Chairman Rogers, members of the City Council, and gathered guests…
Tonight I am pleased to be presenting to the City Council and the people of Salt Lake City a fiscally responsible budget.
This budget recommendation provides for our city employees, prioritizes our city’s infrastructure and maintenance needs, funds programs important to Salt Lake City’s values, and makes key investments in city government operations, all in line with the vision I laid out in my State of the City Address.
Guided by policy and fiscal discipline, we will meet these goals without raising taxes, or laying off employees, and while maintaining a relatively flat budget.
This budget is also the beginning of a conversation I intend to continue throughout the year between my office, this Council, and the people we serve.
We must begin this conversation with an understanding of where we are today as a city.
Since the Great Recession, Salt Lake City has been operating with a gap between ongoing expenses and ongoing revenue. The money we spend to cover expenses has outpaced what we generate from ongoing revenue sources such as property and sales tax.
In order to present a balanced budget and to provide services to residents, we are relying on one-time sources of revenue to pay for ongoing needs.
With a strong economy, we must now work to remedy this situation.
Moving away from this model will put Salt Lake City on firmer financial ground and allow us to supplement our rainy day fund to insulate us from any future financial crisis.
I am pleased to say that in my recommended budget, we have reduced one-time funds used to balance the budget from a high of $7.7 million dollars last year to $6.7 million dollars this year. While this will be a multi-year effort, this is a step in the right direction.
We must also acknowledge other hard truths about the city’s budget.
Salt Lake City has a number of debt obligations that we should give careful consideration to in this budget and in the future.
While Salt Lake City maintains a AAA bond rating, we have, at a fairly regular rate, since 1999, issued debt to fund a number of new capital projects.
Much of this debt is found and serviced in the city’s Capital Improvement Project fund, or CIP.
Beginning in FY17, our payments on debt serviced through CIP will nearly double, and the cash available to fund pay-as-you go capital projects will drop in half for the next four years.
CIP, has been a great asset to our city, providing for projects ranging from new facilities, park improvements, to transportation upgrades.
Based on an analysis of our deferred maintenance needs that was completed in 1999, the city has been allocating between 7 and 9 percent of our ongoing revenue to CIP.
With this fund now being further strained by the city’s debt service needs, I believe it is necessary to re-examine the policy behind this fund, a process my office will begin this year.
As a first step, my recommended budget proposes moving some basic maintenance of city parks and facilities out of this program and into the general fund.
With our deferred maintenance needs growing at a rapid rate, I do not believe it is a prudent policy to continue including basic maintenance needs in a funding program which is shrinking, is competitive, and allows for wants to be prioritized over needs.
I have provided $500,000 dollars in the general fund for park and facility maintenance.
While this is a decrease in the amount of funding provided last year, I believe with our debt service burden growing, the appropriate level of funding would not have been allocated through the CIP process this year or in future years.
This move guarantees funds for maintenance of critical community assets.
Moving forward, basic maintenance will remain in the general fund, a reminder of the city’s obligation to appropriately care for the assets we currently have.
To be clear, the debt paid through our general fund is not the only debt this city and it’s residents are shouldering.
Salt Lake City has asked its residents to bond for projects like our Public Safety Building. These bonds, approved by voters, have allowed the city to borrow against increases in property taxes.
The city has also guaranteed debt on behalf of the RDA.
City residents have recognized the need for certain large projects and as city leaders, we must now prioritize caring for the facilities they have generously approved.
When we choose to invest, regardless of whether the funding comes from our general fund or through voter approved bonding, we must also be transparent about future maintenance costs and plan for the future revenue to cover them.
And, where we make investments matters as well.
City residents have known for some time that we must turn our focus to the basics.
Our needs, not our wants.
To focus on storm drains, sewer systems, and the roads we use to get to and from our homes, and businesses, and on which millions of dollars of goods are carried on a daily basis.
