the data with the state, with cms and we would hope that they will see that we are putting every effort in to meet the requirements and perhaps offer us some accommodation butthat accommodation has not been extended at this point . >> thank you president walton. >> thank you supervisor, supervisor melgar .>> in the entire universe of patients

that are different categories of patients with different needs as supervisor mandelman talkedabout . there are folks under service receivership who had need extensive care and miss rutherford talk about a patient who could be served because of economic reasons. this was brought upby some advocates before. if we had in-home supportive services , what total percentage of the population could be in that category? so with some support and if their families were able to take careof them . >> thank you for that question. in the most recent data we identified approximately 80

patients who fall into that category who no longer have skilled nursing needs and could potentially go to with supportive wraparound services. most wharton care you have to be pretty independent.someone who wouldhave high needs . we are working closely with do , hsa and now hsa to for their assistance to try and identify appropriate discharge locations that are within the control of the city and county of the san francisco agency and cms has told us they expect san francisco agencies to assist with laguna honda in its effort to discharge patients who are appropriate to thecommunity location . >> but the reality is 80, almost 700patients .

so back to where we are, looking back to where we've been you have a very illustrious resume . you know how to do a lot of things at a high level your employees sitting behind you due to but you're all on loan to laguna honda. there's been a leadership change which was necessary but i wonder what'sthe plan ? we are able to keep working with consultants, with our union partners through the recertification process. how do we then, what's the plan? >> thank you for that question. wethought about that at the beginning . first thing i can say is i'm invested. i'm in this for the long also i will be at laguna as long as the need is there so i was more than happy to come over to

update when doctor koufax asked me to do that. it's my responsibility and i think i take it seriously. one of the things that's in the consultants work is to assess the organizations structure with laguna, its operations and itsleadership . those consultants will be making recommendations on what is the best long-term structure for laguna in terms of being successful? that includes does the current organizational structure benefit lend itself for ongoing regulatory compliance? they've already told us there are parts of the structure that need to change and in fact the included some of those in the assessment that they shared with us yesterday that we

shared with staff .one way to think of it is laguna honda has 2 licenses. the license of an acute care hospital just like san franciscogeneral , st. mary's but then there also licensed as the nursing facility and the consultants have said and cms has also said through the years that most of your patients are skilled nursing you have very few acute care patients. so the consultants have made the case that we need to change the mindset and structure of laguna to be more of that of a skilled nursing facility as opposed to an acute care hospital so we're actually going to be letting some of that change of structure over the next few weeks but again consultants have said this will get the best scenario for recertification and more importantly it will send a message to cms that you get it and you're changing the structure to meet what they say

are skilled nursing facility should look like. a higher functioningregulatory skilled nursing facility . >> great, thank you. my last question is about the recertification process and how you are involving the employees in it. you've stated in your presentation the average of an employee is 10 years. and for get used to doing things a certain way and also i think some of these are the most dedicatedfolks that we have employed in the city . so i'm thinking that making sure that everybody understands that compliance issue is valuable to get that feedback as to what they know so what is that process. >> happy to share that with you and our union partners also share because doing a lot of it together in fact if we have a

weekly meeting with our union leadership in addition to their daily meetings of local union leaders at laguna honda and its opportunity to share with them what's going on with the plan also get their feedback in terms of what are they hearing from their members and their concerns.i will tell you consultants havetold us that they find that the staff is very hungry . he said you have some of the most dedicated staff and when we are interacting they want to know tell me what weneed to do to make sure we are in compliance because the message is clear to all the staff. they know what's on the line . most consultants, the leadership and even the union leadership are all given the same message that you may have been doing something a certain way for all these years. rules change.

regulations change.so we need for you to be open-minded to new ways of doing things. andso far the staff has risen to the occasion . and i think everyone is working together just saying we're only going to get through this together and if any change is going to get me going to make it because it's the future of laguna is at stake . >> it is my lastquestion about the data that you're keeping. thank you for providing that update to us . iknow that i've gotten discussions from a lot of my constituents . and that is what, howare you keeping track of all this ? the amount of calls that you're making to other facilities, the number of assessments, the transfers and then what are you able to provide or for the public on a regular basis. >> so much of the information that is provided yesterdaywill now become a standard . it willbe updated every monday

