Minutes of the Health Commission Meeting Tuesday, July 15, 2003 at 3:00 p.m. 101 Grove Street, Room #300 San Francisco, CA 94102 1) CALL TO ORDER The Commission was called to order by Commissioner Chow at 3:10 p.m. Present: Commissioner Edward A. Chow, M.D., President Commissioner Roma P. Guy, M.S.W., Vice President Commissioner Harrison Parker, Sr., D.D.S. Commissioner David J. Sánchez, Ph.D. Absent: Commissioner Lee Ann Monfredini Commissioner Michael L. Penn, Jr., M.D., Ph.D. Commissioner John I. Umekubo, M.D. 2) APPROVAL OF THE MINUTES OF THE MEETING OF JULY 1, 2003 Action Taken: The Commission (Chow, Guy, Parker, Sánchez) approved the Minutes of the June 17, 2003 meeting with one change to Commissioners’ Comments pertaining to Item 4, page 6. Commissioner Chow added “Population Health and Prevention” before “Joint Conference Committee” in the following comment: “There has been a request that there be additional presentation to the [Population Health and Prevention] Joint Conference Committee to describe the impact, especially because the identified Rite Aid is not always very close to the patient’s clinic.” 3) APPROVAL OF THE CONSENT CALENDAR OF THE BUDGET COMMITTEE Commissioner Sánchez chaired, and Commissioner Parker attended, the Budget Committee meeting. Commissioners Monfredini, Penn and Umekubo were absent. (3.1) DPH - Laguna Honda Hospital - Request for approval to accept a gift donated by the Laguna Honda Hospital Volunteers, Inc., consisting of a 2002 Dodge Ram 3500 customized passenger van for the use of Laguna Honda Hospital residents. The van is wheelchair accessible and safety equipment has been installed to the specification of hospital staff and City regulations. The total value of the van is $37,857. (3.2) DPH - Laguna Honda Hospital - Request for approval to accept a gift donated by the McKesson Corporation consisting of two electric vehicles for the general benefit of all Laguna Honda Hospital residents. The electric vehicles will be used to provide tours of the Campus to educate current residents, family members, visitors and the general public about the LHH Replacement Project. The total value of the two vehicles $14,310. (3.3) CHN-Nursing Operations - Request for approval of contract modifications with the following firms for a combined total of $2,390,000:HRN Services, Inc., Medical Staffing Network, Inc., Medstaff, Inc., Nurse Providers, Inc. and United Nursing International, to provide supplemental, temporary per diem and traveling nursing personnel services for San Francisco General Hospital, Community Health Network, for the period of September 1, 2002 through August 31, 2003. (3.4) CHN-Revenue Management - Request for approval of a contract renewal with Accordis, Inc., previously known as Health Management Systems, Inc., to provide retroactive electronic claims submissions to Medi-Cal, Medicare and Commercial/Third Party Insurance payers, when recipient eligibility was not previously identified by the Community Health Network, for the contract period of July 1, 2003 through June 30, 2004. [The contractor will only be compensated by a % of recoveries if their efforts result in revenues to CHN]. (3.5) BHS-MIS - Request for approval of a renewal software maintenance agreement with The Echo Group, in the amount of $411,597, to provide ongoing system maintenance and application support services for the INSYST software application in use by Community Mental Health Services, for the period of July 1, 2003 through June 30, 2004. (3.6) BHS-MIS - Request for approval of a renewal software maintenance agreement with InfoMC, in the amount of $254,160, to provide ongoing system maintenance and application support services for the CCURA3 software application for Community Mental Health Services, for the period of July 1, 2003 through June 30, 2004 (3.7) BHS-Substance Abuse - Request for approval of a contract renewal with Potrero Hill Neighborhood House, in the amount of $390,766 per year for a total contract amount of $1,563,063, to provide intensive outpatient substance abuse services targeting youth/young adults and adult parolees/probationers, for the period of July 1, 2003 through June 30, 2007. Commissioners’ Comment Commissioner Parker recommended that this item be held out individually for approval of the full Health Commission, enabling the Commission to publicly honor Enola Maxwell, the former Director of the Potrero Hill Neighborhood House. (3.8) BHS-Substance Abuse - Request for approval of a contract renewal contract with Horizons Unlimited of San Francisco, Inc., in the amount of $1,229,156 per year for a total contract value of $5,506,619, to provide day treatment, outpatient and prevention services targeting Latino youth, for the period of July 1, 2003 through June 30, 2007. Commissioners’ Comment Commissioner Sánchez requested a follow-up report to the Population Health and Prevention Joint Conference