September 9, 2015
Watch The Mayor's Full State of the City Speech
State of the City Full Text
144 years ago, on July 31, 1871, a stake was driven into the ground at the south east corner of Cascade and Pikes Peak avenues, and the city of Colorado Springs was born. 100 days ago, I was entrusted with the honor, privilege and responsibility of serving as the 41st mayor of that city, which has grown to become the 41st largest city in America. Today, I'm here to report to the citizens of Colorado Springs on the state of our city. I'll start with my conclusion. The state of our city is good. The potential of our city is great.
In many respects the city I grew up in has remained the same. It is still the kind of city our founder, General William Palmer, envisioned. We’re a city of remarkable natural beauty, a city with an outstanding system of parks and trails, and a city that attracts many tourists to see our sites and enjoy our healthy climate. I believe that General Palmer would be pleased to know that we still see ourselves as vibrant, rugged and exceptional and that the city once known as “Little London” has become “America’s Olympic City”.
But in other respects, Colorado Springs is much different than when I grew up here. When I was a boy, the soon to be paved Circle Drive was on the eastern border of the city. Today, it's in the western half of the city. The city has grown over 1000% in my lifetime. There were about 40,000 people in Colorado Springs when I was born. Today there are more than 40,000 college students in Colorado Springs.
In my campaign for mayor, I identified three priorities that I would pursue if elected. First, to improve the political climate in the city. To restore a collaborative relationship between the Mayor and the City Council and between Colorado Springs and other governmental entities in the Pikes Peak region. Secondly, to begin to invest in the city's critical public infrastructure, particularly roads and storm water systems. To do so is not only necessary for public health, safety and welfare but also for our future economic development. Finally, I promised to aggressively promote new job creation. Quite simply, these priorities were a reflection of the difficult issues Colorado Springs has faced over the last two decades. Let me elaborate.
While Colorado Springs has continued to gain population since the 2000 census, growing by almost 100,000 people the economy has not grown proportionately. Private sector job growth has been relatively flat, as has been wage growth in the region. There’s no real mystery here. During the last 20 years, Colorado Springs lost a lot of high-tech manufacturing jobs which went overseas or ceased to exist. Much of the job growth that did occur was in lower paying jobs. Today the Colorado Springs economy is about 50% dependent on the United States government. 33% on direct government payroll and 17% on government related contracting.
The underperforming local economy and downturns in the national economy have had consequences for the delivery of services by Colorado Springs city government. The city faced a significant downturn in revenue after 9/11 and a very large downturn in the great recession beginning in 2008. In the year 2000 the city of Colorado Springs had 1,842 general fund employees. Today, despite the fact the city has grown by almost 100,000 people, the city has 135 fewer employees. That means in 2000 the city had 5.1 employees per 1,000 residents. Today it has 3.8 employees per 1,000 residents. Today, on a per capita inflation adjusted basis, the city's general fund is less than it was in the year 2000. In 2000 we spent $422 per resident. Today we spend $336 per resident. This reflects good stewardship of taxpayer dollars. But there is one area of essential city services that has suffered disproportionately. By far, the most dramatic impact from the economic adversity has been on public works. When revenues plunged, it was a lot easier for the city to stop maintaining roads and stormwater systems, than it was to lay off police and firefighters. In 2001, police and fire were 47 % of the general fund budget. Today they are 51 %. In 2001, public works was 18 % of the general fund budget, today it is 11 %. And the fact is that over this period of time the cost of public works projects, including road construction and maintenance, has far outstripped inflation. As a result, while the state of our city is good, the state of our roads is poor. Today we find over 60% of our roads are beyond the normal ten-year resurfacing cycle and are in a state of rapid deterioration. 53% of our roads need an overlay, and 8% of our roads need to be reconstructed. A recent national study indicates that Colorado Springs has the 26th worst roads in America and that the average driver in Colorado Springs pays $723 per year because of the poor condition of the roads, far above the national average. For almost a decade, virtually the only funds Colorado Springs has consistently spent on road maintenance and repairs is its proportionate share of Pikes Peak Rural Transportation Authority maintenance dollars, and a share of federal and state gas tax dollars. This year that amounts to about $18.5 million. Unfortunately, that only resurfaces less than 2% of the 5,600 lane miles in the city per year. By the way, PPRTA dollars are being well spent on exactly the things promised. The 55% share of PPRTA funds that goes to capital projects is paying the local share of much-needed major projects like interchanges at Academy and Woodmen, Austin Bluffs and Union, Fillmore and I – 25 and Cimarron and I-25 and other major projects such as the Woodmen Road widening, the Marksheffel realignment and W. Colorado Ave. between Colorado Springs and Manitou Springs. 10% of PPRTA funds go to support the Mountain Metro Transit System.
