State Of The City || State of the City Address

State of the City Address January, 2010

MAYOR
Good afternoon and welcome to the State of the City Address. I'm Mayor Doug Hutchinson.

I'm very pleased to be standing here today with City Manager Darin Atteberry, for the fifth time, delivering this address live and taking your questions.

It's great to look out into this audience and see so many people who care deeply about this community. Before we begin, I'd like to recognize my fellow Council members: Mayor Pro-tem Kelly Ohlson and Council members Ben Manvel, Lisa Poppaw, Aislinn Kottwitz, Wade Troxell, and David Roy who is out of town. Please join me in expressing appreciation for their service.

We take open government and our partnership with you very seriously. This afternoon we're going to look at the state of our city our accomplishments and our challenges and ask you to engage in efforts that will shape the future of our community.

DARIN
Thank you, Mayor. I'm excited to be here today talking about Fort Collins' future. We don't, however, want to minimize what's happening in our world today. This is a difficult time. The nation's current recession is likely to be the longest since World War II, and by some measures it could be the worst since the Great Depression. State and local governments across the nation are struggling to fund basic services. From fencing off parks and closing libraries to cutting bus service and eliminating hundreds of jobs, our peer cities in Colorado and across the nation are taking drastic measures to balance their budgets. Just like governments, families are struggling. The Food Bank for Larimer County has seen a 30% increase in clients this past year. Times are tough, and we all recognize that.

But I'm an optimist by nature. Not a blind optimist, but an informed optimist. We have good reason to expect great things ahead. Fort Collins is one of the best places to live in the nation. That's not just our opinion; you might remember in 2006 Money Magazine declared Fort Collins the number one best place to live in America. They were impressed by more than our healthy economy and educated population. Fort Collins has something unique, something very special.

MAYOR
It's almost a clich to say our quality of life is second to none, but it's true. Our parks, recreational opportunities, bike trails, natural areas, our educational system that includes a major University and Community College, and our historic downtown combine to create a world-class community. And that's our vision at the City of Fort Collins: we're passionate about creating a vibrant, world class community.

DARIN
When we talk about our future, what we're really talking about is community expectations. Through the citizen survey and other feedback, you have told us that this is what you expect. This is what we're delivering. We need to talk about adjusting expectations, or adjusting revenue.

MAYOR
Fort Collins didn't become the community it is today by accident. It's the result of a long line of leaders, Councils and community members whose vision for the future became a reality.

One quick example: when the first mall came to Fort Collins almost 50 years ago, a group of businessmen formed the "Downtown Merchants Association" the great granddaddy of today's Downtown Development Authority and Downtown Business Association. Their vision was to save our downtown and turn it into a robust gathering place for people a place that would have healthy businesses and be the "crown jewel" of our community. I'm proud that my father, Paul Hutchinson, was one of those visionary leaders. It worked. This summer we'll celebrate the 25th anniversary of Old Town Square.

There are many others examples. We get water from the visionary Colorado Big Thompson and Horsetooth projects of the 1950's. We get our electricity from Platte River Power Authority which formed in the 1970's. You get the idea.

DARIN
These leaders, and so many others over the years, embraced their obligation and privilege to envision our future, and to prepare for it. And we've benefited! I believe that we have that same obligation. Now it's our turn.

As we look to the future, we have pressing, immediate needs and a long-term vision for a stronger, sustainable community. Good governance demands that we talk about these needs now, even when many of us are struggling to plan for today, let alone 10 or more years from now.

MAYOR
When I was first elected in 2005, we were NOT ready to have this conversation. Now we are. We've spent the last five years implementing significant changes to make local government more efficient, more transparent, and more accountable. We're doing more than ever before to help businesses succeed and to strengthen the local economy in a way that fits Fort Collins. Only now can we credibly stand before you and talk about resourcing our future.

Solutions start with a healthy economy. The City is doing our part.

Over the past five years, there has been a complete paradigm shift about the City's role in economic health. We have never, in the history of Fort Collins, done more to create a community where businesses can succeed in a way that fits our values. Look at the efforts that are currently underway and you'll see we are relatively well positioned for the future.

Fort Collins unemployment rate of 7% is lower than the state, and significantly lower than the national unemployment rate which hovers at 10%. That's partly because we're creating new opportunities with smart investments in our community's future.