Committee, specifically regarding units of service, demographics and how data are tracked and quantified among different types of contracts. (3.9) BHS-Substance Abuse - Request for approval of a contract renewal with Episcopal Community Services, in the amount of $886,645 per year for a total contract amount of $3,546,578, to provide mental health and substance abuse services targeting homeless individuals, for the period of July 1, 2003 through June 30, 2007. (3.10) PHP-STD Prevention and Control - Request for approval of a contract modification with Internet Sexuality Information Services, Inc., in the amount of $110,000 for a total contract amount of $203,900, to provide syphilis elimination services targeting men who have sex with men, for the period of January 1, 2003 through December 31, 2003. Public Comment Patrick Monette-Shaw submitted hand-written testimony regarding item 3.10. Instructions submitted by Mr. Monette-Shaw with the comments read: “Do not type, will e-mail to you.” E-mailed comments were never received but original written comments can be found in the Department’s Health Commission meeting files. (3.11) PHP-Community Health Services - Request for approval of a retroactive contract modification with the Regents of the University of California, in the amount of $483,801, for an increased total of $1,975,506, to provide Model Tuberculosis Prevention and Control Center services to local and national TB health care providers, professionals and funders, for the period of January 1, 2003 through December 31, 2003. Commissioner Sánchez abstained from voting on this item. (3.12) PHP-Community Health Services - Request for approval of a renewal contract with AmeriChoice, in the amount of $228,657, to provide fiscal intermediary services to the Personal Assisted Employment Services for dental services, for the period of July 1, 2003 through June 30, 2004. (3.13) PHP-AIDS Office HIV Services - Request for approval to retroactively accept and expend a grant from the Substance Abuse and Mental Health Services Administration, in the amount of $1,482,354, of which $1,437,487 is a request to retroactively approve a three-year sole source contract with UCSF-AIDS Health Project. The period of the grant and the contract is June 1, 2003 to May 30, 2006. Commissioner Sánchez abstained from voting on this item. (3.14) PHP-AIDS Office Research - Request for approval to retroactively accept and expend a subcontract from Public Health Foundation Enterprises, Inc., in the amount of $405,101, to fund a project for “San Francisco HIV Vaccine Clinical Trials”, for the period of June 1, 2003 to May 31, 2004. (3.15) PHP-AIDS Office Prevention - Request for approval of a renewal contract with Lavender Youth Recreation and Information Center, in the amount of $141,000, to provide HIV prevention services targeting youth, for the period of July 1, 2003 through June 30, 2004. (3.16) PHP-AIDS Office Prevention - Request for approval of a renewal contract with Stop AIDS Project, in the amount of $875,871, to provide HIV prevention services targeting behavioral risk populations, for the period of July 1, 2003 through June 30, 2004. (3.17) PHP-AIDS Office Prevention - Request for approval of a renewal contract with Larkin Street Youth Services, in the amount of $190,968, to provide HIV prevention services targeting homeless and runaway adolescents and young adults ages 13-23, for the period of July 1, 2003 through June 30, 2004. (3.18) PHP-AIDS Office Prevention - Request for approval of a renewal contract with Westside Community Mental Health Inc., in the amount of $135,302, to provide HIV prevention services to female African American injection drug users, for the period of July 1, 2003 through June 30, 2004. (3.19) PHP-AIDS Office Prevention - Request for approval of a renewal contract with Harm Reduction Coalition in the amount of $157,337, to provide harm reduction training services targeting HIV prevention service providers, for the period of July 1, 2003 through June 30, 2004. (3.20) PHP-AIDS Office Prevention- Request for approval of a renewal contract with Haight Ashbury Free Clinic, Inc., in the amount of $605,727, to provide HIV prevention services targeting behavioral risk populations, for the period of July 1, 2003 through June 30, 2004. (3.21) PHP-AIDS Office Prevention - Request for approval of a new sole source contract with Public Health Foundation Enterprises, Inc., in the amount of $88,995, to provide fiscal administrative services for the “Post Marketing Surveillance for the OraQuick Rapid HIV-Antibody Test” project, targeting persons who have received an OraQuick test at a CDC or State government-funded site, for the period of July 1, 2003 through December 31, 2003. (3.22) PHP-EMSA - Request for approval to retroactively accept and expend funds in the amount of $920,650 from the Emergency Medical Services Fund to reimburse providers for