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Finance

State of Metro Address 2010

By Mayor Karl Dean
April 29, 2010

Vice Mayor, Neighbors, members of the Metropolitan Council, members of the Judiciary, other elected officials, and distinguished guests … thank you for joining me this morning.

Every year at this time we have the opportunity to reflect on where we’ve been as a city and where we’re going. It’s a chance to evaluate our past achievements and set goals for the new year. As we have for the past three years, we’re going to remain focused on our priorities – education, public safety and economic development. And we’re going to continue working on those things that make our city a great place to live. Being able to do all of this, especially in difficult times like now, starts with how we establish the city’s budget.

For the last two years we have been living in a historic recession. Hopefully we will be reaching the end soon. But, we, as a government, are still feeling its effects. And the families and businesses in our community are too. Even as our economy recovers, it will likely not be the same as it was before the recession. And we will need to be prepared to operate our government on a leaner, more efficient budget not only this year, but for the foreseeable future.

With all of this in mind, there are three principles that have guided my thoughts and analysis of the budget: One, we need to keep taxes low. Two, we need to maintain essential public services. And three, we need to continue to invest in our city's future.

First, keeping taxes low ... We have managed the last two years without a property tax increase. And fundamentally, I do not believe it is right, particularly during difficult times, for our government to balance our budget by unbalancing the budgets of the families in our community.

Our city is faring better than most. But still, many families in Nashville are sitting down at their kitchen tables, examining their budgets, and facing real financial challenges with how they’re going to get by – how they’re going to pay for groceries, how they’re going to make the mortgage. As a government, we do not need to add to their burden.

In addition, raising taxes in a down economy would potentially stifle our already-slow recovery and hamper our growth. Whatever financial gain our government would get would be more than offset by the negative financial impact it would have on our community as a whole.

In recent history, most Nashville mayors have raised property taxes during their first few years in office. Today I am announcing that we are going to break that tradition. We will not ask for a property tax increase this year. And keeping taxes low – something that should always be a key objective of our government – will remain at the forefront of our financial decisions.

Second, maintaining essential public services ... Every city has managed through this recession in its own way. Some have had to take drastic measures – laying off police officers, closing libraries, community centers, parks and schools. This is something we’ve been able to avoid.

We’ve had some innate benefits working in our favor – a diverse economy to start. And we have a reasonably stable housing market. For these reasons, Nashville is weathering the recession better than many other large cities.

In addition, for the last two operating budgets, we have made very conservative revenue projections and we have been prudent with our financial resources. We began trimming expenses even before we knew the full scope of the economic downturn, and we’re in a better position today because of it. And we have benefited from the willingness and sacrifice of Metro departments and their employees to step up and simply do more with less.

Because of all of these reasons, we have managed the last two budgets without closing any government facilities and while protecting public safety and education. We’re going to have to ask departments to trim their budgets again this year. But like the last two years, my goal is to do this without hurting the people we serve or the way our city functions.

Third, continuing to invest in our city’s future … Nashville is a city on the rise. For the last several decades, Nashville has seen strong growth. We’re attracting young people, families and new businesses. And despite the economic conditions over the last two years, we have been able to maintain our city’s forward momentum.

We’ve done this working together – my office, the Metro Council, the business community, our universities, the philanthropic community, neighborhoods, churches. Rather than sitting idly by and waiting for things to get better, we have stayed focused on the things that matter most, and we have pursued progress. And by doing so, we have been able to accomplish a lot in a short time.

Whether it was starting the Attendance Center – a place where truant students get the help they need to address the root cause of their absence from school – an effort that has helped drive down the truancy rate by 17 percent this year in our high schools alone … or defeating English Only and reaffirming that Nashville is a welcoming, friendly and diverse place … or beginning construction on the Music City Center to grow our tourism industry and our tax base for decades to come … or passing a comprehensive water infrastructure program that’s allowing us to replace water lines over 100 years old, and equip our city for another 100 years of growth …
We have accomplished much over the last two years and we have done this together.

