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BUDGET 2006-2007
2006-2007 Proposed Annual Operating Budget [PDF]
Budget Info for 2006
Transcript of Mayor Bill Haslam's speech on the proposed budget

City of Knoxville's fiscal year 2006-2007

April 27, 2006
West Hills Park

Good afternoon, thank you for joining us, what a beautiful day to be living in Knoxville, Tennessee, I might be a little prejudiced, but I think every day is a good day to be living in Knoxville and I hope that you feel the same. One of my goals today is to outline for you why it's a good deal to live in Knoxville and to share with you how it's going to get even better.

We are here to talk about this year's budget, I believe a good budget is based on the vision and goals an administration establishes and I want to show you how our budget helps us reach these specific goals. I want to thank my partners in City Council for their support and input as we proceed through the budget process. As we worked through our budget this year, I heard my staff say….THIS is not a sexy budget and they're right it isn't sexy. But it is a budget that keeps us moving in the right direction.

And I believe we have the results to show that as a city, we ARE moving in the right direction and the budget I present to you today will keep us headed that way.

I'm convinced that good government is not always flashy or about the next big project, good government is about setting goals based on a strategic plan. My administration has established a plan called "KNOXVILLE WORKS" with four major goals; First, Stronger, safer neighborhoods, Second, City services you can count on at a competitive price, Third, An energized downtown; everybody's neighborhood and Fourth, More and better jobs. It's important that we accomplish these goals while realizing that costs continue to rise faster than our revenues, so we must always be looking for efficiencies in government. You've heard me say this many times and it's not something that's going to change. If not managed the cost of government will always rise faster than the revenue.

Managing a city budget is a lot like managing a family's budget….the numbers just have more zeroes behind them. We make money, we spend money and we should be saving money. Just like your family, we want to make enough money to provide for our basic needs, pay our debts and save some money for unexpected expenses. Obviously the biggest piece of our budget, just like yours, goes for providing the basic needs; we'll talk about that in a minute.

But whether it's a family budget or a city budget, a smart budget is one that has a rainy day fund and works to reduce its debt. I'm really pleased to share with you that over the last three years we've more than DOUBLED the amount in our savings account, an amount that had gotten dangerously low, it's been increased from $14 million dollars to $30 million dollars. By increasing our savings, we're able to do more of the things we want to do, we have a firm foundation and money to fall back on in case of an emergency.

Some of our fellow citizens in Middle and West Tennessee have suffered greatly in recent weeks from devastating tornadoes, none of us know when something like that will happen here, having a solid savings account is good for our city. We've also reduced our debt by $35 million and will not borrow any new money in next year's budget for the third year in a row. Increased savings and lower debt are two very important ways to keep our city moving in the right direction.
Let's now go back to those basic needs. Whether you're running a family or a city, it's not easy to control spending, when the kids come in and need new clothes, shoes, a new skateboard whatever….you have to make choices, set priorities and say no to some of the wants and make sure you take care of the needs. We operate the same way. We're presented with lots of great ideas and we have to say no to some things we'd really like to do, but like your budget,
there's just never enough money to do everything we want to do. We make choices and set our priorities based on the goals in KNOXVILLE WORKS and I'm going to share our accomplishments and our plans for the future based on these goals.

First, Stronger, Safer Neighborhoods….

Our city is a compilation of its neighborhoods and neighborhoods are a compilation of families. We take very seriously our #1 responsibility, which is to protect the safety and welfare of all of our citizens. That job falls primarily to the men and women of our police and fire departments. Almost half of our city budget goes to pay for public safety. It's important that we make every effort to recruit and retain the best people available to serve as police officers and firefighters and we'll continue to invest in training for them.

None of us want rundown, dilapidated houses or dirty lots in our neighborhoods, one of our responsibilities as a city is to motivate people to take care of their properties through our codes process. If that doesn't work, we have programs in place to help rehab blighted properties. There are times when problem properties demand immediate attention, they are unsafe and unhealthy for the citizens in the community. Our service department takes care of literally thousands of dirty lots, houses and buildings that are dangerous and crime-ridden and pull down our neighborhoods. It's a major source of complaints throughout the city, in fact last year, city neighborhood codes enforcement inspected more than 8,000 complaints. They also help with small projects like roofs or windows or doors, sometimes a little help can make all the difference in a neighborhood that's in transition. Last year we did small rehab projects on more than 200 houses. We have some properties that need more extensive rehab.

Over the last 2 and a-half years, we have given new life to over 150 houses and today I'm committing $200,000 more to this effort. I want my team to have the resources to tackle this problem and I want our citizens to know we're serious about cleaning up problem properties.
Revitalization of our historic neighborhoods will always be a priority with my administration, work has begun in Lonsdale and it's going to be great when it's finished. As we work to revive to some of our neighborhoods, we know that small businesses are an important piece of the neighborhood. Our façade grant program helps these businesses get a little lift that can change the way they look and feel.

