Mayor Coleman's 2012 Budget Address
Mayor Chris Coleman Budget Address Remarks as Prepared for Delivery 8.15.11 Today we gather to present the proposed budget for 2012. We come together at a time of great angst about financial stability throughout the state, the country and, in fact, the entire world. In an unprecedented period of using the word unprecedented, we have seen an unprecedented shut-down of state government, an unprecedented game of brinksmanship over the national debt ceiling, unprecedented market fluctuations on Wall Street, and an unprecedented downgrading of the United States’ credit rating. Everyone is looking for some good news. Some sign that there is someplace that knows how to manage finances properly. I believe that you need look no further than the city of Saint Paul to see how to properly manage a budget. With the leadership of the City Council and Council President Kathy Lantry, our finance team, our department directors, and all of our incredible city employees, Saint Paul is an example for all that budgeting doesn’t have to be a roller coaster ride nor an exercise in bad behavior. This isn’t because things have been easy. In fact, they have been as difficult this year as any year in the past. With a nearly $16 million cut to local government aid handed down almost 2/3rds of the way through the year, we have had to be nimble, smart and hard working. But, because we have done the work over these last several years to achieve and maintain structural balance, the blow of the cuts to LGA, while painful, can be handled without diminishing public safety, without significant service disruptions and with no turning back on the progress we have made in Saint Paul. Nowhere is the progress we have made more evident than in this room. There are two sounds I love: hammering guitars and hammers making sweet music building a new venue in our city. I know that the Amsterdam will quickly become known as one of the premier music rooms in the Midwest. I appreciate that Jon and Jerret Oulman have allowed us to show up a little early for the party. They join Joe Furth, owner of Eclipse Records and Peet Fetch and Jeff Johnson, owners of Big Table Studio poster shop in revitalizing Wabasha Street and turning this block into a destination unto itself. Let’s all give Jon, Jerret, Joe, Peet, and Jeff a loud welcome to downtown Saint Paul. ********* The 2012 budget I present today continues the work of the last several years. It prioritizes public safety, emphasizes our work surrounding education and moves our city forward with smart investments in critical infrastructure. But before we could get to 2012, we also had to deal with the $15.6 million hole blown in the city’s budget by the State Legislature. Repeatedly, cities across Minnesota have warned the legislature that the continued erosion of local aid doesn’t prevent tax increases. It only increases the burden to property owners, placing particular harm on homeowners on fixed incomes and small business owners. Shifting the state’s challenges onto the backs of our cities doesn’t erase our need to put police officers and firefighters on the streets. I was proud to have our officers and firefighters stand with me this past year at the Capitol, trying to explain this fact to legislators. Unfortunately, they did not listen. Nor did the legislative leadership avail themselves of offers to come to Saint Paul and look at the work that we have done over the years to strengthen our community, balance our budgets and put the city on sound financial footing. Last year, I proposed, and the council adopted, a zero percent increase in the levy. But I also warned that it was only possible if the state fulfilled its commitment to the partnership between state government and cities throughout Minnesota. We explained that every dollar cut in local aid results in fifty cents of service reduction and fifty cents of property tax increases. We showed that Saint Paul contributes far more to the state’s bottom line than it receives in return: We send $240 million of city revenue generated through sales and property taxes alone to the state, versus $63million we were suppose to receive back in local aid. Despite that, the legislature continued a pattern begun in 2003 and pushed the state’s problem onto local property taxpayers. Perhaps I should take comfort in the fact that it could have been worse. While a $15.6 million dollar cut for 2011 and an additional cut of $12 million in 2012 is deeply painful, the original budget passed by the legislature would have cut over $28 million in 2011 and eventually eliminated local aid for the cities of Saint Paul, Minneapolis and Duluth. This mean-spirited proposal served neither the interests of our cities or our state, nor the children, families and small business owners trying to scratch out a living in a very difficult economy. Rather, it served the narrowest interests of the most partisan few who do not understand that you cannot have a strong state unless its three largest cities are strong and vital. Wisely, the Governor vetoed that bill. That it could have been worse does not give me comfort. What does allow me peace of mind is the smart fiscal management of our city. Under the leadership of our financial services team, we braced for the 2011 cut, held the line on spending, looked for opportunities to obtain one-time infusions of additional revenue and followed the fund balance policy wisely adopted by the council several years ago. Thus, to counter the impact of the state cut in 2011, we will use several strategies. First, nearly $3.5 million in savings will be reached by carefully managing staff vacancies in each of our departments. Second, we will use $2.1 million dollars received from refinancing the Riverfront tax increment district. Third, nearly $1 million dollars in authorized contingency for 2011 will not be spent. Finally, we will use $5.3 million from the fund balance. This will be done pursuant to the fund balance policy and consistent with smart financial management. I want to thank our