. it will be available on the website and so will be available for folks to track our progress. howmany calls have we made, how many beds are available . how many dischargesand how many patients have been referred . so again, our goal is to be transparent. wehave nothing to hide . we want everybody to know where we are and we need everybody's help and we're sharing that information with our staff as well and also with the sister city agencies who arehelping us with some of thosecommunity discharges . >> thank you mister president . >> supervisor safai. >> listening to the presentation one of the things i want to get some clarity on his you have csm has given you an extension of 2 to 4 months.

to continue to bereimbursed . with the potential of an additionaltwo months . >> correct. >> that would take you until whatmonth ? >> november. >> after that time if they were not to give you an additional extension to work on recertification how much funding would you lose from the federal government in terms of reimbursement ? >> the cost to operate laguna based on the current population is half $1 million a day and much of it is for reimbursemen . >> how much would city and county be looking at . at least half $1 million. >> that comes out howmuch a month .

>> i was hoping they would answerthat on the record . >> so 15 million and has the department identified a source of funding to be able to pay for that in case the funding may no longer bereimbursed ? >> the department through our finance team are in active discussions with the controller's office to identify any available sources of revenue that might be used in the event of the scenario you justsaid , that there would be a cessation of cms continued patience.where we need to have at least some form of funding until we arerecertified . >> so $15 million a month even if we did identify and we had this conversation at the budget

committee. there are certain reserves available but it's certainly not sustainable to believe that $15 million a month spread out over an annual basis that we would have anywhere nearthat type of money . that in and of itself would necessitate winding down of the patients in that facility if we were not able to get reimbursement from the federal government, is that correct? i don't know where that money would come from . >> that is definitely one of the most dire outcomes available to us. which is why we are focusing so much of our efforts on recertification and recertification as soon as possible so that we would avoid any lapse in federal funding. so we wouldn't have to address that but if we do the hard charges will have to be made that we're going to have to make the board and the city leadership we're going to shift

over to the population of residents. can you talk about that with the average age is most of the patients are from40 to 60 . and the patient population this is changed over the last years. i've been in dph about 20 years and i would say about 15 or so years ago we began to see the population of younger patients begin to increase at laguna and

that was a regulation in terms of what we were seeing going on in terms of san francisco . younger folks are susceptible to traumatic particularly injuries . gunshots, car accidents. it's accidents overthe past 15 years or so . there is a younger population and our substanceabuse that we see in the general san francisco community .

>> would you say some have been withthe mixing of different age groups ? >> i would say some of the issues related to illicit substance abuse like the overdoses that occur last summer are related to having that particular population because that's a part of their lifestyle. and one of the things about laguna is historically it's served all of san francisco particularly i think the de-stigmatization of mental health and substance abuse over the last few decades. we've been also seeing that transfer to the patient population that it takes care of so that's the increase in health.

>> is part ofyour recertification or reorganization management of the facility , is there a plan to deal with the difference in age and different needs of the service delivery? have we talked about that western mark i wanted to share that on the record . >> you must have been some of those rooms where we've been consultants because of the fact that part of the feedback that they're giving us is that the comment made about the observations. one of their recommendations that was considered was very common in healthcare which is cohort in patients with similar issues into areas where they can really get the specialized detailed care that they need . so it may very well be that as we emerge from this recertification process will we actually sit for recertification that we establish say a behavioral health unit or a unit that may cohort a particular patient who right now may be first among

the 13 units that may then be recorded into one or two units that are taking care of their needs. >> would you then by the nature of that would then put more senior populations amongst themselves for the younger population? >> that very well could happen. when you visit laguna, we basically have 2 towers in terms of where nursing units are located so it sets itself up for being able to have one set of programming at one tower and another set at another tower so at this point the options are really many for us in terms of how do we best structure the facility going forward . to minimize particularly any regulatory noncompliance as relates to substance use and