A pavement conditions report prepared for the City Council by our experts in the city’s engineering and transportation department, highlights the need we have when it comes to this major asset in our city.
The report shows more than half of our city’s streets require full repavement or overlays. Of the 1,855 lane miles in our city, over 1,200 miles are rated as poor or very poor.
That is 66% of our city’s roadway.
The City Council has included infrastructure in their strategic plan this year and my office is joining you in this long-term effort.
I know some members of this Council are interested in exploring the sales tax option related to the construction of the new prison to help deal with the city’s infrastructure needs.
During this year’s legislative session, my team lobbied to keep this option available to the city.
However I am not prepared to utilize the tax this year and would want public input before we moved in that direction.
Plus, the city does not currently have a strategic plan to utilize this tax option, and I request we explore every option available to us, before we turn to a tax increase.
I look forward to working with the Council and interested parties to continue finding solutions to our infrastructure funding needs.
This year, my proposed budget increases overall road and sidewalk funding by 50%.
A large share of this increase comes from a prioritization of roadway projects in the city’s west side.
The funding for these projects was previously secured from the state, but the money was never utilized, keeping these important projects from moving forward.
With our infrastructure in it’s current state, we must move away from a “wait and see” policy and move forward with basic infrastructure projects we have funding for.
These projects will significantly improve the roadway and access to a key economic area of our city along 5th and 7th south on the west side.
Nearly 16 percent of our city’s GDP is driven by manufacturing, trade and transportation, and this is growing.
We continue to be the Crossroads of the West. With our airport redevelopment project now expanding to include the northern terminal, we should expect and encourage more cargo, and goods to flow in and out of our city’s warehouses and manufacturing spaces.
Finally investing in this infrastructure is good for our city’s economy and strengthens our future revenue prospects.
Other road and transportation projects proposed in my budget, including; $300,000 in funding for a needed traffic light timing calibration, bus stop improvements, pavement overlays, ADA improvements, and sidewalk rehabilitation will help all of us move around our city more easily.
And for some of you, who may have encountered difficulty while parking in our city, I am proposing a reprieve or pardon.
This proposed amnesty program will be available between August and October of this year and will allow for a one-time reduction in unpaid parking tickets, in exchange for a donation of cash or canned goods to local non-profits.
We estimate the average citation will be reduced by approximately $110 dollars and the amnesty program will generate revenue of $320,000 dollars. Not to mention the resources we will generate for those in need.
So if you have outstanding citations, issued before July 1, 2014, consider taking advantage of this proposed program.
And if you occasionally make a mistake on a parking meter keypad, I believe you should receive a little help as well. I am also proposing a one-time dismissal for clearly miss-keyed entries.
This is a frustrating ticket to receive, one compounded by the inability of the city’s parking enforcement officers to provide relief due to previous administrative policy.
This change, will cost approximately $60,000 dollars, but is in line with our desire to be a welcoming and accessible city.
To appropriately service the residents and businesses of our growing city, our employees must be able to move around the city and sometimes the state efficiently.
Our city’s aging fleet is making this difficult, especially for members of our police department who have a strong need to work with agencies across the state.
We have a policy in place requiring police officers planning to leave the Wasatch Front in a city vehicle to obtain an inspection permit. This policy was adopted in 2015 after old fleet vehicles repeatedly broke down far from the city limits, costing the city time and money.
This isn’t something our city’s public safety officers, or any city employee, should have to deal with.
And this type of policy isn’t a way to address our city’s underlying need.
Our city’s fleet and fleet fund must be managed more effectively. We have aging vehicles in every department.
Fleet employees have done a great job of working to maintain these vehicles, but without an effective plan for replacement, they have been simply triaging a larger problem.
My office is working with our leadership in the Public Services Department to develop a long-term strategic plan for fleet replacement.
This plan will also include significant guidance from my proposed Department of Sustainability to ensure the new vehicles we purchase are the most fuel efficient and environmentally friendly of each model type.