For example, with the formation of an Urban Renewal Authority, we've taken a proactive role in facilitating the redevelopment of North College. You the voters approved road improvements. City Council offered tax increment financing. Private investors stepped up to the plate. As a result, revitalization of North College is gaining momentum. These improvements create jobs which in turn helps the greater economy.

DARIN
We refocused the Mason Corridor from a transportation project to an economic health initiative enabled by transit. The link between transit, development and redevelopment allowed us to leverage approximately $60 million of federal funds AND kick-start economic activity along the corridor. Revitalization efforts are also underway in Midtown and the area surrounding Foothills Mall.

Amidst the economic downturn, we've had other beacons of good news. OtterBox is a remarkable local entrepreneurial success story. Curt Richardson and his expanding workforce are relocating to a new downtown location to accommodate their explosive growth. Under the leadership of Dr. Hans Betz, Advanced Energy recently opened a new manufacturing facility in south Fort Collins to serve a growing demand for alternative energy products. Richard Bison and his team from Water Pik are now industry leaders with a growing global market share. With guidance and leadership from the City, and Executive Director Mark Forsyth, the Rocky Mountain Innovation Initiative or RMI-squared has expanded significantly. They are providing services to more entrepreneurs, which in turn creates and supports high-paying jobs.

In a time when economic good news was rare, Fort Collins companies announced job growth, facilities expansion, and new investments. We even attracted an environmental engineering firm from overseas. Almost a year ago, during the height of nation-wide economic turmoil, the German company Wirsol chose to locate their U.S. headquarters in Fort Collins. The number of jobs created was small, but this move is an indicator that Fort Collins is, beyond a doubt, a good place to do business.

MAYOR
We are pursuing our economic vision and creating an environment where businesses can succeed, in a way that fits our community values. One of those core community values is environmental stewardship. In Fort Collins, the economy and the environment are not mutually exclusive, in fact, they are mutually supportive.

Everyone is talking about the new energy economy and creating green jobs. Here in Fort Collins, we're not only walking the talk, we're leading the way. In 2006, the City was a driving force behind the creation of the Northern Colorado Clean Energy Cluster. Since its creation, clean energy jobs have increased by 19%. The 60-some businesses now within the cluster have set a goal to add an additional 1,650 new primary, clean-energy jobs over the next five years. Simply put, the clean energy industry is booming in Fort Collins.

DARIN
Many of us believe we can be world leaders in this field. For those who think this statement is overly bold, I ask you, why not Fort Collins? We have a quality of life that is second to none and increasingly important to the next generation of workers. We have community values that not only support entrepreneurial efforts, but also support the philosophy behind clean energy.

We have innovative research taking place at Colorado State University that's having global impact. We have resources, such as RMI-squared to help bring that research to the marketplace. We have dozens of local businesses, including Woodward Governor, leading the way. And we have several environmental firms such as Spirae, and Solix Biofuels, that are having world-wide impact. Just last week, Solix Biofuels and CSU were included in a $44 million consortium that will focus on converting algae into biodiesel energy. This consortium is the only one in the country funded by the U.S. Department of Energy.

MAYOR
Fort Collins is already leading the way and others have noticed. The federal government awarded FortZED $6.3 million to kick-start the effort to create a zero-energy district that extends from CSU's main campus through downtown. The US Department of Energy also awarded Fort Collins Utilities $15.5 million to fund smart grid technologies including Advanced Metering Infrastructure.

These smart grid technologies are an important piece of implementing our Climate Action Plan. The goal is clear: reduce community-wide emissions. Energy efficiency is a key strategy to reach this worthy goal. We're moving in the right direction. In 2008, despite population growth, Fort Collins reduced community-wide greenhouse gas emissions by almost 1 percent compared to 2005.

DARIN
As an organization, we're doing our part. Through efficient buildings, lighting retrofits, increased recycling, and other efforts, we reduced the operating expenses of your City government by $250,000 last year alone. It's a win-win for the environment and the economy. This is simply smart business.

And smart business requires that we have the courage and foresight to plan for the future, even during tough times. As we look to the next year or two and beyond we have identified important needs.

Fort Collins is still a safe place, but we're at a tipping point. For the first time in 50 years, one of our police officers was shot in the line of duty on Christmas night. Fortunately, Officer Allen Heaton is recovering. We are deeply grateful for his service and we wish him and his family all the best during this difficult time. This is a vivid reminder of the dangerous situations in which our police officers find themselves day in and day out. I'm extremely proud of our police department.