behavioral disorders. >> so that is part of the recertification plan that the consultants are advising in terms of reorganizing. would that that happened as part of the recertification? >> it very well could. we're actually going on to piloting a new organizational structure that they recommended so they are still making their recommendations on again what are the areas where we can maybe get back for our buck in terms of ensuring the best chance for recertification hoarding of the patients is one of those things and we will be looking forward to getting a separate recommendationbefore we actually submit the application and the end of august . >> i guess i would say a little bit more forcefully regardless

of what the consultants recommend it seems to me that you look at the data, if you look at the trends historically, if you look at what potentially has gotten us into this situation and this is just being strange and real based on population that you serve. people are bringing in weapons and people are bringingin drugs. people are openly overdosing in that facility and that's what triggered this reality . i think you have to confront this. you can't just wait and hear what the consultants have to say. we have to say this is going to be ouraggressive play going forward. this is a trend that goes over a 15 year trend eight and here we are . i want to hear it more directly that's part of the management plan to move away from this and that you have the ability, to have a different segmentation ofyour facility . that's what i'm looking for. because as many of us have said here today this is a crisis for san francisco as one of the

premier skillednursing facilities . front-line workers have been putting themselves in harm's way for the past 2 years. the management has been doing what it can but i think that there's just been a shift in the direction of this service delivery over the last 15 years that's gotten us to this point where we are today that is has put us in a crisis and this is a significant crisis for the city. and the population that's being served. 800 people having to be relocated is a monumental task in any situation and the beds just do not exist. i want to underscore that point and say i appreciate the thoughtfulness. i appreciate the directness but i would like to see a more aggressive plan to really segment this population not just wait for the consultants

advice.>> i can assure you we're actually not waiting and thank you for prompting my memory of our discussion early. we actually have taken steps already. one is we have installed new state-of-the-art security scanning. that will be able to identify illicit substances including narcotics tracers and weapons. we've also, the medical staff and physicians have reviewed and updated their procedures when it comes to discharge of patients who can follow the rules . who are found to be noncompliant with going out on pass, coming back with appropriate items increase safety searches . and in fact there was an email yesterday of one of those patients who now we may have

found aplace for that patient to go . so we're actively addressing those issues and will make sure we include the appropriate cohorts of behaviorally challenged individuals. >> that is what wespoke about earlier . >> supervisor ronen. >> i wanted to associate mysel with supervisor mandelman comments . it is so cruel and so extraordinary inthe worst of ways .if we are successful which i sort of hope we're not and that's just me speaking in,

does that count against us in terms of the recertification or re-whatever it'scalled ? >> know, cms has made it clear that 2 processes are separate and so that the survey process is separate from the closure plan although they tie. the funding to the closure plan the funding is not, it is tied to the certification in the extent that it's got to be certified in order to receive reimbursement. >> that's good at least. and theni went through this not so long ago with my own dad and it was in los angeles but it was a statewide problem everyone i was talking to . that there's no stasis anywhere. i don'tunderstand how they can

ask you to move people when it is a statewide crisis . that there is no places for medicalrecipients and skilled nursing . >> as that question we posed to the state.and it is, this has been a situation in the making for many years and i've been in the san francisco healthcare delivery arena for almost 30 years and i can tell you when i first came here in the late 80s justabout every hospital in the city had its own skilled nursing facility . well, they're all gone except the one in san francisco and laguna. only the city's hospitals are operating skilled nursing facilities so in a way this will be the making of the industry itself. having said that my understanding is the governor through the secretary mark dally is making efforts to do

something in terms of increasing access for skilled nursing at thestate level . i'm just not aware of the details. my understanding is those specials are happening. >> is there anything else this board, just give me a call or send me a text but i would like to help in any way i possibly can. i know we all feel that way and being creative and in any way shape or form. i know you guys are doing the daily possible work in front of you but is there other ways politically or otherwise that you can just bring to light the insanity literally of this requirement. please let us know. just thank you so much to all of theworkers. your heroes . i saw the way that your counterparts in the new facility that was private the

