Health and Hospitals System Special Board Meeting - September 16, 2011

The HHS Board met in a special meeting to discuss the proposed 2012 HHS Preliminary Budget. Dr. Mason, Interim CEO, began the presentation by stating that the budget that has been prepared to present to the President has proposed revenues of $315m less than proposed expenditures. Since this will need to be justified to President Preckwinkle and the CC Board he outlined the core goals from the Strategic Plan that provide the basis for the proposed budget. Dr. Mason stated that the system intends to continue to shift from an inpatient model of care to an outpatient model and work on employee satisfaction issues.

Since personnel is a significant part of the budget the number of positions in the budget became the focus of discussion. At the present time there are 839 vacant positions - which are being left in the budget - and an additional 343 positions are being added across the system. In the budget as presented these positions are budgeted at 0.2 FTE for salary purposes. Dr. Ansell wanted to understand if this meant that the intent was only to fill 20% of these positions. Dr. Mason stated that the amount for salary to fill these positions was $12.9m and that was the limit for hiring for vacant positions. Director O'Donnel wanted to know what the prioritization was for filling vacant positions, which led to a discussion of whether money was determining the direction of the system or there really was a strategic plan that determined how to allocate money to execute the plan.

Mr. Carvalho then made what he felt were introductory remarks that probably should have started the meeting. He stated that the budget process this year is on a different timeline than it has been in the past due to several transitions - a new CC President, a new HHS CEO, a different menu of taxes for funding the county, and the desire to approve the CC Budget prior to the beginning of the fiscal year on December 1. HHS budget personnel have been working with the President's office to establish a timeline so the President will be able to pull together her proposed budget to present to the CC Board. What is being presented at the meeting is still a work in progress that will continue to be refined. Three public hearings are scheduled for next week and this budget is being presented to the commissioners at their next board meeting for comment.

Mr. Ayres, Interim CFO, presented these comparison summary numbers for the 2012 budget:

Proposed budget for 2012

Appropriations $937.6m Revenues - $610.0m Difference ($327.6m)

Budgeted in 2011

Appropriations $911.8m Revenues - $638m Difference ($273.8m)

Actual in 2011 (anticipated)

Appropriations $911.8m Revenues - $548m Difference ($363.8)

There was also discussion of the Price/Waterhouse/Coopers contract which is due to end in June of 2012. In the 2012 budget it shows as an expense of $17.5m. Dr. Mason stated that most deadlines for replacing PWC had been missed and there was a definite need to plan for what will happen when their contract ends and the county needs to perform the duties that this contract has provided for.

Dr. Mason further stated that there is a fundamental problem in HHS handling their mission of providing care to all and being fiscally responsible, for there is no such thing as "free medical care", and providing free care to those who cannot afford to pay will continue to be a challenge.

Mr. Batts, HHS Board Chairman, wanting to wrap up the 2 hour discussion, stated that while this was not a budget that the board was happy with it was perhaps the best that management could do at the present time. Mr. Carvalho then made a motion that the board approve the following process for moving forward with the budget process:

1. Present the budget as they have it now as the Proposed 2012 HHS Budget to the CC Board on Sept. 20 at their board meeting for comment
2. Hold 3 public hearings on this proposed budget next week as scheduled to get public comment
3. Vote on a final revised version of the 2012 Proposed HHS Budget at the HHS Board meeting on Sept. 28
4. Submit the final version of the 2012 Proposed HHS Budget to the CC Board for their approval at the October 4 CC Board Meeting

The motion was approved with Director Golden voting present. Mr. Carvalho stated that the HHS budget needs to be completed before the President can proceed with the rest of the budget process. The meeting adjourned at 10am.

Cynthia Schilsky

LWVCC Observer