emergency medical services rendered during the period July 1, 2002 to June 30, 2004 and for administrative costs associated with the program. Action Taken: The Commission (Chow, Guy, Parker, and Sánchez) approved the Budget Committee consent calendar, approving Item 3.7 separately. Commissioner Parker introduced a motion approving Item 3.7 and recognizing Enola Maxwell’s outstanding service to the community, honoring her memory and acknowledging her work as the Director of the Potrero Hill Neighborhood House. Sánchez seconded and the Commission approved the motion. Commissioner Sánchez abstained from voting on Items 3.11 and 3.13. The Commission requested a follow-up report to the Population Health and Prevention Joint Conference Committee regarding Item 3.8, specifically regarding units of service, demographics and how data are tracked and quantified among different types of contracts. 4) DIRECTOR’S REPORT Mitchell H. Katz, M.D., Director of Health, presented the Director’s Report. Alliance Announces New Best Practice in Ending Chronic Homelessness Earlier this month, DPH’s Direct Access to Housing (DAH) program was identified by the National Alliance to End Homelessness as one of only a handful of model best practice programs in the nation that address and prevent homelessness. The Alliance highlighted DAH’s significant achievements in improving the health care service utilization of its residents, including reduced reliance on emergency room care, acute inpatient hospitalizations, and psychiatric hospitalizations. Michael Petrie, EMS Section Michael Petrie, Administrator of the EMS Section, was recently selected, as one of 20 civilians nationwide, to enter the prestigious United States Naval Postgraduate School's Master's Degree Program in Homeland Defense and Security. This 18-month program is fully funded by the United States Department of Justice, Office of Domestic Preparedness, and is designed to provide a graduate-level education and develop research to help strengthen America's capability to prevent, deter, and respond to terrorist attacks, and to foster interagency cooperation, which is critical to terrorism preparedness. This program is regarded world-wide as the best of its class in this discipline. Youth Health Advisor appointed to PHP JCC The Population Health & Prevention Joint Conference Committee is pleased to announce the appointment of Nicole Williams as its first Youth Health Advisor. Nicole will be a junior at Mission High School this fall, she is 16 years old, and is interested in pursuing a career in medicine. As the Youth Health Advisor to the PHP JCC, Nicole will work to identify and voice the concerns and needs of youth in San Francisco. Nicole will also work with the Office of Adolescent Health on DPH’s annual adolescent health report. Nicole will be supervised and mentored by Iman Nazeeri-Simmons, Adolescent Health Coordinator and Maria Cora, Women’s Health Coordinator. The Health Commission and the Office of Adolescent Health are very excited to have Nicole’s energy and expertise as a part of the PHP JCC. Centralized Behavioral Health Court San Francisco Judge Susan Breall initiated the creation of a Centralized Behavioral Health Court in collaboration with Community Behavioral Health Services (CBHS), the Public Defender’s Office, the District Attorney, Probation, and other behavioral health service providers. The Centralized Behavioral Health Court is scheduled to begin on July 14, 2003 and brings together the various drug and mental health courts such as Drug Court, Proposition 36 court and Mental Health Court. The Court will focus on addressing the treatment needs of clients. The Court will use a combination of services, incentives, and sanctions, to get clients the help they need to not offend again, and to get their lives on an improved track. Services will include mental health and substance abuse treatment, case management, housing, education, and vocational training. SFGH Regulatory Visit - JCAHO On June 5, a JCAHO surveyor conducted an unannounced survey stemming from a report that SFGHMC was placing patients inappropriately as a result of the hospital’s “no verbal/telephone order” policy. (The “no verbal/telephone order” policy was implemented in response to JCAHO’s own Type I recommendation in 2002, citing a lack of documents authenticating verbal orders within regulated timeframes.) The surveyor interviewed staff, reviewed closed and open medical records, personnel files, and hospital policies related to verbal/telephone orders. On June 25, the follow up report from the JCAHO surveyor showed no Type I recommendations. There were, however, supplemental recommendations regarding verbal orders, such as a need to reconcile language differences between the nursing policy, hospital-wide policy, and the medical bylaws. The surveyor also recommended that SFGHMC design a data collection system to determine