Mayor Mark Begich remarks
State of City Address – Anchorage Chamber
Noon; 7/19/04; EganCenter

Thanks, George. Thanks to the Chamber for providing this forum and for your cooperation over the past year.

It is something of a tradition for elected officials to take advantage of various milestones to deliver speeches. For me, it doesn’t take much of a milestone.

My staff gives me a hard time for speaking to just about anybody who will sit still long enough to hear me out.

In fact, my office did a little math and calculated that over the past year, I’ve spoken to 270 groups. That includes 56 welcomes, 33 school functions, eight Rotaries and two speeches to this Chamber. And I can’t forget my favorite - the Northwest Association of Mothers of Twins.

 It is hard to believe it’s been a year now. After a few of those midnightAssembly meetings and the agonizing over a $33 million budget gap, it sometimes seems a lot longer. But I love every minute of it.

Today I’d like to discuss where the city’s been over the past year, the direction we’ve tried to take it, and where we’re headed.

You might have noticed the insert in the paper when it dropped into your cereal this morning. There are also copies on your tables. This State of the City publication gives what we hope is useful information about developments over the past year.

As I reflect on my first year in office, I’m amazed at the many ways the community has stepped forward to work together to address Anchorage’s challenges and make our city such a great place to live.

Over the year, there are two overall areas of focus we’ve tried to emphasize. Each has been possible because of the commitment of citizens, local businesses and non-profits, and city employees.

First, we’re trying to do the city’s business smarter and more cost-effectively, while holding the line on taxes. Second, we’re kick-starting projects that have long been stalled. And we’re launching new initiatives which require creativity or work with affected citizens to get them on track.

This is how we can continue to make Anchoragea place we’re proud of.

It’s a different approach than in recent years. And as I’ll detail this afternoon, it is producing results.

When it comes to doing the city’s business smarter, the single issue we’ve devoted most attention to is the budget.

A few days after settling in, our OMB director came into my office with a pained smile. He reported a budget shortfall of a little over 5 million dollars for the 2003 budget year, and less than six months to make it up. That was the good news.

The bad news was a 33-million dollar budget gap for Fiscal ’04 - about 10 percent of the entire municipal budget. It is the worst budget challenge the city has faced since the oil price crash of the late ‘80s.

A significant portion of that gap was a direct result of the state’s elimination of aid to communities. That shifted an immediate $11 million burden directly onto Anchorageproperty taxpayers.

To tackle the budget gap, we enlisted the help of the Municipal Budget Advisory Commission, headed by your former chairman, Eric Britten.

With broad community involvement, we plugged the gap through three actions:

·            We cut costs while providing core services;

·            We asked those who benefit from city services to more equitably cover their costs; and

·            We reduced services or eliminated those we can no longer afford.

The result is a stable, sustainable, 309 million-dollar budget for the current year - a strong foundation for our future.

But keeping the city’s budget balanced is not without challenge. At least weekly, I meet with my budget team to review spending and revenues to keep the budget in the black.

One significant step we’ve taken to find greater savings is creating a Division of Efficiency. I realize that sounds a little like a government Office of Paperwork Reduction.

But consider that the city spends about 200 million dollars each year on purchases – from pens and copy paper to sand and snowplows.

In just the six months since we created this six-person Division, it has targeted 10 million dollars in savings –from cheaper office supplies, to cutting the number of cell phones and city vehicles.

A few examples. If the city purchased this style of high-quality Bic pens instead of the multitude of pens we’re currently buying, we could save over 7,000 dollars a year. Buying this slightly thinner file folder would save nearly 12,000 dollars over the current top-shelf brand purchased by most departments.

There are also lots of big ticket examples. Lowering the cost of prescription drugs through cooperatives or increased competition could save 2 million dollars.

We’re partnering with other entities, including the School District, Mat-Su Borough and State, to achieve even greater savings.

Another area where we’re doing the city’s business smarter and more efficiently is tax assessment.

When we got in to office, budget cuts had decimated the Assessor’s Office. That resulted in a backlog of appeals of months, and sometimes years. Working with the Assembly, we revamped that entire operation.

For the first time ever, property owners can contact the assessors’ office 24 hours a day on a new Internet site. This site fielded over 30,000 hits.

We extended office hours, improved the appeals process and sent valuation notices three months early. The result is a 75 percent reduction in appeals.

I can’t say everyone’s happy with their assessment - my own went up 30 percent. But we are on the right track fixing a broken system.

A lot of the credit for balancing this year’s budget belongs to our employees. About 55 percent of the city’s budget is personnel.

When we got into office, city workers were scheduled for significant pay and benefit increases, negotiated in previous years by the nine unions representing them. To help plug the budget gap, we asked them to sacrifice this year – to forego those raises – in exchange for modest increases in the future. I’m proud to say they stepped up.

Fire fighters alone gave back half a million dollars. Police gave back thousands of hours of sick-leave. All but one of the unions agreed to no raises this year. The overall result is a savings of about 3 million dollars for 2004.

We also negotiated huge future savings in health care by putting virtually all city workers on the same plan. I commend all city employees and the unions that represent them for sharing the burden.

We’re working to be smarter and more efficient in every department in the city:

o        Collecting $3 million in old debts and closing 10,000 long overdue accounts;

o        Reorganizing city departments, from the Library to Parks and Rec;

o        Partnering with the Court System to collect court-sanctioned fines electronically, eliminating months of delay.

We’ll continue to search out ways to be more efficient because I believe we can always do better.

Our second major area of focus is kick-starting projects that have been mired in controversy, or launching new initiatives which require a creative approach.

Think back a year ago to some of the front page hot issues. Controversies over the Simonian ball fields. A sign ordinance. Barking about dog parks. The Fort Richfence.

