City staff recommend finding CPMC in compliance with development agreement for 2022–23

San Francisco planning and public-health staff told a joint meeting of the Planning Commission and the Health Commission on Thursday that California Pacific Medical Center appears to have met the bulk of its obligations under its development agreement (DA) for the combined reporting years 2022 and 2023, and recommended the directors of planning and public health find CPMC compliant for those years.

The recommendation was presented by Tina Tam of the Planning Department, who opened the informational hearing on case 2016-4775 MCM and described the final annual review required by the DA. Tam said the directors will make the official determination after the hearing and that a third-party monitor will then review the directors' finding and notify the Board of Supervisors whether it concurs.

The hearing covered three major areas in the DA: fee‑increase audits, workforce hiring and training commitments, and health‑care commitments and community benefits. Ithaca Hussain of the San Francisco Health Service System and Maxwell Guerra of the Department of Public Health presented compliance details on the DA’s health provisions; Lowell Rice of the Mayor’s Office of Economic and Workforce Development presented on hiring goals and the CPMC workforce fund.

On finances and community benefits, staff reported that Sutter Health completed the DA payment obligations with total payments of more than $73,000,000 for the combined reporting period. The third‑party audit work on fee increases was performed by an actuarial firm; staff said the review is time‑consuming but concluded CPMC is in compliance on those items.

On workforce commitments, Lowell Rice said non‑construction hiring goals were met: the DA required that 40% of entry‑level non‑construction positions be filled through the city’s workforce referral network and that a final 48% goal be met in year 10. Rice said construction hiring goals were previously exceeded and that, for the DA’s final year, 78 of 160 hires reported as coming through the workforce referral network were hired by CPMC; Rice also noted a retention rate of about 77% for those hires. Rice said the CPMC workforce fund targeted training and barrier‑removal programs in listed priority neighborhoods and that, as of May 31, 2020, $870,000 remained in the fund before subsequent distributions to grantees including Jewish Vocational Services (JVS), Self‑Help for the Elderly, Success Centers and FACES San Francisco.

On health‑care obligations, Maxwell Guerra summarized Exhibit F of the DA and reported that CPMC exceeded the DA requirement for unduplicated charity‑care and Medi‑Cal patient counts (about 30,836 patients in 2022 and about 31,865 patients in 2023). CPMC also exceeded the DA community‑benefit requirement, providing roughly $15,000,000 in 2022 and $11,300,000 in 2023, figures that staff said were verified by Deloitte. Guerra said CPMC’s charity‑care policy was found to comply with California law and noted operational support to the Bayview Child Healthcare Center (operation grants of about $2,240,000 in 2022 and about $186,000 in 2023).

Staff addressed several Mission Bernal items that remain obligations through 2028. The DA allows CPMC to put 30 ‘‘shelled’’ additional beds into operation only after the Mission Bernal campus maintains a daily census of at least 75% for a full fiscal year; staff said that threshold was not met in 2022 or 2023. CPMC notified the city on April 3, 2024, of the permanent closure of labor and delivery at the Mission Bernal campus; that notice triggered the DA’s six‑month meet‑and‑confer process and the city’s Proposition Q community‑planning hearing requirement. Health Commission hearings in fall 2024 found that the closure would not be ‘‘detrimental’’ to citywide services provided CPMC take certain recommended actions, including maintaining or expanding Mission Bernal Women’s Clinic services and communicating transportation options to patients.

Staff also reported progress on Mission Bernal campus programs: the Health First center of excellence in community health served roughly 723 unique patients in 2022 (a year‑over‑year increase), and the acute care for the elderly (ACE) unit served about 1,000 patients in 2022 and over 1,100 in 2023 (above the DA goal of 600). CPMC told staff that a proposed Mission Bernal medical office building has been approved by the Sutter West Bay board, is fully funded and is aiming for an opening around 2028.

Commissioners raised remaining concerns that staff said will be tracked. Kyle Hennessy of Public Works said Guerrero Plaza (the plaza at Guerrero and Eighteenth) is at final design stages but delayed by a single outstanding water‑line design issue; Public Works said it will issue a construction permit once that is resolved. Victoria Chung of the San Francisco Municipal Transportation Agency said a traffic signal at 20th and Guerrero is planned and targeted for activation in fall 2027; CPMC representatives said the lower plaza at Mission Bernal was installed as an interim amenity and will be removed and reinstalled as part of the neurosciences care complex/medical office building project, which staff said is expected to connect the lower and upper plazas once completed.

Several commissioners asked the Department of Public Health to continue reporting on the DA items that run through 2028, and to provide updates on the city’s efforts to develop subacute care capacity. Commissioner Chao specifically requested annual reporting on the outstanding health‑related DA obligations and on commitments tied to the maternity‑unit closure resolution.

Staff concluded by recommending that the directors of planning and public health find CPMC in compliance for the 2022 and 2023 reporting years; the directors will issue the formal determinations and the third‑party monitor will review those determinations and report to the Board of Supervisors. No formal vote occurred at the joint hearing.

The meeting record contains presentations and staff reports from the Planning Department, Department of Public Health, the Mayor’s Office of Economic and Workforce Development, Public Works, SFMTA and representatives from Sutter Health/CPMC; public comment was not offered during the item.