care i got it was the most extreme everything i've ever seen in my life and it's the hardest work i've ever seen in my entire life so you see we love you, we appreciate you and i'm so sorry this is happening to you and your patience .i just wanted to thank you for the presentation and tell you i'm outraged and mad and i want to help in any way. giveus a text or call if you can think of any way we can help . >> president walton i have one of those numbers earlier. the number of patientsthat have public conservator is 101 . >> supervisor january thank you supervisor ronen. >> i want to confirm, help me understand. in order for us to get reimbursements or allow us to have four months we must commit

to the transfer that shows there's a transfer inrelocation of patients . andwhat is the timeline for that ?>> the timeline in the closure plan is september 15 for all those patients. obviously we've only moved six so the chances we're actually going to move allof them , i think were going to do everything we can. we're going tolook for every bed that we can . the numbers states we're probably not going to meet that goal but we're going to do everything wecan . >> basically it's to say immediately youmust start to transfer the patient's . >> when they accepted that plan on may 13 we immediately started the process of again, doing those assessments on all 600 patients. making those assessments and referring them out to other

facilities so this process has been going for months and through that we've only been able to address six patients so far. >> we have this conversation during our briefing that apparently there's no specific threshold. meaning it's not like we actually do understand. this month if we transfer to san pedro the number of patients and perhaps we can actually ask for the extension or have the extensionapproval , it basically is 700 or nothing. >> that's correct. just directed from cms that we are being held to what's inthat plan and the plan says we must transfer those patients by september 15 . >>are there any actions we are taking ? any conversation ? what other conversations are taking place, can they somehow negotiate some type of threshold with the transfer ?

>> i would say if youknow the right people , we would ask you to make the right phone calls. we are working with the federal cms folks. we're in region nine, san franciscoseattle so those are the folks that we work with . we're also in touch with cms and washington dc. we feel that we are definitely doing everything we can in terms of reaching out, communicating with cms. we're sharing information with them on a weekly basis so they can see. we're not just sitting on our hands. we're making 1500 calls a week trying to find places for these patients . soagain if you have context and influence we ask you to use it . >> i think it's definitely impressive how many calls that you're making. speakers identify facilities

including those out of county but ithink again like we had discussed during our conversation , out of county it could be 30 miles out of county. it couldbe 60 miles, could be 300 miles out of county . that is a significant difference for especially for families wanting to visit their loved ones and definitely for our patients. will there eventually be a breakdown for us to better understand the availability of facilities ? >> we will have that. of those six discharges already those have happened within the top three counties so so far no one has gone outside that radius but that will be the data we will begin to track and make available.the discharge destination . >> would you say that overall it sounds to me if we have that only to six patients and neighboring nine counties would you say at this moment that we could initially limit early

conclude that it's actually very challenging to identify the earliestavailable that meet our patients needs within the nine counties . >> you are correct>> thank you president walton . >> supervisor. >> my apologies, can ido supervisor preston ? >> thank youpresident walton . just had some questions. let me just join in the comments supervisorronen made , supervisor mandelman all of us are expressing the same frustration and outrage and also appreciation of the incredible work of folks who are caring for the most vulnerable in our community so i want to thank everyone and also recognize what an incredibly stressful and

difficult time thisis not just in the employment situation but all the folks people are caring for and working with . it was everything up in the air with potential closure and transfers and this entire situation. i didn't want to find out a little more on like in a normal year thank you foryour work . yourteam , in a normal year how many folks are transferred out back into communities or two other facilities? >> we will get youthe actual numbers.when i look at the reports , usually it depends upon the patients so asyou've heard many of the patients at

laguna come fromsan francisco general though theymay have come with trauma . and they will end up there for rehab . for them they may be going back home . i would venture to say most laguna patients stay there. i think ... the majority are the ones that will not be there for a long amount of time and go back out. there are some cusp again, they are there. they get worked on, they get rehab and they're able to go home but we can get you that number . >> i think we're trying to wrap our brains around what this level of transfer and displacement means and i assume there's some smaller subset of folks who typically here are getting back into community and our facilities and then there are folks that account for the vast majority of whom who are there. and it is hard to think about this without thinking about the

