will come back to that. the companies that have been certified, which is the certifying agency, benefits corporations. if you look into the website and the information there, you will see that these corporations are providing back to the community. we volunteer two employees per day per month and we donate our topline revenue to children, education, and fair trade. we have enormous amounts of energy that we put into this.

the companies that qualify are doing an enormous amounts of giving back in their communities. the transparency is very high. you will see all of our profiles that we have filled out. any company that qualifies has to do that as well. this really raises the bar of transparency and giving back. we are strong support of this legislation and we commend supervisor chu for bringing this item forward. >> public comment is closed. i think that there are a number of amendments that have been proposed. we should take the amendments and then we can talk about the item itself. >> one of the questions that came out from public comment was any increase work in the purchasing department. i think we might have someone

from the purchaser here today and they could be addressed and how this ordinance, how this might impact the work. >> we would like to have some time to determine the impact. we understand the intent and are very supportive of the intent of the legislation. however, we are a little concerned in terms of our

ability to actually do a practical implementation. we applied both the discounts that are available through to local businesses and micro businesses. i would like to be able to sit down with my staff and model some of the numbers that would be applied. for some commodities such as it, 4% is a lot.

we would ask the committee for a little bit of time to take a look at this. >> thank you. could you summarize what experience is? you mentioned that as an experience the city as had. >> we have various levels of the implementation depending on how compliant a vendor is. there is limitations on how much impact. the legislation says something to the effect of 50%. however, it is 50% before you provide a discount or after you provide a discount. if we were to throw in these discounts, the question is what

comes first. it has an impact on some evaluations. we have not run into it very often. >> thank you. >> we have an amended version that supervisor chui has indicated. >> i have circulated an amendment as a whole that lays out all of the amendments that we discussed, many of which our budget analysts had already incorporated. there is language that would insure that no benefit corporation would insurreceive d discount. we did hear public comment today

from an organization that represents nonprofits statewide and we had heard feedback from local nonprofit providers, specifically through the human services that work and they were concerned about benefit corporations bump in local nonprofits. our amended version would insurer that benefit corporations don't get it discount and they would somehow thought the nonprofits. the nonprofits get that status and this would apply to contracts under $10 million which is similar to the maximum. we are removing the additional bid discounts 40 corporations and the additive numbers that were referred to. we reduced the other big a discount from 8% to 4%. this is followed by an annual evaluation.

there are two additional amendments that i would like to also add based on the feedback that we have heard from the committee today as well as from various city staff and the public. first, that we require benefit corporations to submit proof of a third party verification of their public benefit to ensure that those companies are receiving benefits and also contributing to the public good and this amendment would require that they have a responsibility to provide oversight over this and to keep an up-to-date list of approved benefit corporations for this discount. then to deal with the fact that you might have non san francisco benefit corporations competing with local businesses that are not on profits. we would like to make it clear that a non san francisco benefit would not receive a discount if

this would displace one of the san francisco businesses. i would like to suggest that we add those amendments and i am hearing feedback. it sounds like we may need to come back if that is what folks want to do. i would ask each of our colleagues and members of the public, if there are additional amendments that you would like, we have introduced this in october but what is another five weeks? of like to hear some specific feedback. the point that i heard a round i t from the purchases office. -- i would like to hear some specific feedback. the point that i heard around it from the purchaser's office. >> getting something back from

the department would be good. looking at commodities and in the impact to their review process, if that is going to be more burdensome. what do we need to know about that? it would be good to have a report. also, the stiffer structures. it would be good to have a little bit more information. if we have more experience on what is happening in philadelphia. it would be good to present that information as well. it would be very useful to see. those are my main comments. >> thank you, supervisor avalos. there is a request to take these amendments as proposed. we can move these in a better direction. can i entertain a motion to take those amendments? we have a motion to take the amendments that are articulated including the two additional amendments that you don't have the language for but you will be working to draft.

>> i just had one question about third party verification, who does that? what are the entities that do the third party verification? is this a business? how did they get funding to do that work? >> one of the major third-party providers are a nonprofit organization that has fairly stringent standards. they actually testified at the small business commission. what i will probably do is and fight them to our next meeting said that you can hear more about that and maybe have them brief you beforehand. you had asked questions about the philadelphia experience. it is my understanding that the tax policy just went into effect so i don't think that we will have any data on that.

