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Committee backs retroactive $2.166M supplemental for Laguna Honda; staff cites state licensing costs
Summary
The committee forwarded a retroactive $2,166,000 supplemental for Laguna Honda Hospital after DPH and the controller attributed overspending to repeated state licensing surveys and one‑time staffing and pharmaceutical costs.
The Budget & Finance Committee on Sept. 26 heard a presentation from the Department of Public Health and the controller’s office on a retroactive supplemental appropriation for Laguna Honda Hospital totaling $2,166,000 for the fiscal year ended Feb. 2006.
Greg Sass, chief financial officer for the Department of Public Health, said DPH returned more than $25 million in surpluses to the general fund for the year, with $8.8 million of that coming from Laguna Honda’s enterprise fund. Sass said Laguna Honda exceeded its appropriation mainly because of repeated state licensing surveys that required increased nursing and non‑nursing staff, security and equipment, and higher pharmaceutical expenses. He described the supplemental breakdown as about $784,000 in salary and fringe variances, $732,000 in non‑personnel contracts (including UC medical services), and the remainder in materials and pharmacy costs.
Controller’s staff and Monique Smuda explained that Laguna Honda is an enterprise fund that cannot easily absorb surpluses from other departmental divisions; they urged a retroactive supplemental to correct the imbalance and said the controller’s office will monitor Laguna Honda’s expenditures monthly and report back in six months. When asked why the department didn’t request a supplemental earlier, staff said the timing and unpredictability of state surveys made precise projections difficult. Committee members pressed for assurances that spending would be brought into line for the current fiscal year; Sass said managers expected to reduce costs through monitoring and operational adjustments.
Outcome: The committee forwarded item 6 to the full Board with recommendation (no objection taken at the time the item was placed in the hands of the committee earlier and later forwarded). The committee also asked for a six‑month status update on Laguna Honda’s budget and spending trajectory.
Context: Laguna Honda serves a substantial share of long‑term care needs in San Francisco; supervisors noted the hospital’s general‑fund commitment in the current budget was approximately $47 million. The committee’s action corrects last year’s appropriation record and signals close monitoring going forward.