incredible trauma on the long-term folks. like, displacement is displacement . whether it's from some home, apartment or from some nursing facility. it is traumatic even when done in the best way possible. even in finding a place even though we know they like the places for folks to go. i am certainly interested in appreciate a lot of questions. ask around what's the price tag. what happens if we don't meet these goals. obviously there's not linked to this part of funds but there's also the concern held by the board and desire to make sure long-term that it is not" also short-term. shorter-term that we are not pushing folks into a bad

situation and out .i am just curious though and this is more on the politics of all of this. i'm intrigued by your invitation which i don't know if it was more rhetorical if you know somebody important. i'm curious drives. like i'm on speed dial with nancy pelosi and diane feinstein and kamala harris and whoever else hasmade it up the political food chain . but i'm not asking you to name names on that front but i am curious on like, who does have the power. let's start with the extension that you referenced. maybe we get an extension. we saw the extension to december, maybe we would get one till november . so who has the power to grant those extensions.

why are they limited to november and who would have the power potentially to do an extension beyond that. >> thank you for that question. if you look at the code of regulations it says the secretary of health and human services has the discretion to provide extended funding in the event of facilitybeing decertifiedso that in fact is where we are right now . through the cms administrator , the secretary provided this with the possibility of two additional funding. so that is where we are and that's where the authority through federallegislation is . >> what do we have to show for the extension that are legally available? could it bethrough november ? what do we have to show? >> we have to showwe are implementing that closure .

>> and that's not tied to specificnumbers of transfer . it's tied to the efforts that are being undertaken. >> it's tied to the population. that plan says in exchange, the plan says laguna would transfer patients by september 15 and that is the date that cms approved. >> thank you. i will wrap up. i'm just going right back to where supervisor mandelman started. i'm just in disbelief. i understand that sometimes the rules are structured in a certain way and you've got to follow those rules but the idea that the path to continuing to provide these critical services to the most vulnerable people

is to kick them all out so that we can bring them all back is absolutely bonkers and so i will say this. i don't have the speed dial to thesecretary of health and human services but maybe one of them or someone within their orbit is watching this . like, this isabsolutely , it makes absolutely no sense. there is no justifiable reason to kick people out of skilled nursing facilities in order to justify why you can bring them back into a skilled nursing facility. it does not take a genius and you all are a bunch of geniuses trying to work through this. it does not take a genius to figure out that is not a good structure for discussion where people stay in place while the

issues are being worked out is what we need so i'm not saying anything and

who are already on the brink. and i fear that when people get placed in other settings that don't have the 360 degrees support that miss rutherford talked about, that they may be like okay, i need to go the someplace in the central valley or someplace far away from their families and to be like this is terrible, i want to go back home andend up on our streets . and i really am worried about that for their health and also the health of the city so i'm wondering if we can just make sure that we have a system where folks have arecourse . if, you know, i don't know that we will be all that given the realities but for the ones that do choose to take a place and there is a match on the other side and they go and they don't

like it that we have a way to make surethat they have options . >> absolutely and wewill make sure we include that data elements in future reports . >> thank you, supervisor mandelman. >> to amplify the first .50 years ago the state of california was providing mental health care through a network of state institutions that provided mental health care 50 years ago and providers were in the space and 50 years ago other counties were doing more. francisco is in some ways being punished for absorbing i need everybody else is at the end of the field and as everybody's saying it's pretty infuriating. >> i just want to make sure that we're being transparent with workers at the hospital, with the public, with all of my

colleagues here with the city. because i keep hearing about this recertification. that is there a letter or email or document from cms that says that if we do certain things that they will recertify us? if we or is this something that we've been told. >> there is noletter that says if we do certain things we will be recertified . think of it, laguna is being treated as if it were a brand-new skilled nursing facility link for its first ever cms certification which basically means we will get recertified if we pass their survey process. that's the 2 service. the first one at 190, 128 day period and a second survey that the only assurance that we hav . that is the oneand only path to

