January 20, 2011
Mayor Bill Bogaard
Good evening, and thank you for coming. I am greatly honored by the presence of so many residents and community leaders and, once again, thank you for attending this 2011 State of the City report.
It is fun to be here in this theater, which makes an excellent venue for the event. I want to thank Michael de Leon, general manager of Paseo Colorado, for his help in securing this venue, and ArcLight Cinemas for hosting us.
I want to acknowledge a special person who is here tonight. Since she was 10 years old, Jackie Stone has been a client of Villa Esperanza, the Pasadena non-profit that serves children, adults and seniors who have developmental disabilities. Jackie is a resident at Villa Esperanza, and she happens to be an employee of ArcLight Cinemas. I would like everyone to join me in greeting Jackie Stone.
I consider it a privilege to work with my colleagues on the City Council. I thank them for their dedication and leadership, and for the collegial spirit with which our work is carried out. The City benefits in many ways from the service of these capable persons!
City Manager Michael Beck is here tonight. We are fortunate to have him at City Hall and I thank him for leading the way to excellence in our municipal services and the highest level of public service. Michael, will you please stand and be recognized?
There are several department directors, division managers and other city staff here tonight, and I thank them for their continued service to the people of Pasadena.
BUDGET AND FISCAL REVIEW
When the Council sits down to consider the city manager’s budget for fiscal year 2012, it will be the third successive year in which significant reductions have been necessary. This year, however, appears by far to be the most difficult.
Major revenue sources have fallen dramatically over the past few years, most significantly in the General Fund – the largest operating fund for providing basic city services. Sales tax revenues alone have decreased more than $7 million since 2008. The current General Fund budget, approximately $217 million, is at the same level as in 2007.
To address a serious structural deficit, the city manager has worked with department directors to make reductions that will save more than $100 million in the General Fund during fiscal years 2009 to 2014. Savings were achieved in several ways, including agreement by staff to forego increases, voluntary early separations for more than 90 employees, and the cutting of 138 previously authorized jobs, including some vacant positions. On behalf of the Council, I want to express thanks to City employees who have joined in the City’s actions to reduce costs.
Several factors have contributed to our current situation, including the weak economy and high unemployment in the nation and in California; an anticipated drop in federal funding compared to recent years; drastically increased pension costs; and major negative impacts, direct and indirect, such as Governor Brown’s budget proposal.
Based on the financial news, some might be encouraged by positive economic trends in recent times, as well as the announcement last year that the recession had ended. My sense, based on various reports, is the recovery this year will be modest and that benefits to Pasadena’s operating budget will be negligible.
Governor Brown’s budget proposal will have a serious negative impact on Pasadena. California faces a projected $25.4 billion shortfall over the next 18 months. The Brown proposal would rely on $12.5 billion in cuts, which would hit higher education, safety net programs and redevelopment particularly hard, and on $12 billion in revenues from an extension of temporary increases on sales, income and vehicle taxes currently in effect. The new revenues would require voter approval in special elections planned for June.
The possible termination of redevelopment in California would dramatically set back programs in many California cities to attract businesses, to create jobs and to build infrastructure, and the League of California Cities is strongly opposing that part of the budget proposal.
There is substantial controversy about his proposal, and substantial uncertainty as to what the outcome will be. The only certainty is that this will not be good for Pasadena and the other cities of California.
Governor Brown’s proposal has been called by many a good starting point for fixing the fiscal problems in Sacramento. Local governments want to be a part of the solution, and Pasadena will work in that spirit in the months ahead. I have the opportunity, as a vice president of the League of California Cities, to be involved in the negotiations at the state level. During the months ahead, I hope to add some value to these discussions, and to keep City Hall and our community informed of problems as well as progress.
As to the City’s budget, I believe the Council has no choice but to explore ways to reduce expenses even further, in the coming year and over the long term. Let me mention some of the areas where preliminary work is already underway, at the city manager’s direction, for addressing our difficult fiscal challenges.
In general, a hard look is needed at current employee compensation and benefit practices. One question: Is our current practice of tying compensation to the 75th percentile of competitive cities still appropriate, or do we need to take into account our City’s ability to pay? Another question: Do current benefit cost allocations between employer and employee need adjustment?
A recent assessment from CALPERS of employee pensions imposes an increase of $13.2 million over the next three years. As a result, our pension program does not appear to be sustainable over the long term. There are questions here too. Should we adopt a new pension benefit for new hires? Should we be moving over time toward a defined contribution plan rather than the current defined benefit format?
