Mayor's Summary Budget Presentation

Aug 19th, 2004

I'm excited.

This is the first time in several years that I can say I'm excited as I begin presenting my budget. Our economy is growing and our city revenues and budgets are strengthening. We've made it through the hard times, keeping our city services strong without having to layoff hundreds of employees and freeze or lower employee benefits and retirements. Now, in my 2005 budget, as our economy is growing and with your support, we will provide pay raises for all of our city employees. I have established in this 2005 budget a plan that creates a reserve so that we can continue providing a 5% Merit raise for our employees for the next ten years and at the same time build a "rainy day fund" with our next level of growth.

These annual raises along with our continuing to provide health insurance at a competitive cost to workers and their families and strong retirement benefits that are offered through RSA and the Police & Fire Pension Fund, will allow us to continue working toward retaining all of our experienced employees including police officers and paramedics, and providing even stronger city services that our citizens-our customers-deserve and have come to expect.

This is something to really get excited about! I hope that each you will share my enthusiasm and work with my staff and me to do these important things for our city. Progress takes teamwork-without teamwork, we will fall far short of our potential.

We're blessed this year with a rebounding economy; our sales tax growth rate is nearing the 5% annual growth of the 1990's; we have many new construction projects throughout the city; we have new hotels and a brand new cruise industry knocking at our door. And, that's only the beginning.

We are doing a lot of things right. But we can do better. Here are some of the ways I intend to make things better:

• To provide the best in city services we must retain our experienced employees. That means all of our employees--from Police Officers and Firefighters to our Urban Development Inspectors and Mowers--will receive a raise under this budget proposal. I am recommending a 5% Merit raise for all eligible employees along with a 2-and-a-half % blanket increase. This will bring our Public Safety employees' starting salaries up to the same level as the Mobile County Sheriff's Dept.


• I intend to use revenue from our expanding tourism industry and growth in our downtown business district to help fund the raises and to provide the reserve necessary for annual Merit raises for the next ten years.


• The reserve will serve another purpose--it can be built up to provide a "rainy day fund". We can do this with an increase in revenues generated from the city garage, cruise ships, hotel taxes, new downtown office tenants and nearby expanded shipbuilding, port and aerospace activities. We've put a lot into our urban renewal, and we're expecting a big increase in private-sector investment for residential and mixed-use development and in the number of cruisers and land-based tourists visiting and staying in Mobile. Now we can make all of our redevelopment efforts these past several decades payoff citywide in a number of important ways. Meanwhile, we have much more to accomplish.

My budget includes $2 million dollars annually for economic development incentives to be paid to the city's Industrial Development Board for 20 years in order to match the county's same level of incentive contributions. When we combine these local investments with state incentives we will be better able to attract and/or expand up to four major high-tech companies that will change Mobile's economic landscape forever.

These recruitments and expansions initially involve more than $700 million in capital investment, generating $196 million in payroll and creating up to 4,000 new high-paying jobs for the Mobile area. We already see examples of how providing these incentives can work:

Austal's production of military combat ships will hire 600 - 1,200 workers and draw 300 General Dynamics employees to Mobile; The USA Cancer Center will hire 700 people at an average annual salary of more than $100 thousand dollars each; and our several aerospace initiatives are a multi-level recruitment and expansion that will make Mobile only one of a handful of leading-edge aircraft manufacturing technology center's in the world if we are successful.

Recently, the city and county of Montgomery gave $38 million as an incentive to Hyundai. That's the level of local commitment that it takes to compete with these huge high-tech opportunities. We as elected officials have the responsibility for creating more economic prosperity. WE can't stick our heads in the sand and just HOPE for the best. We must be aggressive, and tell people what it takes to compete. Most importantly, we must ACT. I know that each of you are as excited as I am about our near term economic development and jobs creations opportunities. I solicit your support of our incentive plan outlined in this budget.

Bring all of this together and the revenue we generate will enable us to provide stronger and even better city services. We already do a good job-but we want and can do better. Though you've heard a lot lately about our experienced police officers and paramedics leaving for higher paying or less stressful jobs…our crime rate is NOT SOARING. In fact, according to the FBI-Mobile's violent crime rate is down 50% this past decade. We live in a city where we can and should feel safe--where our visitors can feel safe. Our firefighters and paramedics are still on the job answering calls. Did you know that emergency medical services are within 6 minutes of every resident? We do a good job in a lot of areas --

Our Police and Fire Departments are nationally accredited; many of our sanitation employees are going back to school at city expense to get their Certified Drivers' Licenses in order to qualify for promotions; the city of Mobile provides recreational programs for children and adults year round; and we're selling an employee designed Request for Action System called REACT to other cities? We do a good job-With annual Merit Raises, and continued economic development we will provide even better customer service and better solve our problems.