Through all of this, we have faced unexpected challenges. We have had spirited debates. But each time, we were able to come to consensus, agree on how to move forward, and as a result, our city has continued to progress.

With good fiscal management and a determination to see our city thrive, we can continue to invest in our city’s infrastructure, and in the areas that matter most; and we will be in an even greater city when the economy begins to recover.

And that’s the analysis of what we need to do with this year’s budget: Keep taxes low, maintain core services, and invest in the future. Put that way, it sounds simple. And in principle it is. But it’s challenging to implement in practice. So we have taken a hard look at our financial circumstances and considered what changes we can make.

For a household, the items that impact a budget the most are the mortgage, the car payment – the big, one-time ticket items that you pay over time. Cities finance capital expenses as well, and for the same reason – because they benefit our community over a long period. Every time we undertake an improvement project – when we build a sidewalk, a community center or put a new roof on a school, we finance that project in the form of a bond. We pay off that bond over a number of years, and during that time, we pay interest – just like you do for a mortgage on a house.

Shortly we will present the detailed operating budget for Fiscal Year 2011 to the Metro Council. In that budget, we have proposed restructuring a portion of our city’s debt to provide some financial relief for the next two years. We can reduce what we’re paying to finance capital investments in our city for the short term, and free up more money in our budget for other things. We can do this, and still protect our city’s finances in the long run, because we will take advantage of the historically-low interest rates that have come about as a result of the current economy.

We have to prepare a balanced budget – operating on a deficit is not an option for local government, nor would we want it to be. So to make ends meet, we are faced with three choices – raise taxes, drastically cutting our services, or instead, find a practical approach to getting through the remainder of the recession. And that’s what we’ve done.

By restructuring some debt, the most reduction we’ll have to ask any department to make in their budget this year is 5 percent, and less for those departments whose core mission is to provide essential services directly to the public. Our libraries and parks facilities will maintain their hours of operation. Public Works will maintain the same level of service they provide now. And bus lines will remain in tact.

For schools, we will fully fund the budget request submitted by the Board of Education. As part of their request, our public schools will receive $25 million dollars more from the general fund dollars allocated last year. I have confidence in Dr. Register and the School Board that these funds will go towards continuing to improve the quality of education we provide our children.

In addition to education, the proposed budget protects funding for public safety. Ensuring that our citizens are safe is one of the most fundamental functions of our government, and we will continue to support public safety with only small cuts to police and fire. Neither department will lose a single sworn / frontline position. And for police, we will continue to bolster our crime-fighting efforts by beginning to add staff for the DNA crime lab, which will open in 2011.

In addition, we will be able to reward those who have shouldered most of the burden for the last two budgets – our Metro employees. I believe government is only as good as the people that work there. And our employees have gone too long without an increase in pay. To help our employees and their families manage their own budgets, we are proposing an across-the-board 2 percent bonus for Metro employees this year, and we will restore longevity pay for employees, rewarding them for their service to our community.

Restructuring our balance sheet will make coming through the tail end of the recession much easier on our city. But still, for the budget to work this year, next year and for the foreseeable future, we must remain prudent and continue to find ways to save. We’re going to continue to eliminate everything but essential travel. We’re going to continue to take a long, hard look at new hires and replacements. And we’re going to continue to reduce the internal cost of running the government.

By cutting back where we can, and taking advantage of this opportunity to restructure some debt, we have met the first two guiding principles of this year's budget – keeping taxes low and maintaining services. Which leaves the third – continuing to invest in our city’s future.

If you recall, last year we proposed, and the Council approved, a substantial capital spending plan that reprioritized a number of projects that had previously been approved, and we introduced some new projects that are in line with our priorities as a city. This year, at the same time we file the operating budget, we will file another capital spending plan. It will be much smaller than last year’s, but it will include critically important investments for our city.

We are proposing to fund the construction of the 28th Avenue Connector. We included planning money for this project in last year’s capital budget, and this year, we’re including the funds to build it. This project will reconnect North Nashville and West Nashville – two communities that have been divided for over 40 years.