the impact of the policy on non-emergent cases. The hospital has already initiated the process of re-reviewing and reconciling all hospital policies and procedures and has begun monitoring the impact of this decision. DHS/Renal Center On June 9, two nurse-reviewers from DHS-Berkeley/Contra Costa conducted an unannounced four-day re-certification visit of the UCSF Renal Center. The purpose of the review was to recertify the Renal Center’s UCSF provider number, despite our having already submitted an application to DHS to place the Renal Center on SFGHMC’s license and receive an SFGH provider number. There were no violations to the Conditions of Participation and only minor deficiencies noted. As a result of our application to DHS to acquire a new provider number for the Renal Center, SFGHMC received an unannounced on-site visit from DHS-Daly City on July 2. The surveyor mentioned the need to establish an advisory board with oversight responsibilities. A return site visit is anticipated. DHS/Long Term Care Facilities From June 16-19, SFGHMC successfully completed its annual DHS licensing and certification visit for long term care facilities. DHS conducted an unannounced visit of the Mental Health Rehabilitation Facility and 4A-SNF, and reviewed various support services. There were no major quality of care or resident issues mentioned. Minor deficiencies were noted in patient assessment, accident prevention, and fire safety. SFGHMC will provide a written plan of correction in response to deficiencies. Institutional Police Transfer to Sheriff Effective May 10th supervision of the Institutional Police transferred from DPH to the Sheriff’s Department. The IP’s are now officially Sheriff Deputies. You will note that the majority of these new deputies at SFGHMC, 101 Grove and the primary care clinics are now donning Sheriff Deputy uniforms. This transfer will provide better back up for our staff and facilities. COMMUNITY HEALTH NETWORK SAN FRANCISCO GENERAL HOSPITAL JULY 2003 Health Commission - Director of Health Report (from 07/07/03 MEC) 7/03 7/02 to 6/03 New Appointments 25 221   Reinstatements 0 3 Reappointments 22 341   Delinquencies: 0   Reappointment Denials: 0 Resigned/Retired: 18 137 Disciplinary Actions 0 Restriction/Limitation-Privileges 0 0 Deceased 0 1 Changes in Privileges Additions 7 32 Voluntary Relinquishments 1 36 Proctorship Completed 7 179 Current Statistics - as of 7/1/03 Active Staff 427 Affiliate Professionals (non-physicians) 155 Courtesy Staff 503 TOTAL MEMBERS 1,085 Application In Process 30 Applications Withdrawn Month of July 2003 2 19 (07/02 to 6/03) SFGH Reappointments in Process Aug. 2003 to Nov. 2003 168 Commissioners’ Comments: Commissioner Chow commented on the amazing number of unannounced surveys, noting that it was good to hear there were such positive findings consistently. Commissioner Chow asked how does the centralization of the Department’s behavioral health programs impact changes like those seeing in the Court. Dr. Katz said that the Department is a leader in the creation of a new behavioral health model, and is now asking everyone else to catch up. The court readily is recognizing that clients are often dually diagnosed, in need more of treatment (substance abuse and mental health) than incarceration. Commissioner Chow asked if this is the centralized court in San Francisco. Dr. Katz answered that it was, for the dually diagnosed. Commissioner Sánchez noted that the next protocol is to link the Court and Youth Guidance Center with schools. Dr. Katz said that this particular program would not do this because it is the adult court and juveniles are handled through a different Court. The juvenile court has been recognizing the needs of individuals with dual diagnosis, but Dr. Katz agreed that there is more work to be done in transitioning and coordinating within the jail, health and school systems. 5) PRESENTATION OF THE DEPARTMENT OF PUBLIC HEALTH EMPLOYEE RECOGNITION AWARDS FOR THE MONTH OF JULY Commissioner Chow presented the July Employee Recognition Awards. Team Awardees Division Nominated by Dana Horton, MSW, and San Francisco General Hospital, Medical Social Services Alicia Boccialiari, Director, Psychosocial Medicine Joseph Headlee, Clinical Supervisor, Medical Social Services Leigh Kimberg, MD, Medical Director, Maxine Hall Health Center Sharon Kwong, Clinical Supervisor, Medical Social Services Penney Mitchell, Assistant Hospital Administrator, and Maureen O’Neil, Clinical Supervisor, Medical Social Services Greg Merrill, LCSW San Francisco General Hospital Trauma Recovery Center 6) BIOTERRORISM EXERCISE EVALUATION Susan Fernyak, M.D., Director, Community Health Epidemiology, presented this report, prepared by Dr. Fernyak and Amy Pine, Immunization Program Manager On June 17, 2003, the Department of Public Health held a mass immunization exercise at Bill Graham Civic Auditorium. The exercise