Board hears concerns as mayor’s office moves HSS into two‑year fixed budget process

Pamela Levin, HSS CFO, briefed the board on budget instruction changes from the mayor’s office and controller: HSS is in a group of departments moving to a two‑year fixed budget model for fiscal years 2016‑17 and 2017‑18 that requires submission of ongoing reductions (1.5% general fund support) and limits mid‑cycle re‑budgeting. Levin said the city is projecting a general fund deficit driven largely by higher retirement contribution costs and other mandated expenditures; she warned the fixed budget process raises complexity because HSS’ fiscal and plan years differ and because many of the system’s revenues come from work‑order recoveries from other departments.

Commissioners, including the chair and finance committee members, expressed concern that a fixed two‑year horizon may hinder operational flexibility for a benefits enterprise and that HSS would be exposed if other departments’ work‑order recoveries change. The board requested stronger engagement with the Finance Committee and asked staff to provide a more detailed explanation of forfeitures, transfers to the general fund, and methods used to forecast plan projections (questions about straight‑line vs. actuarial projection methods were raised). Levin agreed to provide follow‑up materials and to coordinate with the finance committee and board budget analyst.

The board did not amend the mayor’s guidance but asked staff to report back with precise schedules, more granular forecasts, and options for the finance committee to engage with city budget offices before the Board of Supervisors finalizes the approach.