2014 Budget Address Prepared Remarks
Mayor Chris Coleman 2014 Budget Address Remarks as Prepared for Delivery 08.14.13
Thank you, Kathy, for that nice introduction.
And thank you John for hosting this event at Matsuura today. This is an incredible building – where I know you had your grand opening only a few months ago. We promise not to break anything.
And a quick welcome to our newest Councilmember, Nathaniel Khaliq! As many of you know, Nick grew up in the Rondo neighborhood, served as a firefighter and has spent much of his life working for economic and social justice. Welcome to your first budget address as a member of the Council.
In 1883, Mark Twain wrote, “Saint Paul is a wonderful city. It is put together in solid blocks of honest brick and stone and has the air of intending to stay.” Not only has Saint Paul stayed, but it has thrived through World Wars, pandemics, depressions and recessions. And as we emerge from years of significant economic challenges, those honest bricks and stones still stand strong. Some are being brought back to life – like the Pioneer Endicott Building or the Union Depot. These landmarks are being joined by new buildings, like the Penfield and the Lowertown Ballpark. And amidst them there are old traditions, like the Winter Carnival, Rondo Days and the Saint Paul Bouncing Team. Or new ones, like the ever-popular Saint Paul Beer Dabbler, Red Bull Crashed Ice and the Hmong Soccer Tournament. The city has seen its ups and downs since Twain’s days, but today we’re in the midst of what I believe will be viewed as one of Saint Paul’s best times.
With light rail just months away from taking its first passengers down University Avenue, building permits are being pulled along the Central Corridor faster than we can count them. New housing is springing up at the Schmidt Brewery. Hamm’s Brewery is a new center for jobs on the East Side. And construction of the Ballpark is beginning in earnest. We’re tackling some of our most difficult challenges. We’ve created innovative educational partnerships between the city, schools and other stakeholders to effectively address the achievement gap. We’re finding new, meaningful ways to close the economic gap between the white community and communities of color – utilizing strategies like our EMS Academy, or our most recent 32 percent minority workforce inclusion goals that we’ve set for projects like the new ballpark.
Finally, I believe we are among our best days because Saint Paul stands on structurally sound financial ground.
This didn’t happen by accident. It is the result of years of fiscal discipline. It happened by making fundamental changes to the way we budget and do business. We put away one time fixes to long-term problems. And we rebuilt the partnership between the State of Minnesota and local governments across the state. Finally, we made strategic decisions about how we can provide better services at a better price.
The residents of Saint Paul have made it clear that they expect quality services from their city. But we’ve also been clear about the real costs of government. We’ve had to make tough choices. We’ve made difficult cuts and taxes have been raised. But the decisions we’ve made in the past have put us in a stronger position for 2014 and beyond.
That’s why this year, I call this budget the “no drama budget.” But what it lacks in excitement it makes up for with a new emphasis on innovation, which will make the choices we’ve implemented sustainable for years to come.
The budget process for the city starts in late winter and continues until Christmas. It can be hard and complicated. It takes dedication, attention to detail, and – oftentimes – creativity to put together the adopted budget. I want to thank Office of Financial Services Director Todd Hurley, Budget Director Scott Cordes and the entire OFS staff for their efforts in preparing today’s budget.
While Saint Paul has become financially sound, continuing to maintain AAA credit ratings, many cities across America have struggled tremendously—some, like Detroit, declared bankruptcy. There were times when it wasn’t clear that Saint Paul’s trajectory wouldn’t follow that path. In the 1980s, thousands of jobs were lost on the East Side as anchor companies like Whirlpool moved out. In 1992, West Publishing, a 120-year-old Saint Paul company that had grown to become the city’s second-largest employer, pulled up its stakes here and moved its headquarters, and its 2,100 employees, to Eagan.
West’s departure was a dark day. It made people question the future of Saint Paul. But with determination and a refusal to quit, we kept on fighting to not only preserve Saint Paul, but to bring back its vitality.
In a true sign that Saint Paul’s new vitality is real, West Academic, a subsidiary of West Publishing’s parent company, recently announced that after 21 years, Saint Paul’s prodigal son will be returning to its home city, and taking up offices in the UBS Building. They’re bringing 60 employees with an average salary of $80,000 with them, and plan to add 25 jobs over the next year.
