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BUDGET 2009-2010
2009-2010 Proposed Annual Operating Budget [PDF]
Budget Info for 2009
Transcript of Mayor Bill Haslam's speech on the proposed budget

City of Knoxville's fiscal year 2009-2010

May 1, 2009
Mary Costa Plaza
The James White Memorial
Civic Auditorium - Coliseum


The world has changed a lot in these five plus years we have been together. We went from a natural atmosphere of growth and investment, and increasing property values almost overnight, it seems, to one of caution and a loss of confidence.

Lots of institutions, especially financial institutions, failed us at the national level. This has affected us all. Here in Knoxville we are fortunate to have approached our budget cautiously, conservatively, and openly during these five plus years. We have known that good times always come to an end. We just never know when. I have found that one great fundamental principle for any government is that sometimes you have to pull in the reins during good times so you have enough momentum to carry you through the tough times.

So we have worked hard to keep a grip on the reins and resisted the temptation to spend all that was coming in when times were good. Instead we added to our fund balance - the City’s saving account - during each of the last few years. We have made sure that our city financial structure is built on a solid foundation.

Sometimes in our hubris, it is tempting to assume that we can look past the basics. When we prepare our budgets we might want to just assume that our costs will only go up a little, but that our revenues will go up a lot. Those budgets might want to assume that people will keep on building more and more expensive homes. Fundamental principles of economics tell us that just can’t happen forever. But it is tempting to figure - “Maybe just one or two more years.”

I am more convinced than ever that we pay a heavy price when we give in to the temptation to look past basic principles, whether in business, government, or, for that matter, in our personal lives.

Basic principles matter! They matter in budget management. We have followed the basic principles of making cautious projections, building up our savings account, and keeping our headcount as low as possible. We have operated under the fundamental premise that it makes sense to spend capital dollars once, on the front end, if the result is to keep from spending operating dollars year after year far into the future. It is temping for those of us in government to ignore that principle because the payoff occurs far after we are gone. But we are stewards of not only the present taxpayer dollars, but also of future dollars.

Basic principles matter in personnel management. We are driven by three. The first is to keep our number of full time employees from growing, finding better ways to work efficiently and effectively. The second is to see that our city employees are paid competitively. The third is to involve employees in decisions.

These principles led us last year to enact a major compensation plan to bring our employees to market levels for each position. This plan was the product of months of hard work among administration, council, and employee representatives. Council approved this plan last year and we had a successful first phase of a three-year implementation plan.

Among the most fundamental rules of managing a private company is to pay attention to those who choose to do business with you – your customers. Violate that rule and you will have lost most of your business to your competitors.

In government that rule holds as well. We always have to keep in mind the fact that people have choices in where they live, work, visit, and locate their businesses.

We govern better when we recognize that our taxpayers are also our customers. That is why we continue to make use of our 311 service to identify and fix individual problems. We also use it to make our systems work better. The data from 311 help us find better ways to not only provide real value to those who use city services but also to deliver these services in the most cost effective and efficient manner possible.

We govern better when we hear from our neighborhoods. Knoxville, like other cities, is a city of neighborhoods. Strong neighborhoods have strong neighborhood organizations, and these organizations can be great partners. They are often our eyes on the street and help us prevent small problems from growing into large ones.

That is why we worked together with council members and community leaders to create our Office of Neighborhoods. This office is helping us understand the special concerns that arise at the neighborhood level and how to craft solutions.

We govern better when we work with, and communicate with, our citizens. We know how important it is not only to listen, but to bring together people with a common concern but differing viewpoints. That is why we have used public processes to help inform our decisions, whether dealing with flooding in North Knoxville or designing our plans for the South Knoxville waterfront.

That is why we use every tool available to us in communicating with those who we touch, as we are doing with our Gay-Street 100-Block Construction Blog, to provide up-to-date information daily to residents and businesses living and working while the street is torn up in front of them. When it is built back - better than ever - the end result you will see will reflect the input of property owners, business owners, and residents.

We govern better when the executive and legislative branches respect each other and respect each other’s roles.

When governments fail to work it is often because institutions lose sight of their basic functions. Working with council, I think we have struck a very good balance of mutual respect and cooperation as we pursue our different and complimentary roles.

Following these fundamental principles has put us in a position to weather the economic downturn without gutting the services we provide.

Our fundamental approach to personnel management has helped us keep our costs under control and retain excellent employees who do a great job for citizens.

Our fundamental approach to working with and communicating with our citizens and with council has allowed us to get things done, get them done the right way, and get them done while avoiding gridlock and dysfunction.

So our attention to fundamentals has worked and is paying dividends. It has helped us achieve the highest bond rating in the City’s history and we have maintained this rating through these tough times. The City’s debt is 25% lower than it was when we took office. Most importantly, we have tripled the size of our fund balance - the city’s savings account.

Therefore, I don’t think that you are going to be surprised to hear that I am proposing a conservative budget for 2009 – 2010. The recommended operating budget is smaller in size than last year’s budget. In fact, it is also smaller than the operating budget council approved two years ago.

We prepared this budget fully aware of the fact that things have changed. Locally, our economy is not slowing as much as the national economy but, it is slowing nonetheless. We can look at the objective data that we have, like the number of applications for building permits, or we can take it anecdotally and talk to real estate agents and business owners around town.