In this year’s budget we will begin to address this issue by providing fleet services with $250,000 dollars in realized fuel cost savings. These funds will be prioritized to replace some of our aging vehicles. Helping to make our fleet more efficient, greener, and safer.
The greatest asset our city has is not our fleet or our facilities, it is our people. The experts who keep Salt Lake City moving forward everyday. Investing in them is the best time and money we can spend.
Just look at our dedicated 911-dispatchers. For years they have been working mandatory overtime at one of the hardest jobs in the city.
When I delivered my State of the City Address, I asked leaders to find solutions for this difficult work environment.
As part of this plan, dispatchers were surveyed. Almost universally there was a high level of dedication indicative of all our city employees and a desire for cross-training so they could do even more for the residents of Salt Lake City.
I am happy to say, we have already taken steps to resolve the staffing issue, and I thank the City Council for helping to make this a reality by approving our budget amendment request for ten new dispatchers, a change I have also included in this budget.
The dispatchers have also been working with leaders to develop a long-term plan, and I am grateful for their tireless efforts.
This budget reflects my continuing effort to empower employees at all levels and to ensure Salt Lake City is an equitable, respectful and safe place to work.
First, I am proposing a 1.25 percent increase in salary for all non-represented employees. We are continuing our negotiations with our represented employees and are hoping to reach an agreement in the next few weeks.
To build equity, we have also identified a number of employees who are not currently being compensated at market rate. These city employees will receive a larger pay increase, to bring them to market rate along with the universal increase other employees are receiving.
Our city health care benefits will be expanded to cover new treatments and services, such as additional therapy hours for autism. We will also once again front-load employee health savings accounts to help plan for and deal with deductibles and other expenses.
I am also allocating funding to begin implementing the employee university system I spoke about in my State of the City Address.
Our Human Resources team has identified a learning management system which will give city employees access to thousands of trainings.
These trainings range from the very technical and specific, to mandatory types, such as the harassment training all employees are required to take.
Employees will be able to improve their skills, learn new and efficient techniques, and city managers will be able to universally encourage and track professional development.
Currently several trainings are required by city policy or state statute, including sexual harassment training for all, and drug and alcohol awareness training for those operating machinery in our city.
Right now our HR staff has no way of tracking these trainings. This system will help us stay in compliance with the city’s policies, and state statutes that we must follow.
I am also proposing to fund two new positions, including a gang intervention case manager with the Police Department, and permanently fund the diversity outreach specialist with the Fire Department. These are two critical roles that have been identified within public safety.
Because of our shared goal to address homelessness, I am continuing to fund the city’s HOST Social Worker program, by maintaining positions which were vacant last year but will be utilized as we carefully and deliberately grow this program.
In coordination with the Salt Lake City Police Department, we will initially fund five positions, and prioritize the funding of three more social workers later this year through a budget amendment, as this new program grows.
These social workers and this program are key to the ongoing work in compassionately dealing with our homelessness crisis and the City Council should be applauded for initiating the creation of this program.
And as this city moves forward, generating more revenue will be key to our future success.
It is in the city’s best interest for this Council and my office to stand united in our economic development efforts.
Today, I stood on the roof of the historic Walker Center with Jason Mathis of the Downtown Alliance, Lane Beatty, Natalie Gochnour, the Governor, and others to kick off the next phase of the Downtown Rising plan.
This plan will build on the city’s Downtown Master Plan which the Council will also hear about tonight.
We have a tremendous amount of energy and initiative coming from various parts of the state to build a stronger economy in Salt Lake City.
And it is time for us to lead as only the Capital City can.
In this budget I have proposed a strategic realignment of our city’s economic agencies, including the creation of a cabinet level Department of Economic Development.
This proposed department will be carved out of the city’s current Department of Community and Economic Development, essentially splitting the two functions of this existing department into two separate agencies.
As you will see in this proposed budget, this change will include a division of the existing budget and staffing.