We're also very proud of the new shopping center in Five Points including a new grocery store. Efforts like this can be a catalyst for changing a whole neighborhood, this investment has been a public-private partnership.

We're having the Grand Opening for the Five Points Village Plaza on May 5, and you're all invited.

We're going to spend more than a million dollars on sidewalks, this includes building new sidewalks and fixing old ones all across our city. There's no doubt this is an "A#1" priority for our citizens as it is for me. I'd love to tell every neighborhood, yes you're going to get a sidewalk, but sidewalks are very expensive, so we select the locations that will help the most people… starting with sidewalks around our schools. We're also working to make more of our sidewalks handicapped accessible.

Sidewalks are pathways and so are greenways. Our goal is to have a greenway system that connects throughout the entire city and we're well on our way to making this happen. We've added about four miles of greenways and have plans for two and a-half more this year, including the second creek greenway, which will connect the World's Fair Park with the Waterfront, and is a partnership with the University of Tennessee. In another partnership with Knox County, we're getting started on the Knox/Blount greenway; this is an important regional greenway and I'm very excited about it, this greenway will allow us to walk, bike or run from various points in the city all the way to the foothills of the Smoky Mountains.

My hope is that you're able to walk or run down a greenway into one of our city parks. These parks are wonderful assets for our families and they greatly enhance our neighborhoods. We've made improvements to over 20 athletic fields - north, south, east and west. We invest tax dollars in our parks, but we also look for private investment opportunities. There's a great example right here in West Hills Park. We've committed $25,000 for planning and design money to renovate the Jack Murphy Tennis Courts, and the Greater Knoxville Tennis Association is holding a fund raising campaign to help raise the money to repair and upgrade the courts. This is a good partnership. AND…in yet another partnership with Knox County, we're getting closer to opening our new Skate Park in Tyson Park, we're saying early Fall….Councilman Chris Woodhull has promised to teach Mayor Mike Ragsdale and me how to do a kick flip so that we can bring our skateboards out for the grand opening.

We will continue to make money available for traffic calming. I know that speeding through neighborhoods is an ongoing problem. We've done a public service campaign to raise awareness and citizens are working to figure out the best way to slow down cars on their streets.
We believe these are all positive ways we can invest tax dollars and make our neighborhoods stronger and safer.

Our second goal is City services you can count on at a competitive price.

What does this mean to you….well it means that we're going to provide services for you that only the city can provide and provide it at a great value. The cost of providing the services we all want continues to rise.

We pay some of the same bills that you do, you are paying more to keep your homes warm, keep the lights on and to fill up your gas tanks, well so are we. In fact, we'll pay $2 and a-half million dollars more for energy and fuel bills this year. We've promised an aggressive road paving schedule, since I've been Mayor, our engineering department has paved over 100 miles of streets. This is a schedule we want to maintain, but to keep paving close to this pace; it will cost us a million dollars extra in this year's budget.

You've heard me say before that our city faces huge challenges when it comes to fixing our drainage problems. There is a million dollars in this budget for continued work on the First Creek Project in North Knoxville, $1.1 million for Third Creek Restoration, $800,000 to fix a chronic problem at Cross Park Drive and $360,000 for other neighborhood projects. This is just the beginning, but we must lay a good foundation for the leaders who follow us.

As with any business our greatest asset and our greatest expense is our employees, our total payroll is $80 million dollars including benefits. Salary increases will cost us $1.5 million dollars and we're putting $5.7 million dollars into the pension fund to keep it fully funded, that's $1.6 million dollars more than last year.

These are all costs that we can't control, so we have to look for other ways to save money so that we can keep your taxes low. One way we've done this is by moving to a new health insurance plan for our employees. It's a wellness plan; our employees get credit for things like not smoking and exercising. We also offer preventive checks for free and our employees have more choices in this plan, so each employee can select the plan that works best for him or her. By taking an innovative approach to our health care, we're going to save $1 and a half million dollars. This plan encourages our employees to live healthier AND it saves them money….we think that's a good deal all the way around.

Speaking of a good deal, I promised to set up a 3-1-1 Call Center to make it easier for you to access city services. 3-1-1 has been operational for a year now and it's working better than I could have imagined. I'd like to recognize our 3-1-1 operators…will you please stand. Let's give them a hand. These men and women have taken almost 200,000 calls since we opened the center.… everything from simple questions to logging complaints and taking calls for service. I believe that 3-1-1 has definitely made us more efficient; we can log our calls, see where the problems are and get them fixed much faster.

3-1-1 is all about accountability. I am a firm believer that when we set goals and are held accountable, we all do a better job. That's why we established a new review process for our employees and included performance bonuses as part of that equation.

