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Mayor Coleman's 2015 Budget Address

Mayor Chris Coleman’s 2015 Budget Address

As prepared for delivery on August 13, 2014

 

There are moments in history that define the future for generations to come. Often those moments are not recognized as they happen. Rather, only through the reflective lens of history can we identify when a new course was set. When a bootlegger named Pierre Parrant was kicked out of his roost across the river from Fort Snelling, I doubt the commander understood his actions planted the seed for the future capital of Minnesota. When an ambitious young man from the prairies of Western Canada first set foot in Saint Paul, did anyone take note or understand that James J. Hill would build a railroad empire spanning half a continent. When Saint Paul socialite F. Scott Fitzgerald said he wanted to be an author, did his contemporaries really believe he would go on to write the great American novel? 

We cannot be certain which actions of today will be recognized by future generations as the defining moments of our time. Will it be the decision to build the Green Line and include three additional stops to truly serve the community? Will it be our continued commitment to the development of a robust cultural scene that draws thousands of visitors to Saint Paul? Will it be a child coming out of the Arlington Hills Community Center with a newly discovered sense of all she is capable of, who will go on to write the great American Novel of the 21st Century, invent a life-saving device or go onto the Supreme Court or into the Oval Office?

We do not know – but we must continually evaluate our decisions today with a simple question: how might this influence the future?  And so, we gather today to talk about the future – our hopes and aspirations for our community, our shared values and the challenges we must confront.

Certainly, standing inside this iconic building, we can see in the studios of hundreds of artists the expressions of hope, aspiration, values and challenges. They grapple with the big ideas, they explore the past, present and future, they push the boundaries of their medium, and they challenge us to consider what is and what might be. Ultimately, they reflect back to us a version of ourselves, our world, our realities.

The budget we reveal today is not a painting or a sculpture; it is not a guitar solo or a Great American novel. It is simply a budget – the medium is not oil on canvas, clay thrown on a wheel or music recorded in a studio. It is spreadsheets and numbers and basic arithmetic. But, if a budget were simply about the tools used to build it – if it were simply about addition and subtraction - it would not express our values or mirror who we are.

$103 million in a police department budget doesn’t just tell you that there will be 615 cops, it tells you about a community that values a safe city, where officers know the people and families in neighborhoods they patrol and the residents value gatherings like National Night Out or community BBQs with cops.

$61 million in a Fire Department budget offers us 114 personnel on duty every day. But, more importantly, it offers 4 minute response times when a neighbor, friend or loved one suffers a cardiac arrest emergency – leading to a survival rate more than three times the national average.

A Human Rights and Equal Economic Opportunity Department, while a small part of the city’s overall budget of nearly $515 million, is a $4 million commitment to equity – to working toward a day when every resident of Saint Paul has the chance to reach their full potential, unencumbered by practices that close doors to their future.

***

As in past years, the 2015 budget I present here today mixes aspiration with reality, hope with hard truth, and inspiration with intractable assessments of yet another difficult fiscal year ahead. And it includes input from all of you. Through community conversations and comments shared online, several fundamentals have emerged.

First, the people of Saint Paul are excited about all the great things that are happening. Investment in transportation, festivals filled with world-renowned artists, new housing developments, renovated and new libraries and community centers, enriching summer activities in our parks, restaurants and taprooms springing up in corners of the city that had seen little investment in decades – all are part of a changing landscape for Saint Paul. There is a clear sense that we are on the right track. Even visitors from other parts of the country, such as the more than 225 participants in the recent National League of Cities Summer Conference immediately grasped the excitement generated by new investments being successfully woven into a historic fabric.

Second, I have heard loudly and clearly that the deteriorating condition of our roads is unacceptable. Aging roads and a particularly harsh winter, followed by a protracted and wet spring led to lunar-like conditions across our city streets. While it is not a problem unique to Saint Paul, we will lead the way in repairing our streets.

