cleaning and preventative. at kaiser you get a free exam every year and what if you used your -- you have a crown at the beginning of the year and you go over the thousand dollars and you might want to put it off until next year to get your teeth cleaned and you might have or x-rays and you might have more serious problems. so i think the commission in delta dental should look at the teeth cleaning and x-ray as a preventative method included in the rate and not raise the rate because they are preventing future cost down the road unless they want to make more money off us going to the dentist more often. i think they are looking at it the wrong-way. i agree we need to survey the ones that are not in the system but maybe ask them a question or two why they are not in, i think i know the answer. but it would be good to know why they are no the in the system. thank you >> director? >> i just wanted to in direct response to the last two comments point to slide 26 of the deck which we reviewed at the last meeting and we can have our actuary o'neal speak to this. you can see the last ratio on this product is 99 percent.99 percent of every dollar is going to care for people's teeth. there is no profit made. there is $0.01 to at administer the care to preventative care. there is no free lunch here. we can't just cover cleaning. somebody has to pay the dentist to do the cleanings and it has to be embedded in the premium. we have to remember that and we have to remember to keep everybody in, as said best, we need more people in the plan to bring the premium down. it is complicated insurance. i'm hoping we are all grasping that idea to keep everybody in one big pool to keep the cost down and affordable for everyone. >> any other comments? if not, we'll move to recommendations. i will entertain a motion to that affect. >> we have a motion. >> all in favor say, "aye". >> aye. >> opposed? the ayes have it and we'll move to item 6. i will get the rhythm of this before we move forward. >> item 6, action item, report on receive policy. committee chair scott. >> as we are going forward, just as we went through the policy affirmation on the blackout period the same is here. for those who read the men's of the board, i'm sure the vast number of you do, at the last meeting we instructed the actuary to go out and prepare certain plan alternatives. i think that we might have implied that we should have been talking about the various, the policy guidance that go into preparing these directives. these option. so that's what we are going to be doing over the next several of these policies is confirming and instructing the actuaries to do certain things. and the amendments that you will see in the documents are having him look at the alternatives that we said we wanted him to look at. if there is no confusion later on that he's done something, if you will that we didn't ask him to do. so this is belts and suspenders type of an approach. all right? >> well said. first we are going to review the ibnr fund status and any changes to the policy. so you have before you the -- >> and would you please clarify what i b.bnr is >> for any self funded plan which is now why you # your flex funded program with blue shield and city plan, you hold the liability so at the time of terminating the contract, any claims that are paid after the date of termination that happened at the date of termination or earlier you will have on your balance sheet as a liability and you are fully funded without paying any further assessment. any on going -- on the program is required to do this. you do an excellent job. an additional caveat is that this gets approved, i don't set it as your independent actuary. you have an audit june 30th and the auditors also approved these numbers. it's doubly approved. with that, our first document reviews the amount of the reserves that you presently hold under this particular requirement. they are the city plan medical rx reserve which is primarily for all active participants, all retiree participants and medicare or paid by medicare. that plan and delta dental is $7 million $869. this is an amount approved by your auditors and on the books since 2013. additionally you hold $18 million 371,000 fou blue shield, this also approved by your auditor and what we need to look at today is that at last year's meetings we updated the policy to be current with the then funding structures that were being taken by the trust who facilitate the coverage of the employee and retiree base. since that time we talked about the potential of kaiser to take risk and we need to update our policy to include all vendors appropriate to consider the policy. we have caveat to cover dental, city plan and funded and now red line and brought to your attention the ibnr policy. i think this is incredibly good to have these policies discussed and approved at the board level. it's very good fiduciary and good responsible work. what we've done is change the date and also under the third bullet point under the other.bnr policy is flex funding which is hmo and self funding which is the case for kaiser once you take the risk depending on the renewal. we want to do one of the two options that we were considering under kaiser. there are no other changes of this policy at this time and my recommendation is that you approve the changes to the ibnr policy. >> is there a motion? >> i move we update the policies? >> is there a second? >> it's been properly moved and seconded. is there a discussion by the board? any public comment? hearing no public comment, we are now ready to move to a vote. all in favor say, "aye". >> aye. >> all those opposed? the ayes have it. we'll move to item no. 7. >> city clerk: action item review status for contingency reserves and policy. committee chair scott. >> i will turn this over to our actuary for explanation. >> okay, very good business practice when you are taking risk and you are part of a trust under self funded benefit add m rgs to -- administration for a contingency reserve and you approved it by your prior actuaries for a city plan and delta dental