I am so looking forward to welcoming West Academic back to Saint Paul.
Today, we are standing in another important symbol of the renewed Saint Paul-- Matsuura Machinery USA. Matsuura is an internationally renowned company, with subsidiary companies across the globe. Matsuura machines are used to produce machine parts on many types of components for a variety of manufacturing sectors, from space shuttle turbines to pacemaker components, with an annual overall revenue of $170 million. They pride themselves on their innovation and high-quality products—John often says that if this was a car dealership, it would be selling Rolls-Royces. More than that, Matsuura brings a tradition of long-term commitment to the communities in which they locate. Working with the Saint Paul Port Authority, Matsuura chose Saint Paul to open its first U.S. headquarters, bringing with them 30 high-quality jobs and a first-year local revenue of $30 million.
I want to thank Louis Jambois and the Saint Paul Port Authority for their efforts in bringing Matsuura to Saint Paul. And I also want to thank them because every year, they make crucial investments and form partnerships that result in truly important projects like the Lowertown Ballpark.
West Academic and Matsuura join Flagstone Foods and Urban Organics as the new face of jobs in Saint Paul.
In addition to large businesses, new restaurants continue to pop up. In the past, we’ve celebrated Ward 6, the Strip Club, Colossal Café and more. Just a couple months ago on 7th Street, one of the region’s best bakers quit her day job to open one of my favorite new restaurants—the Buttered Tin. Word has spread fast, and getting a seat there on Sunday mornings could qualify as an Olympic sport. And just last week, Cupcake announced it would be opening a new location on the corner of Selby and Snelling.
Of course, as Minnesotans, we need outside validation of our accomplishments and status.
Take it from Sinbad. He was here a few weeks ago for the Starkey Gala. They asked him what it was like to be back in Saint Paul. He said, “Saint Paul…I used to come here often and it has grown so much! But it still has that small town feel…you just kind of chill out. You walk around.” The fact that he described Willy’s Guitars as “off the chain” only proved he knows of what he speaks.
While this year is the no-drama budget, we know that unless we continue to rethink how we do things, we will be in a very difficult position.
Every year, due to regular inflationary pressures, the City of Saint Paul faces an $8 to $12 million budget gap. In 2014, we were facing an $11.5 million gap before the increase in LGA. As mayors across Minnesota have stated for years, absent increased aid, the pressure on property taxes would continue to grow. With state aid, we could hold levies flat.
This year, the Legislature and Governor listened, and I am pleased to propose a zero percent increase in the property tax levy for 2014.
Overall spending in my proposed 2014 budget increases less than one half of 1 percent—well below the rate of inflation.
But just as we took a long-term approach to achieving structural balance, we must recognize that the budget continues to face long-term pressures. Unless we comprehensively rethink how we deliver services, the ability to hold the line on the levy as well as enhance, or even maintain, the quality of services in Saint Paul will be impossible.
There is a path forward, however. Through innovations, finding new ways to deliver services at a better price, studying best practices throughout the country, and ensuring that each one of our departments are deploying their resources using the best technologies. And we must do it within existing—or even smaller—budgets.
At the beginning of this year’s budget process, I instructed each department director to focus on innovation. I made it clear that this increase in LGA was not to be looked at as a windfall, and not to expect more in the future. Rather, I asked them to rethink the way we deliver services.
Cities like Phoenix, Louisville, Memphis, Chicago and others have implemented innovations teams in their own cities. These teams work to find better ways to deliver city services, and at a better price. Louisville alone has accomplished a number of efficiencies; among them are strategies which reduced the number of low-severity 911 calls and thus unnecessary EMS runs, and the implementation of a more efficient rezoning process. It’s time for Saint Paul to catch up.
Today, I am announcing a City Innovations Team lead by our Budget Director, Scott Cordes. Scott will pull together a team to work with city departments, stakeholders and the community to identify areas and strategies to improve, as well as facilitate those changes.
And while it’s important to have an insider’s perspective, we will bring in an external innovation expert. With an insider and an outsider’s perspective, we will move aggressively to find innovative solutions to our challenges.