Last year, Fort Collins police personnel worked more than 34,000 hours of overtime. In the past, staff members often chose to work some additional hours; however because of personnel shortfalls and increased service demands we have had to require mandatory overtime, sometimes just to meet minimum staffing requirements. In addition to basic police protection, the community is calling for more neighborhood patrolling, more party and noise enforcement, coverage at special events, a larger police presence downtown, and increased traffic patrol.

MAYOR
A comprehensive study tailored specifically to Fort Collins identified a critical need for nearly 50 additional officers and civilians to provide the services you need and expect. This is not an arbitrary number. We organized local focus groups, engaged a special citizen committee, and conducted a data-driven assessment of current conditions. Your thoughtful involvement produced recommendations that are tailored to meet the needs of our community.

Like police, Poudre Fire Authority is also nearing capacity. Because of sound planning, PFA is nationally recognized for quick response times and efficient use of resources. However, growth in the south part of town has added more people and neighborhoods to our responsibilities. To effectively respond in south Fort Collins, we need additional resources, including more firefighters. Again, this is not arbitrary. These needs are meticulously defined by an evaluation of how to best serve our entire community. This investment could be the difference between a 5 minute response time and a 7 minute response time in critical situations where, literally, every second counts.

DARIN
A growing number of people are taking advantage of our excellent park system. We, as a community, visited Fort Collins' 50 parks 3.2 million times last year. Everyone from major employers to college students, from my children to Doug's grandchildren say that our parks are key to our high quality life. Yet, as part of balancing the budget, we've cut nearly a-half million dollars from parks maintenance in the last two years alone.

At the same time, we've cut over $1 million of General Fund money from recreation programs and facilities. We've used reserves to temporarily back-fill most of the shortfall in recreation, but those reserves will be completely depleted in 3 years.

Keeping up with future park maintenance and recreation needs will require an additional $2 million annually.

MAYOR
We have serious shortfalls in Transportation. Our infrastructure and equipment are aging. Transfort ridership has jumped 16% since 2007. The demand for mass transit is increasing. At the same time, historically reliable funding sources such as state and federal dollars have declined by more than 30%.

There are real problems.

As part of the last budget, Council debated taking the extraordinary step of using $2 million from reserves to fund more stop-gap work on the growing street maintenance needs. Council recognizes that Fort Collins streets are generally in good condition, but asked the question, "are we at the tipping point where streets have deteriorated enough that the costs of repairs will increase dramatically?"

That is a good question. Delaying maintenance for too long can dramatically increase repair costs.

The staff answered: "We're not there yet. We have postponed a lot of street maintenance because of the budget, but we do have one to two more years before the cost of repairs begins skyrocketing."

That's how close we are to the tipping point for this key element of our transportation system.

DARIN
At its core, maintaining City infrastructure isn't much different than maintaining your home. You can delay needed repairs and maintenance for a while. But eventually, you will reach a point where further delay will make the damage worse and significantly increase the cost of repair. We are quickly approaching this threshold with our City infrastructure.

It will take an additional $6.5 million annually to simply maintain our streets, fill potholes, and make basic repairs. And that's before we take on bridges, new roadways, interchanges, and transit.

We do not have the resources to address these critical services. As a community we have an important conversation ahead. Last year, due to the extreme economic unknowns, we did not explore a sales tax increase. This year, we can't make that same commitment. The economy will recover. Experts are predicting that we've reached our low point. And we cannot delay this conversation any further. There is simply too much at stake for our community!

MAYOR
We could not stand before you today to talk about our options, if we hadn't been working to get our own house in order. We have. For five years, we've been dogged in our pursuit of efficiency and unwavering in refocusing our budget.

In 2005, we threw out the old bureaucratic budgeting process and implemented Budgeting for Outcomes, which mandates that all items in our budget must directly contribute to the services you need and expect.

Over the last five years we've cut nearly $24 million of planned and existing expenses, including eliminating more than 140 jobs to trim $9.5 million from the City payroll.

We eliminated lower-priority services, reorganized to flatten the levels of management, and aggressively pursued making your local government more efficient. We are working with Larimer County and Poudre School District to find areas where we can partner to combine resources and cut costs even more.

