Official Statement Airport Commission City and County of San ...

A decline in the actuarial value of assets over time, without a commensurate decline in the actuarial value
of liabilities, will result in an increase in the contribution rates for the City and the Commission. No assurance can
be provided by the City or the Commission that contribution rates will not continue to increase. Since mid-2008,
global capital markets have experienced unprecedented adverse events, including severe credit and liquidity
contractions, and continue to suffer extreme price volatility. The overall economic climate has had an adverse
impact on the Retirement System’s portfolio.
Medical Benefits. Medical benefits for eligible active Airport and other City employees, retired employees,
eligible dependents and surviving spouses and domestic partners of covered City retirees (the “City Beneficiaries”)
are administered by the City’s Health Service System (the “Health Service System”) pursuant to the Charter.
Pursuant to the Charter, the Health Service System also administers medical benefits to active and retired employees
of SFCCD, SFUSD and the San Francisco Superior Court (collectively, the “Other Beneficiaries”). However, the
City is not required to fund medical benefits for the Other Beneficiaries. The contributions for health care benefits
made by the Airport for the last five Fiscal Years are set forth below:
AIRPORT CONTRIBUTIONS TO THE HEALTH SERVICE SYSTEM
($ in millions)
Fiscal Year Active Employees Retirees
Total
2004-05
2005-06
2006-07
2007-08
2008-09
$10.283
11.042
12.309
13.552
N/A (4)
$2.770
4.529
9.694 (1)
10.495 (3)
N/A (4)
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(1) Includes $6.294 million to provide postretirement benefits on a pay-as-you-go basis.
(2) Restated.
(3) Includes $7.046 million to provide postretirement benefits on a pay-as-you-go basis.
(4) This information is expected to be available on or before February 28, 2009.
(5) Includes $7.216 million to provide postretirement benefits on a pay-as-you-go basis.
Source: San Francisco Airport Commission.
$13.053
15.571
22.003 (2)
24.047 (2)
26.160 (5)
The Health Service System is overseen by the City’s Health Service Board (the “Health Service Board”).
The seven-member Health Service Board is composed of members of the Board of Supervisors, appointed by the
Board President; an individual who regularly consults in the health care field, appointed by the Mayor; a doctor of
medicine, appointed by the Mayor; and four members of the Health Service System, active or retired, elected from
among their numbers.
The plans (the “HSS Medical Plans”) for providing medical care to the City Beneficiaries and the Other
Beneficiaries (the “HSS Beneficiaries”) are determined annually by the Health Service Board and approved by the
Board of Supervisors pursuant to the Charter.
The Health Service System oversees a trust fund (the “Health Service Trust Fund”) established pursuant to
the Charter through which medical benefits for the HSS Beneficiaries are funded. The Health Service System issues
annually a publicly available, independently audited financial report that includes financial statements for the Health
Service Trust Fund. This report may be obtained by writing to the San Francisco Health Service System, 1145
Market Street, Second Floor, San Francisco, California 94103, or by calling 415-554-1727. The report is also
posted on the Health Service System website at myhss.org.
As presently structured under the Charter, the Health Service Trust Fund is not a fund through which assets
are accumulated to finance post-employment healthcare benefits (an “OPEB Fund”). Thus, the Health Service Trust
Fund is not currently affected by Governmental Accounting Standards Board Statement Number 45, Financial
Reporting for Postemployment Benefit Plans Other Than Pensions, which applies to OPEB Funds.
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