Industrial and business recruitment activity in Mobile is at an all time high. According to Economist Dr. Semoon Chang at the University of South Alabama, "Mobile's economy looks good, is on the upswing and should continue." I believe the growth that Dr. Chang glimpsed last year is now occurring and will last throughout the decade.

Our current growth can be credited in part to an increase in construction projects including the RSA Tower/ Battle House, Mobile Landing, our State Docks expansion to include the Choctaw Point Container Facility, and our many new schools pumping new dollars and jobs into the local economy. New and renovated shopping-center developments and new subdivisions are springing up all over town and in our western jurisdiction. This growth strengthens our entire city and area.

Mobile's developing waterfront with the Cruise Terminal and National Maritime Museum of the Gulf of Mexico and our upgraded hotels will be a catalyst for bringing more conventions and tourism business to Mobile while attracting more and larger private-sector investors to the city. Why is tourism so important? It's a clean industry-brings no pollution, people come to the city, spend their money and leave. If we do a good job, they return. They also tell their friends about us.

In the long run, we will be proud and recognize the significance of having renovated a strong, historic, urban city. A vital city center will strengthen our image and economy and better market our entire region. The arts and cultural growth, cruise ships, expanded tourism, a new waterfront, two-way streets and the creation of a private sector business improvement district will accelerate our growth and urban renewal. All of this goes hand in hand with providing the financing of raises and better, stronger city services.

This positive economic news means that we can better face our challenges and meet our city's highest priorities. Remember, had we NOT made the decision to begin investing in our historic downtown in the early ‘90's, much of this growth and these merit raises would not be occurring. Today, we can take pride in the fact that our growth is "city-wide." It's not just in West Mobile or downtown - it's everywhere.

But, we can't plan and make all of this happen in a vacuum. Without your support and vote of the proposals in this budget, these raises won't happen. The economic growth we should see could slow -- or - stop without commitment to decisions that produce revenue. Retaining our experienced employees won't happen. Our services and citizens will suffer. Several factors must come together first to make this budget strong enough to be effective.

First, you -- members of council -- must approve leasing the city's parking garage for $5 million dollars and 35% of the net profits in order to help provide our employees one of their raises -

$2.5 million of that $5 million make the first payment of the merit raise in the budget. $1 million goes to much needed department capital; $1 million to discretionary projects and $500,000 to operations.

If $5 million is lost from this budget, I want our citizens and our employees—police, fire, sanitation, parks, recreation, MIS, GIS, urban development, human resources, revenue, municipal court employees and other employees from department heads to entry-level clerks and office assistants to know that I sincerely tried once again to put a funding source on the table for their raises. This is accelerated cash flow that we need badly. It is 20 years of our current revenue on the garage with no risk attached. We can more than double our current revenue overnight.

Over the weekend, RSA modified their agreement to give another 2.5% after 49 years and an additional 2.5% after 65 years up to 76 years. This timeframe matches their hotel land lease with the Housing Board. Additionally, we have worked out a 50/50 split up to the $235,000 average income the city has experienced these past several years. It will be trued after that annually to the 65/35 split.

It is my sincere hope that WE all can be praised by the employees and our citizens for doing this right thing! I understand that we are okay on this today. This was a tough one. I thank each of you! The lease of our parking garage is legal and in the city's best interest. It is certainly in the employees' best interest.

While providing these raises, and stronger services we will continue analyzing and addressing the loss of our experienced employees. We must be able to recruit and retain qualified workers. We must do more. We will do more to insure competitive salaries in appreciation for our employees' long hours and hard work for the city of Mobile. In the 1990s, we had to rebuild our aged and deteriorated infrastructure in technology, equipment, facilities, drainage, landfills, jails, libraries and tourist infrastructure to compete for economic development, jobs and investment momentum. We made those investments. It is timely and appropriate that we prioritize our human capital as we are benefited by growth into this decade. We must have BOTH levels of investments and accomplishments to succeed.

Thank you for hard work and your commitment to elected office, your time for listening and for being part of this government. Together, as a caring and responsible team, we will move Mobile forward and realize our dreams.