We will fund the design and pre-development of a new, state-of-the-art headquarters facility for our Metro Public Health Department to replace Lentz – it will be LEED-certified, and reflect the high quality of service our Health Department provides and the importance of health in our community.

We will fund the construction of two additional police precincts in the Madison and South Nashville areas, which will benefit public safety throughout Davidson County by reducing the coverage areas of our other precincts.

In this capital spending plan, there are a number of projects for Southeast Davidson County. It’s the fastest growing part of our county; and it’s a community that is greatly underserved. In addition to a new police precinct, we have allocated funds for a new community center, a new public health center, and a new elementary school. With funds from last year’s capital budget, a new fire hall is already underway.

In other areas of Davidson County, we will fund the construction of a new community center at Sevier Park. We have included funds to begin planning and land acquisition for a new library in Bellevue. And we will continue to fund the expansion of our sidewalks, greenways, and bikeways throughout Davidson County.

We are proud of Nashville’s high rankings on all types of lists, and rightfully so. We are one of the friendliest cities. We are a top city for business relocations and expansions. And we’re ranked as a great place to visit and a great place to live. But one list, an important list, that we don’t rank high on – in fact, we rank very low on – is the health of our citizens, especially our children. Childhood obesity is a serious problem in our community.

This is counterintuitive to who we are. We are the center of the healthcare industry. We should be one of the healthiest cities in America. Health ultimately boils down to individual lifestyle choices. But what we can do, as a government, is ensure our citizens have access to healthy choices. That’s why being a walkable, bikeable city is important.

And all of this ties in with our efforts to be an environmentally sustainable city. Health and our environment are directly linked. There are many ongoing efforts, both public and private, to protect and enhance Nashville’s environment. In the past year alone we have completed a downtown tree inventory, a tree canopy study, a stormwater management plan;
and we have added 558 acres of land to add to our park system.

We have also formed a partnership with The Land Trust for Tennessee to work with The Conservation Fund to develop a progressive Open Space Plan. This project will create a comprehensive strategy that balances conservation with growth. For the first time, we will have a complete inventory of the remaining open space in Davidson County. And we’ll be better able to identify what parts of our community are lacking access to open space and green space.

We have included $5 million in the capital spending plan to establish an Open Space Revolving Fund that will leverage public / private partnerships. This is money that, when matched with funds from the private sector, can be used for the conservation or creation of open space. Investing in our city’s future involves more than just physical, structural investments.

We invest in our city, and continue to move our city forward, by making thoughtful decisions with the operating budget, and by staying focused on our priorities and working together.

Let’s start with schools … When it comes to investing in our city’s future, there’s nothing more important than the education of our children. We have to invest in our kids.

This spring we launched a new program called the Nashville After Zone Alliance. It’s a partnership between my office and Metro Schools to increase the availability of quality afterschool programming specifically for our middle school students. In one semester, we doubled the number of middle schoolers in the Maplewood and Stratford clusters who are participating in structured afterschool programs. In this year’s operating budget, we have allocated $600,000 in the general fund, which combined with $250,000 in private funding, will sustain this program and launch a new zone in the Glencliff and Overton clusters.

We also launched a new partnership between our Metro Schools and our Public Library called Limitless Libraries. With this program we are breaking down the silos of individual government departments and making the full resources of our public library available to our high school students in their schools. We started this program in February with three high schools: Pearl-Cohn, Hillsboro, and Hillwood. This year, we are including funds in the budget to expand the Limitless Libraries program to all 16 high schools.

We are continuing to improve the education our students receive in our traditional schools, but we also recognize that our traditional public schools can’t always meet the needs of all of our students. Parents deserve choice, and one choice we need to provide more of is charter schools. Charter schools are not a panacea. But they are a tool we can use. And like any tool, charter schools have to be of high quality if they’re going to work. To ensure every charter school meets the highest standards, last year we created, with the support of the private sector, the Center for Charter School Excellence in Tennessee. It will be one of the nation’s first charter school incubators to operate statewide.