We will also shift the Redevelopment Agency within this department, allowing for greater cooperation, while preserving the unique autonomy of the RDA.
The Economic Development Department will be led by a strong economic expert with extensive business and regional development experience, able to coordinate city resources.
I will announce my choice for this position early next week.
The RDA component will be fully serviced by the newly appointed economic development director, and current staff, and led by the chief administrative officer, within the Economic Development Department.
Tonight I am pleased to announce my choice for the chief administrative officer, Justin Belliveau and I encourage the City Council to approve his appointment.
The other arm to this new department will focus on business development, and the Art’s Council will be moved into this division to ensure we are fully realizing the economic engine arts and culture bring to this city.
The overall fiscal impact of this change to the general operating budget this year will be just over $60,000 dollars.
For years, without clear direction or vision, the division of economic development has been floundering under the current structure.
City and economic advocates like those that stood on the roof of the Walker Center today and will be advocating for a Downtown Plan tonight, deserve to have a strong resource in the city to support their work.
It’s time for the capital city to embrace our role in the state’s economy and move forward as true leaders in economic development.
Let’s work together to get this right. As reflected in my proposed budget, this change isn’t the unchecked growth of government or a power grab, it’s creating an efficient and effective tool for building a robust economy.
In fact, with the RDA more closely aligned with this Department, the policy decisions made by the City Council, acting as the RDA Board, will inherently have greater impact on the overall economic picture of our city.
This change brings the Mayor’s Office and the Council closer together, not further apart.
My vision for this new Department will be to support and advocate for local businesses, both large and small. We will also continue to provide services like our loan and start-up programs. As well as work to attract complementary new businesses into our local economy.
I am proposing additional efficiency changes in the Department of Community and Neighborhoods as well.
My recommendation includes funding for two new full-time positions in planning and licensing. These individuals will be focused fully on customer service, helping to alleviate wait times in the department which have frustrated residents and cost businesses money.
The other shift in city operations I am proposing is to elevate the Sustainability Division to a full department.
Our natural resources and the quality of air we breathe are top priorities for Salt Lake City residents.
Because the Office of Sustainability is appropriately staffed and financed by the city’s Refuse Enterprise Fund, this change will have limited impact on the general fund.
However, I am proposing the suspension of the city’s solar permit fee. This suspension is in line with the goals of the new Department of Sustainability, and will make it more cost effective for homeowners to install solar panels.
This loss of revenue from the fee will be offset by a transfer from the Energy and Environment portion of the refuse fund.
Before I end tonight, I want to take time to thank all of those involved in crafting this budget.
We asked department and division heads to find efficiencies and areas they could cut, a stressful task for any leader. Yet every single one of them showed up and demonstrated in-depth knowledge of their departments creating cost-effective operations, which have led us to a balanced budget.
And to our finance experts, many of whom are here this evening. I want to express my gratitude for your expertise and candor through this process.
Gina Chamness our Finance Director, John Vuyk our Budget Manager, Marina Scott our City Treasurer, and Mary Beth Thompson our Director of Financial Operations, along with their analysts, worked hand-in-hand with me to create this fiscally responsible budget.
Your advice was not colored by politics, only the interest of sound financial policies for the city we serve.
And I Thank you.
I want to end tonight by expressing my respect for the Council. Your priorities of homelessness, economic development, and infrastructure, align exactly with my priorities. And align with our city’s priorities.
The budget process is the nuts and bolts of government and represents the execution of our priorities and vision.
I know we can forge a collaborative path forward to reach our shared goals.
Please know my door remains open to each of you. If you have any questions as you pour over the budget please let me know. I am happy to answer them.
Before you is a fiscally responsible budget which cares for our city employees, begins to address long-term problems, and finds funding for programs important to our identity as a city. A city for everyone.
I respectfully request your thoughtful attention to my recommendations and look forward to future discussions with each of you.