A year later, those issues are settled, or on their way toward resolution. Our approach has been to hear out the affected residents, make a decision and move on.

Take the convention and civic center. Most Anchorage business leaders – and most Anchorageresidents, for that matter – support a new convention and civic center, according to recent polls.

This community rakes in 77 million dollars a year in economic impact from conventions. Yet we turn away millions more and can’t accommodate local events because of lack of convention space.

I think most agree that the problem with the last convention center proposal was too many unanswered questions: Who would pay for it, how would it operate?

We’re now working closely with the business community on a new convention and civic center that answers all those questions.

Within the next few days, we expect a decision on a finalist from a panel of experts which we’ve assembled to review the two private sector proposals. Both are excellent. Either will put Anchorageon the international convention map.

I’m confident the finalist will excite Anchoragevoters to support a modest increase in the hotel bed tax to finance the new center.

Another stalled project vital to Anchorage is capitalizing on the enormous potential for expanded year-round recreation in Girdwood. The Glacier-Winner Creek area just north of Alyeska is the best undeveloped ski terrain in North America.

Next month, I’ll join a delegation of local experts on a mission to Californiato pitch one of the nation’s top ski development companies on Girdwood’s unmatched potential.

This 400 million-dollar public-private development could create nearly a thousand new jobs and attract hundreds of thousands of additional visitors to our community.

I’ve got to plug another example of innovative thinking to solve a problem - Trail Watch.

Anchoragehas one of the most envied trail systems in the nation, with over 250 miles of trails and 14,000 acres of parks. But a number of assaults on the trails made some users feel unsafe. A handful of concerned citizens brought forward an idea for a volunteer system of trail watchers.

Today, Trail Watch includes 250 volunteers and 17,000 dollars in donations from local businesses.

A couple of weeks ago, I was proud to accept a national City Livability Award from the U.S. Conference of Mayors on behalf of Trail Watch. Another great example of citizens coming to the aid of their community.

Another example of citizens stepping forward to make Anchoragegreat is the “foster-a-flower” program.

More than 200 businesses and individuals paid 75 dollars each this summer to “adopt” one of our renowned hanging flower baskets.

Thanks to those donors, and hundreds of Anchoragecitizens who make our city great by volunteering.

In this business, we don’t have the luxury to rest on our past accomplishments. We’ve got an aggressive agenda for the future. Let me touch on four areas: transportation, public safety, economic development, and tax relief.

When it comes to transportation, relieving Anchorage’s traffic congestion is Goal Number One. Every day in this city, 1 million trips are made by a growing number of cars, trucks and SUVs.

This summer, we’ve got 41 road and safety projects on the streets, totaling about 45 million-dollars. But congestion will only get worse until we address some of our major intersections: Lake Otis and Tudor, 5^th and 6^th avenues, New Seward and Glenn Highwayinterchanges.

We successfully convinced the State House to fund the $9 million in Lake Otis and Tudor changes we need. But like too many issues in Juneauthis year, it died in the Senate.

We’re going back to the Legislature and state administration, and to our congressional delegation, for Anchorage’s fair share of state and federal transportation dollars.

In public safety, we’re putting more cops on the streets so Anchorageresidents can feel safe in their homes and neighborhoods.

An internal review we directed last year found that the police department was 93 officers short of what a city our size should have. That review found that some serious crimes, such as sexual assault and property crimes, simply weren’t being investigated. We’re changing that.

 Since January, we’ve added nine new officers, and we hold another academy in August to train 28 more, the largest in a decade.

The Assembly also agreed to our request for half a million dollars for a new, specialized unit to focus on interrupting the cycle of sexual assault. We’ve also added prosecutors and secured 2 million in federal funds to combat this terrible crime.

Our streets are also safer, thanks to the re-introduction of a traffic unit.

With 10 officers focused exclusively on enforcement, traffic fatalities have dropped 13 percent compared to 2001. And the number of accidents is down 21 percent, as this unit has written 21,000 citations so far this year.

We’re also beefing up fire protection – opening two new stations, getting voter approval for a third, and training 24 new fire recruits.

 Of course, Anchorage’s continued prosperity is directly tied to a growing economy.

In addition to the economic development projects I’ve mentioned, we’re working closely with the Chamber, AEDC and the private sector to create a pro-jobs climate.

We’ve already done two business-promotion trips with AEDC, with promising results.

More are planned as we take our message to the Lower 48 and abroad that Anchorageis a bustling, diverse international city of great amenities that welcomes business investment.

Our newly formed Mayor’s Business Development Council is providing important guidance.

Thanks to the many members of this organization for their participation – Eric Britten, Kathy Porterfield, Ernie Hall, Rick Morrison, and many others.

As we work together to create a business-friendly environment, I believe we’ve got to revise our city tax policies.

Right now, 61 percent of the city’s budget comes from property taxpayers. That’s a 13 percent increase since 1989, when just 48 percent of city services were financed by property taxes.

This increasing burden on property taxpayers limits our ability to make the necessary investments in vital core services. We’ve been looking at several ways to more broadly and fairly diversify Anchorage’s tax base.

Among the proposals we’re reviewing are a residential property tax exemption, establishing a business personal property tax exemption, and a possible tweak to Anchorage’s tobacco tax – all for property tax relief. We’ll have more to say about these ideas in coming weeks.

As I reflect back on the past year, I believe there’s considerable cause for optimism about Anchorage’s future.

We’re enjoying our 16^th consecutive year of economic growth. A growing number of national publications tout Anchorageas a top place to live and do business.

Everywhere I encounter a new sense of the “can-do” spirit I remembered growing up here. With your continued help, and with a renewed commitment to public service, we can realize Anchorage’s unmatched potential. Anchorageis a great place to live and do business.

Thank you for letting me be a part of it.

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