because those are the two funding arrangements that you had at the time that you are exposed. so you had a policy in place, we just rolled that policy forward and after that, the next question was will we take and consider this for blue shield funding, absolutely. the parts not decapitated, we have a standards review for that and for kaz -- kaiser will you want to take that as well and the answer is absolutely. as the amounts of june 30th, $10 million and blue shield flex funded amount is $13 million $180,000 and these are all in your audit papers and the next thing is what do you do with the policy? we are at the same place where we were with the ibnr because we can roll the program onto the risk taking side, that would be kaiser the end of the cycle if you decide to do that. they -- this is at the door and we redated it and if you include kaiser, they are covered under policy. there are no other changes to this document around here it was approved last march, and i recommend you, unless you have questions, accept these changes and approve it. >> i just want to remind the actuary that there is another reason to modify the policies accordingly. we could take blue shield self funded. we are paying currently 2 1/2 percent federal taxes on the blue shield because it's still a fully insured flex funded model. we can get rid of millions of dollars if we took self insured too. the policy would cover that as well as any decisions we might make. >> yes. thank you for that clarification. >> i'm ready to entertain a motion? >> i move we prove the contingency policy update. >> second? >> second. >> any discussions by the board? public comment? hearing none. we are ready to vote. >> all in favor say, "aye". >> aye. >> opposed? the ayes have it. item 8. >> city clerk: action item, review plans stabilization reserve policy. committee chair scott. >> i will have the actuary take the lead in the explanation of this item. >> okay, this is the item we discussed under united health care city plan. so what's happened now is that you have a flex funded or a potential self funded blue shield product or as kaiser product to be offered. at this point, we, when we initially looked at flex funded last year they said are you going to recommend a stable reserve? i said not until your two other reverse and your continued reserve is fully funded. their ample dollars are for both reserves and they are able to fund a claim stabilization reserve much earlier than i thought you could. so we've had to cl this in the stabilization because it was addressed the city plan which has the $17 million. so what we have done is we've included the flex funded and/or self funded hmo both buckets in this particular document to say going forward instead of saying when we get there we've gone ahead because it was probably not prudent on my part to waiting a year. so that we've gone ahead and decided to codify anything that could possibly happen. with that said, this document goes through all of the various changes and one of the things that's important to understand is when we calculate this, there is no gain or loss generated by the egg wip. any premium part of this process we changed some of the language in here to clearly outlaw in the fact that they do not create a gain or loss. we had to add additional language in part of this. i this i think this thing is fully updated for all possibility set for claim restabilization and when you are fully funded for your ibnr which is first, contingency second, you are very responsible and we use the amization and depending on kaiser and we amortize this over the history of the contract. unless there is any questions, i recommend you an approved the changes. >> i have ready to entertain a motion. >> i move we update the stabilization reserve. >> is there a second? >> second. >> are there questions boo i -- by the board? any public comment? no public comment. >> all in favor say, "aye". >> aye. >> opposed? the ayes have it. i believe we are at a moment to rise and support the full board. i would recommend we take at least a 5-minute recess. >> madam secretary? >> item no. 9. are we reordering the agenda? >> yes. discussion item, president's report. >> first i want to say that we are going to change our terms around today and hear the action items because i'm afraid we are going to lose our quorum. if there is no objection, we would hear item 13, 14 and 156789 15. there will not be an election because commission frino and i were uno opposed. i want to commend lisa for her hard work in leadership when she's holding down two jobs and the whole staff who were really thinking of the members first. i think it would have been a very tough job to fill in. thank you very much. public comment on this item? now we'll go to item no. 12. >> approval of administrative budget of fiscal year 2014-2015. >> chief financial officer. i extracted some information from the report that went out in your binder on the budget. and put copies of the powerpoint on your desk and i would like to use that so we are all looking at the same thing. there is no new material. it's just put on powerpoint. the first thing i wanted us to do in doing budgets there is a really good reason to start with looking at why are we here, what are we doing? what are we providing? so i wanted to just look at quickly the health services system mission to improve sustain able quality benefits for employees and their families. i would like to keep in mind that that is our top priority and the budget is how we actually fund doing our priorities and our mission. i wanted to start and a detailed discussion was where are we now, what did we request last year for this fiscal year and what kinds of things do we still need to do? so i put a chart on approved staffing levels and fte's. when we were looking at the budget requesting it for 2013-2014. we requested to have approximatelly 8 fte's, remember those are not necessarily heads. it's the full time equivalent. when you ask for a new position it's always at.77. that's how you get partial fte aechlz we asked for 799 new positions and asked