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HSS CFO: trust fund projected up modestly; mayor's budget instructions call for 2% ongoing reductions and contingency savings
Summary
CFO Pamela Levin reported a projected trust fund balance increase to $79.6 million and an unqualified draft audit; the mayor's budget instructions project $107.4M and $183.4M deficits in the next two biennia and require 2% ongoing reductions plus contingency savings, driven largely by pensions and labor‑negotiation uncertainty.
Pamela Levin, chief financial officer for the San Francisco Health Service System, briefed the board on the trust fund's preliminary year-end projection and the city's mayoral budget instructions for FY 2019–20 and FY 2020–21.
Levin said the trust fund balance as of June 30, 2018 was $77.4 million and, based on activity through November, the projected balance is $79.6 million—an increase she attributed to favorable claims experience in some plans and salary savings from delayed position fills. Levin also said the draft audit was unqualified and that KPMG will present the audit at a later meeting.
On the city's budget guidance, Levin summarized a five-year plan that shows a projected $107.4 million deficit in 2019–20 and $183.4 million in 2020–21. Departments were instructed to propose ongoing reductions equal to 2 percent of general fund growth (for HSS, roughly $67,000 in the first year) and contingency savings of 1 percent, with further reductions expected in the next fiscal year. Levin said pension costs and collective bargaining were the principal uncertainties driving the guidance.
Commissioners pressed staff on long-term assumptions and asked that HSS stress the savings it provides to the city when negotiating reductions. Commissioner Wilfredo Lim noted the city's history of ending fiscal years with surpluses despite conservative projections and called for scrutiny of assumptions.
Levin said staff will bring proposed budgets for the healthcare sustainability fund and the general fund back to the finance & budget committee and the board in February. She also noted new GASB pronouncements and other accounting developments that may affect future reporting requirements.
The board did not vote on budget matters at this meeting; members requested further detail and asked staff to continue to advocate for the system's contributions to city savings.
