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  • Report of Independent Auditors and Combined Financial Statements

    Santa Clara County Health Authority (dba Santa Clara Family Health Plan) and Santa Clara Community Health Authority

    June 30, 2019 and 2018

  • Table of Contents

    MANAGEMENT'S DISCUSSION AND ANALYSIS ................................................................................................... 1 

    REPORT OF INDEPENDENT AUDITORS ................................................................................................................ 8 

    COMBINED FINANCIAL STATEMENTS 

    Combined Statements of Net Position ............................................................................................................... 11 

    Combined Statements of Revenues, Expenses, and Changes in Net Position ................................................ 12 

    Combined Statements of Cash Flows ................................................................................................................ 13 

    Notes to Combined Financial Statements .......................................................................................................... 14 

    SUPPLEMENTARY INFORMATION 

    Schedule of Proportionate Share of the Net Pension Asset/Liability ................................................................. 37 

    Schedule of Pension Contributions .................................................................................................................... 38 

    Schedule of Changes in Net Other Post-Employment Benefit Liability ............................................................. 39 

    Schedule of Other Post-Employment Benefit Contributions .............................................................................. 40 

  • Management’s Discussion and Analysis

  • Santa Clara County Health Authority (dba Santa Clara Family Health Plan) and Santa Clara Community Health Authority

    1

    Management's Discussion and Analysis June 30, 2019, 2018, and 2017

    INTRODUCTION:

    In accordance with the Governmental Accounting Standards Board Codification Section 2200, Comprehensive Annual Financial Report, the management of the Santa Clara County Health Authority (dba Santa Clara Family Health Plan) and Santa Clara Community Health Authority, (the “JPA”) (collectively, the “Health Authority”) has prepared this discussion and analysis to provide readers and interested parties with an overview of the organizations’ financial activities for the fiscal years ended June 30, 2019, 2018, and 2017. This discussion should be reviewed in conjunction with the Health Authority’s combined financial statements and accompanying notes to enhance the reader’s understanding of the Health Authority’s financial performance.

    ORGANIZATION:

    Santa Clara County Health Authority is a licensed health maintenance organization that operates in Santa Clara County (the “County”). The County’s Board of Supervisors established Santa Clara County Health Authority in August 1995 in accordance with the State of California Welfare and Institutions Code (the “Code”) Section 14087.38. During 1996, the Health Authority obtained licensure under the Knox-Keene Health Care Services Plan Act of 1975 and commenced operations.

    The JPA is a licensed health maintenance organization that operates in the County. The County’s Board of Supervisors established the JPA in October 2005 in accordance with the Code Section 14087.54. During 2006, the JPA obtained licensure under the Knox-Keene Health Care Services Plan Act of 1975 and commenced operations. The Health Authority has advised the California Department of Managed HealthCare (“DMHC”) of its intent to surrender the JPA’s license as of December 31, 2019.

    OVERVIEW OF FINANCIAL STATEMENTS:

    The Health Authority’s annual combined financial report consists of three statements – Statements of Net Position; Statements of Revenues, Expenses, and Changes in Net Position; and Statements of Cash Flows and accompanying notes. The statements report the following financial information:

     The combined Statements of Net Position present the Health Authority’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position.

     The combined Statements of Revenues, Expenses, and Changes in Net Position present the results of operations during the fiscal years and the resulting changes in net position.

     The combined Statements of Cash Flows identify sources and uses of cash from operating activities, capital and financing activities, and investing activities.

  • Santa Clara County Health Authority (dba Santa Clara Family Health Plan) and Santa Clara Community Health Authority

    Management's Discussion and Analysis June 30, 2019, 2018, and 2017

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    The following discussion and analysis addresses the Health Authority’s overall program activities.

    FINANCIAL HIGHLIGHTS:

     Total enrollment decreased 4.0% to 249,206 members at June 30, 2019, from 259,475 members at June 30, 2018. Total enrollment decreased 6.0% to 259,475 members at June 30, 2018, from 276,028 members at June 30, 2017.