finance director Todd Hurley, Scott Cordes, and the entire OFS staff for their extremely disciplined approach to budgeting that has allowed us to weather a very significant storm with minimal damage. I also want to pause just a minute and thank someone who has been a real partner in keeping the city fiscally strong. While the Council and I enjoy a strong partnership, one member I can always count on to ask the tough questions about the budget is Pat Harris. Many of you know that Pat has chosen not to run for re-election. His voice on the council will be missed. Because this is my last budget speech he will be forced to sit through, I would like for us all to recognize Pat for his service to Saint Paul. *********** As recent economic news makes clear, we are at an increasingly dangerous place in our history. The greatest concern centers on a seeming unwillingness to compromise or even consider another point of view. Our system of government is built upon the inherent tension among conflicting ideas. But it is also built upon a willingness to come together for the common good. Whether bringing the state to shutdown or bringing the federal government to the brink of financial ruin, the rank partisanship and acrimony in this country has shaken the confidence of Americans in our ability to solve our most basic problems, let alone the most difficult. Sometimes I think it has less to do with philosophical differences and more to do with the fact that we don’t even understand what the other person is saying. Since we’re in a music venue, a music analogy is appropriate. The other day, my son was playing a new, slowed down version of Elton John’s song Benny and the Jets. I realized I’ve been listening to that song for years thinking that I knew the words. I really only knew the words “electric boots, a mohair suit, read it in a magazine.” I missed the great lines like “where we fight our parents out in the street to find out who’s right and who’s wrong.” So it took a new artist, a new perspective, to understand what I thought I understood all these years. Maybe we all need to slow down the music, stop pretending that we know what is being sung and actually listen. When we’ve done that in the past, we have accomplished some pretty remarkable things in this country. 76 years ago, when our country was rattled by the greatest economic crisis in history and thousands of senior citizens were living in destitution, social security was born and lifted millions out of poverty. Nearly 50 years ago, Americans confronted the ugliness of the continued discrimination, subjugation and segregation of African Americans and landmark civil rights legislation was signed into law. And in 1971, Minnesotans, facing soaring property taxes and an imbalance in the public education system, found a better way to equitably fund services throughout the state. The resulting partnership was dubbed the Minnesota Miracle. We may be in short supply of miracles lately, but wouldn’t it be something if we just slowed down the bickering, lessened the bitterness and started working together for the good of our state and our country? ******* We don’t always agree on everything in Saint Paul. But we do agree on one thing: This is a great city that is getting even better. But it won’t get better if public safety is diminished. It won’t improve if we fail to invest in our future. And it will never realize its full potential unless all of our children are prepared to reach their full potential. It is upon this understanding that my proposed 2012 budget is based. This budget maintains our strength of force in the police department and fire department. While the police budget is slightly reduced, we will maintain an authorized force of 610 officers. The 24 new officers sworn in last week will continue in what we hope will be a long career serving the residents of our city. While several civilian positions will be eliminated, the budget depends primarily on the wise leadership of Chief Smith and his team to manage vacancies and reduce costs in a way that does not reduce the department’s ability to respond to any situation. Under Chief Butler’s leadership, our fire department continues to be among the best in the country. Fast EMS response times continue to offer the best chance of survival for anyone facing a life-threatening situation. The department budget will be reduced primarily through reductions in overtime hours. But the confidence and support that Saint Paulites have in their fire department will continue to be well placed. The important third leg of public safety is the work of our city attorneys. It is critical that we build upon the nationally recognized work of Sara Grewing and her staff on domestic violence and public safety. Any reductions to the offices’ budget would threaten that work. Therefore, we will maintain the current staffing levels in 2012, allowing us to continue the work of the joint prosecution unit with the county attorney’s office and our community prosecutors. ****** In recent years, we have reshaped the role that the city plays in education. Our work is gaining national recognition. Several months ago, I was at an event in Washington, D.C. A woman raced across the room, reached out her hand and introduced herself as an assistant to Education Secretary Arne Duncan. She then sheepishly looked down and said, “Honestly, I don’t remember your name. And I don’t remember what city you’re the mayor of. But I know you guys are doing incredible work on education.” At least we’re on the radar. From the work around the Promise Neighborhoods to the network of out-of-school-time learning opportunities through Sprockets, we recognize that every department can play a part in our education work. But the two most critical partners in these efforts are our Parks Department and the Saint Paul Public Library system. While both departments will see cuts, their work will not be slowed. In libraries, there will be a system-wide reduction of 50 hours. However, no library will close. And, in fact, we will move forward with