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Fire Department presents draft operating budget and warns of reimbursement shortfalls
Summary
Department staff briefed the commission on a draft operating budget for FY2020'022, noting a mayoral 3.5% general-fund reduction target, a projected citywide $420 million deficit and structural EMS revenue shortfalls driven by Medicare/Medi-Cal reimbursement limits.
The San Francisco Fire Department presented its draft operating budget for fiscal years 2020'022 on Feb. 12 and asked the commission to approve submission of a budget proposal that does not meet the mayor's requested reductions. Director Mark Corso and finance staff walked commissioners through timelines, assumptions and several areas of pressure including EMS revenue, staffing and deferred capital needs.
Corso said the mayor's office requested a 3.5% reduction in general fund support, an instruction tied to a projected $420 million citywide deficit over the next two years. For the department, Corso said 3.5% is roughly $2.7 million in the upcoming year and about $5.5 million cumulatively over two years. He described the department's limited ability to absorb cuts, given a budget dominated by frontline salaries and benefits.
On revenues, Corso described modest fire-prevention fee increases aligned with activity but highlighted a structural problem in ambulance billing. Commissioners were told the department bills roughly $150 million but realizes only about $30 million after contractual adjustments and write-offs. Corso explained that a large share of patients are Medicare or Medi-Cal recipients and those programs cap reimbursements (he cited approximately $425 per Medicare transport and about $125 for Medi-Cal), creating a significant gap between billed charges and recoverable revenue. The department is exploring supplemental state and federal programs and cost-reporting strategies, but Corso said specific additional revenue figures were not available to include in the draft.
On expenditures and capital, Corso said the department has a backlog of equipment and facility needs, with one-time allocations (for example, $4 million for host tenders in the current year) not included in the second budget year; deferred maintenance remains substantial. Corso listed staffing priorities including annualization of five EMS positions and airport-funded positions tied to new apparatus; he also noted requested investments in training, health and wellness, and the upcoming single-stop permit center opening.
After discussion and questions about EMS reimbursement mechanics, SCBA and communications upgrades, and the likelihood of capital funding, the commission voted to approve the department's budget proposal for submission to the mayor's office; the department will continue negotiations with the mayor's budget team and the Board of Supervisors.
