January 18, 2006
Thanks to all of you for being here and for your support of Pasadena. I want to join with the Vice Mayor in saluting Maranatha High School for its commitment to educating students. Congratulations to the Board of Directors, the Head of School, and all of the others who have contributed to the School’s successful relocation to this campus, and thank you for allowing us to hold this event here in the Student Center.
I stand before you tonight, at the beginning of a new year, proud of Pasadena and its many accomplishments. I admire the many people and organizations who are dedicated to making our community great. It is a privilege to work with the City Council, the City Manager and her staff, and all those who serve on our commissions and task forces.
There is another person of whom I am extremely proud. I want to salute my wife, Claire, for her dedication and success over the years in making Pasadena a greater place, particularly in historic preservation and affordable housing, and I am grateful for her support of my work as Mayor.
City’s Fiscal Situation
I can report that the City is financially sound, maintaining gradual growth under
Cynthia Kurtz’s administration. For the first time in history, this year’s operating budget exceeded $500 million, and the General Fund this year is in excess of $190 million. There are 2,330 full-time City employees, up slightly from last year.
The City’s debt level remains moderate after the issuance of $53 million in bonds to support the seismic retrofit of City Hall. Our current condition, coupled with sound fiscal policies and management, led two of the major rating agencies to upgrade Pasadena’s bond ratings from AA to AA+. This is higher than 90% of other rated California cities.
After allowing the General Fund Reserve to dip below 8% due to revenues lost to the state—its current level is 7.17%, this year the reserve will move up to 7.5%, with a plan to reach the 8% target in the next couple of years.
This is not to say there are no challenges, since the cost of providing services to the public continues to rise. Two areas we are closely watching are employee health care and pension benefits.
Another challenge is the pending revision of the Telecommunications Act. Proposed changes in federal law will reflect the dramatic technological advances in the telecommunications field. This could, in the end, reduce—or even eliminate—local governments’ ability to raise revenues through utility franchise fees and user taxes. The loss to the General Fund could exceed $10 million per year, or more than 5% of total revenues.
The Council follows legislative matters closely. We are involved in advocacy directly with our elected representatives in Sacramento and Washington, and will continue a vigorous effort in the coming year. This telecommunications issue is high on our agenda.
I was reminded of the dramatic changes in the telecommunications industry last month when Charter Communications introduced local and long distance telephone service. This brings Charter into direct competition with telephone companies and turns the tables on that industry, which offers internet access and video programming. The competition is great for consumers—it could reduce prices and promote better service—but a new regulatory framework for these fast changing companies could have a costly impact on the City.
I am pleased to report that during 2005 our economy continued to strengthen, with sales tax revenues moving upward and significant new investment taking place. Existing Pasadena companies are expanding and important companies are relocating to our City.
Our technology sector is growing. Pasadena is home to Guidance Software, whose business is computer forensics and other security measures for government and corporations, and to Smith Detection, which produces electronic “noses”, based on discoveries by Caltech scientists, that can smell bombs, bacteria and other sensitive materials.
Cogent Systems, a leading provider of automated identification systems, is moving its headquarters to Pasadena in June. Cogent, which topped Business Week magazine’s 2005 “Hot Growth” list, will come with more than 200 jobs, and the Company is growing rapidly.
Another area of economic strength is financial services. IndyMac is the largest savings and loan bank in Los Angeles County, and the largest online mortgage loan originator in the country, and Wescom is the largest credit union in the county. Western Asset Management continues to grow with over $300 billion now under management, and trading operations around the world. East West Bank, the second largest bank in Los Angeles County, is moving its headquarters to Pasadena this year.
Another source of vitality is the many academic and non-profit organizations preparing to make significant new investments in Pasadena, including Fuller Seminary, Caltech, Art Center College of Design, Waverly School, and Huntington Hospital.
Numbers and economics are critically important, but they are not the only measure of the state of the City.
