Mayor Rahm Emanuel announced a new plan Jan. 11 that will help delegate supplemental funds to city departments.

The Innovation Loan Fund, part of the mayor’s 2012 budget, consists of $20 million set aside for applicants with projects that cannot be funded from their existing budgets. Departments that seek funding are encouraged to only send project proposals that demonstrate they will improve city services to residents and businesses.

“As a city, we must constantly push the envelope and strive for more innovative solutions so we can deliver the highest quality service with the lowest cost to taxpayers,” Emanuel said in a written statement.

“The Innovation Loan Fund will encourage department employees at every level to submit their ideas on how we can run this city more efficiently and cost effectively.”

According to Kathleen Strand, director of public information for the mayor’s Economic, Budgetary and Business Development Council, one of the mayor’s top priorities is to find ways to reduce the time it takes for Chicagoans to receive city services.

“The hope is to decrease the time it takes for residents to get those important services so they can start their small businesses or build their homes, which is all very good for them personally but also the local economy as a whole,” Strand said.

The idea for the ILF was inspired by a conversation between Emanuel and Philadelphia’s former Mayor Edward Rendell, who added a similar measure to his budget to encourage the development of innovative programs in the city’s government, Strand said.

Capital for the ILF is generated from special financing through Chicago’s contract with JCDecaux North America Inc., an outdoor advertising firm that handles advertisements on the city’s bus shelters, according to Strand.

The deadline for applications is Feb. 15. Proposals for project funding must adhere to a clear set of guidelines and demonstrate either

cost savings or revenue gains, Strand said.

Departments may be able to acquire additional funds after repaying loans received through the ILF.

In addition, if different departments combine their efforts to work on the same project, their ILF loan cap increases from $1 million to $3 million.

The Office of Budget Management will review all applications to make sure they can generate enough revenue to pay back the original investment. After the review process is complete, an oversight committee consisting of cabinet leaders and an alderman who has yet to be selected will

vote on the final proposals, Strand said.

“We anticipate an enthusiastic response from the departments, because this is giving them access to funds they otherwise wouldn’t have access to in order to do some innovative and creative projects, [which] will lead to cost savings and efficiency,” she said.