you for engaging the stakeholder group of community advocates and neighborhood groups, but also fully briefing supervisor kim, the new supervisor for district 6. thank you for doing that. >> thank you, supervisor. it is a pleasure to be here today. i'm going to try to be brief. i think we did a pretty exhausted presentation last week, but of course, i would be more than happy to answer specific questions. i wanted to focus if i could my presentation on the policies that were the focus of the stakeholder group over the last several weeks, if i may.

we continued to refine the draft policies, and i wanted to provide this in context. when we originally discussed launching a pilot project, it was always in the context of having draft policies to guide the future use in the city, and our intention is we hope to be able to use this tool in other appropriate areas, which may include some of the existing neighborhood plans like market and octavia, or the eastern neighborhood or the west side of the city. these criteria that i'm going to present our the culmination of a conversation that began almost six months ago with key agencies, and including specific input from the capital planning committee. i was at the capital planning

committee today, and that committee approved and recommended this package to the board today. i would also like to mention that the small business commission last week passed a similar recommendation. the five main threshold criteria, and these would be the criteria that would determine when an ifd would be appropriate, are listed on this slide, and i thought i walked with them. we are suggesting that these tools be limited to areas that have been rezoned as part of an area of land for development agreement, and that are also located within what we call a priority development area, which is an association of bay area government designation, which is essentially an area that is close to transit and that is planned for more housing. this designation, which is regional, moves that area of in terms of priority for regional, state, and federal

transportation infrastructure funding. one of our strategies is to leverage any ifd monies we have with outside sources. supervisor mar: can you give examples of areas that are designated for housing and transit? >> san francisco has more than any other city in the region. they are sprinkled throughout the area, which i believe now is nine counties. the majority of them are all long bart -- along bart or caltrain lines. sort of along the corridor. the entire -- well, not the entire. a good portion of the eastern half of san francisco, where you would expect to see it, all of downtown, south of market, and the majority of eastern neighborhoods are within the

pda. now, a new one has been proposed for 19th avenue adjoining right along the m line corridor. supervisor cohen: i am processing this -- i just want to make sure i'm processing this information correctly. it includes the -- >> southeast quadrant. the entire candlestick area as well as most of the bayview is within the pda. supervisor cohen: can you tell me what makes a neighborhood attractive to attract a foreign ifd? >> i should clarify -- the state law does not have as many restrictions as we are proposing. it essentially says it has to be essentially a partially

undeveloped area, and that is left undefined, but we believe that means lacking in infrastructure. that is about it. the moneys have to be directed towards public facilities, and, of course, you have to have a vote of either the property owners or the people, and it cannot be within an existing redevelopment area. the logical reason for that is we are already using tax increment with in redevelopment areas, so it would be duplicative of that. those are the broad restrictions if you will on the use of that at the state level. we were asked to restrict it further in san francisco, primarily out of a concern of projecting -- protected the general fund. supervisor cohen: fast by whom? >> by all our partners in the city. their job is to make sure we protect our general fund monies. the concern is simply this is a

very powerful financing tool, and we need to use it judiciously. otherwise, presumably, every neighborhood would like to have an ifd, and pretty soon, all the cookies in the cookie jar would be gone. we were proposing this as a smart growth carrot, a reward to neighborhoods that have been willing to accept growth and change, and it is essentially a social compact. the city saying we will prioritize a portion of our future tax increments to be reinvested in the very neighborhood that has accepted growth and change for public facilities that supports that destiny. parks, sidewalks, transit, bicycle improvements, and the like. the term we used in the planning field is building complete neighborhoods. this is a way for the city to show its commitment towards that. it has the advantage, of course, that it can be used to

supplement existing impact fees. your previous item dealt with the issue of impact fees. we never seem to have enough. so this is a way for the city to contribute to that. to the laudable goal of building better streets and parks and transportation infrastructure. supervisor mar: thank you. >> item two, if you look -- criteria two, excuse me, is further limiting them to study areas where zoning is projected to result in a net fiscal benefit to the general fund. this term is from the previous presentation i made. it has evolved in response to feedback from committee members and stakeholders. the concern here was that by looking at an entire plan, we may overlook specific benefits. that is the set -- the best example i can give you is in

