Transcript of Mayor Madeline Rogero's State of the City Address
Proposed Budget for City of Knoxville's Fiscal Year 2017-2018
April 28, 2017
Suttree Landing
Thank you, Councilman Pavlis, and Vice Mayor Grieve! And thank you R.B. As our city’s first Poet Laureate, you are setting a high bar for those who will follow you.
I am honored that Pastor Beckett delivered our invocation today. His Woodlawn Christian Church here in South Knoxville is a great neighbor. Their community outreach includes ministries to the Hispanic community, to refugees from Burundi and the Congo, and to scholars and students from China. They offer classes on English as a Second Language. They regularly open their doors to neighborhood meetings, and public and political forums. Pastor Beckett, please thank your congregation for their big servant heart.
Sherri Lavon Williams – thank you for that wonderful rendition of our national anthem! And how about our South Knoxville Elementary kids? I want to recognize their principal Tanna Nicely. These young students remind us today to whom we are ultimately accountable – our children and future generations.
Thanks to our Knoxville Police Department Honor Guard for their precision in presenting the colors. And isn’t it breathtaking when the Knoxville Fire Department displays their gigantic US flag!
Mayor Burchett could not be with us today, but we are so pleased that his better half has joined us - Kelly Burchett. I also want to recognize my daughter Joan Monaco.
Our public officials have already been recognized, but there are five members of City Council who deserve a little extra attention. These five are completing their second term in office later this year, which means this will be their last time at this event as Council members. And this will be their last budget vote!
They were first elected in 2009, so they have served with three mayors now. They have represented their constituents well, with dedication and thoughtfulness. We’ve been through a lot together: pension reform, major infrastructure projects, and some tough budget decisions. These Council members all share a deep commitment to serving the people of Knoxville and finding solutions to our shared challenges.
So please stand as I call your name – and let’s hold our applause to the end:
• Former Mayor Dan Brown, who represents the 6th District and served as interim mayor after Mayor Haslam became governor;
• Vice Mayor Duane Grieve, who represents the 2nd District;
• First District Councilman and former Vice Mayor Nick Pavlis;
• Third District Councilwoman Brenda Palmer;
• And Fourth District Councilman Nick Della Volpe.
Thank you all for your service!
At last count there were about 35 people interested in replacing these council members. Many are here today. I encourage all of you to get to know these candidates and I look forward to an interesting and lively campaign season.
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I am blessed to lead an outstanding workforce of more than 1,500 City employees. I’ll get back to them in a minute. Right now I want to recognize my senior leadership team who makes sure that all of our departments are working together to maximize our effectiveness.
• First of all, my Deputies to the Mayor – Chief Operating Officer Christi Branscom and Chief Policy Officer Bill Lyons. They are a dynamic duo who truly can solve any challenge put before them.
• Our public safety chiefs, who between them supervise almost half our workforce: Police Chief David Rausch and Fire Chief Stan Sharp.
• Law Director Charles Swanson;
• Senior Director of Finance Jim York;
• Senior Director of Community Relations Avice Reid;
• Senior Director of Public Works David Brace; and
• Senior Director of Communications and Government Relations Jesse Mayshark.
• And of course, the most important person in keeping me together, my invaluable Executive Assistant Terry Alexander.
Please join me in thanking all of them!
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So, before I move on, I want to take a quick survey – raise your hand if this is your first visit to Suttree Landing Park. Welcome! Isn’t this a beautiful public space? As Councilman Pavlis mentioned, this is our first new City park in more than a dozen years.
It is a great public amenity – and in many ways it also represents four principles that have made our City so successful in recent years. I want to talk about those for a minute.
1. Public process and participation: This park evolved from the South Waterfront Vision Plan which, as many of you remember, was an intensive 18-month process with a huge amount of public input.