DARIN
You have clearly told us that you expect high-quality, cost-effective government. We share that expectation, particularly in the areas of transparency and accountability. Last year we released Fort Collins' first-ever community scorecard which reported our progress in reaching community goals. We launched Open Book which literally opens the City's books up to you. Open Book is on the City website and it posts every dollar the City spends for you to examine. The City of Fort Collins is one of the first in the United States to offer this level of information to its citizens.

We believe local government should be accountable for every dollar. Everyday we demonstrate transparency and efficiency, not just talk about it. And we are a far better organization today than we were five years ago. You have my personal commitment that we will continue to pursue efficiency and accountability for the long-term.

As an organization, our house is in order. We've spent the last five years deliberately making services more cost-effective. We cut costs by focusing the budget on the services you need and expect. Yet we still do not have the resources to fund our well-defined needs in police, fire, transportation, and parks. We will continue to find ways to improve. But I have to tell you, having been intimately involved with scrubbing this budget since 2005, I believe there is little room to trim without significantly impacting your services.

MAYOR
One option is to continue to cut current services to pay for these unfunded needs. I have received a few just three e-mails in the last year suggesting that we completely eliminate Transfort and Dial-A-Ride, close the Lincoln Center and EPIC, and simply shut down our 50 parks. We could do that. But would that be the kind of community you really want? We need to ask because steps like this would seriously undermine our very quality of life. And even if we took those drastic steps that I listed, we would only save $10 million annually that is about half of what we would need to meet the important long-term demands this community has defined.

In comparison, a penny sales tax increase would generate $20 million annually. It would add a dime to every $10 you spend. We are working to diversify our revenue, but sales tax is still our primary source, and it allows us to capitalize on the fact that approximately 25% of our sales tax dollars come from people who live outside of our City limitsthat's 25 cents of every sales tax dollar from visitors, tourists and others who live in the region, who shop here, dine here, and attend cultural and other events.

DARIN
Increasing revenue is one option. It's certainly not the only option. But it is one to consider if you value our existing quality of life and don't want to see drastic cuts to service. Fort Collins' current city sales tax rate is the second lowest among comparable Front Range cities and our base sales tax rate has not been changed for almost thirty years.

Just as leaders before us, we have an obligation to be straightforward about the state of the city and your options regarding the long-term health of our community and our economy.

We need to act now to assure that Fort Collins high quality of life continuesnot only so we can enjoy the community where we live, but also to capitalize on emerging industries especially green industries - and to assure that we attract and retain the talented minds that will become the next generation of leaders.

We live in one of the nation's best cities. I believe that the City organization plays a key role in that designation. We are 100% committed to excellence and efficiency. In the next year, we'll raise the bar even higher by implementing an organization-wide performance excellence program.

Let me take a moment to recognize the people who have delivered on your high expectations. From our parks crews to utility line workers, parking attendants to customer service representatives, my colleagues take great pride in the quality of their work. We take great pride in this community. And we take great pride in serving you. Please join me in thanking them for their commitment and hard work.

MAYOR
Today we've been candid with you about the state of the city. We've provided concrete examples of the tools we're implementing to foster a healthy economy while being careful stewards of the environment. We have demonstrated that we are being responsible with your tax dollars. We now face the tough challenge of either cutting more of the services that define our unique community, or asking you to consider a sales tax increase.

This is not easy. The easy thing to do would be ignore these challenges for a few more years and let future Councils and future leaders deal with themto kick the can down the road. It would be the easy thing to do, but it's not the right thing to do. I'm proud of this Council and City staff for the tough issues we've tackled. And now, together with the community, we face our biggest challenge yet.

We're not here to ask you to consider a tax increase today. We're not here to ask you what services you would like to cut today. We are here to reinforce that we have serious, well-defined community needs. And we're here to ask you to engage in an honest conversation about our options. We're asking for true cross-the-board involvement from you, the people of Fort Collins, so that we find the solutions that best fit our entire community. We are asking you to be informed, to examine the needs we've identified, to examine the services we are now providing to you, and to examine the budget that funds these services.

At no other level of government do you have this opportunity for such direct interaction and direct involvement. At no other level do services so directly impact your everyday life. You have access to your elected officials and to all City information, and the genuine ability to influence our future. We're asking you to take advantage of this opportunity and to engage, to embrace our responsibility and obligation to plan for and provide for our future. Because it is truly up to you to shape the future of our community.

Thank you for joining us today. We'd like to now open it up to questions.