It's been a good year for the city, a lot of city employees worked very hard to meet their individual goals and our city goals and they've worked diligently to keep our expenses below budget. I'm going to ask City Council to add another $300,000 to THIS year's budget in addition to the $460,000 they have already approved to reward the hard work of our employees. And I am budgeting $600,000 for performance pay bonuses in next year's budget. I want to send a clear message that hard work pays off and high performers will be rewarded.

Our third goal is An energized Downtown; everybody's neighborhood.

As I walked over to the first Sundown in the City a couple of weeks ago, I was really excited to see all the activity downtown. The days of comparing us to other cities are over, no more "I wish we could be like you "fill in the blank". Now our downtown is something to be envied. Just look at what's happened over the last two years….the Tennessee Theatre is thriving….Tony Bennett, Bob Dylan and Merle Haggard will all be here next week, last year more people went to a performance at the Tennessee Theatre than at the Grand Ole Opry, the Bijou will have its grand re-opening on June 2nd, the cinema is under construction and the S & W has been saved and will be a new restaurant, condos and retail space. The Mast General Store opens in August, Protein Discovery, an entrepreneurial start up business is headquartered on Gay Street, as is the most popular radio station in the state, WDVX. The Candy Factory and Victorian Houses are now in private hands saving the city $10 million dollars. The Candy Factory will be a hot new address for city dwellers, whose numbers continue to increase. We have 1800 people living downtown, about 320 more will move in over the next year and 100 more units are scheduled for construction and with all of this….there's still a waiting list to live downtown. That's what I call an energized downtown.

Now we want to capitalize on the momentum and move it across the river. We want the south waterfront to be an extension of our downtown and the theme "everybody's neighborhood." We can all be very proud of the planning process for the South Knoxville Waterfront project, it's been inclusive, open and realistic. On Tuesday night, City Council approved the Vision Plan, and we're already beginning work on the action plan, there's $1.3 million dollars in this budget to start making things happen on the South Waterfront. In twenty years when we've completed the South Waterfront, we project an investment of more than $900 million dollars, mostly in private funds. What a difference that will make in our entire city.

Our fourth goal is More and better jobs.

And we're creating major headlines under this goal. In March, we announced that Sysco Corporation will purchase land in the I-275 Business Park to construct a 300,000 square foot complex. It will be a $34.2 million dollar investment in the heart of our city. More importantly, Sysco will employee 300 people at an average wage of $50,000. This is a big win for our city. But there's more news, in the first six months of this fiscal year, from July to December 2005, we've announced the addition of 440 jobs just in the city, through business expansions, this represents almost $200 million dollars of investment in our city. Expansion Management has ranked Knoxville the 9th Best City for business growth. By creating jobs and expanding businesses, we are able in increase our tax base and keep taxes low. Growth translates into increased revenues; we need this extra money to offset increased expenses and keep our city healthy. As an investor in Jobs Now, we're committed to a regional strategy, more jobs throughout the region mean more people will live, work, play and spend money in the city of Knoxville.

Now I want to talk about something I am passionate about, improving the quality of education. The city may not operate schools any more, but we still make a huge investment in the education of our children. Last year the city contributed $83 million dollars to the Knox County Schools, that's what we spend on police, fire and public service COMBINED, our three biggest departments. So we're contributing as much to educate our children as we do to we provide for basic services in the city….THAT'S a lot of money. The City of Knoxville contributes a greater percentage of its sales tax revenue to schools than any city in the state. We should all be committed to County Mayor Mike Ragsdale's Every School a Great School concept; very few things impact our city, its residents and businesses as much as having great schools. This ties directly into our fourth goal because an educated work force drives the economy and creates more and better jobs.

We've talked about being productive and efficient. We're looking for ways to do more with less and keep services at the highest possible level. Like your family, we want to do all the things we need to do and still have a little fun. It's been a good year in Knoxville, we're presenting a budget that is responsible, pays the bills, puts some money into our savings and let's us do some projects that move us forward. We're going to provide good service and we're NOT going to raise taxes, I guess I should have mentioned that earlier. I believe the most important part of my job is to work to live within our means as a city. I want us to be the greatest city in the country….but we must do this responsibly and not at all costs. I am very sensitive to the fact that we're all being hit with extra costs for the basics in life, primarily utilities and fuel. This is NOT the year to add to a family's burden by increasing taxes. I truly believe that our city is stronger and on a firmer foundation because of the hard work of a lot of people in city government, an involved city council, our partners in government at every level and the support of our business community. We can share great pride in what's been accomplished and share in the anticipation of what's to come as we work together to make Knoxville one of America's premiere city's to live, work and raise a family.

Thank you for coming today.

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