were certain positions that were previously funded by the redevelopment agency. they were not actually positions -- they are not new positions, per say, but they had received funding through developer reimbursements. supervisor kim: that is for existing individuals but a source of funding has not changed. >> that is correct. those are the primary other things that you are not seeing here. overall, in terms of the fiscal impact on the city, you recall the redevelopment agency's budget was comprised of a variety of sources, including tax increment on proceeds and other revenues. going forward, these same sources are available to the successor agency, the city, but there are somewhat more restricted uses because of the rules associated with as 26.

-- ab 26. over all, the agency tax increment, the successor agency tax increment request is increasing a little bit. that is primarily driven by mission bay and the requirements to transfer all of the increasing tax increment to mission bay. as well as increases to certain required passthroughs back to the state. there have been some changes in the windows are calculated by the state. debt service continues to remain the largest cost in the successor agency budget, and that is relatively flat. project and staffing costs are lower, both because the agency is no longer allowed to do the same range of things that it did before, and because there is a limit to administrative costs that is permitted by ab 26.

this next slide is showing you the tax increment that is allocated to enforceable obligations. tax increment, as you will recall, is basically our general fund property-tax that is dedicated to these projects. the board has made the decision to set those funds aside. to the extent that the tax increment request increases or decreases, that does have an effect on our overall fund, because it is a property tax dollar. what this table is showing you, at the highest level, you can see the net tax increment that is available in these project areas. in the current year, the $134 million, and it is increasing next year, 135.6, and the following year, $143 million.

that is the amount that could be allocated to the agency. you recall the city has the story made choices about how much tax increment to provide to the city and has never fully provided that full tax increment value. down at the bottom, uc the actual tax increment provided in the current fiscal year to the agency, $112 million, increasing to almost one harder 14 in the second year, $123.8 million in the third year. that increase is primarily driven by redevelopment -- by mission bay pastor's increasing and by this change to the way the pastors are calculated. -- passthroughs increasing in by this change to the way the pass- throughs are calculated. briefly, what is continuing at

the successor agency and the city administrator's office in the community reinvestment division. community reinvestment division is continuing the activities that are permited on the rops, debt obligations including paying bonds, continue to implement the major approve development projects i mentioned a minute ago, mission bay, hunters pay shipyard, transbay, managing certain assets and continue to be the responsibility of the agency, and then managing the transfer of certain responsibilities into the rest of the city. overall, the successor agency 12-30 proposed budget will be $140 million, off following year, decreasing steadily to $127 million. for the mayor's office of housing, you see a significant increase in the or on mayor's

budget due to the transfer of these assets and responsibilities. the mayor's office of housing began implementing the responsibilities related to the house and obligations in february of this year and is completing the commitments related to the pre development and affordable housing construction for the enforcement obligations that are on the rops, as well as continuing property management for redevelopment constructed unions, as well as providing staffing to there is funding in the budget for housing, staffing, and program delivery. the enforceable projects that are included in the mayor's office of housing are the major improvement areas, housing related obligations, related to the shipyard, related to mission bay, transbay.

the match and implementation of the alice griffith rebuild. as you recall, we received a federal choice grants of $30.2 million. those funds and the obligation to continue that are viewed as an enforceable obligation. replacement housing obligation. that was the obligation of the redevelopment agency related to housing that was destroyed and is -- the city has made a commitment to replace. you will see the budget for the mayor's office of housing related to develop and obligations, about $8 million in each of the next two years. the tax increment request is increasing, and that is primarily due to the mayor's office of housing spending down fund balances as a way of funding the budget in the first year and then requiring an additional tax income and allocation in the second year.

i think there has been a significant amount of interest in the work that is not considered obligated and that the successor agency will no longer be able to perform, using the redevelopment tax increment proceeds. the major impacted areas are housing and hope sf, community and neighborhood development. the primary area affected are the main market, bayview, and the visitation valley area. finally, work force readiness is something the agency is not able to continue to provide through tax increment dollars. in order to continue those import services, there are new costs to the general fund. this chart shows you what the

general fund impact of all of this additional -- of the dissolution of the agency and the work that is not enforceable on the general fund. the top line is showing you -- there is some positive. as the property taxes perot, as the agency has tried to contain its cost, there is some small net positive benefit to the general fund. effective that in the first year is $2.8 million, second year, 2.5. that could be considered a source that could be used to fund these of our general fund costs. below you see costs related to housing and community development of $6.8 million. primarily, that is due to the

way this city funded our hotel tax allocation related to affordable housing, by allocating additional tax increments to the agency. you can do that anymore. those hotel tax dollar to go directly to the mayor's office of housing. the agency was also a critical partner in the hope sf project and is no longer able to fund a project-related activities, community-related to activities, job training-related activities and associated with the project. the agency also contributed to serve supported housing projects that are part of the dph, hsa, and mayor's office of housing pipeline. they are no longer able to do that. on the neighborhood-based economic development side -- these are all included in the mayor's budget. on the neighborhood-based