It seems to me that every area of city operations must be reviewed for efficiencies, for incorporation of new technology and, ultimately, for quality service delivery at lower cost. In this regard, it seems likely that some operations can be accomplished, pursuant to outside contracts, with little or no loss of quality or control.
Further, perhaps this is a time for me and the Council, as well as members of the advisory bodies, to think with open minds about ways to reduce the cost of our revered commissions.
To maintain the city’s commitment to fiscal stability, which the Council fully intends to do, all of these reviews seem essential in the months ahead.
INITIATIVES FOR 2011
Now, with these budgetary challenges, it would be easy to lose perspective of what the city has accomplished and will accomplish in the future. As we know from last year’s record, there is much to celebrate. Let me share some examples of how our City departments are leading the way in the coming year.
We know that young people must have positive alternatives during after-school hours. Tomorrow, a ribbon-cutting ceremony will occur at the new Teen Education Center at La Pintoresca Park. The center will provide leisure-time experiences for youth between the ages of 13 and 18.
On January 29, there is another celebration to inaugurate a new soccer field at Villa Parke. It features artificial turf as a water-saving measure, and will significantly expand the capacity for local field sports, providing increased recreational opportunities for children, youth and adults.
Investment in infrastructure is also critical to our quality of life. A project is the Civic Center-Midtown Improvement plan that began last week in front of City Hall. The goal is to implement pedestrian and transportation enhancements within about eight blocks in the project area. Components include streetscape and walkway improvements, landscaping and street trees, lighting, signage, and additional decorative elements.
Work on several affordable housing projects will begin this year. Construction will start soon on Hudson Oaks, a 44-unit development of low-income senior housing. A sustainable rehab of the Euclid Villa housing complex, with energy and water conservation elements, will begin soon. And a fresh start is underway for the Heritage Square project, with the release to developers of a request for proposals to construct 70 units of affordable senior housing.
There are two new programs that result directly from state and local budget cuts.
Pasadena is launching a program that involves residents to supplement existing service levels by volunteering their time, talents and expertise. City Hall will reach out to the community to engage anyone who is interested in providing their best ideas for this program. Participation as volunteers is open to everyone from youth looking for community service credit to retired residents who have a lifetime of experience to share.
At present, nearly 500 Pasadena residents are parolees who have been released early from prison but have limited resources for integrating back into society. Everyone deserves a second chance, so a community coalition has a vision for providing local parolees with guidance, educational opportunities and job training. The Police Department is working with the Flintridge Center and the county’s Pasadena Parole Office, to identify methods by which such reintegration can be achieved. They will invite about 50 community-based organizations to join in this effort. The goal is to reduce crime, lower the recidivism rate, and provide parolees a path to productive citizenship, and to make Pasadena a safer community.
ROSE BOWL PROJECT
On January 1st, the Tournament of Roses and the City hosted a successful Rose Parade and Rose Bowl Game. Wisconsin and TCU squared off in a game that all fans felt was one of the great games in Rose Bowl history – except those rooting for Wisconsin. An added benefit of having two teams that “travel well,” as the Tournament of Roses likes to put it, is that Pasadena hotels, restaurants and retail stores did extremely well.
To ensure that the Rose Bowl will continue as a world-class venue, work has begun on its renovation and expansion. This work is scheduled for completion in time for the 100th Rose Bowl Game in 2014, with the final game of the Bowl Championship Series one week later. Plans for the project as well as the financing were completed last year, which was perfect timing – construction costs were down, interest rates were low, and funding from federal economic stimulus legislation was available.
It is significant that our major tenants – the Tournament of Roses and UCLA – have signed 30-year leases to continue the Rose Bowl tradition, alleviating the risk that the tenants might relocate in the future to another stadium in Southern California. We treasure the Rose Bowl as America’s Stadium, an icon of the nation’s great college football tradition. Going forward, we can expect the stadium to continue as home to the granddaddy of them all.
GOLD LINE FOOTHILL EXTENSION
Last year was a turning point in the long-awaited easterly extension of the Metro Gold Line: construction of the first phase has begun and will be completed in less than four years, adding 11.5 miles to the line and six new stations between Pasadena and Azusa. The first element of the Foothill Extension – a rail bridge over the 210 Freeway in Arcadia began construction late last year.
