DPH projects $43.4 million surplus for FY21-22 Q2 but flags several program shortfalls

Jenny Louie, chief financial officer for the Department of Public Health, presented the department's second-quarter revenue and expenditure projections.

"Overall, the department is projecting a $43,400,000 surplus," Louie said, describing $41.3 million in revenue savings and $2.1 million in expenditure savings that together drive the projection. She said a portion of administrative savings will move to the management reserve, leaving a net projected surplus of about $34.1 million in operating funds.

Louie walked commissioners through division-level variances. She said Zuckerberg San Francisco General (ZSFG) projects a $23.4 million surplus driven by better-than-expected patient revenues and programs but noted a potential $15.8 million prior-year settlement tied to federal reconciliations that could offset gains. Laguna Honda's surplus was attributed to an increased Medi‑Cal per‑diem rate. Behavioral health showed a projected ~$29.4 million surplus driven largely by revenue improvements including Medi‑Cal billings and an initial CalAIM quality incentive payment.

Louie warned that COVID-19 eligible cost reconciliations remain in progress and could change projections later in the year, especially for hospital operating costs tied to surges and isolation/quarantine hotel expenses. She said the management reserve has an updated balance of roughly $113.3 million after an additional deposit.

Commissioners asked for clarifications about timing and budget recognition practices; Louie explained some shortfalls reflect timing differences, revenue recognition choices and prior policy decisions that will be corrected in future budget cycles.