For many Pasadenans, the most dramatic local experience this decade has been the amount of development in the Central Business District, including office buildings, the Paseo Colorado, and the large number of multi-family residential units. I often hear the question: What is going on, and does it contribute to the City’s attractiveness as a place to live, work, study and play? The short answer is: We are following a comprehensive plan the community created as a blueprint for growth.
Urban planners throughout the nation consider Pasadena in the forefront of urban revitalization. Recently named one of the ten most livable cities in the United States by Outpost magazine, Pasadena was a winner of the 2005 National Award for Smart Growth, granted by the Environmental Protection Agency. The Parkinson’s Spirit of Urbanism Award from the USC School of Architecture will be presented in a ceremony in March. These awards focus on our development trend in which homes are constructed in the downtown area, near transit and above retail stores and restaurants. This “transit-oriented development” allows residents to conduct daily business without using cars for each and every trip.
The City’s General Plan, adopted in 1994, presents a vision for Pasadena in which new residential development is directed away from our precious neighborhoods and into downtown areas; where people can circulate without cars; where the City functions as a regional center with cultural, scientific, corporate, entertainment, and educational activities; and where historic character and architectural resources are preserved. This General Plan is the framework for directing Pasadena’s destiny.
What has happened in Pasadena in terms of development is dramatically consistent with this vision. It is also consistent with the principles of smart growth, which are intended to provide sustainable, less intrusive and more economical development. While these achievements are important, the plan is not and should not be a static thing. It must evolve as the City grows, and I encourage discussion about what kind of community we want Pasadena to be. I hope that all of us will rededicate ourselves to thinking about our future and advocating what seems best.
One of the trends of recent times is a dramatic increase in the price of homes, which has a very negative effect on renters, prospective home buyers, and persons of lower income and with special housing needs, such as disabled persons and seniors.
Our Housing Division has formulated a “vision” which seeks a socially diverse community of homeowners and renters, and asserts that Pasadena residents have a right to live in decent and safe housing. The City intends aggressively to pursue that vision in the coming year.
Assistant City Manager Brian Williams has scheduled a Summit on Affordable Housing on March 10, which will explore ways Pasadena can increase its effectiveness in preserving and producing affordable housing. I am proud of what has been accomplished over the years, although I recognize that what has been achieved falls far short of the need.
The cost and the complications of constructing affordable housing make that goal almost an elusive dream. I am interested, and I believe others on the Council are, in looking at existing structures as the raw material for affordable housing. If experienced buyers committed to creating affordable units buy existing structures with agreement that the City will purchase a so-called affordability covenant, I believe the number of affordable units produced, and the time within which that is accomplished, will be superior to the alternative of new construction. My hope is that this approach will be examined fully during the Housing Summit, and then pursued in the coming year.
The General Plan also called for making Pasadena a City in which “people can get around without cars”. Impressive progress has been made in providing multiple transportation choices. The arrival of the Metro Gold Line, dramatic expansion of ARTS bus routes, restructuring of regional bus routes, and improved opportunities for bicyclists all support this General Plan goal. Pasadena has been widely recognized for its progress toward mobility—the ability to get around—without using a personal vehicle for every trip.
Traffic management continues to be a City priority. Many attribute the increase in traffic to newly constructed residential units, but there appear to be several additional factors at play. Studies show that a large part of Pasadena traffic is through traffic, as people travel from the San Gabriel Valley to Glendale, Los Angeles, and elsewhere. Moreover, Pasadena offers employment to more than 100,000 persons, a good number of whom come and go each day by car. There are also over 40,000 students in our colleges, many of whom commute to class along with the professors who teach them.
Added to the above, the retail activity and more than 700 restaurants in Pasadena, and the cinemas, museums, theatres, and other cultural activities, all of which draw local patrons and many regional ones as well.
Turning to parks, last year 30 acres were acquired from the Metropolitan Water District to expand Hahamongna Park, and the City Council gave final approval to the Central Arroyo Master Plan. A community-wide master planning process for parks and open space will be done this year. The goal is a new General Plan element on open space and recreation, which will help quantify the elements and the costs of future park improvement and expansion.