I think all of us would agree that this is a time to be particularly cautious in how we spend the city’s money. There are always a lot of things that we would like to do that we can’t do as a city. But, when things get a little tight in the economy, I think there is all the more reason we should be even more careful with how we spend your money.

We are going to do that in this year’s budget. We are living within our means, and this year our means are a little smaller. I’ve made sure that each of our managers scrutinizes his or her spending, especially on anything that is not central to performing their mission.

Despite the challenging fiscal picture, and in no small part because of the hard work of our great team of employees, I am pleased to announce today that we are continuing with the second phase of our compensation plan this year. The average raise for our employees will be greater than 3% at a time when most cities are not giving raises, and many are laying employees off.

We are able to do this while – assuming our projections hold up – adding another one and half million dollars to the general fund - our savings account - by the end of this fiscal year.

And I am pleased to tell you that the budget I am presenting today does not contain a tax increase and… we are not recommending any employee layoffs!

Despite the tough times it is critical that we don’t lose our momentum. We have a lot of good things happening, and even if we have to shorten our stride a bit we don’t want to take our eyes from the prize.

Mayor Ashe saw to it that we became a city of great parks and greenways. We have expanded on our greenway system and will continue to invest in our parks. Downtown continues to be everybody’s neighborhood, with new businesses continuing to open and older businesses continuing to flourish. This budget I am presenting today keeps downtown moving.

Our administration has concentrated on the core of the city, reaching from downtown out to the surrounding neighborhoods on all sides.

Reinvigoration of this core is good for everyone and we are going to keep that momentum going. Investment here provides economic opportunity and hope for those who live nearby. Creating investment, where there has been disinvestment, in the core of the city eases the burden of paying for government services from those living in neighborhoods throughout the city.

This year I am recommending to council that we continue to fund the South Waterfront and the Downtown North redevelopment projects. We are also continuing with our work on Cumberland Avenue to the west and the new proposed redevelopment area along Magnolia to the east.

One fundamental rule of development is that investment in an area follows stable housing. The success of the Hope VI in Mechanicsville underscores this. I am pleased to announce that we are recommending an $800,000 installment toward the development of another Hope VI to ultimately replace Walter P. Taylor Homes.

In tough times it is tempting to forget about our “quality of life” services that bring us together in a variety of ways – at ball fields, in our recreation centers, and in our city parks. Investment here is critical in building neighborhoods, and in building community. Today we are proposing one million dollars for improvements in our recreation centers, ball fields, greenways, and our new Downtown Dog Park and Fountain City Skate Park.

Quality of life is sometimes a great challenge to those with disabilities. Often we take for granted our access to facilities that can be very difficult for others to navigate. I am pleased to announce that we are recommending the installation of an elevator in the garage many of you parked in for this event. This elevator will make it much easier for those in wheelchairs to access the auditorium and the Coliseum.

In tough times it is tempting to cut back on basic infrastructure. Again, despite a challenging fiscal environment we are continuing with our commitment to sidewalks and road paving and repairs to roads and bridges. Infrastructure is usually not that exciting. It often goes unnoticed. But without it our city gradually becomes a place where businesses do not invest and people don’t choose to live, shop, or visit.

The work of the City’s energy and sustainability task force has put on a road to making investments in efficiency that will not only save money year after year, but will also help us in our role as responsible stewards of our natural resources. We will use our stimulus dollars in much the same way, to spend now so we can save later on.

This budget contains twenty-seven million in recommended capital expenditures. Half of that, thirteen and a half million, is for basic infrastructure that will serve our city for years to come.

Budgets are not just about dollars. They are about priorities, particularly spending priorities. They are about realities that constrain those priorities and how we make tough choices. They are also about vision.

At this point, well into our second term, we want to make sure our vision for Knoxville is one of optimism. We have had setbacks here – lost jobs, challenges in the real estate market, and businesses under pressure. But we are working as hard as we can to keep our taxes low and our business climate positive. Despite the challenges we face I am more convinced than ever that Knoxville is a great city to live, work, play, and raise our families.

We will miss our relationship with the council members who have worked with us to set priorities and to follow through to make sure that we accomplish what we intend. They will be leaving us at the halfway point of the budget I am presenting today. They have helped us build a strong foundation, and, along with those who will remain - Councilmen Bailey, Roddy, Woodhull and Vice Mayor Becker, have helped establish a high bar for governing.

As I close today I want to address what in many ways is our greatest accomplishment – a heightened sense of community. Having a sense of community does not mean that we always agree. After all, we live in a diverse community with a lot of viewpoints. (You should read my emails!) But community means we have found ways to make decisions while being open to hearing, and considering, other views.

Having a sense of community does not mean we must continue to talk until everyone agrees. We all know that often there is no final consensus. We always have to remember that our citizens expect that we make decisions as well as go through the proper process of making decisions.

Doing government right means being open and deliberative, but at the right time making tough decisions and taking action. We have learned together that we can be open, transparent, civil, and inclusive and still get a lot done! We have finally put to rest any notion that we in Knoxville just cannot “get our act together.” It is always a work in progress, but our act is coming together and it is a good act!

Thanks again for coming today, and for supporting us in so many ways. Taking the time to come shows that you care about our city… I am always gratified when I realize how many people care and care deeply about Knoxville. When I look out today, I am again reminded that there is no more rewarding service than public service. Thank you very much for giving me the opportunity to serve this great city. Have a safe trip home!!!
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