2. Rebuilding the urban core: Our approach along the South Waterfront as well as downtown and along our older commercial corridors is to bring new life and new uses to blighted commercial and industrial areas. This park was an abandoned brownfield that we cleaned up and made a recreational asset. This principle makes good sense – by reclaiming and rebuilding our urban core, we are achieving important economic, environmental, and social equity goals that ultimately serve us all, no matter where we live in Knoxville.
3. Strategic public investment to leverage private investment: We have seen over and over that when we invest in public infrastructure – whether in streetscapes, parks, greenways or parking garages – private investment follows.
We see that happening downtown and along Cumberland Avenue, and it’s happening here in South Knoxville along the riverfront and along Sevier and Island Home avenues.
4. And perhaps the most important principle, valuing what we have: Like a lot of cities, Knoxville spent many years looking for silver-bullet solutions to urban redevelopment. But what has worked is learning to appreciate what we already have:
• The beauty of our natural resources -- like our river, which this park showcases and celebrates, and our Urban Wilderness.
• Market Square and Gay Street, and the Old City;
• Our iconic historic buildings, like the Tennessee and Bijou theatres;
• The rich diversity of our people, and
• Our arts and cultural heritage; the talent of our local artists, performers, and musicians.
In these and so many other cases, the building blocks of a newly vibrant city were sitting right in front of us, often neglected and underappreciated.
Sticking to these principles is paying off – in our city and for our region. Innovation Valley, our regional economic development partnership, had its best year in history last year, bringing in more than $1.5 billion in new capital investment and more than 4,000 new jobs. We are seeing wages rise across the region, by nearly 6 percent in the past three years.
Visit Knoxville and SMG, which operates our public facilities including the Convention Center, the Civic Auditorium and Coliseum, and Chilhowee Park, are also seeing the effects of this momentum. Last year, for the first time, visitor spending in Knoxville exceeded $1 billion. It was the third straight year of double-digit growth in our hotel-motel tax revenues.
That surge is continuing. The convention center has never been busier – bookings for conferences, conventions and shows have increased by 15 percent just in this last year alone.
To put it simply, Knoxville is on the map.
So this is the State of our City in 2017: enlivened, energized, connected to its past, and excited about its future. We are a city with plenty of challenges, and I will talk about those. But we are also a city that has learned how to work together and find solutions. And I feel blessed to serve as Mayor for this great city.
Budget
In talking about a proposed budget, there’s always one question to answer up front, so here you go: I am not proposing a property tax increase for next year.
We have been good stewards of your tax dollars. We have a substantial fund balance and we continue to hold the highest credit rating in the City’s history. When adjusted for inflation and countywide appraisals, our tax rate is actually lower than it was ten years ago.
The proposed net budget for 2017-18 is $353.8 million, a 16.9 percent increase over last year, which is mainly due to proposed capital projects. This budget will be funded from growth in revenue, a capital bond issue that will pay for itself in cost savings, and strategic investment of a portion of the City’s fund balance.
As always, most of our annual budget goes to support our ongoing operations and city services: police and fire, public service, parks and greenways, recreation, road paving, pothole repair, leaves and brush pick-up, garbage collection, codes enforcement and blight remediation, and all the other services we provide day in and day out to preserve and enhance the quality of life in our city. Those operations typically don’t get a lot of headlines, but you expect this work to get done every day, and so do we.
I want to recognize the uniformed and non-uniformed men and women who are there – around the clock – looking out for all of us. They plow the roads when everyone else is warm and snug at home. They clean up Market Square after festivals and Neyland Drive after football games.
They respond to emergency calls all hours of the day. And they show up, not knowing what they will find. Like senior firefighter Bo Merritt who showed up this week, and caught one-month-old Josiah who was dropped 30 feet from a burning building by his Dad to save him from the smoke and flames. Others were rescued down fire ladders, and all lives were saved.
Our emergency responders, law enforcement, and general government workers do an incredible job, and I want to thank them all.
A City government is first and foremost a service organization, and we are committed to paying our employees competitively with the market. That’s why we do an annual salary survey and adjust pay grades as necessary. And it’s why a 2.5 percent cost-of-living adjustment is included in this budget.
