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SF Department of Public Health reports $120M Q3 surplus; Laguna Honda shortfall flagged
Summary
DPH presented a FY23–24 third-quarter report showing a combined surplus of about $120 million driven by revenue and expenditure improvements, while Laguna Honda faces an estimated $52.5 million revenue shortfall tied to reduced census; department announced tentative labor agreements that must be ratified.
Jenny Louie, DPH chief operating officer and chief financial officer, presented the department's third-quarter financial report and described a combined surplus of roughly $120,000,000 — about $101,000,000 in revenue improvements and $19,000,000 in expenditure savings — after accounting for one-time items and mayoral midyear reductions.
Louie said behavioral health revenue outperformed budget by approximately $30,000,000 and that hospitals, including Zuckerberg San Francisco General, saw notable one-time and ongoing revenue increases. She flagged a projected Laguna Honda revenue shortfall of about $52,500,000 attributable to reduced census and unrecognized state supplemental payments in the current fiscal year.
"This third quarter represents about a $22,700,000 improvement compared to where we were in the second quarter," Louie said, adding that some of the gains reflect one-time settlements and delayed payments. She described ongoing work with the mayor's office and the controller's office to refine contingency projections and noted additional reforecasting will occur before year end.
Public commenter Patrick Monet Shaw pressed the department on cumulative revenue shortfalls tied to Laguna Honda and questioned the timeline for when those losses would stop; he supplied independent estimates that differed from staff projections. Louie and other staff described the fiscal drivers, one-time items, and the work underway to project forward and collaborate with city offices.
As part of the director's report, the department also announced tentative labor agreements covering multiple employee groups and a tentative nurses' agreement with SEIU Local 1021 RN. The statement highlighted a $25 per hour minimum wage for represented employees, a 13% wage increase over three years for a broad group of contracts and a 17.5% wage increase over three years for nurses, along with staffing commitments and other provisions. The agreements are tentative and require union ratification and Board of Supervisors approval before taking effect.
No formal budgetary actions were taken during the meeting; staff committed to return with updates and to provide more detailed projections at the next commission meeting.