was the first of its kind in the nation to test a local jurisdiction's ability to vaccinate a large number of individuals within a short time frame. Organizers selected a smallpox vaccine scenario because it presents the most difficult challenge to execute. Nearly 200 staff and 1400 volunteer patients participated in the day-long event. Approximately 100 individuals representing the Centers for Disease Control and Prevention, the State, local and regional cities and counties and emergency response agencies came to observe and participate. The following goals were formulated in March 2003: Test DPH’s ability to provide mass vaccinations: Accommodate 300 - 350 patients an hour Operate site in English, Cantonese, and Spanish Test DPH’s ability to recruit volunteer “patients” from the community. Activate DPH’s Departmental Operations Center (DOC). Evaluate the drill and provide information to other jurisdictions interested in creating a similar exercise. There were 66 working days to plan the entire event. Project leaders were designated, a Steering Committee was formed and tasks were delegated regarding supplies, equipment, logistics, staff and patient recruitment, marketing of the event, evaluation of the event and activation of the DOC. The drill was funded by salary savings from a federal bioterrorism preparedness grant, and cost approximately $95,000 (excluding personnel). The exercise was evaluated in three ways: A time-motion study was conducted to determine the average amount of time spent in the clinic per patient. Each DPH staff member had a code, and each patient volunteer had a data collection sheet. Every interaction with a staff member was documented with a time stamp. This study also examined average amount of time per station at the clinic, and specific amounts of time for different activities. This was set up via a contract with James Bowman Associates, Inc. Data from the time-motion study are still being analyzed. Patients completed “Patient Evaluation Forms” to learn their feedback regarding understandability of information and site organization. Their responses were entered into a database on-site at the June 17th event and have already been analyzed. DPH staff members participated in debriefing sessions at the end of the event to determine what was successful and what was not successful in their assigned work areas. This information was all documented. DPH staff also completed “Staff Feedback Sheets” for qualitative responses about communication on-site, supplies, and their job training. Final analysis of this data is expected by July 22. All evaluation and project information will be available in a comprehensive “Final Report.” The target date for completion of this report is July 31. The report will also be available on the SFDPH website. Approximately 1,400 patients came through the exercise. Self-Reported information from the patient evaluation forms reveals the following: The median age of all patients was 42. 63% of patients completed the exercise in 90 minutes or less. 12% of patients did not speak English at home. Languages spoken at home included Cantonese, Spanish, Tagalog, American Sign Language, Vietnamese, Russian, Korean, French, Portuguese, Mandarin and other Chines Question from Patient Evaluation Form % of All Patients Who Agreed % of Monolingual Patients Who Agreed Medical History and consent Form was easily understandable 63% 57% Exercise was well organized and orderly 94% 87% DPH Staff was confident and knowledgeable 90% 77% Patient was able to understand all written information given 93% 81% Patient was informed of right to decide against vaccination 87% 78% A. Significant gaps/barriers identified for a real emergency scenario There was a need for greater security. DPH staff assigned to specific areas had multiple job functions for that specific area. Asking them to act as security guards in addition was overwhelming. More people needed to be designated specifically to watch patients and ensure that they were not loitering or in need of assistance. Clear, large and creative signage is of paramount importance. When large rooms are full of people, pointing to a sign for the next station is only minimally effective. Larger signs in more visible display positions were necessary. Designate more time for staff training. For this exercise, Job Action Sheets were used with clear job descriptions, but most staff members received 45 minutes of training and for some this were not sufficient. In a real emergency, doors should not open until all staff is adequately trained. There was need for increased mental health staff presence. Based on staff estimates for the June 17th drill, in a real emergency, with 40 different mass vaccination sites happening simultaneously, 16,000 staff members would need to be recruited for two shifts of work per day. B. How well did we meet our goals? The primary goal of this exercise