recertification is through the survey process . >> but we haven't beentold . i want to make sure because it seems to me we were just told to shut down. that's what it seems. it seems like the hospital we've been told the hospital needs to shut down and i know from conversations with you that there's a thought process that if we do certain things we can be recertified so as much as i all my god. we cannot afford for this to shut down and most certainly there's no way by november, by september that we would even be able to relocate 700 patients but what i don't want is to be given a false sense ofwhat we are affecting , what we are able to do in this body for quite frankly we're able to do as the city . i would much rather be told that we've been asked to shut down. this is the price tag and this

is what we need to be looking towards as a body versus saying there's a process. and i'm sorry. i understand how important this facility is. most important for the people and families are affected. but i'm not convinced that we are getting the rightmessage from the department . >> resident walton, i can tell you cms has not told us to shut laguna honda down. what they said is laguna did not meet their requirements and became decertified and if you want to come back into the program go through the process at any ofthe skilled nursing facility would do and that's the certification process . they also then have thisclosure plan that they tied the money to .

>> explained to me there telling youto come up with a closure plan. explain how that's not asking you torelocate to other facilities and shutdown the hospital . that's hard for me to understand unless i'm crazy . i don't get that . >> you're not crazyand as i said it's been congruent it's antithetical but because there are two opposing things . however , that is the dilemma. and that's where we arewith cms . so we're having to do both of those at the same time. >> i want to make sure as we do everything we can to keep the doors open and to make sure that everybody being served all of our employees. that we're getting accurate information so the path forward is achievable and it's something we can all focus on and it's important to me receiving transference accurate information as wehad this conversation . >>i pledge to you and the board

we are being extremely transparent . we will share everything with you just like we're doing with our staff and our union partners.again, the emperor has no clothes. we have nothing tohide. we have to succeed and withholding or hiding information won't get us there. we will share until you tell us to stop sharing . >> thank you supervisor melgar, any other ? madamclerk can we go to public comment ? >> at this time the board of supervisors welcomes your testimony on the laguna honda strategy for recertification and a report on patient transfer. those present in the chamber willaddress the board first and you can line up on your right-hand side near the . the first i want to provide the information about the remote

system. if there are individuals who are not in the chamber who would like to either listen to this public comment or perhaps provide your comments via remote i understand the best practiceis to dial-in . the telephone number is 415-655-0001. when you hear the prompt enter the meeting id. press the pound symbol twice and you'll know you have joined the meeting. you'll be muted but you can hear the discussion. once you are ready to provide your comments presssoftware 3 and the system will indicate you have raised your hand . listen carefully when you have been unmuted. we had interpreters earlier who have signed off since then but if anyone in language does provider comment we will have that public comment translated and provided to the board members placed in the file for this meeting

let's start with those who are physically here in the chamber . i want you to thepodium . pleasecome on forward. i will set the timer for 2 minutes . >> my name is ben she my dell and i'm with closures that were voluntary in the city for quite some time. the last being st. luke's which closed. 2 supervisors weighed in and prevailed and 17 sub acute patients wererelocated to davies campus . two yearslater , hr still living and that is a testimony to unseen forces resulting from a relocation. we worked with mission bay, a small pace place on pennsylvania avenue. cantonese, that was a voluntary closure. the people were moved to east bay and burlingame. other places, families could

not visit every day like they did, that's a cultural issue. i heard from a nurse that only two residents are still alive. that's atestimony to some of the adverse effects of relocation . laguna honda is special. the program is working intimately with some of the management and quality people had laguna honda. i have to say it's the best of the city even though it has 2 and a halfstars all the others run by corporations have five stars . that's an odd kind of enforcement which i cannot figure out and i can't speculate in my three minutes. i just want to say that family members are calling us up. residents are now calling us u . the ombudsman are the avenue for all the emotionality and the anguish families are

experiencing when they are notifiedtheir person is slated for relocation . andwe are working with the administration . laguna honda is special, i agree. it's a publicly run nursing home. it's huge thank you vince and nate l for yourcomments. myapologies for interrupting anyone this evening . we are setting the timer for new 2 minutes . >> speaker: my name is sarah larson andi worked in dph for 20 years now. laguna honda , when they went down from 1200 beds to the 780 beds ... >> can i ask you to speak directly into the mic . >> speaker: they went from 1200 beds to 780 beds. is that a direct effect on the cityitself , all the people, the homeless people.