Sustainability and Healthy Living
The City has launched a “Green Building” policy, establishing guidelines, incentives and educational programs to promote environmental stewardship in commercial and residential development.
The Public Health Department will complete its MAP campaign this year, charting a course for healthy lifestyles. The MAP campaign is following our great tradition of civic engagement by seeking out residents, non-profits, businesses, health care providers, the PUSD, and various City departments to participate in creating this plan.So, the City is pursuing the vision that frames the General Plan. The goal, and it is one that seems achievable, is to offer an exciting urban core with historic character, diverse economic housing, cultural and recreational opportunities, several choices of transportation, including walking; and community participation. If there were awards given for community participation, I bet we’d win them all!
Another question I frequently hear is: Are we prepared? Pasadena has traditionally had a strong program for emergency preparedness, the result of hosting the Tournament of Roses for over 100 years and being in earthquake territory. This program had been strengthened in preparation for Y2K, and in the wake of the tragic events of September 11.
But the City moved into action once again following Hurricane Katrina, the most destructive natural disaster in the history of America. We want to learn from the lessons of that event. Our program for emergency response now recognizes the complexities of relocating huge numbers of persons and animals in the wake of certain emergencies. For example, special attention is now given to the needs of disabled persons and seniors. The Fire Department is committed to training 1,000 community members to step forward as leaders in the event of a major disaster.
The City has signed a long-awaited agreement with NASA—the National Aeronautics and Space Administration—for cleanup of perchlorate that closed down several of the City’s water wells. This problem dates from 50 years ago due to JPL’s waste disposal practices, which have long since been abolished. But the problem today is significant and extremely expensive. The settlement calls for a comprehensive cleanup effort that will achieve water quality that complies with federal and state standards.
City Hall Project
Everyone asks about the City Hall project, which involves the installation of base
isolators to protect the building from major earthquake damage; plus upgraded electrical, plumbing, heating, air conditioning, and technology infrastructure; it includes ADA upgrades; and renovation of the building’s exterior and landscaping. I am happy to report that the project, which is approaching 40% completion, is on time and within budget, with no substantial change orders to date.
When the City Hall project was approved, the Council determined that $6 million be funded through grants and private donations. This amount represents the cost of various exterior restoration efforts and finishing touches such as courtyard landscaping, the façade of City Hall, and renovation of the courtyard fountain. Last year, a FEMA grant was received in the amount of $3 million, and other grant applications are still pending. A private fundraising effort is about to be launched to complete the funding.
Conference Center Project Status
Many are aware of the plan to expand the Pasadena Conference Center. This project will increase rentable space by 50%, create two ballrooms, and provide equipment and technology to expand the size and the quality of meetings held there.
The current estimated cost of these Conference Center improvements is more than $80 million, to be funded by the existing bed tax collected by hotels, and a supplemental assessment on hotels established three years ago with their voluntary cooperation. After the bids have been opened, they will be reviewed and a recommendation will be brought to the City Council, which is expected to occur within 90 days.
Rose Bowl Situation
Turning to the Rose Bowl, we all know that an effort started three years ago to develop a strategy for the long-range needs of the stadium. This 80-year-old structure underwent a seismic upgrade last year, and it will be improved this year with new locker rooms, a new media center, additional storage, and other improvements. The cost is about $14 million. These improvements, pursuant to our 20-year lease with UCLA, are funded through bond financing to be repaid over the remaining lease period.
The effort to address this challenge by bringing an NFL team to Pasadena was dropped in June, after extensive studies and negotiations with the NFL. As you know, not all Councilmembers are satisfied with this decision. An initiative has been circulating which would allow voters to express their views on the question, and its viability should be determined during the next few months.
In any event, the Council intends to develop this year a long term plan that does not involve an NFL team. The goal is to determine the capital improvements needed to assure the comfort of fans and to enhance the Bowl’s competitiveness, as well as to study alternatives for financing those improvements. Meanwhile, marketing efforts will continue to increase revenues at the Rose Bowl, consistent with usage guidelines that respect the surrounding park areas and neighborhoods.