You will find details on all these city services in the full budget document that will be online. Now I’ll highlight some major capital projects and special initiatives.
Economic Growth and the Urban Core
How do we support these service and safety operations, and all of the other investments we make? The answer is through economic growth and development.
One of our goals is to strengthen our economy and invigorate our tax base. We all recently received our property appraisals from the county Assessor’s Office. You probably heard that overall property values went up across the county.
But we don’t get extra tax revenue from that – under state law, we and the County will both have to lower our tax rates so that there is no net gain from these new appraisals.
So, we can’t directly benefit from increases in appraised value for existing properties – only from economic growth and new development and redevelopment.
That’s why we work closely with and will continue to support the Chamber, Innovation Valley, the Development Corporation, and the Knoxville Entrepreneur Center on business recruitment and expansion, and support for entrepreneurs and makers. That work is paying off, as I indicated earlier.
We will also continue our support for public art and our arts and cultural organizations in this budget, as they are economic drivers in addition to reflecting and sustaining the heart and soul of our city.
We have also known for years that the most fertile ground for growth is in downtown and the urban core. In those areas, we already have infrastructure in place, and density is both appropriate and welcomed.
The Tax-Increment Financing projects that have been approved by City Councils since 2004 are already returning almost $500,000 yearly in city property taxes. And as TIF and PILOT projects roll fully onto the tax rolls in future years, they will add approximately $6 million a year in city property taxes, in addition to the significant sales taxes they are already generating.
And that’s not counting the many other benefits to both residents and visitors of a revitalized downtown.
So think about just a few of our more recent successes and current projects downtown:
• the completion of phase one of Marble Alley apartments on what was a surface parking lot;
• the repurposing of an industrial warehouse to an event venue, The Mill and Mine;
• the current construction of Regas Square on another surface lot;
• the Farragut Hotel being returned to its glory;
• the massive reconstruction of the former KUB building for Tombras Advertising;
• the office tower renovation for Regal Headquarters, and new construction of luxury apartments and student housing on the former Baptist Hospital site;
• the dual-flag Marriott hotel at the old News Sentinel site; and
• the mixed-use redevelopment of Pryor Brown Garage.
Just this past Tuesday, Council approved a contract that allows us to begin the negotiation of a development agreement for the former State Supreme Court site. That has been a long time coming and we couldn’t be more excited.
Our downtown continues to serve as “everybody’s neighborhood,” with dining, shopping and cultural opportunities that make it a regional destination every day of the week.
With downtown’s success comes the high-class problem of finding places for our business customers and visitors to park. We added floors to the State Street Garage a few years ago and, in anticipation of future demand, fortified the structure to support more levels.
The time has come to add two more floors. This will also provide the capacity to solicit future proposals for residential or commercial development on top of the garage. I am including $7.5 million in this budget to expand the garage and modernize it with sensors to indicate available spaces – no more driving all the way to the top only to find it full.
We are also adding sensors in Market Square Garage. (That might be as popular as the new public restrooms at Market Square.)
This year, we will also see progress on our investments in commercial corridors extending from downtown. The Cumberland Avenue Corridor will be completed by football season. On time and on budget, you can already see the new function, look, and feel of that corridor. Our $17 million dollar streetscape investment has leveraged $190 million to date in new private sector mixed-use development.
To the east of downtown, we will soon begin construction of Phase One of the Magnolia Avenue Streetscapes project. I am including $5 million in this budget for Phase Two, which will extend the improvements to Bertrand Street just east of the Pellissippi State campus. This is a major public investment in an important and historic corridor.
Two more commercial corridors will also receive funding for planned streetscape improvements: Downtown North and Sevier Avenue.
Complete Streets - Sidewalks
Let’s talk sidewalks. The desire for more sidewalks is what we hear most often from Council members and neighborhood associations, and with good reason. Sidewalks are a crucial part of our complete streets policy and multi-modal transportation network, and they encourage healthy lifestyles.
