Mayor Becker Fiscal Year 2013 Budget Address & Recommended Budget
Mayor Ralph Becker
FY 2013 Budget Address
April 24, 2012
Update: Click here for the Mayor's Reommended Budget
I’m pleased to appear before you this evening to deliver a message that's a first in my five years as Salt Lake City Mayor: Our local economy is on the upswing.
While my office, working closely with the Council, has been able to navigate the waters of the worst fiscal crisis of our lifetimes – and done so without adding property tax increases except when our residents voted for the Public Safety Building – tackling the budget over the last four years has been perhaps the biggest challenge in my tenure as Mayor.
Now, as we look ahead, the first glimmer of sustained recovery is in sight.
With revenues trending upward and our state unemployment rate falling below the 6 percent mark for the first time in four years, and with the opening of City Creek Center and many other developments, there is no reason to doubt a prosperous year is ahead for Salt Lake City.
City Government Fiscal Realities Stable
While the fiscal position we find ourselves in now is much brighter than in my past years in office, the recent sacrifices we've made as a community to weather the storm are still with us – and will be for some time.
We've tightened our belts in City government, but some City expenses beyond our control have risen, affecting our operational budget – health care, fuel and rapidly increasing retirement costs lead the way. And, Salt Lake City taxpayers continue to bear some $6 million annually to pay for the Jordan School District split.
Had we not made changes in City operations in the area of health care and retirement, the impact could be devastating this year; and even with those changes, we still face increases in expenses that must be addressed – expenses that offset our improving economic conditions.
My budget proposal this year continues to reflect the lessons we've learned in surviving tough economic times: The need to find efficiencies and operate smarter, do more with less revenue, and find ways to meet the needs of changing times and circumstances is no less critical today than it has been over the past four years.
This new, leaner version of ourselves is now challenged with taking on the backlog of projects and efforts that were necessarily delayed and deferred in recent budget cycles as we sacrificed to cope with our financial condition.
For example, this challenge is embodied in how we balance the immediate need for savings against the long-term cost of not replacing vehicles in the City’s fleet – a fleet of almost 3,800 cars, trucks and specialized equipment. Much of our fleet is older and in need of replacement or additional maintenance – with heightened maintenance costs compared to years past.
As we prepared this year's budget to reflect the City's fiscal realities, every department head was asked to once again find operational savings.
Capital City Plea
We will also be seeing an increased financial burden that comes with being the largest, busiest and most dynamic City in the state. Our commuter population – a group that doubles Salt Lake City’s size every working day – continues to rise, and with this comes the necessity for our state leaders to rethink the current distribution of taxpayer dollars. While our downtown renaissance continues and many new businesses are opening their doors throughout the city, the fiscal reality is the lion's share of new revenues created by these expansions are funneled to state and other local governments’ coffers.
And, Salt Lake City is much like a rural Utah county: the majority of our property is non-taxable, affecting the amount of revenue we can claim through property taxes.
Unequivocally, Salt Lake City appreciates our role as the Capital City – we realize the importance, responsibility and prestige of that role. We also recognize that our full-time residents subsidize the daily population influx. We will be focusing new energy on working with the Governor and the Legislature to find a more equitable solution.
Partnerships for our Future
While we continue to grapple with our economic challenges, starting down the road of recovery also provides opportunities to secure our future livability and prosperity. Meeting City needs for today and tomorrow continues to be a high priority for my Administration.
We've benefitted from partnerships with the federal government on transit improvements – specifically the initiation of the Sugar House Streetcar – and from our partnership with state government on the development of the North Temple Grand Boulevard as a complete street. Our business community continues to offer strong partnerships in achieving the needs and goals of Salt Lake City.
One of the few positives accompanying the economic downturn is a cost-effective construction climate. Our City is well positioned to reap benefits from this condition, with the North Temple Viaduct nearly rebuilt; our net-zero Public Safety Building under construction; the design phase of the Utah Performing Arts Center underway; and other important infrastructure projects poised to commence. So, in a time when construction costs have become highly competitive, Salt Lake City – with federal, state, local government and private partnerships – has been able to develop important, needed facilities and transportation improvements, help create jobs and save businesses.
This year, we also have an opportunity to recognize one of our City’s most important resources – our City employees.
This group of committed public servants has been nothing short of exemplary in getting us through the recent hard times. We asked them to do more with less, and they did. We asked them to bear a bigger burden of rising insurance costs, and they did. We asked them to forego wage increases at a time the City could least afford it, and they did. And, through it all, our City employees continued to provide services and execute their duties at a level that should be the envy of every City in this country.
We are now in a better position to recognize our employees’ commitment to Salt Lake City. My budget proposal to you will continue the restructuring of the personnel compensation system, moving toward a performance-based salary structure and making whole some employees – particularly our early-career employees who lost the greatest opportunities during the downturn.
And, in large part because of their willingness to participate in a high-deductible/health savings account plan, our employees will not be asked to contribute more to their health care costs, and I propose a small increase in their salaries.
Efficiencies in Service Delivery
As we recognize that an inclusive and collaborative effort was essential to getting us through hard times, we need to continue an internal evaluation of what tasks we perform best for the community and which ones are better positioned in the private sector.
In the past year, we've put our refuse collection and recycling system to this test by submitting a request for proposals to businesses for provision of this City service. This exercise concluded that Salt Lake City is performing these duties in an efficient and cost-effective manner compared to service delivery by private providers. The result showed that our City employees save us millions of dollars over the term of a contract compared to private providers. That's a testament to the efficiency and effectiveness of this part of City government.
In the coming year, I propose we conduct a similar process for City engineering and design functions. I am asking the City Council to work with me to conduct an in-depth analysis of our capital project program to determine the most cost- and time-efficient approach to meeting our design and engineering needs in the City.
Between the projects funded by the Redevelopment Agency, the Airport, Public Utilities, federal and state partnerships and the General Fund, Salt Lake City’s annual spending on capital projects equals nearly $290 million. The General Fund portion, however, has a current backlog in implementing capital improvement projects ranging back several years. I propose that this coming year we selectively delay funding additional construction efforts to give us a chance to catch up on these backlogged projects and use the time to perform necessary improvements in roads, buildings and other infrastructure while we assess the best way to complete projects in a timely, responsive and efficient manner.
In closing, let me emphasize that Salt Lake City is in strong financial condition. This budget further strengthens our AAA bond rating while taking care of our dedicated employees. Fiscal prudence will always be a leading principle of my budgets, and this proposal does not draw from our reserves in order to balance.
I submit a budget for your consideration that does not raise our general taxes and allows Salt Lake City to continue to invest in a livable future. We foresee a more vibrant downtown, a more balanced transportation and energy system, support of local business entrepreneurship, and protection of our watersheds and natural resources. Our City’s future is bright.
I look forward to continuing my work with the Council and members of our Salt Lake City community to achieve our goals for a Great American City.