was to test our ability to provide mass vaccinations. While data is still being analyzed, preliminary information demonstrates that we were able to communicate clearly and effectively in English, Cantonese and Spanish, and that we were able to move up to 350 patients an hour through the clinic. Based on the number and diversity of the patients who came to the June 17th exercise, we were also able to accomplish our goal of patient recruitment from the community. We had hoped that the clients who came would reflect the diversity of the San Francisco community and this was, indeed the case. Our next steps will be to share our lessons learned and identified information with other public health departments or interested parties. The final report for this project will be posted on the SFDPH website, and future presentations will also be developed to share with others. Commissioners’ Comments Commissioner Chow asked why it takes each individual an average of ninety minutes to get immunized. Dr. Fernyak explained that with smallpox vaccinations there is a large educational component and informed consent involved. Commissioner Chow also asked about the Medical History and Consent form that was reported to be not well understood by participants, how will this form be improved. Dr. Fernyak explained that this was a Centers for Disease Control (CDC) form, so the Department will provide the feedback to the CDC. Commissioner Chow asked about the number of personnel that would be needed for a large-scale vaccination and the size of the site required. Dr. Fernyak said that if 40 mass vaccination sites were activated, 16,000 staff members would need to be recruited for two shifts of work per day. Each site would need 200 personnel per shift for sites to cover the City’s residents and visitors. The Department is looking to use schools, with a large room (basketball court or auditorium) as well as smaller rooms to have the educational component. Commissioner Guy pointed out that when you have these types of exercises you learn something applicable for this type of scenario and for other emergencies. Commissioner Guy’s question was what is the Department doing to pursue agreements with the sites that we will need to use in case of an emergency of this type. Dr. Fernyak explained that the Department now has a better idea of what types of sites are required. The Department is getting extra money to use for bioterrorism activities that it plans to use partially to set up agreements with appropriate sites. Commissioner Chow asked when they did the prophylaxis for Anthrax in Washington D.C., did they use a similar process? Dr. Fernyak said that there were mass sites set up in DC during this time, but that most people that went to sites these were already exposed. The Department tested a different scenario where people had not been exposed and would need informed consent before being vaccinated. Commissioner Guy expressed her concern about the range of ages that were not well represented in the exercise. How will the Department deal with children, frail elderly, etc? Dr. Fernyak said there are quite a few target groups to consider, and some were represented at the event. Some other groups will need to be addressed in planning. Commissioner Chow asked how the Department would schedule this type of event over five days, when people may all want to come at once. Dr. Fernyak said that the Department has not worked this out exactly. The first groups will be high-risk individuals, including medical, health and emergency workers, and all contacts for smallpox cases. The general population will need to be organized, an issue the Department understands but has not answered. Commissioner Chow asked when the Commission would hear about next steps. Dr. Fernyak said that the next step is to know the results of the time motion analysis. The Department will then have a staff working-group to arrange for identified people to set up sites if an emergency situation occurs. Issues to consider have been identified through the exercise, and there will be 6-8 months of planning to work them all out. Dr. Katz said that the Department did this presentation early because it was so extraordinary, the largest exercise in the United States with a short planning period. The Department will forward additional results to the Commission in written form. Dr. Katz also noted that the issue now is to determine the best way to keep the Commission and the Department involved in emergency planning. Generally the Commissioners are updated through the annual Emergency Medical Services report. However, at this time, there is more awareness around the idea that a real biological emergency may occur. Rather than health being a part of the planning (as in the case of an earthquake) it would be the lead agency in dealing with certain events. Dr. Katz said that he would look at the meeting schedule and plan for an update every six months regarding the Department’s emergency preparedness around biological events. The Health Commission agreed to this approach. Commissioner Parker noted that this was an excellent learning exercise. Commissioner Parker said that one of the most important things is flexibility. We need to know exactly what to expect when an event happens and be flexible in our response. He suggested the use of numbers in helping vaccinees get from station to station, as everyone can understand numbers. Commissioner Guy supported what Dr. Katz said about the Department getting more involved in emergency planning. 