So that's the background on the priorities I've set. Now let me report on our progress in addressing them. I am very pleased to report that the relationship between the Mayor's Office and the City Council has improved dramatically and that we are communicating well and working collaboratively in the best interests of the city. We won't always agree on everything but our working relationship will be respectful and collaborative. And I want to extend my heartfelt thanks to members of the City Council, most of whom are here today. Merv Bennett, council president. Jill Gaebler, counsel pro tem. Councilmembers Keith King, Don Knight, Andy Pico, Helen Collins, Larry Bagley, Tom Strand and Bill Murray. Would the council members please stand so we can acknowledge your good work.
As to infrastructure, the council and I have heard our citizens loud and clear. In every poll or survey we've conducted, and every town hall we've attended, the citizens have told us they want to fix the roads. And we're going to give them an opportunity to do so. The November 3 ballot will contain a referendum asking Colorado Springs voters to approve a .62% sales tax increase for five years. That would raise approximately $50 million per year or $250 million over five years to be used only for road maintenance and repair. While we would likely need to spend that amount for 10 years to get our roads to where they need to be, this will allow the voters to assess our progress and decide whether to extend the tax. By a 69% to 14% margin voters prefer a sales tax increase to a property tax increase as a means of funding road repairs. This stems from the fact that 38% of sales tax is paid by non-residents of the city, including tourists and that it is a non-regressive consumption tax. He who buys more pays more, but utilities, groceries and prescription medications are exempt. A poll indicates residents also like the fact the money would be used solely for roads and that all the work would be done by the private sector. Not a single new city employee will be hired to do the work. The City Auditor will help ensure all funds currently spent on road maintenance continue to be spent on road maintenance. The sales tax would cost the average household about $100 per year.
The council has also agreed to place on the November ballot a question concerning retention of revenue received by the city in 2014 that exceeded the amount allowed under the Tax Payer Bill of Rights by $2.1 million. That excess resulted from the fact the city received state grants in 2014 for flood and fire disasters that had to be counted as revenue under the TABOR calculation. Our poll indicated the vast majority of voters want the city to retain the $2.1 million and apply it to repair of park trails throughout the city that have been damaged over the last several years.
These ballot initiatives are critical to our city’s future. It is clear that dealing with our deteriorating roads is absolutely vital to the quality of life of our citizens and to our success in economic development in coming years.
Well, what about stormwater infrastructure? Doesn't that need to be addressed? Yes it does, and the City Council and I have a plan to do so. Understanding that plan requires some historical background. As recently as the late 1960s, our neighbor to the south, Pueblo, was larger than Colorado Springs. Since then Colorado Springs has grown to be about four times the size of Pueblo and that means considerably more impervious surfaces contributing to storm water flow into Fountain Creek, with impacts on Pueblo. Mindful of this reality and in response to specific flooding incidents, the Colorado Springs Mayor and City Council set up a stormwater enterprise. Each property owner was assessed a fee based on their impervious surface and approximately $15 million per year was raised to be applied to storm water mitigation projects. However, in 2009 the voters of Colorado Springs expressed their displeasure with the stormwater fee and in 2010 the City Council voted 5 to 4 to defund the stormwater enterprise. In the meantime, in 2008 and 2009 Colorado Springs Utilities negotiated with Pueblo County to receive what is called a 1041 permit to construct the Southern Delivery Project, a massive water delivery project that pipes water from Pueblo reservoir to Colorado Springs and will supply our city's water needs for the next 50 years. Pueblo contends that in issuing the permit they were relying on the fact Colorado Springs would continue funding a stormwater enterprise and is considering a lawsuit to revoke or amend the permit. I and members of the City Council, which also serves as the utility board, have been negotiating with Pueblo in an attempt to resolve the matter. We would like to avoid litigation that would delay the Southern Delivery System from going on line in 2016. The Council and I propose to essentially reconstruct the stormwater fund and commit to funding at least $19 million per year for 10 years to stormwater projects. Where would the $19 million come from? Eight million would come from the maturing of capital improvement bonds issued 20 years ago. The city borrowed $100 million for infrastructure projects 20 years ago and has been paying eight million per year in annual payments. That money will be freed up to apply to stormwater. Five million will be available in 2016 and the remaining three million in 2017. Another three million would come from utilities. That's basically their annual stormwater expenditures to protect their infrastructure. Another three million represents the amount the city has essentially been spending each year on stormwater to comply with water quality regulations. That leaves five million and I am proposing to the council that we reduce or freeze the funding of other areas of the budget, including elimination of wage or salary increases, in order to be able to fund that amount in 2016. While Pikes Peak area voters declined to pass a stormwater proposal in November 2014, this is a complex problem that is not going away and needs to be addressed. And I emphasize that this is a public safety issue for the citizens of Colorado Springs as well as those of Pueblo. Again I applaud the council for helping to find a solution.
The Council and I are developing a 2016 budget at the present time. Because of increased sales tax revenue the total general fund budget will increase by about 3.8%. But, as indicated, virtually all of that, eight million this year, will go to create the storm water fund I described. I’m also proposing to increase the City’s general fund commitment to transit from four million to five million, bringing us closer to the $5.7 million maintenance of effort commitment the city made in 2004 when the Pikes Peak Rural Transportation Authority (PPRTA) was created. We are also committed to funding architectural plans for a new Sand Creek Police station and to ensuring the Police Department implements body cameras for all its officers as soon as possible, and finally to funding, over a two year period, the first comprehensive plan for the city in 15 years.
