our projections would be all of this money will not be expanded this fiscal year. if that is correct, and i cannot say that with certainty, but if that is correct, that means to be leaving money in this department's budget. you may have other priorities to use it. if the department could demonstrate, if you were to make this cut and to demonstrate they needed additional funds, they could always come back to the committee for a supplemental from the general fund reserve. we do not want it to happen, but the committee would have use of the funds. if the department demonstrated a need, they could come back at a later time. supervisor chu: thank you. any questions on the revolving loan fund? supervisor kim. supervisor kim: last week became for with that of the $500,000 we did allocate to the revolving

fund, none of those dollars have been expended. we can pull them over to 2012- 2013, right? >> the $500,000 has not been expended. there is $380,000 in small- business loans that have been preapproved by working solutions that are in the queue. we have had administrative problems getting it to them. when that goes out, it will leave $120,000. supervisor kim: i remember working solutions had a fund balance. there's the 500,000 old rear granting them. one of the policy considerations was was that working solutions already had a fund balance it was not able to expand. the question is whether they can expand $1 million over the next year given the heavy fund balance already. the $300,000 could come out of their existing fund balance prior to our $1 million

allocation. >> i do not remember what the balance was. i can find out and report back later in the day. i understand was the balance rotated again in the last couple months and the 380 would be directly coming out of the 500 allocated in march. supervisor kim: i appreciate the breakdown. i see they are going to different types of loans for small businesses. being that this is somewhat of an emerging or new area for our city to be involved in, why is it we want to allocate the most amount of money in the next fiscal year bursa's the following fiscal year reverses -- fiscal year versus the following fiscal year after we have had a time to test it out? >> i think we chose -- it is a

good question. i think we chose these amounts $500,000 because it was an amount we thought we could get out the door in the next fiscal year based on the need we have seen in talking to businesses. if you have a loan fund that is $50,000 to $250,000, it could be eight to 15 months. it is not that many loans to process in the year. we see a need. with the sf shines and tenant improvements, those are smaller loans but it is amateur program -- a mature program. we have the infrastructure for that program. we have a partner, a community- based partner. we know how to move those dollars. we know how to get those projects permitted and built.

we feel like there will be a larger number of them. we do have the infrastructure there. with regard to section 108, that is a large chunk of the money we are proposing. the vast majority will not be spent. it is a loan-loss reserve to unlock the $23 million. it is not prudent to put these out without having a loan-loss reserve to make sure our cdbg funds are not put in jeopardy. it is a conservative amount. one thing we discussed, i am not sure this money needs to sit in our budget. it may be able to sit on reserve and could be called upon when we issue the loans to have it set as a loan-loss reserve for a particular loan rather than having it money that sits in our budget prior to making loans.

we have had interest in this program before. because we have not had a reserve, we have had other sources of money. we have not made large loans, but we see opportunities in the next year of important projects that could use this money. supervisor chu: thank you. this is loans in the range of $50,000 to $250,000. can you explain the need? in your analysis, was there something in this area we thought was a hole in terms of the lending options for businesses? >> we see there are several micro lenders in san francisco that do a good job of lending a few thousand dollars up to $50,000, often for new businesses to get started. but when you have an existing

business looking to do a round of improvements or expansion, it can be harder to find that loan product from a commercial lender, especially if you are still a new business without showing large amounts of revenue. we wanted to work with -- we would not be lending directly. we would do anrfp and work with a community lender for folks graduating out of the type of business loan you do when you are starting a business. we have seen tenant improvements, new equipment, inventory, and expansion are the main categories for loans of this size. supervisor chu: ok, thank you. any of the questions on the revolving loan fund? if not, go forward with information about the neighborhood initiative.

explain what is in the budget for this area. >> sure. i have -- i wanted to provide more information on the background of what invest in neighborhoods is and begin to create an understandable narrative about the initiative. we're trying to marshal existing city resources but use them in a different way. we want to say to the neighborhoods we're choosing that every neighborhood receives baseline services from the city better known today. stakeholders. they are made aware of these are available any systematic way. all of the neighborhoods issue assessments. those will look at demographics, physical conditions, and the need for support from nonprofit

partners and ongoing funding. from understanding the baseline services and quarter assessments, services will be designed for that particular neighborhood. to the extent they need funding, there will be operational support and grants. we created a toolkit. the first thing we did was figure out baseline services. as you can see in this handout and on the overhead -- i am sorry. i do not have a slide for this. we read able to catalog all of the city services that could possibly be used in a commercial corridor. that was illustrative to the city family to better understand. the puc has dollars for waste-

water treatment. that can be used for street beautification as long as you know who will take care of the improvements when they're implemented. when you have intra-department of conversations about programs, use your resources are being used more strategically. this baseline assessment is a tool we will be giving to stakeholders and partners in corridors so they know what is available. from there, we will be doing corridor assessment. i have prepared an outline of what these look like in terms of elements. you need to do an economic and business analysis. you need to do demographic analysis. you need to understand planning and land-use analysis. look at this neighborhood institutions. libraries, banks, schools,