part of my interest in moving this sooner rather than later is that i want san francisco to p a west coast destination or capital for this movement and this world which is why we're looking to see what happened in philadelphia. i hope that san francisco can follow suit. we to encourage that kind of social responsibility. >> just to really make clear, i think it would be important to know when we are seeing small corporations or even larger corporations and their main purpose is around public benefit. when we are actually helping to increase their work in the bay area or in the world. there is a phenomenon of the major corporation being able to create some kind of subsidiary that is creating some sort of

public benefit. >> that is a very fair point. >> we had a motion and i think we can take that without objection. then, to the item. supervisor avalos spoke to the benefits and we spoke to the purchasing issues. supervisor kim raise the point about making better expense numbers. i am asking the budget analysts to work more closely to figure out what that will look like. and again, the feedback on commodities will be important. finally on the issue on whether it is a purpose to have a different level, i think the purchaser alluded to the 4% being high. i would like to get some more information on that. >> add to that, transparency and accountability of a third-party their fire. -- verifier. >> we would like to incorporate

some of this information that would be receiving, not only on the expense side. perhaps others that you can look to some other things that would help to inform us. can we continue this item to the call of the chair? >> i am wondering if we can put it to two or three weeks out so we can have a date certain and let people know. i might suggest maybe three weeks out. two weeks at the least. >> why don't we say that if we can set it to april the fourth, this coming weeks wednesday meeting will be canceled and i would be just returning. it would be helpful if it is ethical forth. we will continue this to april 4th. -- it would be helpful if this is april 4th. the next item, please. >> item number5 the ordinance upper pretty $1 million of general fund prior year fund balance for the small business

revolving loan fund program in the office of economic and workforce development. >> thank you very much. we have the office of economic workforce development but before we began that presentation, i would like to turn it over to supervisor kim. >> i appreciate the moment to speak. there is a special announcement that is being made currently. i want to express my support for this item. i am a co-sponsor and i am happy to see the mayor's prayer ties in ways that we can support our small businesses. i think it is really important. i will not be able to hear a report that we had asked. i am hoping that we will have this come back to budget in terms of valuation in terms of how it is going. this could expand or potentially increase the dollar amount.

most curious specifically about the number of jobs this creates and the number of low income individuals that benefit from this job creation program. i am happy to see this move forward. this has answered a lot of my questions about the fund and i want to thank the mayor's office for this. >> thank you for your comments. why don't we go to the presentation? >> thank you very much. i am the director of economic and workforce development. we appreciate the upper to 80 to be before you to answer some of the questions from the last hearing. the revolving loan fund began in 2009 when the city provided funding of $800,000 and the program was designed to create jobs and economic dignity while providing greater access to capital. the initial funding, and many

have graded and retain 75 jobs. some of the loan recipients have graduated to conventional financing and have borrowed an additional $500,000 in capital. oewd does receive a monthly report on the fund. we will be conducting with working permissions, our working partner, and an annual analysis which will include a job and tax impact, business liability, and we will endeavor to continue to collect information about the profile of the employees of the businesses that receive these jobs. i want to clarify some questions that came up in the last hearing. the wells fargo loan is at one

time source of funding. this must be repaid and only targets the five quarters that you see on the slide. there is mission street, and ocean avenue. these finds come up another question that came up is where did they come from and how long have they been with in city control? these funds were lent to the city as 80% interest by wells fargo. at that point, these were dedicated just to storefront improvements in the bayview. at the same time, the redevelopment agency had a portfolio of funds to provide grants to businesses in the bayview for restoring storefronts. it was hard to interest businesses in a loan program when we had greagrand dollars fr the same activity.

as a result, the funds state dormant for many years and it was the sheriff that we worked to have those incorporated into a revolving loan fund and for the first time we set rates for what those could be lent out and with wells fargo's help, we really expanded the scope from just store front, now they can be used for working capital, inventory, for other improvements and expanded the number of neighborhoods in which it could be used. >> just the expansion, this is to district 11 neighborhoods. this is more recent? >> yes. >> did we see a huge amount of activity that went before the grants program in district 10

that we can talk about said that we can see that there was a lot of businesses that were applying for the grants and choosing that for a loan program? you mentioned that there is the loan program which did not succeed because we had a grant program. what is the evidence that the grant program was actually effective? >> i don't have any information today from the redevelopment agency and i did not come prepared to talk about who those grants went to and what the amount was and when they went out and i can further provide that information to you and your office but i do know that this money sat dormant. there was a up take to the store fronts. >> thank you. >> the loan was let out from wells fargo to the city to provide these loans out at a 2% rate?