As to my third priority of promoting new job creation in our region, I am growing increasingly optimistic. We are experiencing improvement in many of the indicia of economic growth. The city’s unemployment rate has dropped from 9.6 % to 4.9 % since 2010. The Southern Colorado Economic Forum is projecting an increase of over 6,000 jobs in El Paso County in 2015. New home sales have increased and the median sale price of a home increased 5.8 % last year. Lodging and rental car tax revenue is up 14.2 % over last year. Trips up Pikes Peak are up 21 % over last year. These are signs of a growing tourism business. But I am most pleased by the prospect of major local employers expanding in the near future and our capability to attract new companies to the region. Based on conversations with large national companies with a presence in Colorado Springs, I am confident we will report on several significant expansions in the next year or two. Small companies are growing also. Aerospace, medical innovation, cyber security and many more areas show excellent prospects. Colorado Springs was once known as Silicone Mountain. But technologies change and business landscapes change. Given the synergy in the cyber security arena between the military, the private sector and the University of Colorado at Colorado Springs, I firmly believe Colorado Springs has the capability to earn acclaim as the “cyber security capital of the world.” Speaking of UCCS, under the innovative leadership of Chancellor Pam Shockley-Zalabak, the University continues to grow as an economic force in Colorado Springs. It’s responsible for 6,200 jobs and a payroll of $300 Million dollars. Given what’s transpiring on the North Nevada corridor, including a Performing Arts Center, a Sports medicine program and a branch of CU Medical School, it is not unrealistic to believe that by 2020 the University’s annual economic impact on the city will approach $1 billion dollars.
There is still more good news. Our airport's commercial aeronautical zone is showing significant success in attracting new companies and new jobs to Colorado Springs. Other companies will join Sierra Nevada and Sierra Completions in locating in the commercial aeronautical zone. We have every reason to believe that will lead to expansion of commercial aviation activity at the airport.
The downtown area of Colorado Springs is also showing increased commercial activity. Thanks to companies like the O'Neil Group, the prospects are bright for significant job creation and an increased residential population in the downtown area. Thanks to the efforts of Dick Celeste and his team the US Olympic Museum will be built and will be a great catalyst for development in the Southwest sector of downtown and solidify our position as “America’s Olympic City”. I also believe the improving economy and the voter’s investment in city infrastructure can be a catalyst for a renewal and revitalization of areas such as South Academy, South Nevada and East Platte.
While tourism is growing again and remains a significant part of our economy, there is room for considerable future growth. The competition for tourism dollars is intense and frankly we spend significantly less on tourism promotion than our competition. An increased investment in tourism promotion would exponentially grow our economy and I look forward to a regional discussion in the coming year about how to expand our tourism industry in the Pikes Peak region.
While my principal objective is to secure expansion of private sector job opportunities in Colorado Springs and reduce our overall reliance on the federal government, please make no mistake about the fact that we as a community value, in fact we cherish, the military presence in our community and will do everything possible to oppose any reductions and promote expansion of that presence. The signs are encouraging. Fort Carson fared well in the first round of troop cuts. But the Army will cut another 20,000 troops next year and we must continue to help Fort Carson press its case. In that regard I want to thank everyone involved in our military promotion efforts and give a specific shout out to the Regional Business Alliance and Andy Merritt in particular for helping to lead the charge on the Keep Carson Strong effort.
In summary, there are encouraging signs in all aspects of the Colorado Springs economy. We need to translate that momentum into new jobs and economic opportunities for the citizens of Colorado Springs. In my remarks when I was sworn in as Mayor 100 days ago, I asked all the citizens of Colorado Springs to take renewed pride in our city and look for ways to contribute to its success. And I renew that request today. Perhaps you can volunteer to help beautify our city, to improve our trail system, to pick up trash or cut weeds, to mentor our youth, to assist our sick or elderly or to support the arts. There are unlimited opportunities to become involved in making Colorado Springs an even better place to live, work and play. The City of Colorado Springs has the support of thousands of volunteers and I am grateful to all of you. I am also grateful to the outstanding employees of the city of Colorado Springs. In my first 100 days in office, I have learned that the city is in very good hands.
Ladies and gentlemen, I hope you agree with my assessment that the state of our city is good and the potential for our city is great. Janet and I love Colorado Springs and are working hard to promote our city everywhere we go. Colorado Springs is full of talented people in business, government, the arts and all endeavors of life. It's full of outdoor enthusiasts. As a city we've got everything we need to grow and prosper. We are truly vibrant, rugged and exceptional. If we set realistic goals and work together to achieve them, we will be successful. Let's join together to continue building a shining city at the foot of a great mountain, and creating a society that matches our scenery. Thank you very much.
PowerPoint Presentation
Lifetime Achievement Award
Harry Hoth was awarded the Spirit of the Springs Lifetime Achievement Award