I am proposing that we quadruple our usual budget for new sidewalk construction. We will spend close to $3 million to address five of our top identified sidewalk needs in neighborhoods across the city.
We will also fund a comprehensive study of our entire sidewalk inventory to better identify and prioritize sidewalk needs. This will be similar to our recent studies for greenway connections and bicycle facilities. This sidewalk study is the first step in adopting a long-term plan for making Knoxville a truly walkable and accessible city.
Sustainability
We will also continue our investments in making Knoxville greener and more sustainable, to ensure that the quality of life we enjoy is shared by generations to come. We have previously committed to reducing greenhouse gas emissions from City of Knoxville operations by 20 percent (when compared to 2005 levels) by the year 2020.
We have already reached a 15 percent reduction, thanks to measures we took to reduce energy use at city facilities and improvements in the fuel efficiency of our fleet and KAT buses. But there are opportunities to do more.
Our nearly 30,000 streetlights are one of the City’s largest energy users, accounting for nearly 40 percent of our total municipal electricity consumption. The Office of Sustainability, working with KUB, has developed a
plan to retrofit the City’s street lights to LED technology. This will modernize the street lighting system and improve the quality of lighting, while significantly reducing our costs.
I am proposing an upfront investment of $17.5 million for this new technology, funded by a capital bond issue that will pay for itself in less than a decade, and is then projected to save the City more than $2 million annually.
Knoxville will be the first of Tennessee’s major cities to make this conversion to LED streetlights. And, with these LED streetlights, we will exceed our goal of a 20 percent reduction in greenhouse gas emissions by the year 2020. So that is really something to celebrate!
Outdoor and recreational amenities
Outdoor green spaces and recreational amenities are important in terms of quality of life, health, and sustainability, and they have proven to be economic drivers for business and tourism.
World’s Fair Park. For years we have celebrated the Fourth of July and other festivals and concerts on the South Lawn of World’s Fair Park. But without a permanent stage, it is costly to hold events there, resulting in the underutilization of the South Lawn while other venues are overwhelmed. And if you have ever been there during or after a good rain, you know that the South Lawn is plagued by poor drainage.
With this budget, we will build a suitable pad and permanent stage and we will correct the drainage issues. This will make our park an even greater amenity for our residents and visitors.
Knoxville Convention and Exhibition Center. We also have an opportunity to become a hub for youth and amateur sports. Recently Visit Knoxville purchased portable arena flooring for basketball, volleyball, and other similar events, but we need more space to accommodate the growing demand for these sports events. You might remember the Knoxville Convention and Exhibition Center (KCEC), located under the Holiday Inn at the World’s Fair Park. It is underutilized because it hasn’t been updated since the World’s Fair, 35 years ago this month. This budget provides $2.1 million to fix the roof and replace the HVAC system so Visit Knoxville and SMG can book events that bring people to Knoxville and put heads in beds at our local hotels, which of course means jobs and other economic benefits to our city.
Urban Wilderness. Another major asset for residents and visitors alike is the Urban Wilderness, a 1,000-acre network that includes this beautiful park where we are gathered today. Actually, we aren’t quite finished with this park yet. At the east end we have reserved a space for permanent restrooms, a pavilion, and a boat launch. This year I am recommending $1.5 million to fund the completion of this major riverfront asset.
I am also recommending funding for the next phase of our strategic plan for the Urban Wilderness. This is another great example of using public dollars to maximize private investment. The Urban Wilderness is a collaboration of many, including these major partners: Legacy Parks Foundation, Aslan Foundation, Ijams Nature Center, the Appalachian Mountain Bike Club, Knox County, and the City.
Our $1.7 million investment will provide better access and recreational facilities at the quarry at Fort Dickerson Park, and will support the 3-mile Rail-with-Trail project planned by Legacy Parks Foundation and Gulf and Ohio Railways, which will run next to the rail line from Kern’s Bakery at Chapman Highway to Mead’s Quarry.