     Net position increased by $24,109,890 to $202,125,755 for the fiscal year ended June 30, 2019, from $178,015,865 for the fiscal year ended June 30, 2018, due to operating income of $18,298,263 and nonoperating income of $5,811,627. Net position increased by $19,635,304 to $178,015,865 for the fiscal year ended June 30, 2018, from $158,380,561 for the fiscal year ended June 30, 2017, due to operating income of $15,867,109 and nonoperating income of $3,768,195.

     Total assets and deferred outflows of resources increased to $1,009,258,566 as of June 30, 2019, from $763,293,226 as of June 30, 2018. Total assets and deferred outflows of resources decreased to $763,293,226 as of June 30, 2018, from $866,340,704 as of June 30, 2017.

     Total liabilities and deferred inflows of resources increased to $897,132,811 at June 30, 2019, from $585,277,361 at June 30, 2018. Total liabilities and deferred inflows of resources decreased to $585,277,361 at June 30, 2018, from $707,960,143 at June 30, 2017.

     The current ratio (current assets divided by current liabilities) of 1.19 as of June 30, 2019, reflected a decrease from 1.26 at June 30, 2018. The current ratio (current assets divided by current liabilities) of 1.26 as of June 30, 2018, reflected an increase from 1.22 at June 30, 2017.

  • Santa Clara County Health Authority (dba Santa Clara Family Health Plan) and Santa Clara Community Health Authority Management's Discussion and Analysis June 30, 2019, 2018, and 2017

    3

    CONDENSED COMBINED STATEMENTS OF NET POSITION:

    2019 2018 2017 Amount % Change Amount % Change Assets:

    Current assets 1,060,344,723$ 724,183,257$ 846,240,713$ 336,161,466$ 46.4% (122,057,456)$ -14.4% Capital assets 27,392,240 24,269,369 10,507,128 3,122,871 12.9% 13,762,241 131.0% Other assets 2,283,994 305,350 305,350 1,978,644 648.0% - 0.0%

    Total assets 1,090,020,957 748,757,976 857,053,191 341,262,981 45.6% (108,295,215) -12.6%

    Deferred outflows of resources 9,237,609 14,535,250 9,287,513 (5,297,641) -36.4% 5,247,737 56.5%

    Total assets and deferred outflows of resources 1,099,258,566$ 763,293,226$ 866,340,704$ 335,965,340$ 44.0% (103,047,478)$ -11.9%

    Liabilities: Current liabilities 891,447,827$ 574,535,150$ 695,799,085$ 316,912,677$ 55.2% (121,263,935)$ -17.4% Noncurrent liabilities 2,539,090 6,533,514 11,675,729 (3,994,424) -61.1% (5,142,215) -44.0%

    Total liabilities 893,986,917 581,068,664 707,474,814 312,918,253 53.9% (126,406,150) -17.9%

    Deferred inflow of resources 3,145,894 4,208,697 485,329 (1,062,803) -25.3% 3,723,368 767.2%

    Net position: Net investment in capital assets 27,392,240 24,269,369 10,507,128 3,122,871 12.9% 13,762,241 131.0%

    Restricted 305,350 305,350 305,350 - 0.0% - 0.0% Unrestricted:

    Designated by Board of Governors 2,200,000 - - 2,200,000 100.0% - 0.0% Unrestricted 172,228,165 153,441,146 147,568,083 18,787,019 12.2% 5,873,063 4.0%

    Total net position 202,125,755 178,015,865 158,380,561 24,109,890 13.5% 19,635,304 12.4%

    Total liabilities, deferred inflows of resources, and net position 1,099,258,566$ 763,293,226$ 866,340,704$ 335,965,340$ 44.0% (103,047,478)$ -11.9%

    2018 to 2017 June 30 Change

    2019 to 2018 Change

    Assets and Deferred Outflows of Resources

    For the fiscal year ended June 30, 2019, assets increased $341,262,981 or 45.6% due primarily to the accrual of receivables for fiscal year 2018 hospital directed payments, which were received after the end of the fiscal year. During the same period, deferred outflows of resources decreased $5,297,641 or 36.4% due to the timing of amounts attributable to employee retirement plans.

    For the fiscal year ended June 30, 2018, assets decreased $108,295,215 or 12.6% due pri