Third, residents expect a great deal from city Government, but they are growing increasingly concerned about the burden of property taxes. Recent analysis of data from the State Auditor’s Office reveals that steep decreases in Local Government Aid since 2003 resulted in total city revenues dropping 15.6 percent statewide, even when local tax increases are factored in. This shift falls heavily on our residents.

And so, the challenge before us in 2015 is as it has been in the past.  How do we balance the demand and desire for services with the cost to provide essential services?  The basic principles underlying my proposed budget are:

First, we must continue to make investments that fuel the momentum we are experiencing in Saint Paul.

Almost every week, there is a new opening of a business or a ground breaking for new homes.  Eight years ago, there was little interest when we sought proposals for the redevelopment of the Cleveland Circle/Seven Corners site. Now, every developer I have spoken to lately – and I have met with many – wants to share their vision for this dynamic corner. The national interest in the Ford site will lead to a rich pool of developers offering proposals for the 125 acre redevelopment opportunity when Ford puts it up for sale a year from now – and our vision for a 21st Century Community will be brought to life. New restaurants on Payne Avenue, along with the new Arlington Hills Community Center are bringing renewed vitality to a storied Saint Paul neighborhood. Ridership is already exceeding projections on the Green Line and people are exploring the myriad of restaurants and shops on University.

In the first half of this year alone, we have celebrated new grocery stores and taprooms, community centers and parks. We rebuilt fields and refurbished breweries. We’ve welcomed PR firms and expanded salsa makers. We’ve opened theaters and greeted train riders at a new old home in the Union Depot.

We have to make sure that this momentum is sustained and brought to every part of our community. And we must budget in a way that makes that possible.

The second underlying principle is that our budget must continue to promote equity in our community. 

We have a great city that is getting better every day. But too many of our residents have neither the resources nor the education to enable their success. Systemic barriers impose even greater hurdles for them. In the last few years, we have tackled this issue head on, but much work remains. In housing, in employment, in city contracting, in education or youth summer employment, we will continue to open doors for all in this city.

The third guiding principle is the responsibility we hold to be good stewards of public resources. 

This does not simply mean keeping the levy low. Others have tried that before, resulting in cuts and neglect that hurt us in the long run. But, it is also clear that the shift from state resources onto the backs of homeowners has placed tremendous pressure on our residents. While we celebrate the great quality of life we have in Saint Paul, we still must do what we can to not overburden hard working members of our community. 

At the beginning of our process, I directed all department heads to review every line item in their budgets for possible cuts and to look for innovation as a way to help drive future savings. This, I remind you, is on the heels of eight straight years of difficult budgeting. There simply is little to no fat left on the bones of our budget. Further cuts could result in a significant and unacceptable diminishment of critical services. And if there is one thing that would slow the progress we have made, it would be to diminish public safety, lessen the great work happening at our libraries and parks, fail to properly plan the future of Ford site or let our infrastructure deteriorate.

***

Let’s start with the basics.  For 2015, I propose a General Fund budget of just over $250.1 million. This represents a 1.25% increase from the 2014 adopted budget – less than the rate of inflation.  Total spending, including all special funds, will actually decrease by nearly $1.5 million. I am also proposing a 2.4% increase in the levy, which allows us to invest in our values and close the $9.6 million budget gap without sacrificing the priorities we share.  I am very proud of the hard work we did to contain the future growth in spending to close our budget deficit.  And while I do not take raising the levy lightly, increasing it means we will not have to cut police officers or firefighters or reduce hours at libraries and rec centers.  As I traveled around the city meeting with residents about the budget this summer, I heard loud and clear that these things are important to all of us - and I feel strongly that this budget delivers what the residents of Saint Paul are looking for from their city.

Most city departments will see either a very modest increase or a decrease from this year’s budget. In order to live with an increase that is below the rate of inflation, strict budget management within each of our departments, overseen by Todd Hurley, Scott Cordes and the Office of Financial Services staff, will be absolutely critical. We will maximize attrition savings wherever possible.