>> no, the city agreed to borrow the money at 80% rate which is why the core business is now reduced to $432,000 because that is the opportunity cost of that money sitting here. last 8 years. >> we ended up borrowing that money at 80% rate. that is a good rate. >> meanwhile, we have been paying interest. >> correct. >> that is why it is a logger $500,000. >> was there a way in the future that if we do have any partnerships to not borrow unless we need it? >> absolutely. i don't think that we would engage in any transactions with banks and we are working with a lot of banks right now and try to find ways that they can help

us to provide more lending and enter into agreements that to not start until the funds are ready to be deployed. the $1 million supplemental is not approved. they will have $300,000 to launch citywide. if the supplemental is approved, we believe that we will be able to make 62 loans and would be well positioned to be self sustaining and recalled for some time because the rate of return will create a pool that can continue to resolve without starts and stops. >> iin answer to another question, and late 2009, we conducted a small business needs assessment survey and it informed us that there was greatly reduced ability of capital from commercial lenders as a result of the recession. access to capital was an

overarching need of small businesses, we actually heard it from small businesses. after the fund to launch, work is solutions handled 283 inquiries and there has been over 900 today. through the work that we do with neighborhood economic development organizations that help to package loans, we tracked through cbdt the total amount of loans that we have made. in the past few years, we have seen the number of laws that we have helped to package has been reduced from 126 to 88. the empirical evidence that we have based on the anecdotal evidence that we hear from small business and access to capital remains a big issue. >> you mentioned that there was 900 inquiries since the program has been in place for the revolving loan fund.

over what time was that? >> since april of 2009. >> and the number of loans that we have been able to package has increased? >> correct. >> is there information because i think part of the question that i had in our previous hearing was what is the real level of demand. part of it was a capacity issue. is there something that is provided or some information that we can know about the actual number of loans that working solution has been able to put out the door for their working capacity? >> i would be happy to have emily answer that question. "the executive director of working solutions and we administer $3 million in loan

funds around the bay area and last year we provided 31 loans total and then this year we are looking at hitting 50 loans depending on the additional funding, if it happens, that would be more than 50 loans. >> help me understand, the $3 million that is an annual number. >> no, that is the full pot of money that continues to recalled. we have let out a total of 2.3 million. >> 31 loans have gone out, 50 loans, expect this year. >> at least. >> does that assumed the million dollars? >> know. >> we receive about 25 inquiries a month and we have the ability to process about four loans a month. we believe that the additional

resources will allow working solutions to process between 6- 12 loans for month. these loans will be some of the lowest interest rates. we think with the increased capacity and the dollar amount we are talking about deploying, we would be able to lend out all of the bunny in the next 8 months -- of the money in the next 18 months. >> are those san francisco specific? >> yes. you also ask how this fits in with other programs and services available to small businesses. the revolving loan fund is one of many resources that are available for small businesses throughout the city. supervisor avalos, one of the questions you ask is whether the treasure or the tax collector

provides loans. they do not. they announced an initiative to do a paperless initiative. in response to this informal network of city services, the mayor recently asked the city administrator and oewd to form copper has a strategic partnerships that will benefit small businesses organized by it neighborhood. -- to form a strategic partnership that will benefit small businesses organized by neighborhood. rather than having oewd the hub of the informal network, we are better organized on a systemic basis to look at neighborhoods comprehensively at the same time and to have to buy yen from all of the city apart is to understand both timing and deployment on how to leverage

these resources. -- and to have buy in from all of this city departments to understand both timing and deployment. >> we are getting ready for the request for proposals for the cash transaction services with the city and county of san francisco. the treasurer discussed making available about $240,000 per community development financial restitution or credit union that could be available for x type of work or services. i think the money being developmen-- to live and think e money being available does not mean that they will try to access those funds. let's say there is a bridge that could be built with these financial institutions that can't do this type of neighborhood type work but that has to be developed.

-- that can do this type of neighborhood type work. there is a willingness for it to happen in the treasurer's office which is great to see. some of the things which have been talked about a lot and the great concern about how banks are not necessarily as accountable to local neighborhoods and we can create those mechanisms with our local public dollars. >> that example is the perfect one in which you have very good intentions but don't have the outreach budgets or even the connections in order to ensure that the uptake as it is robust as we would like. the idea in this interested neighbor had shed agee involves a working group that the city administrator and die are competing to create a program designed that brings in all of the the problems that you see.

>> they will to assessments and then work with the district supervisors, to create an action plan of what is needed, and then have accountability from all of these departments to deploy the resources that they currently have through oewd through the ad reject a passage that we had to. this will continue to be one of those tools but it will be one that we are very systematically marketing and offering to existing businesses and to businesses that we want to bring in to fill vacancies on all of our neighborhood commercial corridors. this brings me to our outreach and marketing strategies. it was going back to the previous slide, can you talk about how the revolving loan fund sits within all of these disparate programs and areas of focus? i'd stand there was the