laguna honda, the old laguna honda and the new laguna honda are two of the most wonderful resources the city owns. i don't know why the old laguna honda is in city because they couldbe hosting a number of programs for individuals especially people with drug use issues . it doesn't take a genius to know you cannot mix youngpeople who are actively usingdrugs and elderly people . you know the presentation is going to happen . i have to say i don't think it's going to happen without the culture of administrative complacency . if you notice the people here that are fixing the problem have been in these positions in the city for along time. but there's no accountability . when things go wrong they just play musical chairs. and to easily add up finding a scapegoat. they fire the new guy, it sounds like he has a good resume but if they listen to the employees, management was

able to interface more with employees, they wouldn't need to spend $6 million on these contractors. there is no accountability for people at the top and that's really got to stop.in the meantime we you need to save laguna honda because it's an amazing place. when i moved to the city i volunteered at a hospice program under doctor kerr who was a whistleblower. >> thank yousarah larson for your comments to the board . we have nine callers who are in the queue. if you'll hang on a moment we want to take this next individual in person . >> speaker: my name is michael connelly, a retired schoolteacher insan francisco . i live in supervisor mandelman's district. my wife and i, our son was shot

at the age of 19. the victim of gun violence and he lived on his own with help from my hss and attendance but as he got older the needs of a quadriplegic intensified and hisbody is deteriorating . he no longer felt safe living on his own in an apartment and luckily we got him into laguna honda which saved his life, actually. and it's been an amazing place for him. the needs of a quadriplegic are quite severe and with bathroom ink and body care and the chores of daily living. he has been lucky to be at this wonderful institution. it's so life-affirming. the workers are incredible and the staff has been great.

we've had quarterly meetings and all the team gets together and shares their views of what was going on and how things can be improved so everything that's been said about laguna honda, i don't need to repeat it but it's been a wonderful life-saving thing the stress that it's moved for mywife and my son , iguess that's it. it's been awful thank you very much . >> thank you for your comments to the board. are there any other members of the public would like to address the board on this matter, please come forward. seeing non-mister atkinsfrom the clerk'soffice can you check to see. can you send our false first caller through. we have nine callers who are in

the queue and there are 15 of our listening . let's welcome our first caller. welcome . >> supervisors, san francisco if it had an incident commander for the incident andmanagement commander we would not have this situation . as long as the facts are paying the bill, but supervisors and the mayor at the director took chances. why would we allow people who use drugs, young adults and those on the under 40 and mixed adults. seniors, many of whom suffer from dementia. if you didn't know it the board of supervisors, it's on you. so now we're seeing being

consulted. and on the mentally we had a incident management commander we would be doing a review. we have asecurity officer . and we cannot deserve, the supervisors cannot deserve so out all our professional person has to do a needs assessment and they can't even do a needs assessment let me tell you. this is the patient that transferred. over 30 percent have died. if the patient that got transferred can be traumatized and over 30 percent will die and it's on all of you. the controller, themayor . the boardof supervisors. the director of health . all of you who are now pretending that we know you are hurt. number i don't want to use the

word. >> thank you for your comments to the board. mister atkins let's hear from our next color. >> hello. my name is alana graham and my mother has resided at laguna honda hospital for eight years now. she is 96. we had her in the community. we had her in not board and care but like assisted living. we moved her to a community carefacility . and now she's at laguna honda and she's a native of san francisco. shewas born here . she was school here. she went to college here. she taught here and she's a lover of art and we can't even