Mayor's Budget Address - May 28, 2009

As always, I appreciate the opportunity to join all of you on the Metro Council here today to talk about the year ahead.

This time last year, I told you I saw clouds on the horizon – rising costs…soaring gas prices…and economic uncertainties.

The weather was worse than expected:

Who could have predicted windstorms…and ice storms…Wall Street’s collapse…and a hurricane-force downturn in the national economy? Never in all my years in this community have I seen more families, business people, nonprofit agencies and educational institutions struggle -- facing some of the toughest financial times in this nation since the Great Depression.

Our city’s unemployment rate hit a 25-year record, double-digits. And of course, we’ve faced our own financial challenges in city government as a result of the national economic downturn. We have seen tax revenue slide, made adjustments, faced new challenges, made more adjustments with all of us working together.

That’s the key: We’ve kept working together on ways to move Louisville forward.

That’s the kind of community we live in – and that’s the sort of leadership we are committed to provide.

The people of this community and its leaders have shown the kind of drive and determination that one often sees in championship teams.

Now, don’t get me wrong. None of us are going to make Coach Pitino’s lineup or become a new Angel for the Lady Cards.

But we are a strong team – and that’s what sets Louisville apart from many other cities in these challenging times.

We have worked together to build a strong financial foundation for our community – making tough calls as we managed a $13 million shortfall in 2008 and, more recently, a $20 million shortfall in ’09.

And it’s paid off.

Thanks to our sound management practices, this month we once again received the equivalent of a straight-A report card from bond-rating companies. Standard & Poor’s said, and I quote: Louisville’s “strong financial operations guided by strong management policies” provide stability “even in the face of the economic downturn.” Our finance team, with support from the Council budget committee, has helped build that foundation in times when many others have failed.

We’re not the city of Detroit, faced with a budget deficit of $300 million. We’re not the city of Los Angeles…where the mayor considered declaring a “fiscal emergency” … and layoffs of more than 1,000 are expected. Nor are we the hard-pressed city of Philadelphia… proposing a tax increase.

You won’t see any proposed tax increase in the budget I present to you today.

Or cuts in essential services.

In the budget I present to you today, we focus on two priorities:

o One, maintaining the core services our citizens rely upon and…

o Two, creating new jobs for our community

through targeted capital investments. . . that will translate to an estimated 3,000 new jobs… in the private sector … over the next 2 years.

In the budget I present today, public safety, once again, is our top priority -- it’s always been our top priority -- from police on the streets to modernizing our fire department, from better equipping EMS to completing our MetroSafe communications system.

To help accomplish this goal, my budget continues into the next fiscal year

all the cost-saving measures we put into effect over the past 6 months -- repeating unpaid furlough days, salary freezes for many city workers and salary reductions for my top staff.

In addition, this budget requires us to tighten our belts another notch -- making further cuts in nearly all departments.

This budget continues to reduce the size of government, eliminating 528 positions across our workforce, 119 through layoffs and the rest through vacant slots kept open after we instituted a hiring freeze. Since we combined city and county governments 6 ½ years ago, we have cut the number of jobs by nearly 20 percent. And that’s been one of the keys to our financial health: Remember, two-thirds of our tax dollars pay for personnel costs – and those costs keep rising regardless of the economy….because of health-care costs, pension costs and union-contract raises.

This budget reflects our commitment to continue to seek more efficient ways to operate as it begins to substantially restructure several departments and functions over the coming months.

And this budget reflects the priorities you -- members of the Metro Council -- have already shared with me. I asked you to come up with a consensus, ranking the most important services for your constituents – and the community. You did just that. And, as you review my budget, you will see that I incorporated many of your recommendations. Not surprisingly, we share priorities -- with public safety and job creation at the top of our lists.

As we made budget cuts, my goal was very simple: to have the least impact on the safety and services our citizens rely upon most.

Our game plan: When better economic times return, we will take another look

at what we’ve put on hold…services that this budget temporarily reduces.

Despite the challenges we face, I believe we’re at a turning point, a pivot point, in this community. I am hopeful that the year ahead will be brighter -- that near the end of this upcoming fiscal year we’ll see more signs that our economy is recovering, that our strategic investments in job-creation are paying off, and that the tide is slowly turning. To return to that basketball analogy: It’s like your team has been down and struggling and then you make a couple of good plays, score a couple of quick baskets, and you feel a surge of optimism again.

At the same time, this budget recognizes that better economic times will not bring instant increases in revenue.

The best projections of our city’s finance team…which has been on target time and time again…is that general fund revenue in the year ahead will trend downward slightly. That’s because our largest source of funding – more than half our general fund revenue -- is occupational license taxes. A truck plant’s temporary slowdown, fewer hours worked at stores or restaurants, mandatory furloughs at the local newspaper … every change in workers’ paychecks translates directly to tax dollars. Our hope is that higher paychecks … more jobs…will come as an economic recovery takes root and begins to flourish.

If that were the whole picture, it might seem a gloomy picture indeed.

But our future is far from gloomy. With a network of partnerships: with the state, other agencies, the private sector, and most importantly, with the federal government and its economic stimulus program, we have the resources to make important progress in our community in the year ahead.