eastern neighborhoods, where we had many diverse goals spread over a huge area. some portions work effectively downzoned to protect light industry. if you looked only at those areas, you would see a net fiscal - in the sense that development potential was reduced and next tax base was arguably reduced -- you would see a net fiscal negative. we do not want to penalize the entire area because there was a goal in the entire area. what this says is instead, we will look at a new definition, which is basically a half mile radius around a proposal ifd and to the net fiscal analysis within that zone. to be specific, there was some of selling that allowed substantial new development. the ifd study area were to

encompassed that generally and some adjoining parcels and blocks, and it would not necessarily penalize east soma for a separate decision that was made in, let's say, central waterfront. that is the reason for that study, but again, what we do within the area is we look at the zoning before and after. we do projections 30 years out and say this is the development we would expect compared to the development we would expect without the rezoning, with the original zoning, and they would net out all the associated costs. if there is a fiscal surplus, if the rezoning results in more money for the general fund, the area would be eligible for an ifd. in addition to the restriction, we are proposing a maximum limit of 50% of available increments, and again, this is a cautionary

policy. this board can alter these policies in the future if you feel you need more flexibility, but the desire here was to not give away the store. we would say no more than did the% of the available anchorman over 30 years -- that is cumulatively over the 30-year life. remember, this builds up over time. that does not prevent us from bonding or spending a lot on the front, and then pay it back later through bond payments. it just says that over the life of the program, we would spend no more than 50%. supervisor mar: i think you use the too many hands in the cookie jar analogy last time. >> so we are saying only half the cookie, to continue that analogy. on top of that, we are saying that in no event should that 50% of the increment exceed the net available surplus. so it might be back some plan

areas, our projected fiscal surplus amounts to something smaller than 50% of the available to increment. why would that be? let's say the amount of general fund costs associated with the particular plan are high, and it eats up a lot of the benefit. we do not want to be taking away from the general fund that are needed for city-wide services or even services in that area, so again, we can only use the surplus. that is a really important point. we are suggesting limiting ifd's to projects that address infrastructure deficiencies, and the change you may or may not notice -- i apologize. i did not want to distribute a red line because it looks something like a blood bath. what was missing here is the term "existing." the reason that became a debate is because what is an existing deficiency? we are proposing to use these in

areas that have new growth, and some areas that right now might be perfectly sufficient with and for a structure, without a residential population, when a residential population is added, may become efficient, whether it is parks, sidewalks, or bus stops. we wanted some flexibility with the use of these funds. the key element is we did want to apply universal objective standards city-wide as to what constitutes a deficiency. there is a concern i'm sure all of you are aware of about playing favorites with specific districts getting what some people called the gold-plated park benches. we would be using the existing standard for what is good infrastructure so all neighborhoods would be treated fairly. finally, item five. we are suggesting that the use of ifd monies be limited to

individual infrastructures with a long-term maintenance commitment attached to them. as you all know as well, we turned out to not have enough money from the general fund to deal with ongoing maintenance of what we have, said the budget office and the capital planning group thought that this was a particularly important threshold, that we do not spend the money until we have a source of maintenance identified, and it is important to identify that that source could be the board. the board could say we are going to prioritize more maintenance money this year and ongoing for a particular improvement. that is one approach. it could also be a cfd. it could be a public/private agreement. could be a community but of the district that steps up and says it would maintain the streetscape. there are many ways to do that, but the point is we would not spend the money until we have identified each project, how maintenance would be taken care of. those are the five threshold criteria.

in addition, the next slide, as i highlighted, the new criteria that came out of literally our meeting with the capital planning committee just an hour ago -- a question was raised, and it is a good question -- where does this implement bill? remember an ifd has never been done in the state of california. we would be the first city to implement one, which is exciting, but it also means we have to figure out some of the rules. it is not an independent entity. it does not have its own board. the board of supervisors manages it. that is an important point. we have a choice as to how we allocate the increment. one is to flow into a special fund managed by the board. the other was to have it flow by default into the general fund and have the board at every

annual budget decide how much it wanted to appropriate to the ifd. either way, we have an accounting mechanism in place that tells us how much is being generated. either scenario, the board would retain full discretion over the money. you do not lose control of the enough once the board commits to the bond issue, of course, some portion of that would be committed to the interest payments. other than that, the decision of when to stand is this board's decision. secondly, that we leverage the outside moneys with that increment, and that would be something strategic.