In the Police Department, we will remain at an authorized strength of 615 officers. The Chief has embarked on an aggressive plan to implement technology changes in the property and records room as well as the impound lot. When fully activated, the efficiencies created will allow for fewer personnel to staff each of these operations. In order to stay within budget parameters, we will delay a portion of fleet purchases as we transition to the new systems but will restore the full fleet budget as we realize savings.

In the Fire Department, average daily staffing will remain at 114, but will be closely monitored to make sure that this number is not exceeded except in exceptional circumstances. The Chief will also continue the important work of diversifying the ranks of the department. In 2015, we will build on the work of the EMS Academy which began five years ago and hire the first Fire Medic Cadets. These Cadets will have, upon completion of the program, promotional rights into the Saint Paul Fire Department. This unique program will open doors of opportunities for members of our community who have not seen a path for themselves in fire/EMS services.

One department clearly in need of additional resources is our Department of Safety and Inspections. As we have emerged from the recession, and as the Green Line opened, we have seen an uptick in construction throughout the city. New transportation options like Uber and Lyft, while offering an innovative service to our residents, are creating a whole new demand for oversight. And our desire to ensure all residents live in safe conditions led to a sweeping program in 2007, designed to inspect every rental unit in the city.  This goal, while laudable, was never met with the necessary resources to carry out the work. While adding additional capacity will help, it is insufficient – and quite frankly, can never be solved with simply adding inspectors.

In 2015, I propose adding three additional Fire Certificate of Occupancy inspectors to DSI. This will be paid for by a 15 percent increase over current residential fees and a $50 increase to convert an owner occupied property into rental property. I also ask that the City Council conduct a review of the Ordinance to see if changes can be made that will further ease the backlog of inspections while maintaining safety.

We will also invest in technology. Recent events have shown that even the largest private companies in the world, with technology investments representing 6.4 percent of their total budgets – compared to 3.3 percent in Saint Paul – can be vulnerable to cyber thieves and hackers. While we have invested a great deal in technology upgrades over the last several years, we need to do a better job of protecting our systems from outside threats and preparing for future organizational change. 

The 2015 budget makes significant investments in people and tools to further these goals. I propose hiring a Chief Security Officer and investing $82,000 in new software designed to better protect our information infrastructure and digital assets. This budget also provides $265,000 for the “Saint Paul Cloud” – a more secure, energy efficient, and cost effective means of managing the City’s network. Lastly, a $300,000 one-time upgrade to our email and document management systems will increase employee productivity, while mitigating future costs by allowing Saint Paul’s workforce to more easily communicate and collaborate.

***

Recently, Saint Paul has become the hot new destination for millennials to live. With Lowertown designated as the hipster capitol of the country and one of the top 10 emerging neighborhoods in the nation, we will continue to make Saint Paul a great place to live for those who have options to live anywhere in the world.

I also want the City of Saint Paul to become one of the best places to work for those same young adults who are calling Saint Paul “home” – and I want to encourage the best and brightest to choose public service so that we can introduce new ideas, talent and perspectives that are vital to ensuring our city government is efficient and innovative.

Looking to corporations that are sought after places to work, there is one simple, relatively inexpensive way we in the city can emulate their success at recruiting top-talent. I propose that, starting January 1st, 2015, Saint Paul becomes the first city in the State to offer paid parental leave. While companies like Google offer up to five months of paid leave following the birth or adoption of a child, I propose more modest support for parents: four weeks of paid leave for birth mothers and two weeks of leave for the non-birth parent. I believe that this policy is good for families and good for our recruitment of new employees.

My administration remains focused on achieving equity. One of the areas of our racial equity work where we are seeing the most return on investment is our work with youth in our afterschool and summer program called Sprockets.  We must build a community of learning where children and adults have opportunities at every turn to grow and learn.  You see that in our great libraries and recreation centers like the newly opened Arlington Hills Community Center on the East Side where circulation is through the roof and the teen media center is always full.  We are making further investments in Sprocket’s ability to connect our youth to programs at our libraries, in our schools and with our community partners.  We believe this investment will pay off tremendously.