economic development side, we included approximately $1.6 million in the first year, $1.5 million in the second year relate to work in the mid market, $3.7 million in the second year related to bayview, one in the second year. that difference is due to early funding of the southeast community health facility. approximately $100,000 related to visitation valley. have also included funding for the jobs readiness program. you can see included in the mayor's budget, in the first year, $30 million of general fund support for these programs. second year, $10 million. that is a significant general fund cost. supervisor chu: just to recap, when you talk about the tax increment allocated to enforce obligations, the redevelopment

agency could have asked for a higher version for the redevelopment agency but we did not allocate the entirety of the income in past years to redevelopment agency work. if we look at comparisons year to year and changes, in the current year, we allocated $112 billion to redevelopment agency for the in forcible obligations but we expect those to grow over the next two years, all told about $10 million extra by the time we hit 2013-14? >> that is correct. that is largely due to increased tax increment growth in the mission bay project area. as that increment grows, part of our agreement with the developer, part of that project is that that growth is passed through to the developer to fund additional work in the development area. >supervisor chu: page 10 shows

not enforceable activities. these are all items that were previously going through the redevelopment agency, or they were supporting different work being done in some of these other areas that we can no longer pay for through the state legislation. so the general fund is planning to pick up an additional $10 million for the is not enforceable activities, plus the additional million dollars roughly 40 in forcible obligations in year one, your two, an additional $7 million in general fund expense plus the $10 million in forcible obligations? >> that is right. supervisor chu: over all, the redevelopment agency dissolution has not been neutral to the general fund, it has cost us more. >> that is correct. supervisor chu: supervisor cohen? supervisor cohen: i am pleased to see jri reflected in the

budget. it is not funded at the level of the redevelopment agency had previously committed. i was wondering, what is the mayor's plan for jri overall for the next two years? >> what is included in the mayor's budget is $1 million in the first year, $800,000 in the second year. those funds are intended to complete the initial contract that jri providers had with every development agency through september. additional funds remaining for the second half of the year, the mayor's intention is that those be incorporated into the overall portfolio of the workforce development department so that as the city takes on these additional job readiness training programs and services,

which are clearly needed, they are well integrated into the rest of the offerings of the workforce development division. supervisor cohen: thank you. supervisor chu: i just wanted to point out, doing quick math, in terms of state actions, we talk about what the actions mean to our local government, in terms every development activities alone, we are not talking any additional cuts. impact to the general fund is roughly $32 million over the two years to absorb some of these unenforceable activities or the growth in enforceable activities. i just want to make sure that we are aware that the state has cost us an additional $32,000,000.40 redevelopment activity work. >> to clarify briefly, i think in the first year you are calculating that number is probably correct. in the second year, that top

line on page 10, general fund impact successor were compared to fy11-12, that 2.8 and 2.5, that takes into account the growth in the second year of required tax increment to the agency. i do not think you would want to add the cost of the enforceable obligations in the second year as a state-imposed cost. nonetheless, the point is still a good one. over the two years, nearly $20 million of new costs that are a result of the state action. supervisor chu: meeting for the forcible one that would have grown anyway? >> correct, and accept that there are some changes that i mentioned in the past route. basically they would have grown anyways.

this next slide use to an overview of what is happening in housing and hope sf and what those funds are specifically being allocated to. i walked through this a moment ago. the hotel tax allocation will be provided not to the agency but will flow to the general fund. that hotel tax funding will provide for the development of additional low-income rental housing for elderly and disabled individuals. there is also $200,000 included in the budget for vocational services at hunters view, alice griffith hope that's f site. finally, we have included on the sheet, in the budget a hope sf budget initiative director to manage this project in a more cooperative way and to make sure the tories neighborhood grant is shepherded to completion.

supervisor chu: supervisor cohen? supervisor cohen: i was wondering if there was any budget -- money that was set aside for emergency for, let's say, a fire? >> i am not sure i understand the question. for general emergencies? supervisor cohen: we are talking about hope sf, hunters view, in particular. is there money in the budget that would address -- >> i am the cfo of the mayor's office of housing to there was an early morning saturday fire at the hunters view affordable housing development site. luckily, there were no injuries, but the site was damaged, including the progress we had made for the affordable housing sites. we are still evaluating what that means.

sf fire department is investigating. i think you'll have to work with the developer as you would with any developer project to see what they would be able to do or what additional fine and they would need similar to any affordable housing project that deceived financing that had damaged at the construction site. there is not a reserve set aside in our budget but we have had experiences like this in the past. we will be responsive to what the development team needs out there. supervisor cohen: thank you. i did not need to cut you off with my question, but the cfo answer it. >> that is why they are here to >>. team effort. -- that is why they are here. team effort. supervisor cohen: could you continue to talk about the hope assessed program in relation to the proposed housing trust fund?