We will also begin work on what will be a centerpiece of the Urban Wilderness – a trailhead and parking area at the southern end of the James White Parkway. This grand entrance will provide easy access to the Baker Creek Preserve and the 50 miles of Urban Wilderness trails. Thanks to Governor Haslam and his administration for making this state land available to us.
Housing and Social Equity
With new activity and reinvestment come inevitable challenges of equity. Our successes should benefit and serve the entire city, all communities, and all neighborhoods.
Affordable Housing. Rising housing prices reflect many good things about a city. After all, people’s homes are often their greatest financial asset. But rising real estate prices often lead to higher rental prices and fewer quality rental units at prices that moderate- and low-income residents can afford.
This pressure on affordable and workforce housing is a serious challenge for most cities, including Knoxville. Our Community Development staff and housing partners have funded and developed affordable housing for years, but as federal funding is reduced and demand is increasing, we need to give them the resources to take bolder action before this reaches crisis proportions. I am recommending $2 million to establish an affordable housing fund to help close the financing gaps for rental housing.
KCDC/Five Points. We also partner with KCDC, and this budget includes our ninth annual contribution of $800,000 for the transformation of Five Points and Walter P. Taylor Homes, as well as an additional $1.55 million for the project’s public infrastructure improvements.
Opportunities for Youth. We are committed to provide our children with safe places to go and opportunities to achieve to their potential. In addition, the City’s Save our Sons program works with partners across the city to provide opportunities for young men and boys of color who are disproportionately affected by violence. So here are a few examples of how we will support youth services and programs in the coming year.
This budget includes our second $250,000 capital contribution to the Change Center in East Knoxville -- a skating rink, multi-purpose center, and jobs initiative for teens and young adults. Construction has started and we should be skating by the end of the year.
We know there’s no point in having a great facility like the Change Center if young people can’t get there, so I’m including more than $600,000 for Knoxville Area Transit to provide direct bus service to the Change Center on routes 12 and 34 that serve Lonsdale, Beaumont, Mechanicsville, Holston, Burlington, and Five Points.
Two days ago, we cut the ribbon on a new playground and grassy field for the young children who live in Lonsdale Homes, named in honor of Zaevion Dobson. This was a partnership with Gerdau, KCDC, Zae’s mother Zenobia and her neighbors, the City, and other donors.
Also for the children in Lonsdale, I am including $1 million in infrastructure for lights, streetscapes, and sidewalks along Texas Avenue to support the proposed Emerald Youth Foundation sports complex.
This budget includes year one of a three-year commitment to the Boys and Girls Clubs to support their programs at four KCDC housing developments: Western Heights, Walter P. Taylor, North Ridge Crossing, and Montgomery Village.
Continued funding is provided for the city’s successful Second Chance program that provides temporary employment and job skills/referrals leading to permanent jobs for 12 individuals per year who were formerly incarcerated or homeless. And $800,000 is budgeted for grants to 44 community and social service agencies that provide critical services to Knoxville residents.
This budget also includes $400,000 to support the Behavioral Health Urgent Care Center, which will provide an alternative to jail for people who need mental health or addiction treatment.
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There are many more budgeted projects and services than I could possibly cover here today. As I said earlier, the complete proposed budget document and an executive summary will be on our city website at
knoxvilletn.gov/budget. Our communications team and various city departments also post and blog about their projects and services. Check them out. You’ll be impressed.
What this proposed budget represents is a determination to keep building on our momentum and investing in what works. We can never take for granted that these things just happen.
You sometimes hear people doubt the effectiveness and value of government at any level. What I hope we’ve shown in Knoxville is that, yes, local government most certainly can work and does work.
But it takes constant attention to detail and a willingness to listen, along with a willingness to act. That is the State of our City in 2017.
As R.B. told us: “These are our days to push the river, to turn the world. Our season to stand where we are, and move forward.”
Let’s keep moving forward together!
Thank you.