We will use approximately $8 million from our general fund to leverage

more than $100 million for capital projects in our community – and federal economic stimulus dollars play a pivotal role.

Early this year, working with the U.S. Conference of Mayors, I joined other mayors throughout America to advocate this funding in Washington. We told both our new President and Congress: If you come up with money for cities to tackle important issues like rebuilding aging infrastructure and improving health care, fixing up abandoned houses and enhancing public transportation, we will transform our communities and -- even more important -- we will put people to work. Fortunately Washington listened.

As a result:This year we will pave more roads, replace more curbs, improve more sidewalks, weatherize and rehab more homes …than ever before.

From Blevins Gap Road to Lime Kiln Lane, from Eighth Street to Watterson Trail, from Stonybrook Drive to Stonestreet Road, you will see a long list of road rehabilitation projects get under way across our community.

In addition, economic stimulus money will provide job training for hundreds of adults and summer jobs for scores of young people. It will help us purchase police cars, add staff to our Family Health Centers and jumpstart retail development in an underserved part of the community.

A $7 million energy efficiency stimulus grant will provide a revolving loan fund to help local businesses and nonprofits make their facilities more energy-efficient. And we’ll be looking at our own city buildings and operations – from more energy-efficient heating-and-air systems to solar street lights.

Our best estimate … is that all these stimulus projects …and all the other capital projects in our budget … will put at least 3,000 people to work in the private sector in this community. Those jobs will range from architects, designers and engineers…

to construction workers, concrete workers, painters and carpenters…from accountants and foreclosure intervention workers … to teachers, researchers, and community organizers…and much more.

Add that to the other big-picture projects we have underway …

· That new multipurpose arena rising at Second and Main, a project we supported together: a catalyst for retail, restaurants and other attractions that is already paying off in new convention bookings. It has at

at least 250 to 300 people at work on-site every day... and will help create even more jobs when it opens in 2010.

· This year the MetroSafe emergency communications system –

6 years in the planning and construction -- moves into full operation

so our community’s first responders can more quickly and efficiently serve our citizens. . . another project the council has supported time and again.

· This year we expect to open our first new library in 13 years -- in Newburg. We will cut the ribbon on a long-awaited new animal-services shelter. We will dedicate an Abraham Lincoln Memorial in Waterfront

Park. All are projects the Council encouraged and supported.

· This year, we will embark on an ambitious project to buy and renovate vacant and foreclosed homes in 5 target neighborhoods -- stabilizing block after block, providing much-needed affordable housing …and yes, putting private sector crews to work in the hard-hit construction industry. I hope the Council will continue to be personally involved in this unique partnership with neighborhood leaders, the public and private sectors… local home-builders, nonprofits and our housing department.

· I mentioned our road, curb and sidewalk improvements earlier. An additional list of local road projects -- $40 million worth – is part of the state’s latest transportation plan. Among its pages of Louisville projects are dozens of road improvements in the planning stages, others ready for construction. The biggest items funded with Kentucky’s stimulus money are repaving projects for the Watterson and Snyder expressways and Interstate 65. Already underway: a state project widening a 5-mile stretch of Interstate 64.

· In addition…to help address both traffic and air-quality issues, with the help of stimulus funds, we hope this year to create the technology “backbone” that’s the first step toward synchronizing traffic signals

along major suburban streets like Preston, Dixie and Shelbyville Road, an initiative I know is important to many of you.

· In these challenging economic times, this budget also provides more than $6 million to non-profit agencies that help citizens in need -- including funds for Louisville’s network of community ministries and social-service organizations.

· This year citizens will also have a new tool for understanding our budget. Our city website – louisvilleky.gov – will present documents in a new format when citizens click on “Your tax dollars at work.” In addition, a new “Louisville at Work” site keeps up to date the growing list of federal stimulus projects.

We’re off and running… and hopeful that we can continue to make the most of opportunities for new jobs through all those initiatives in that stimulus program over the next 2 years.

And we’re hopeful that the economy will indeed turn around soon -- to benefit our citizens, our community’s businesses, our bottom line.

I recently read a book by one of my former aides -- a long-time adventurer who is now a local university administrator.

Tori Murden McClure wrote the book ”A Pearl in the Storm” about her experiences alone as she rowed a small wooden boat across the Atlantic Ocean.

In her journey, as storm after storm battered her and capsized her boat, as the tools she has relied upon were swept overboard, she had to be resourceful and resilient. Most important, she stayed fixed on her direction and her destination – the place she was determined to land.

My friends, we are not rowing across the Atlantic alone. But we are setting bold goals and we share the same determination as Tori that keeps us moving forward toward our vision for a greater Louisville.

And we will use all the tools we have to guide our way – to keep our community strong.

The strongest of all those tools is the power of cooperation... collaboration… partnership.

Only by working together can we get to shore despite the storms that hit us hard and weather beyond our control.

Only by working together will we land with full employment and a robust local economy.

I appreciate the job we have done …together… to stay on course.

And I look forward to staying the course …together… in the year ahead.

Thank you.