7) FISCAL YEAR 2003-04 BUDGET UPDATE Gregg Sass, DPH Chief Financial Officer, presented the budget update, reporting that as of today’s meeting, the Board of Supervisors will approve the first reading of the budget and the second reading will be in one week. Hearings by the Budget Committee of the Board of Supervisors have occurred, and the Department has incorporated the budget cuts proposed by the Budget Analyst and the restorations proposed by the Budget Committee. The Department understands that the Mayor endorses the Budget Committees restorations. Final approval of the Budget Committee’s recommendations is expected in July. The Department’s General Fund is declining $35.7M. There are few service reductions, and the Department has made up for the declining General Fund and increasing costs of doing business with administrative reductions, concessions from labor via MOU changes and additional revenues. The Department has also committed to returning a surplus of $16.7M to the General Fund for 2002-03. The Department was fortunate to be able to project a surplus for 2002-03 and also budget growth in revenues for 2003-04, the combined effect of which is over $45M and has enabled the Department to avoid additional service reductions. Overview of the Budget Process DPH Baseline Budget and Contingency Cuts The 2003-04 budget process has been the most was the difficult in the past decade. The City faced a $357M budget shortfall. Public Health receives nearly 25% of $1.2B in discretionary General Fund. It was therefore anticipated that the Department would absorb a similar reduction to our General Fund. The Department’s initial budget submission, following three rounds of contingency cuts, included a $39.5M reduction to the General Fund accompanied by an additional contingency plan that would have reduced the General Fund an additional $21.6M for a total reduction of $70.1M or 24% of the $291M General Fund budget. In addition, the Department committed to returning a $12.7M General Fund Surplus for the 2002-03 fiscal year that would carryover to defray budget shortfalls for the coming year. That commitment included an $8.7M mid-year surplus plus an additional $4M commitment made during the budget process. Mayor’s Office Throughout the budget process, the Mayor’s Finance Office worked to identify revenues and consolidate costs of citywide services. Following is a brief outline of items that affected the Department’s budget. Offline adjustments by the Mayor’s Office The Mayor’s Office identified a number of initiatives to reduce the overall citywide deficit. This process identified over $10M in additional revenues for DPH, including a $3.7M increase in realignment revenue, $3.2M in work-order revenues for mental health and substance abuse services, a $1.45M revenue transfer from the Department of Building Inspection to help fund the Master Lease and SRO Collaborative program, and $0.9M in increased recoveries for services to members of Healthy Workers. The Department was able to increase its commitment to return an additional $3.8M surplus in 02-03. This was also considered as a source of funds to allow restoration of service cuts. Labor concessions Labor negotiations resulted in $16.5M in savings to DPH related to transfer of responsibility for employee pension contributions. Additional concessions were made in exchange for a commitment to reverse budget cuts to the MHRF and the LHH laundry. The Department was able to restore $2.1M in service cuts and avoid $21.6M in contingency cuts. Department of Public Health Administrative Cuts Position deletions SFGH (21FTEs) $1.4M Office of Managed Care (15FTEs) 0.9M LHH (9FTEs) 0.4M Health Centers (6FTEs) 0.5M DPH Admin (18FTEs) 2.3M Behavioral Health, Prevention (6FTEs) 0.5M AIDS Office (8FTEs) 0.6M Subtotal (83FTEs) $6.6M Restructuring of Pharmacy Benefit 1.0M Other non-salary cuts 0.8M Total administrative reductions $8.4M Board of Supervisors The Board of Supervisors held Bielenson Hearings on June 10. The Department’s hearings with the Budget Committee took place on June 11 and June 26. At the June 26 hearing, the Budget Analyst presented their listing of proposed cuts to the Department, which had been reduced from an initial listing of $1.3M to $0.8M. At the meeting, the Budget