critical upgrades of Sun Ray and Highland Park libraries. In parks, through a creative partnership with public works, costs of several areas of work currently paid for out of the general fund will be transferred to the right-of-way budget. This will allow us to minimize service reductions in the system. It is possible because of the spirit of teamwork that our department directors have embraced. I want to particularly thank Rich Lallier, our public works director, for his willingness to step up and help out in any and every way possible. He has set a great example for us all. ******* The budget I propose for 2012 allows us to move forward on several key investments. On the Eastside, we will break ground on the Payne-Maryland joint library and parks facility that will bring a first-class center to the children and families of that neighborhood. Some may question why we invest in these types of projects in such difficult economic times. In yesterday’s New York Times, there was an article connecting the recent London riots to cuts not only to police department budgets but also to closures of community centers and libraries. While there is no excuse for the criminal behavior of the rioters, we should also not turn our backs on those things we can do to prevent such behavior in the future. ************ In 2012, we will begin the replacement of our snow plow fleet. More fuel efficient, more effective at removing snow and able to serve multiple roles, these trucks will also allow us to more accurately monitor whether all streets have been cleared curb to curb after a large snowfall last December. Too many streets went unplowed for too long because we were unable to track the streets that plows were unable to travel due to cars blocking the paths. Anything we can do to clean up after large snowfalls is greatly appreciated by residents. The latest technology will greatly aid these efforts. Last December, in the middle of all of the snow, our email system broke down, making a difficult job even tougher. We have to have reliable email service when dealing with major snow falls and other emergencies. Now, through a shared services partnership with the state, we will have that 24/7 maintenance and support coverage, providing Saint Paul with a communications system we can rely on when we need it. On another front, we will install new parking meters in downtown, making doing business downtown much more convenient for visitors. This has been a priority of the Saint Paul Area Chamber of Commerce and business owners downtown, not to mention everyone that parks in Rice Park when having lunch at the Saint Paul Grill. In our Human Rights and Equal Economic Opportunity department, we will add a position to better monitor city-wide contract compliance. Our Planning and Economic Development department will continue to pursue every opportunity to maximize development along the Central Corridor and across the city. In addition to completing construction of the Farmer’s Market Flats, we will move forward on the Penfield and the Lund’s / Byerly’s grocery store. We will, despite this year’s setback on our efforts to build a regional ballpark, renew and redouble our efforts to get that project done. Finally, we will continue to build the vitality of the city. Whether with great new venues like Amsterdam or expanding successes like next month’s Concrete and Grass festival, the Jazz Fest or the great Thursday nights in downtown filled with Music in Mears and dancing in Rice Park, Saint Paul is and will continue be THE place to be for great entertainment. ******* The challenge of moving Saint Paul forward in the face of continued cuts from the state and federal government is not easy. It is, however, necessary. To do that, we cannot, as some would suggest, take an all-cuts approach to the task. Simply reacting to the recent cuts to LGA by taking an ax to city services would imperil public safety and our education initiatives while making this place we proudly call home hard to recognize. I am extremely mindful of the impacts of property tax increases to our residents and our businesses. That is why we adopted a zero percent increase in the levy last year. It is why I have stood wi h Mayors across Minnesota to oppose further reductions in state aid. But for the $15.6 million dollar cut to LGA, I am confident that I would once again be standing before you to propose a zero percent increase in the levy. In total, the 2012 budget will see $6.2 million in cuts. However, I also propose a 6.5% increase in the levy in order to preserve critical services in light on significant cuts in state aid. I also propose using non-property tax revenues in order to minimize the impact to homeowners and businesses. I know that the increase in property taxes will be painful. But I also know the values we hold in this community. I know the quality of life we desire in Saint Paul. And I know we all want a brighter future for our children. The budget I present today assures that bright future for generations to come. ******** As I close, I know that some of you were thinking I might get through an entire speech without talking about Light Rail. Not quite. I don’t really have to say much. Evidence of progress is all around us. Tracks are being laid in the street. Stations are popping up out of the ground. Pavement and sidewalks are appearing - giving us a glimpse of the completed rebuild of the Central Corridor. Like the corridor, there has been a lot of work happening in Saint Paul. Much progress has been made. But the job is not done. And just as we could never stop the construction of the corridor until the work is completed and the trains are running, we cannot stop rebuilding Saint Paul until the full potential of our city is realized. Today, we have gathered at a part of the new chapter of Saint Paul, where soon the sounds of hammers will give way to the sounds of great music. Our work is not done. Sometimes progress is difficult. But let’s celebrate the milestones. And let’s continue to rebuild this great city together. Thank you.