We are also investing in the pipeline of young people who will be future leaders of our city.  Right Track is a successful program that matches high school juniors and seniors to summer jobs.  These youth gain valuable employment and resume building experiences. We see great potential for this program and the participants, who are primarily kids of color. We will invest additional resources in this program in order to significantly expand it in the years ahead.

Culturally relevant programming is one surefire way to promote equity. Many Hmong leaders, including Senator Foung Hawj and Charles Vue (known by all as Uncle Charles), have asked for a Tuj Lub court in the city. Tuj Lub is a spinning top game played on a court approximately the size of a tennis court. For an estimated $30,000, we can build the first of these courts in Saint Paul. Senator Hawj is also seeking legacy funding to help build courts in other communities with sizeable Hmong populations. I have identified available funds for the first court and have directed Parks Director Mike Hahm to move expeditiously to get it built.

***

Let’s talk streets.  As I noted earlier, no one in this city is satisfied with the condition of our main roads.  Much of what we saw this past winter can be attributed to brutal conditions: extreme cold, heavy snows, often proceeded by rain and ice, and a wet spring that made it hard to get out and patch the potholes as fast as we would have wanted.  But, the simple fact is that what we saw this last year – here and across the State of Minnesota – was the result of deteriorating conditions of our streets, many of which are more than 50 years old. This makes it almost impossible to keep up with the conditions. For some of our streets, no amount of patching potholes or even a full repaving will make much of a long-term difference. The underlying base of the streets, in many instances, requires complete reconstruction in order to make a sustainable difference.

We must act aggressively and immediately.  The first phase was to identify every possible dollar to resurface as many of the “Terrible 20” as possible – the worst streets in the system based on road condition and traffic volume.  I thank the City Council for passing my plan to add $2.5 million dollars into this summer’s program of work.

The next phase is harder and requires us to make tough choices.  For two decades, we have had a residential street vitality program (RSVP) that has directed up to $12.5 million per year to fixing and upgrading our residential streets.  While this has been a very important and popular program, no similar program has been directed towards the arterial streets – those main thoroughfares most people travel on every day.

I propose creating the Saint Paul Street Vitality Program (SPSVP) going forward.  While we will direct $14.5 million into our streets in 2015, $10 million of this will now be directed toward additional work on the arterials and $4.5 million will continue to fund work on residential streets – including $2 million in one-time revenue in 2015. This will allow us to kick-start the complete reconstruction of arterials like Third Street – a road so badly deteriorated that no amount of patching or even repaving will do.

We’ll also work in partnership with Ramsey County to rebuild Randolph, Raymond and Ford Parkway– to which the city will contribute $3.4 million. We are rebuilding the bridge structures underneath Kellogg Blvd. with our state and federal partners, using $4 million in city resources.

As I mentioned, this is not simply a Saint Paul problem. Eighty-four percent of city streets in the state of Minnesota are funded exclusively by property taxes and special assessments. In every corner of the State, residents are frustrated and elected officials are deafened by the volume of complaints.

I believe that a statewide plan has to be part of the short and long-term solution. That’s why Mayor Fred Froehlich from Nicollet, MN and I have asked 21 other Mayors throughout the metro area and Greater Minnesota to form the bipartisan 84% Coalition: Mayors for Municipal Roads. Together we’ll discuss strategies and provide a platform to move legislation forward to give greater equity to municipal road funding and get cities the help they desperately need.

We must look at this also as an opportunity to move forward with a long-term plan that not only rebuilds streets, but shapes and builds our communities.  Many of us were inspired this last May at the Great River Gathering by the impassioned words of Gil Penalosa. Gil’s vision of streets that work for 8 year olds and 80 years olds helped us rethink how streets, when properly designed and constructed, can create vital, welcoming neighborhoods. We will create places where people feel safe to walk and bike, businesses feel confident in investing and all means of transit and travel, including cars, work harmoniously together.