to be able to fill new positions. that's why it looks funny because we said we want to have the ability to fill two more positions. what was actually approved when you look at the administration and the wellness together was 7.73 new positions and the ability to fill one position. the way attrition works if you were to say i have 10 positions, each of them earn $10 and i have $100 and that's what i go out and spend. the way the budget works is we don't fund all those positions. that's why, so and it's a fairly arbitrary number that reduces your budget and it constraints you. the request when i got here the request had been let's ask for money so we can actually fill positions. when you look at this purely by numbers, you can say we did really well which we did but there is still significant need in the near future with our needs to get to where we are going. that's where i wanted to focus on us being thankful to where we are now but keeping our eye on the future and saying we need additional resources. as i mentioned last time, the mayor had instructed us to take some reductions. the reduction targets is 14 1/2 of our general fund is $42,000. our proposal to use to fund this. this is the discussion before about carrying forward up to $500 in balances and 15 the mayor also instructed us to balance with cutting the additional suggested fund and that's almost $69,000 and we chose to use the foefrt. the 6-month report was release d by the controller and we were better than $60 million for the general fund. so what, they may not take the contingency. remember when i met with you last time i wanted to let you know that there are times in which the balance and the general fund is reevaluated. this is one of the times and it was to the positive. we still have to put in 1 percent and we really propose that since we can cut our budget we are not funding what we need to go forward that we use forfeitures and not a fund. it doesn't affect the premium, but this will let us have the ability to not have to cut. we are very lucky this year that we are in a position to do that. we also looked at what if we need to do to augment our budget. we looked at what our priorities are but we first started with the mayor's priorities which were stated as government efficiency, affordability of services and programs and government innovations. it says that we were supposed to, if we were going to propose anything, we needed to have data ann will -- analytics behind this request. staff took that seriously. we looked at, everybody looked at what they had and how what we've been working towards. in the future we all made proposals and prioritized them and would like to come forward with these proposals. generally they hit the five priorities. enhancing emerge requirements implementation of online and benefit enrollment and increasing efficiency level and using an will it -- analyticals to provide health services. identifying and complying with changes in federal and local act including affordable care act and proceed actively and strategically rather than reactively. and the hsf wellness center and actively working with other departments to develop their wellness program. finally to increase fiscal control and oversight to ensure vendors comply with contractual obligations. those are the things we wanted to put together. then we put in to funding packages. i will go through this very quickly, a great deal of specifics that were provided to you in terms of write ups and numbers when we introduced the board deck. i will take any questions you have but i'm not spending a lot of time on any of these. streaming the benefits emerge for e benefits. essentially as you heard our existing benefits administration module of people saw needs quit a bit of work to make it ready to go forward to e benefits. e benefits is i believe 2015. question want to implement it around that period of time some time around 2015. there is a significant amount of work for this. this is a limited duration position because it has a beginning and an end and would include training. the second is to optimize the system performance through analytics. this is to build among other things an internal data where we can use for our analytics and controllers office is interested in what we are doing. it would also allow us to bring a lot of the dashboard work in-house and us to be able to automate reporting. again, a limited duration position because we feel that we can put a beginning and an end to it. i failed to mention that one of the things when we were putting the packages together we felt that what makes sense for the department in order to be compliant with what the mayor's office and others would like us to do in trying to fund some of the things ourselves and ask for the other. the upgrading the benefits is clearly a major proposal that the city needs to get around and is involved with and that's why that would go to the general fund. optimizing the health system performance through an alyticals, we would look to other revenues to cover that. and comply with state and local legislation. that is really to allow us to as i said get pro actively track changes in federal state and local stages in our work that would have collecting analyzing and presentation in health data and would help the directors in terms of being able to provide outreach so that the city can be more of a player region wise and there is an education component to that. that is one position. the next page is the next group of funding packages. the next one is implementing the strategic wellness plan and this is to go to the general fund. we are at somewhat off. it syncs because we have to put our charter mandate before february 21st. you are going to hear the wellness plan and march. we've heard from the other response aureus -- response sponsors and the wellness plan and operating expenditures for the wellness, the work that's done through the wellness center. one of the positions, the major part of the two positions is to help focus on other departments and help them with their wellness activities that includes not