The innovations team will focus on three key areas. The first will be to develop a citywide culture of innovation that promotes interdepartmental and community collaboration, empowers city leaders to identify areas of potential change and redesign, and incentivizes and rewards innovative risk-taking.
The second priority for our innovations team will be to provide support to citywide innovation projects. Pursuing innovative initiatives won’t be easy. They will require a lot of time and resources to develop and implement a new strategy while continuing to keep current business practices functioning. The City Innovations Team will provide material support to city leadership and stakeholders for selected projects through project management and analysis.
Lastly, and perhaps most importantly, the innovations team will work with city and community stakeholders to identify areas of highest need for change. The reasons for change could be many, ranging from inefficiency to not meeting the community’s expected level of service.
It’s a long-term project, and it will be a lot of work, but together with his team, Scott will build a culture of innovation throughout the city.
This year, we start with innovations big and small. These efforts include our work to reduce long-term energy costs by investing in energy-efficient technology and lighting. In the past several years, we’ve implemented 56 energy projects throughout Saint Paul, saving the city $402,000 annually—and we’re going to continue that work in 2014, investing $200,000 to replace street lights with energy-efficient bulbs. This investment will pay for itself in three to five years, and last many years longer than their incandescent counterparts.
Several years ago, we made a decision to invest in updating and upgrading our technology in a way that would help us streamline current processes, but also make future processes more efficient—one example of that would be creating a user-friendly permitting process that business owners, homeowners and any others seeking a permit can utilize online.
By 2014, many of our current efforts will be completed or underway. Prior to 2013, one city employee’s payroll paperwork was touched by seven different sets of hands during processing. This year, we began implementing a centralized and digitized payroll system—a move that brings Saint Paul into the 21st century and will save us more than $360,000 in 2014, and eventually more than $450,000 per year.
We are working within our purchasing department and making strategic changes in how we purchase products. HREEO Director Jessi Kingston has already identified ways we can reduce our office supply costs by 23 percent. Within three to five years, these new strategies will save Saint Paul $1 million annually.
Being innovative also means asking how we dramatically broaden our service delivery with a minimal investment. This year, we will add $70,000 to the Saint Paul Public Library budget to invest in its mobile service delivery. This new plan will create opportunities for residents to utilize library services at non-library buildings or outside of closed libraries, dramatically expanding access to Saint Paul Library materials during times when these sorts of items would have previously been unavailable.
But perhaps where we will see the most extensive innovations this year will be in our police department.
Over the last seven and a half years, we have added 34 officers to the Saint Paul Police Department. We’ve invested in and taken advantage of numerous grants to utilize new technologies which aid our force in solving crimes, and make the streets safer for our residents and visitors. And last year, when we saw a deficiency in the crime lab, we invested an extra $610,000 in ongoing resources to the department’s budget to address those needs. As part of the accreditation process, another $413,000 was invested for build-out and equipment purchases. As is true with all strategies in these rapidly changing times, our police work must continue to evolve with the needs of our community, and our investments must reflect that.
However, given that the Police Department budget represents the largest department budget in our general fund, there is no more important place to demonstrate the power of innovation and creative thinking than there.
I am extremely pleased with Chief Tom Smith’s work to create such innovations already, and to find them within existing resources. The Chief has requested that he be able to apply for federal money to hire five additional police officers. The initial cost of these officers is covered by the federal government for the first three years. After that, the cost shifts to the city. It is imperative that these costs not add to future budget problems and that we find the funds to pay for these additional police officers within existing resources within the department.
I have challenged Chief Smith to find the resources to maintain these positions within his budget when the grant funding ends in three years. I am confident he will deliver on that challenge.
Another critical need the Chief has identified is for crime analysts. This year, the police department welcomed a student intern from Metropolitan State University named Cody Larson, who was working on a criminal analyst certification, to the department. Cody analyzed robberies being investigated by separate units and, seeing a pattern, was able to link numerous robberies that were being investigated as separate occurrences together, uncovering a string of connected crimes. He did this on more than one occasion. Without the analysis done by Cody, the dots may have gone unnoticed and the crimes unsolved. If one person is able to find these patterns, just imagine what we will be able to achieve with two full-time seasoned crime analysts. And, again, we’ll do it all within existing resources.