Today we have with us the Center’s first two fellows who have been selected to go through a rigorous one-year training program: Linda Mendez, currently the founding dean of students at a charter school in Chicago, and a former Teach For America corps member. And Ravi Gupta, currently a special assistant to U.S. Ambassador to the United Nations Susan Rice, and a graduate of Yale Law School. A year from now these two individuals will be fully prepared to become founders of high-performing public charter schools in our city. They will invest their talents and their time in our children. And they will draw more bright, ambitious, young people like themselves to Nashville. Linda and Ravi, if you’ll please stand to be recognized. Thank you for being here. And welcome to Nashville.

Our schools are making progress but we still have a long way to go. Our schools, and more importantly, our students, are going to continue to need the full support of our community in the years to come. We’re beginning to embrace bold public education reforms. And the ship is beginning to turn. I want to thank Dr. Register and the School Board for their partnership in this effort.

Education will remain at the top of my priorities. And it is intrinsically linked to our other priorities, especially public safety – another area we have to continue to invest in.

When it comes to public safety, you have to invest in people. This past fall we hired a combination of 34 new EMTs and paramedics to bring our ambulances up to full staffing. And last year, we reached the point where we have a fully-staffed police department for the first time in five years.

We have hired 261 new police officers since I took office. And we continue to hire and train new officers to keep up with attrition. While many other cities across the country have had to layoff police officers and close police precincts, we are doing just the opposite. And the investment is paying off. The great work of our police officers has driven down overall major crime in our city for a sixth consecutive year, and we’re on our way to a seventh.

The importance of our police officers and the risk they take every day is brought into perspective when you consider what happened last June 25th when Sergeant Mark Chestnut pulled over a vehicle on I-40 for a traffic violation. He encountered two men with complete disregard for the law and for the value of human lives. Sergeant Chestnut was seriously hurt. We’ll never know for sure, but I believe to this day that his actions saved lives. Sergeant Chestnut is here today with his wife Michelle. They have three kids – Keely, Kalin and Eli. And all of their lives have been forever changed because Mark was doing his job that day to protect others and to protect us. Mark and Michelle, if you’ll please stand to be recognized.

Every day the work of our police officers prevent someone in our community from becoming a victim of a crime. Fortunately, for most of our officers, their efforts don’t result in the same situation Sergeant Chestnut encountered. But they are heroic just the same.
So we invest in education, we invest in public safety, and our third priority … We have to invest in economic development. And I fundamentally believe that when you get education and public safety right, economic development will follow.

At the same time, we cannot just sit by and wish for more jobs and for new and expanding companies to come to Nashville. We have to sell our city every day, and we have to create environments that encourage job creation and new economic opportunity. Yesterday’s announcement of HIMSS – the Health Information and Management Systems Society that will serve as an anchor tenant in the Nashville Medical Trade Center – is a perfect example of this.

As a direct result of building the Music City Center, we have the opportunity to turn our current convention center into the world’s first Medical Trade Center, a one-of-a-kind, one-stop-shop that will give companies around the world a place to come to comparison shop the latest in medical equipment and technologies. Governor Bredesen said it best back in November when we announced the project, he said: “This is a big deal.” And he’s right. A $250 million private investment in our city and 2,700 new jobs is a big deal. And it’s a big deal that HIMSS will be locating a permanent showcase for healthcare technology in the center. HIMSS serves as the nexus of information management for the healthcare industry, and they’re sure to attract healthcare technology manufacturers to the project.

Our economic development efforts are paying off. We’re going to have more good news in the coming weeks as it relates to jobs in our community. This is an area where we have to stay focused. We can, and will, never let up. Especially in times like now, we have to invest our time, energy and resources in growing good jobs for our community.