parks. what are the things which can be utilizing to make a stronger and healthier neighborhood? after you do the assessment, if you start thinking about customized services and the tools we have above a base line service that can be deployed. they cannot go into every neighborhood but it could be a specific vacancy, public art, greening projects, seeing if those neighborhoods can qualify for other programs. we figure out the holes we want to target. some of the money proposed in the budget is not yet targeted to particular neighborhoods. after you go through the paces, you have hundreds of thousands of dollars in grant money that can be deployed in a strategic

way. i will pause and see if you have questions. supervisor chu: i am looking at the documents you have provided. you show a summary of different economic investments. you talk about the work force development component as well. with regards to the small business revolving loan fund, we have talked about that. the cruise ship terminal. can you explain what they represent? >> this is in response to an inquiry from supervisor avalos wanting to have a high understanding of how the budget is proposed to be increased in terms of general and non-general fund expenditures. this shows increases in general funds across the department divided between economic development and workforce development. $4.9 million proposed increase

ship terminal funds. those are one time funds placed in the budget because of our long-term relationship with the port. the small business loan fund -- this is only a summary for next fiscal year. this is not a two-your summary. this is the $2 million proposed for next year. i have more of a breakdown. there is dollars and 2.7 million in economic development proposed -- there is $2.7 million in economic development proposed with an additional hundred 50,000 of -- $150,000 for the workforce side and another million dollars for jri. it shows a decrease in america's cup because the proposed budget was $12 million this year. with the $10 million for next year, that is authorization to spend the money coming from the organizing committee.

there is $150,000 for warriors, $125,000 for other development. that would be funds we would not expand until we had a written agreement with developers to reimburse us. you can see the other proposed budgetary-spending on the workforce side, which is largely federal grants. supervisor chu: thank you. supervisor avalos. supervisor avalos: thank you for providing the breakdown. it was to see whether have been enhancements to the budget. to drill down further, jri, that $1 million is combined with other jri funding, is that correct? >> is that?

do you want to j-- supervisor avalos: how was it funded in the past and how is it different? >> that was redevelopment. >> jri is the jobs readiness initiative. it was previously funded through the development agency at approximately $1 million on an annual basis. we have included $1 million in funding going forward for those services which are early job readiness services. supervisor avalos: where are those programs focused? what part of san francisco? >> the existing initiative is primarily focused in the areas the redevelopment agency was working. the focus is primarily south of market as well as in the bay view-hunters point area.

we have asked the department, as we're taking on responsibility with these funds, to consider how these funds were together with general fund dollars -- work together with general fund dollars and determine how those to support a broader base of neighborhood and district services. supervisor avalos: in the past, these funds were used for residents of specific neighborhoods to access services around burial removal? with a survey in people city- wide -- were they surveying people city-wide. it marks there were more serving the neighbors of the redevelopment areas. supervisor avalos: we're now looking at serving citywide, probably with a focus on those neighborhoods. >> the priority is not to have about ends to programs that are important in those neighborhoods. this allows us the ability to

work city-wide and leverage of the dollar's to expand the jri program. supervisor avalos: thank you. supervisor chu: thank you. supervisor kim. >> i also appreciate the overview. you have $10.8 million in general fund allocation. i have that there is $0 11.3 million increase in general fund request from last year. 153% increase, the second- largest increase forgot after the city planning department. to give some relativity, the third largest was from rec and park at 29%. there is a large increase. i know a lot of it has to do with the mayor's 17-point plan.

i am curious about what is not included in the $10.8 million of the $11.3. >> some of that is things we agree to as cuts. supervisor kim: increases in personnel? >> i am the chief financial officer for oewd. it is attributed to personal adjustments from year to year. supervisor kim: that accounts for the $500,000. last week, it it said -- i was not sure if this was in the past today years or the next even years, that you are dedicating $7 million to the market partnership and the third street corridor. is that for the following two years or is this for the previous two years? >> that was for the previous two years. supervisor kim: i was going to ask how that broke down in this

summary. >> in the second sheet i prepared which is a breakdown of how general fund and non-general fund money would be spent, the improved blighted areas is really directly dollars that would go to central market and a view as grants. that is not the only money going. they will also be included in invest in neighborhoods and the overall strategy. that is a pot of money that will be dedicated for next year. supervisor kim: 1 more clarification question. i noticed in your budget for professional services that it has been growing substantially. there was an increase from $1 million to $11 million over two this will cycles. are these redevelopment functions? rather of the reasons for the large increase? >> i think a fair amount of that was america's cup. >a large percentage is reimbursd

by developers. i do not want to speak incorrectly about that. yes, it is america's cup. supervisor kim: that was america's cup. i think i was a little confused about the difference between the job squad and invest in our neighborhood. you feel like they're going to be focused on specific corridors? >> they will be point of contact for the totality of what a particular neighborhood or corridor needs. the job squad will be full-time outreach workers that will be going across the city on a regular basis talking to businesses that cannot come to a small business commission meeting or to the office. they will be working like case manager's understanding what businesses need by talking to them. they will be first line