On any basis, 2005 was a difficult year for PUSD, which of course is an agency independent of the City. Battling budget limitations all year, the Board of Education cut expenditures in several ways, including closing four elementary schools, discontinuing its police staffing and dramatically reducing the number of security assistants. The problem results from reduced state funding and reduced student enrollment, the latter of which is an issue in half of California public school districts.
These decisions were necessary notwithstanding good news on the academic front. The Superintendent announced in September that 20 out of 32 schools achieved a student test score above 700, as compared with only three schools reaching that level four years ago. At the same time, 26 schools met their annual achievement improvement goals.
It is possible that the state will grant some budget relief this year, since the Governor’s budget proposal increases the funding for Kindergarten through 12th grade by nearly $2 billion.
In this situation, I and other members of the Council are asked whether the City is doing everything it can to support the public schools.
We all know that a community with successful public schools has an advantage
in competing for business and investment. Strong schools create loyalty between young people and their hometowns, producing young adults who will be more productive in meeting the challenges of the 21st century.
With that conviction, the City continues its commitment to work with the School District to achieve greater efficiencies and provide other support.
The City’s financial support for PUSD students and programs totals about $3 million annually. In early October, Janet Pope-Givens, Adjutant to Police Chief Bernard Melekian, began a temporary assignment with PUSD. She is coordinating the District’s public outreach regarding budget limitations. Further, the City and the District have formed 13 study groups to examine various business practices to determine if there are opportunities to increase efficiencies. The goal, during this period of tight budgets, is to determine additional ways in which the City and PUSD might develop partnerships for programs ranging from fleet maintenance to purchasing.
There is a strong interest in improving and supporting public schools in the community. I met recently with Chris Brandow, a Caltech chemistry instructor, who is assuming the role of Executive Director of Pasadena Education Network, to which he will devote half time. PEN is working to bring new students to PUSD by conducting campus tours and providing accurate, up-to-date information on test scores and other relevant issues. Knowing Chris and other founders of this effort, now in its third year, I am confident of its success in recruiting students to the public schools.
Before closing my report tonight, I want to call attention to two events of special interest.
First, tomorrow evening the Tournament of Roses will name Paul Holman, a capable executive, President of the 2007 Tournament of Roses. He has been a Tournament member for 26 years, working in the areas of parade operations, public relations and business development. I am confident that he and his committed wife, Susan, will serve with distinction, and I wish Paul and Susan the very best.
In June, Dr. David Baltimore, President of Caltech for nearly nine years, will step down to devote full time to the research which he loves and to pursue his distinguished career in biological sciences. At 37, in 1975, he was awarded the Nobel Prize for his discoveries which contributed widely to the understanding of cancer, AIDS and the operation of immune response. His talent, dedication and good judgment have contributed to his distinguished leadership at Caltech. The Star News said Dr. Baltimore “simply and forever changed the entire scope of the job”.
I know you join with me in extending congratulations and gratitude to Dr. Baltimore, and extending best wishes to him and his wife, Dr. Alice Huang.
In closing, I want to pay special tribute to Pasadena Water & Power, our utility department which this year is celebrating its 100th anniversary.
PWP sponsored a float in this year’s Rose Parade, and I take it that the heavy rain that day was not arranged to spotlight one of PWP’s important products. This department exemplifies the commitment and quality of services available from City Hall, and reflects the remarkable resources we have in this community.
I believe we can all agree that great things are happening in Pasadena. Together we can build on our strengths and overcome our weaknesses.
I am constantly amazed and inspired by the love and dedication Pasadenans have for this City. The people of Pasadena possess a stamina and perseverance that has characterized our community for decades. As we embark on a new year, I ask you to join me in renewing our commitment. I consider it an honor to work with each and every one of you in continuing our great traditions.
Thank you again for attending this event, and good evening.