As we consider future economic development and as we consider the quality of life in our community, there are a two other areas where we need to make serious investments:

First, we need to invest in mass transit. This has been a landmark year for mass transit not only in Nashville, but the entire region. Last spring, the State Legislature passed enabling legislation to create dedicated funding for mass transit – a critical component for us to be eligible to receive necessary funds from the federal government for things such as light rail and commuter rail. We formed a Middle Tennessee Mayors Caucus, a group that will be working on a number of regional issues, but is heavily focused on the issue of mass transit right now. We formed a Transit Alliance, a private sector organization to support the public education and advocacy for mass transit. Vanderbilt has stepped up as the lead donor of the Alliance. And the Metropolitan Planning Organization is in the process of updating the region’s 30-year transportation plan. After decades of discussion, we are finally making tangible progress on developing a true mass transit system for the Middle Tennessee region.

Second, we need to invest in efforts to help those most in need in our city. Nashville is an affluent community. But in contrast, we also have a growing number of people living below the poverty threshold. The challenges these individuals face every day in their lives are real. It’s the basics that many of us take for granted – food, clothing, a roof over our heads.

This year, we completed a community-wide process to develop a Poverty Reduction Plan. Reducing poverty is a complicated task. And this plan is appropriately comprehensive in scope.
It looks at everything from workforce development to daycare, from housing needs to health services. I’ve charged Metro Social Services with overseeing the implementation of this plan. But it’s going to take all of us – government, businesses, churches, nonprofits, individuals –
to see it come to life. In our budget, we will ask the Council to approve funds to support this poverty initiative. Reducing poverty won’t be easy or simple, but it’s something we must do.

We all know that one of the best ways out of poverty is education. But for too many adults in our community, going back to school or acquiring a technical skill isn’t a viable option because they lack the most basic foundation for learning – the ability to read. Adult literacy is something I’ve learned a lot about in the last few weeks. Dollar General, a great corporate citizen in Nashville, partnered with the Chamber of Commerce and the Chamber’s Public Benefit Foundation to commission a Community Needs Assessment for Adult Literacy.

The assessment uncovered what, to me, was an astonishing fact: roughly 12 percent of adult Davidson County residents lack basic reading and comprehension skills. That’s not just a statistic, those are people – 52,000 people living here who are not able to read. If we’re going to continue to thrive and progress as a city, we have to reach out to those individuals and give them the opportunity to learn to read. To help us do this, Dollar General has generously offered to fund half the salary and benefits for a position in our Metro Government to work on adult literacy full time. I attach such importance to this effort that this position will be in my office so that I can focus on this everyday. This person will work with service providers and advocates to create a more coordinated approach in how we address adult literacy in our city and in the region.

If I had to choose one word to describe the state of our city right now, it would be optimistic. Consider the view from where you sit today. Behind me, you can see the East bank of our river – the future site of our first riverfront redevelopment projects. Next year, between these two bridges, Nashville will have a new park for children and families to gather and play. And next door, the former Nashville Bridge Company Building, a historic structure that has been vacant for many years, will be renovated and re-energized with new facilities for our park patrons to enjoy.

Several years from now, the entire first phase of riverfront redevelopment will be complete and both sides of our riverfront will be home to new park space and public amenities. The river will once again be the focal point of our city. And it will bring families downtown on a Saturday afternoon to play. It will draw downtown employees during the work week to take a walk during lunch. It will make our city that much more attractive to visitors and businesses. And that’s what we’re working towards across the board – having a thriving city for businesses and families, and we’re doing this at a uniquely challenging time.

You know, it was here on our riverbank that the settlers of Fort Nashborough some 230 years ago first arrived with dreams and aspirations of creating a community that would support families and commerce. It was an uncertain time early in the settlement of our country. But Nashville’s forefathers saw this place and saw the potential for a thriving establishment where colonists could pursue a fulfilled life.

I believe, as I’m sure our forefathers did, that a great city, a thriving city, is a city of opportunities. Opportunity for people to pursue a fulfilled life – a healthy life, an educated life, a life with a good job and a safe home, and a sense of security about the future.
We’re making progress in our schools. We have a fully-staffed police department. Crime is down. And we are creating new jobs. We’re making Nashville an even better place to live. This community – all of you – deserves the credit. And it’s my job to continue working on those things that ensure our city and our citizens thrive.

Thank you for this opportunity to serve. I am humbled by this job every day, and I look forward to the year to come. Thank you.