connectors to small businesses. supervisor kim: and get the difference, but i am not understand why both. i think that fulfill the same need. i understand one is more external and one is more internal. it is still hard for me to understand why one cannot do both. >> the invest in neighborhood managers are almost like project managers. as projects develop, whether it is streetscape or wanting to oversee the aside improvements of eight different businesses happening within three months, the invest in neighborhoods team would be shepherding all of that. the job squad folks would be

those that spot problems and make sure the responding department gets out and cleans this vacant lot or that dpt paints a green zone they have promised to pay. it is more tactical and small- scale. supervisor kim: ok, thank you. supervisor chu: supervisor cohen. >> i appreciate the initiative you are assuming by stepping up and playing a significant role in recorders. i am grateful for that, particularly in the absence of the redevelopment agency. i want to make sure i am seeing and reading these numbers correctly. the mayor is currently funding -- the mayor's budget is funding for the continuation of contracts through the end of this calendar year.

an additional $800,000 for fiscal year 2013-2014? >> yes, that is right. supervisor cohen: i want to echo the concerns we heard on friday during public comment about the six-month funding gap between the end of the calendar year and the additional funding opportunities available for the next fiscal year. in particular, for smaller organizations. just wanted to share those thoughts with you. >> it is definitely something we have been hearing from our partners, that we are relying on redevelopment funds. it is an issue with the funding cycle. we're looking to other funding sources to try on a smaller scale. >> just to add one clarifying

point, a supervisor. i believe there is not a funding gap in terms of the dollars available. there is $1 million available in the budget. i think she is referring to the timing of the rfp cycles. we will work with the department to make sure there is not a gap in funding. supervisor cohen: thank you for clarifying. supervisor chu: in terms of the full year, there is $1 million placed in the budget for jri funding. in the redevelopment budget, the results of $1 million funding for the full year. >> correct. supervisor chu: the rfp issue is that now the city is taking on responsibility for administering these contracts, we as the city have to reissue an rfp to figure out who the vendors are that will be

providing the service. >> correct. supervisor kim: -- supervisor cohen: understand you said this is just for one year. have there been any thoughts on what will happen next year for jri funding? >> there is $1 million of funding in the first year of the budget. there's $800,000 in the second year. we have asked the director of work-force development to take those funds and look at those in conjunction with the larger portfolio of jobs readiness funding we have on the city side which is general fund dollars as well as federal dollars. to make sure all of those are being used in the most effective way possible. the larger question that has been coming up is a question about the timing of rfp's and making sure there is not a gap

in services. there is funding in the second year. the city will need to conduct a competitive process for those funds. supervisor chu: thank you. supervisor wiener. supervisor wiener: thank you. i raised this last week and am raising it again. this budget has significant increases for the revolving loan fund, the job squad, other economic development programs. i am supportive of all of those things. i wanted to emphasize my continuing disappointment that the promised night life and entertainment position was downgraded to a halftime position.

i think it is a difference between $48,000.9 and $96,000. i wanted to express my disappointment that in the budget where we are expanding these important programs that we could not find $48,000 or whatever to have a full-time position to work on economic development in an industry that contributes conservatively $4.2 billion a year to the san francisco economy. i just wanted to register that again. it was quite a surprise for me in the budget. >> there is no question the night and industry contributes massively to the overall economy. we're wanting to be sure we could utilize that position well. there is a great deal of opposition can do. i hear your concerns. supervisor wiener: was that decision made on a policy basis?

the department did not think you could find enough work for a full-time position? or was it a budget decisions in terms of needing to save $48,000? >> i think it was in contrast to other initiatives we have started that have partners that are readily identifiable in the non-profit sector or a body of work we know someone can dive right into. i think it was not a policy decision meant to negate the impact of the industry. i think it was in starting from scratch and wanting to develop something that was thoughtful in its scope. i hear what you are saying. supervisor wiener: this is a

compliment to oewd. when they are focused, great things can happen in terms of running interference with various departments and permitting. you have a very effective department. we are so behind in terms of saving our nighttime industry and street fairs in san francisco. we're losing ground. we are seeing a lot of planning processes and other projects moving forward that are not taking my life and entertainment into account. it is a side thought or afterthought. having someone who was full time devoted to this $4.2 billion industry sends a strong message and will allow us to make sure my life and entertainment are at

the table and we do not continue to lose ground. -- nightlife and entertainment are at the table and we do not continue to lose ground. i think there is more than enough work for one person. supervisor chu: thank you, supervisor. we have discussed a number of different pieces to the department budget. it is my understanding the department is in agreement on the closeouts and recommendations. the area where the department difference is on the policy recommendations regarding the revolving loan fund. can we have a motion to except the budget analyst's recommendations? we can do that without objection? to the revolving loan fund, any thoughts? supervisor avalos. supervisor avalos: i would like to follow the recommendations on the revolving loan fund. i feel we made the lo