The Chief also identified the need to more efficiently utilize the technolog within the department. In 2014, the SPPD will bring in a technology consultant to create a technology plan. Creating a strategic technology plan in the police department isn’t just about data—it’s about cops on the street. As we utilize our resources more effectively and streamline these processes, sworn officers who currently work behind a desk, taking down and responding to police reports made over the phone, will now be able to fulfill their duties on the streets of Saint Paul as these jobs are better utilized. These changes are being done within existing budgets because of our focus on innovative thinking. Chief Smith and the Police Department are leading the way. I anticipate all departments will follow this lead.
I am very proud of the work the department has done. And statistically, Saint Paul continues to be an extremely safe city. But statistics don’t mean anything if you’re witnessing a fight on your sidewalk. In recent weeks, several disturbing incidents on the East Side have made it clear that we must continue to push forward to find new ways and new strategies to meet the challenges on the street.
This summer already, we have expanded our hours and staff at Wilder Recreation Center, continued a second summer of our Intelligence-Led Community Policing, Community Prosecution, and Community Partnerships program (IL3CP), and have made significant investments in Habitat Houses, Kendall’s Hardware, Payne/Maryland Community Center, Beacon Bluff site and the Hamm’s Brewery.
In addition to these actions, we will be significantly increasing our police presence in these neighborhoods, bringing additional resources and coordinating our efforts with Ramsey County Attorney John Choi, Probation officials and our City Attorney, Sara Grewing.
I, along with Chief Smith and the rest of his team, remain committed to making sure all residents of the city feel safe in their neighborhoods.
An important source in continuing the vitality of Saint Paul is strategic investments through the CIB Committee. This fall, previous decisions will begin to pay dividends – like the Payne/Maryland Library and Community Center. Opening in 2014, Payne/Maryland will bring together people from across Saint Paul, creating not just a top-of-the-line learning center, but also a place where neighborhood children have access to a fitness center and recreational programming. A big thank you to Councilmember Dan Bostrom for his tireless efforts to make Payne/Maryland a reality.
We will continue along this path with investments across the city, such as at Fire Station 19. Presently, there is only one crew of four people at Fire Station 19 to respond with either an ambulance or a fire engine. Whenever they respond, the station gets emptied out, which leaves a service gap. The CIB’s number one recommendation was to fund the Fire Station 19 expansion. I agree with them, and propose providing $2 million to expand Fire Station 19, bringing in another ladder truck to that location and improving fire and paramedic response times throughout the city. With a second crew added to Station 19, when a crew goes out with Engine 19, there's still another crew available to fight a fire. When a crew goes out in Medic 19, the second crew will be available to be a First Responder for medical calls.
Another important proposed investment is on the city’s West Side at El Rio Vista Fields - a place where children spend much of their summers playing and competing. President of the West Side Boosters Rick Hernandez, who has been a vocal supporter of the city’s West Side for years, is here today and I want to thank him for his strong support for one of this city’s great neighborhoods. Please give him a round of applause.
Rick, Councilmember Thune and I know El Rio Vista Fields is far too important of a place to remain in the condition we find it in today. In 2014, we will invest $1.5 million to develop a multi-purpose soccer and football field, as well as renovate the smaller field.
When the city held public meetings about this project, more than 200 people showed up and told us not just about the importance of the fields, but the Parque Castillo play area next to it, where the younger kids spend their time while their older siblings compete. So next year, we will invest $650,000 to replace the play area, add a splash pad, and include other improvements. These are critical investments that make for the high-quality neighborhoods for which Saint Paul is known.
Sometimes, needs arise that require creative solutions immediately. One example is the deterioration of the sidewalks in the Highland Park neighborhood. A couple of months ago, Councilmember Tolbert and I took a stroll along the neighborhood businesses in Highland. Unfortunately, the sidewalks had deteriorated and were unsafe. Planters were crumbling. This strong and vibrant business community was being overshadowed by what looked like neglect on the part of the city. In 2014, we will add an additional $1 million to replace aging sidewalks, boulevards, boulevard trees and planters in Highland. That $1 million will leverage an additional $2 million in private investment further strengthening our streets and neighborhoods.