there is a requirement in newly rezoned areas that we do this, to ensure that there is a prioritization process for how the money is actually get spent. we do not have a formal cac on rincon hill, although there is an active association, and we will communicate with them. along with supervisor cohen, looking at criteria so we can report back to this board presumably on whether our projections for the ifc have

come true, and that will allow us next time to do a better job. that is the extent of my presentation. any of you have questions? supervisor mar: no, it does not look like there any questions, and thank you for being so thorough and for filling in for supervisor kim, as well. >> supervisor kim did send in an email this morning that she would like to co-sponsor this. supervisor mar: thank you. let's open this up for public comment. i have two cars, and the first is from the rincon hill association, and the second is from the cac. >> good afternoon. my name is jamie hill. i am with the rincon hill

association. the demolition of the embarcadero freeway made the town not so attractive for residential uses compact -- uses, so we are trying to turn this into a friendly ear area for folks to live and also for office space. -- a friendly area. there is no redevelopment. it is sort of on its own for building an infrastructure. i support this area plan infrastructure program to help do that. in our neighborhood, there are a lot of young professionals, like myself, and most of us live there so we can walk to work. it is very easy with the transit

center be in there and also the financial district, the jobs being right there to walk to work -- the transit center being there. and children, there are kids living in the towers, and i assume there will be many more in the future. for them to be able to exercise and build their muscles is very important. the street scape is also important. supervisor kim has already mentioned that street safety is very important. speaking of cookies, we make a lot of cookies in rincon hill. it provides millions in property taxes every year. we are just looking for a little bit of reinvestment in our neighborhood for the quality of life. thank you. supervisor mar: think you, mr. whitaker.

-- thank you. >> dan murray -- murphy, stakeholder in the eastern neighborhoods. i was appointed to be on the eastern neighborhood infrastructure finance work group, which was actually the group that recommended this half -- this ifd tool for transitioning areas in san francisco, so i have been very involved in the background. recently, i was voted by the members to represent the neighborhood cac on this committee, which is piloting this incredibly important financing tool in the rincon hill area. i think the policies that staff has developed in consultation with people like me representing the public are right on point. i think it is a great program. i would be remiss if i did not

say in the context of being on the eastern neighborhood cac, i look forward in the not too distant future of working with this type of tool in the eastern neighborhood. i recognize the -- that rincon hill is a pilot area, but i hope we do not wait five years to be able to do this. this is a growth area for san francisco. private sector development for close to 30 years now. i can tell you that when cities showed a commitment to infrastructure, that sense -- sends an important message for growth, and in that sense, i will be pushing with my fellow neighbors in the eastern neighborhood cac to push for

this in the future. supervisor mar: thank you. is there anyone else who likes to speak? >> i will wear a slightly different hat for this one. i chair and was, like the previous speakers, part of the committee, apif committee, whenever that is, but i am one of the stakeholders. i am very supportive. our cac is on record for using this as a tool for funding in our area plants, and i think it is pretty well known to most of us that the market octavia, balboa, some of our recent plans, the funding was actually about 50% short for what was needed to provide this in the community improvements to meet the projection, so if we are looking at smart growth, this is a great tool for that.

there are some specific details in the guidelines that i have been looking at and have been talking to mr. yarne about. one of the things i have been very attended to is that the cac's that are in place have to be strongly involved. it takes years and years of planning work. they are part of the plan itself. this funding to a should be added to the sources of funding to implement those, and they should not be in somewhat overriding that guidance that cac is providing. it is providing sort of a partner or peer role.

i just wanted to point out, as mr. yarne said, this does not mean it is bad. we are still looking for funding for some of these others, perhaps. thanks. supervisor mar: is there anyone else from the public who would like to speak? seeing none, public comment is closed. [gavel] colleagues, could we have a recommendation on item number four? supervisor wiener. so movers, a positive recommendation. -- so moved. a positive recommendation without objection, and we look forward to moving it to the budget commission. colleagues, is there a motion for items 5 through 11? supervisor wiener: yes. supervisor mar: with positive

recommendation without objection, so let's forward this. clerk somera, are there any other items before us? clerk somera: no, there are no other items. supervisor mar: ok, seeing as there are no other items before us, this meeting is adjourned. [gavel]