Analyst agreed to further reduce proposed cuts to $0.5M. On Saturday, June 28, the Budget Committee announced the amount of restorations. The Committee recommended restoration of $13.4M in General Fund to restore $10.8M in service reductions and $2.6M in funding for new services, including $500K in funding to backfill federal Ryan White AIDS funding, $500K to fund planning and startup costs for medical respite care to patients leaving SFGH, $810K to fund housing for homeless seniors and $665K to enable UCSF to continue to maintain operations at the blood clinic. Citywide, the Budget Committee restored a total of $24.1M in programs. Funding to cover restorations were only $18.4M. The Mayor’s office is working to identify $5.7M of additional funding to re-balance the budget. The Department recently identified $0.75M in Federal matching funding that was part of the recent tax bill signed in June and will likely flow to the Department. It appears that the Department will see a substitution of this revenue for General Fund to help balance the budget and close the $5.7M funding gap. Capital Budget The Capital budget is set at $2.55M, all but $23,000 of which is for facility maintenance. The Equipment budget is $2.52M. It was necessary to reduce capital expenditures in order to avoid service cuts. However, this continues a chronic underfunding of capital investment to support the Department’s infrastructure. Future Challenges Looking forward, there several challenges in managing within budget over the coming year. Adequacy of City Reserves for State Cuts The Mayor set aside $30M in reserves to fund reduced City revenues resulting from State budget cuts. The reserves were based on a forecast of cuts included in the Governor’s May revise. Continuing pressure from the Republican side of the legislature to prevent a sales tax increase creates the potential for additional spending cuts that could exceed established reserves. This could lead to mid-year cuts, to re-balance the City’s budget. Impact of Unbudgeted Inflation in Costs of Materials and Supplies The budget did not include adequate provision for inflation in the cost of medical services and supplies. The Department has had increasing difficulty managing expenditures within existing appropriations. Unbudgeted Costs of Floating Holidays In exchange for labor concessions to pick up the employees 7.5% pension contribution, labor MOUs included 5 additional floating holidays. Where these holidays have been granted to clinical employees and other classes at the Hospitals, Clinics and Jail Health that must be backfilled, the Department will incur additional expense that is not budgeted. Our analysis indicates that the estimated cost of backfilling these holidays will cost the Department $2M -$3M that will need to be offset with savings elsewhere. The cost estimates vary depending upon whether the Department backfills with regular salary or overtime. Commissioners’ Comments: Commissioner Parker noted that the Department is giving staff five additional holidays and some will have to be back-filled to keep services going. He asked if the Department really saves money by doing this. Mr. Sass noted that there is an overall savings because of the 7.5% that many employees are giving up from their salaries. Not all employees will need to be filled in for when they miss work, only clinical staff. Commissioner Sánchez commended Mr. Sass and the rest of the staff who pulled together so well on this difficult budget. Commissioner Guy noted that Mr. Sass’s leadership was critical and appreciated in his first year as Chief Financial Officer. She also said that the Department might see some mid-course corrections that could be in its favor, but that the Department also has to be vigilant as there is not yet a State budget. Mr. Sass said that a problem this huge brought an active involvement from all of the Department’s leaders. In many ways it was a harder year for the Department, but in some ways better to have such a high level of cooperation from staff and management. Commissioner Chow pointed out that this was one of the most arduous and difficult budget years in memory. The Department took the opportunity to improve their operations. Additionally, the Commissioners have learned about many of the Department’s programs through this process. 8) PUBLIC COMMENTS Joseph McInerney spoke out against Conard House, Progress Foundation and Baker Places. He said that the Department was aiding and abetting these organizations in a criminal act of involuntary servitude, requiring residential clients to perform chores. He also requested an audit of the All-Star Hotel, as it is a slum and nothing has been done to improve it. In addition, he does not believe that Institutional Police can be used at these sites. 9) ADJOURNMENT The meeting was adjourned at 5:35 p.m. Frances Culp, Acting Executive Secretary to the Health Commission