Another example of an urgent problem facing the city is Emerald Ash Borer. We are at the very beginning stages of what we view as a long-term and very significant problem in the city that will literally change Saint Paul’s landscape for generations. My proposed budget includes an increase in the right of way that will begin to help us address this problem. In the coming months, we’ll be at the Capitol looking to raise statewide funds for what is ultimately a statewide fight.
An additional small increase in the right of way will allow us to match dollars from the county, state and federal government to tackle some much-needed transportation projects along Raymond Avenue, the Warner Road Bridge, Ford Parkway, Randolph Avenue and on Western Avenue.
For 25 years, the City of Saint Paul has been providing a high-quality, innovative, and cost-effective recycling program to residents. In fact, we were one of the first big cities in the country to make this type of commitment. But it has been almost as long since we have done an evaluation of the program, and so much has changed since then.
Last year, we committed to undertake a process that would help us understand what is needed and how we can deliver it. With the help of Ramsey County, we commissioned a study by Wilder Research to evaluate our 25-year-old program and determine what is working and what isn’t. Wilder used a mail survey, held six focus groups and numerous stakeholder interviews. We received thousands of responses--so many, in fact, that Wilder is now joking they should insert a recycling question into every survey they do to boost their response rates.
The research was comprehensive—touching every ward, age group, many different nationalities, homeowners and apartment dwellers, single-family and multi-family housing.
Overwhelmingly – 90 percent of respondents-- said that they want to see expanded plastics recycling. In fact, 40 percent-- far more than any other desire concerning recycling—said that recycling more plastics was their top concern. The second most pressing concern was to move to single-sort recycling. These two items were so important, in fact, that two thirds of respondents said they were willing to pay for expanded services.
Currently, residents can only recycle plastics 1 and 2 – pop bottles and milk jugs, and those sorts of things. I am recommending we expand our plastics recycling to numbers 4, 5 and 7 – including items like squeezable bottles, yogurt containers and the clamshells that hold berries - and move to a single-sort recycling system in 2014. (POINT TO DISPLAY)
Beyond 2014, we will transition to larger, covered wheeled carts and move pickup of recycling materials from the front yard to the alley. We will also work towards a system that allows for curbside – or alley – pickup of organic material.
A major part of this effort will be an education initiative targeting residents who pay for the service but don’t recycle. One of the most concerning results of our research was that most Saint Paul residents do recycle, but they don’t recycle everything that they are able, because they aren’t aware of all the materials that are recyclable. So in the coming months, we will roll out an education initiative designed to encourage more people to participate in the recycling program and get all accepted recyclable materials out of the trash cans. With this program beginning, I am asking all of Saint Paul to recommit to recycling. My goal is to get to 60 percent diversion by 2030. I think we can do it.
I want to thank Councilmembers Russ Stark, Amy Brendmoen and Chris Tolbert for their work on this effort. All three have been working with city staff for months to come up with the best proposal for residents and I want to thank them for their leadership. Please give them a round of applause.
When I came into the Office of the Mayor seven years ago, I did not expect to face many of the challenges that, as a city, we have all faced together. As most of you know, the economic environment has not been kind.
And despite that, the vitality that we’re seeing is truly incredible. And it’s all taking place before one passenger rides the light rail. Before one bag of groceries is sold at Lunds. Before one pitch is thrown at the Lowertown Ballpark. This is all happening because people have committed to a revitalization of this great city.
Imagine Saint Paul a couple of years from now, when all those projects are completed. Imagine what the city will look like when those projects are alongside the Jazz Festival. Imagine the Saint Paul five years from now with a Stanley Cup parade down Wabasha. And layer upon that a city that has truly closed the achievement gap and is a welcoming, safe place for all—and has accomplished this on a bedrock of financial stability.
That is our trajectory. That’s a city with an honest budget and that, in Twain’s words, is “put together in solid blocks of honest brick and stone.”
That’s a city that’s here to stay.