and it's dedicated sources? >> the completion of hope sf and the housing trust fund? i can talk briefly about that. currently, the budget includes -- pope asset is not a fully funded project. we do not have sources for all those sites. i think the housing trust fund would certainly be a potential source for the completion of all of the hope sf projects. supervisor cohen: [inaudible] for affordable housing. >> as you know, through the

chair, supervisor cohen, the mayor has proposed for the ballot a housing trust fund. this would be a dedicated source of funding to anticipate what we have been through in the last several years in terms of a drying up of state resources, dissolution of redevelopment, cuts to important federal programs, loss of stimulus funds. how it relates to hope s.f., hope s.f. is one of the major initiatives that our office is working on. part of our general fund budget here, as well as future bond issuances for allison griffiths and for the upcoming two other sites would be part of any overall budget strategy. whether we use funds from the housing trust fund or wheat

issue certificates of participation for hope s.f. sites, whether we are to include this as an enforceable obligation, the housing trust fund will provide a stable, nondurable committed source of funding over all for affordable housing, including those projects that need get financing at the hope s.f. sites. supervisor cohen: thank you. >> moving to the additional investments in mid market, the city is continuing to invest in economic revitalization on mid market and sixth street. those funds include $3 million over the next two years for the program that are delineated below, including business

attraction and retention, community ambassadors, continuation of the improvements, tenant improvements, completion and operation of the sixth street substation, as well as arts programming and planning, neighborhood community in gateman, and economic development planning. the majority of these activities are included in the office of economic and workforce development budgets. a small portion is in the city administrator's office. supervisor chu: supervisor kim? supervisor kim: before we go on, i do want to thank the mayor's office for the tremendous amount of work that went into this. it was an incredibly complicated process to move around funds and find homes for a lot of these projects and programs that are incredibly important to our communities. in particular, in my district and in supervisor cohen's

district 10. i was pleased to see a lot of this was prioritized in the mayor's budget. i know folks in the mid market and sell the market were happy to see that. we are happy to learn that some of them turned out to be enforceable obligations, whether it was the alleyway improvements, which people were concerned about. one of my concerns now is we have many departments owning this work, whether it is the city administrator, mayor's office of economic develop a work force, dpw, mayor's office of housing. i am curious on how we plan to retain discussion and communication, and whether we can do more consolidating? in particular, there seems to be a lot of overlap between the city administrators on community ambassadors, central market partnerships, small business improvements, and economic development. i think it can be challenging.

i have seen this in our work with pedestrian safety when we have too many departments to work with, sometimes things fall through the cracks and there is not a lot of ownership for the work. i am curious to see whether that dialogue is taking place right now. in particular, i know the city administrator is taking on a large portion of rda, along with the community ambassadors program, along with amid market citizens advisory council, yet there is still some stuff. i am curious as to whether we can put that all in one place. >> generally, supervisor -- the city and minister and director of economic work force may have other thoughts they may want to share. supervisor kim: maybe i could

put that question out there. i know both departments are presenting any way. for me, i would rather fund just one rather than both. i think i would just put that out there and we can come back to that later. >> great. in general, the vast majority of work related to implementing the economic development activities is and the office of economic and workforce development. moving on to the work that the agency previously did in the bayview, the city is continuing that work, including along the third street corridor. we are including $4.7 million in the mayor's budget over the next two years, including significant capital for southeast health center facility planning, sf

shine tenant improvements, community ambassadors, a real- estate project pound center, as well as neighborhood community engagement. there are other projects that were previously -- there are some projects that were previously done by the redevelopment agency that are considered in forcible obligations, such as the work associated with the bayview opera house. that will also continue. in visitation valley, it is one of the more complicated pieces of this puzzle because there was no final development agreement for that project and it is not an enforceable project area at all. the site will work at the office of economic development. they are currently developing an mou that would allow the developer to fund the additional

work in that area. in addition, through the invest in neighborhoods effort that you will hear more about from director that's later, oewd will provide specific economic development support along leanne avenue. that includes the items outlined below. -- leland ave. specific, targeted support to help that court or access funds from city-wide programs, like the small business revolving door fund, or the community beautification fund. my last slide is what we briefly spoke about, the job readiness. previously, $1 million is included to complete the

remaining commitment for jri and work into oewd in the next year. happy to answer any questions you may have. my colleagues are also available for questions. supervisor chu: thank you. colleagues, any questions? we will also be seeing parts of the redevelopment budget born in all departments today. what we move forward with the department hearings, hearing one by one. if it is fine with everyone, we had a request from the city attorney to hear his budget first. he is going to be on available later on in the evening. is the city attorney here? if the city attorney is not here, why don't we go to the department of economic and workforce development.

>> good morning, afternoon, supervisors. director of the office of workforce -- economic reports and development. happy to be here today to talk about