This project comes at a good time in our region, since it will generate $1 billion in economic output, and nearly 7,000 jobs. Last year, the average weekday boardings increased to a new record since the line opened in 2003 – 33,000. When the portion to Azusa is completed, ridership will expand, as will economic activity in Pasadena and other cities along the foothill extension corridor.
Work on the next phase – to Claremont – is proceeding on all fronts, including environmental studies, planning, preliminary engineering and design. A further extension to Ontario Airport, although not currently part of the project, continues to be an actively pursued goal.
Even with budget cuts resulting from the dysfunction in Sacramento, student academic achievement in Pasadena has outpaced state and county performance. For example, PUSD’s Academic Performance Index, or API, has risen 52 points since 2007, and more students are scoring at a proficient or advanced level in English, language arts, and math – especially in the middle schools and high schools. In a year when dropout rates increased throughout California, PUSD reversed that trend by increasing graduation rates by five percent through a comprehensive dropout prevention program in which our City Attorney’s Office plays a major role.
The School District has also established a track record of effectiveness, most notably in its completion of facilities funded by Measure TT. More than 90 percent of those projects have been completed, on time and under budget. The resulting credibility of the district has allowed it to attract, through the Pasadena Educational Foundation, more than $11.5 million from corporations, foundations, state and federal governments, and other donors to supplement education and enrichment programs.
This spring, PUSD will pursue, through a charter reform task force, a proposal for restructuring the method by which members of the board of education are elected. If adopted, sub-districts would be established and board members would be required to reside in the sub-districts for which they seek office. This is motivated by California law adopted in 2004 that strongly encourages the sub-district structure.
With the 2010 Census, Pasadena will start this spring with redistricting. The law requires that voting districts be adjusted, or at least reviewed, every 10 years to conform with U.S. Census data. This will be a community-based effort to which everyone will be invited to participate. A Council workshop will take place in the spring, followed by City Council appointment of a task force.
I want to invite everyone to the Pasadena Convention Center on March 8th – election night – to see the counting of the ballots for the City of Pasadena and PUSD elections. It will also be televised live on KPAS and via streaming video on our city website. This will be a significant election for our City Clerk’s Office, with the mayor’s seat, four City Council seats and three board of education seats on the ballot.
This is a good time for me to salute a person who, on the first Monday of May, will be stepping down from the City Council. Steve Haderlein was elected in 1999, and since then, he has provided exemplary leadership, serving as Vice Mayor, Chair of the Public Safety Committee and Vice Chair of the Finance Committee. Many District 4 initiatives have been completed, including Viña Vieja Park, a safe drop-off traffic plan at Pasadena High School, the new urgent care center on Del Mar Boulevard, and the new butterfly garden at Hastings Branch Library. When he steps off the Council, Steve will continue his work as an economics instructor at La Salle High School, and as husband to his wife Jane and father to their children Kathryn and Jenny.
ONE CITY, ONE STORY
I hope everyone is reading “Mudbound” by Hillary Jordan, which is this year’s selection for our One City, One Story community reading celebration. Pasadena comes alive each year with book discussions, lectures, art shows, film series, and other events, culminating with a visit by the author. This year, the events will take place during the month of March, and Ms. Jordan will meet with the community on March 26. If you haven’t picked up a copy yet, “Mudbound” is available at Pasadena public libraries and at local book stores.
This year marks the 125th anniversary of Pasadena’s incorporation as a city. A committee including the City of Pasadena and the Pasadena Museum of History has been working on a number of special projects and events. The official birthday party will be in June, so stay tuned for more information, as well as volunteer opportunities.
As we celebrate this great City’s 125th birthday, all of us are proud of Pasadena’s reputation for leading the way. The City is known for its success in planning, infrastructure investment, sustainability, arts and culture, architecture and history, and a strong local economy. Pasadena has emerged as a center for the entire region. Our aspirations as a City continue to pursue a vibrant style of life, a sense of community built on a commitment to help one another, a clean environment, support for young people, particularly those who are at-risk, and a sense of safety, place and history.
The fiscal challenges facing Pasadena today do not suggest to me there should be any change in our goals and aspirations. I am confident that, with your help, with your continued participation in the life of this City, Pasadena will continue to lead the way. I look forward to working with you during 2011, and thank you for your commitment to the City of Pasadena.