Recently, we restructured the outstanding bonds for the River Centre. As a result, the city will save money that can be used to bond for $42.5 million in investments to jump-start key projects across the city. Some of this will be used to match State bonding dollars for the Palace Theater, some for fiber optics necessary to support our city’s network. Using the 8-80 approach of Gil Penalosa, I propose that $17.5 million go into rebuilding key portions of our streets – including Jackson Street and completing Phase One of the downtown bike loop. In addition, $13.2 million will go towards the Grand Rounds completion – including reconstruction and bike lanes, and another $2 million toward Dickerman Park and developing green spaces along the Green Line.

The investments we are making this summer and fall to resurface 11 out of 20 of the most traveled streets with the worst road conditions will make a tremendous difference this winter and next spring. With the additional investments included in this budget proposal, the remaining 9 of the “Terrible 20” will be resurfaced, rebuilt or redesigned in 2015.  We will not only address some of the worst streets in the city, but we will also build a vibrant 21st Century city.

When all is said and done, I am proposing $54 million for street repair and transportation upgrades – including $34 million in new money.  If additional assistance from a state-wide funding source can be procured and Congress can pass a federal surface transportation reauthorization bill instead of the band-aide approach we are currently experiencing, we will have the streets we want and deserve in Saint Paul. We have strong partners in Minnesota’s Congressional delegation – and especially in Congresswoman Betty McCollum, who is with us today.

It is hard to overstate how hard the men and women in the Public Works department work. It is also hard to imagine a more thankless task. It is nearly impossible to get it right. When the forecast calls for snow, these individuals are out pre-treating the streets with brine, a strategy we went to a few years ago. If that snow starts as rain, because the temp hovers near freezing a bit longer than expected, the brine gets washed away to no effect. If the temp then drops rapidly, we have an icy mess that no amount of salt can melt and we are reliant on Mother Nature to warm up enough to help us melt the roads.

I have demanded a great deal from Public Works Director Rich Lallier, City Engineer John Mazcko and their staff. I have asked them to constantly evaluate their procedures, proactively manage storms and remain overly aggressive at the risk of being criticized for doing too much, rather than for doing too little.

While I believe we are managing well under difficult circumstances, I do believe a fresh set of eyes on department policy can only help. Over the years, we have had outside reviews of both the police and fire departments. While those have been conducted by private agencies, we have a unique opportunity to work with consultants to review Public Works procedures through a new public/private partnership.  Civic Consulting MN is a new endeavor that matches pro bono consulting services from the private sector with areas of need in the public sector – with the goal of applying private sector disciplines to public sector endeavors. Following the successful path of Civic Consulting Chicago, the work with Saint Paul Public Works will be the inaugural effort for Civic Consulting Minnesota. They will act as advisors to our Public Works leaders to make sure operations are efficient and resources are effectively deployed so that even if the weather doesn’t cooperate, driving in Saint Paul will be different next winter and spring.  

***

I offer my proposed 2015 budget to you as a reflection of our community – its neighborhoods, its rich culture and its values.  It is neither art nor science.  But certainly it is more than simply numbers on a page.

Today we sit in a building that reflects Saint Paul’s past, fuels today’s momentum and creates a bright future, not just for the artists and families that live here, but for an entire community.  We are at a special time in Saint Paul. But the momentum that propels us will not be sustained unless we exhibit the same courage that the early settlers in Saint Paul displayed when they built magnificent buildings like this and created the wonderful city we call home. We must act, as the poet Maya Angelou once said, “according to our light, according to our understanding, according to our courage.  We will have to say yea or nay – and rise!”

Let us say yes to Saint Paul’s greatness.  Let us rise and courageously do what needs to be done to build a strong City for all.  Let us by the choices we make today define the future for generations to come.

Thank you.

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