Mayor Mark Begich remarks
Downtown Anchorage Rotary
Noon; July 29, 2003; Hilton Hotel

Thanks, Rod, for that introduction and for your service to this organization and to our community.

Rod was one of those 100-plus people we recruited for our transition teams. After all those municipal reports he read and meetings he suffered through, I’m happy he’s still talking to me.

I also want to thank program chair Jonathon Lack for inviting me to be with you today and for your service with Leadership Anchorage.

It’s an honor to join Anchorage’s civic and business leadership who are members of Downtown Rotary. You are one of our community’s leading civic organizations and I appreciate the opportunity to visit with you after just four weeks on the job. And thank you for holding your meeting at this civil hour. On Thursday, I’m getting an early start with the Hillside Rotary at 7 in the morning.

Today, I wanted to talk with you about how I believe we can work together to build a strong Anchorage economy to make our state’s largest city the great place to live, raise a family, and prosper that we know it can be.

I also want to use this opportunity to announce the steps we are taking to balance the budget and fill a 5 million-plus dollar budget gap we inherited.

Today marks my Day 29 as mayor. It’s certainly been all it was advertised, and more.

On the way out the PAC after taking the oath of office on July 1st, people were demanding to know when their potholes would be filled, when those property assessments are going down and of course, where is their dog park. It hasn’t stopped since, and I love every minute of it.

I think back to when I began my campaign for mayor - this time. It was last February in my East Anchorage living room with no money, no campaign staff and no office. What we did have were people – hundreds of them - willing to volunteer their time to work for a new direction in Anchorage’s city hall.

I believe we were successful because of a grassroots campaign that energized thousands of people who said doing just OK is not good enough.

Citizen participation has continued in our transition and now in the mayor’s office. Shortly after the April 1st election, I asked more than 100 Anchorage citizens to volunteer their time to dig through every city department and division.
My goal was simple: provide me a report card on the pressing issues we need to tackle, and fully involve the public in the process.

I’d like to thank this organization for the participation of several of your members in that process: Rod Pfleiger, Caren Mathis, Dennis McMillian, Ernie Hall, Tom Williams and others.

Our approach was a little different than that of some of my predecessors. Some former mayors conducted their transition entirely behind closed doors. Another burned his in the fireplace. One former mayor put his on ice in his refrigerator.

The result of our process was a 4-foot-thick stack of reports covering every aspect of city government.  If you have any spare time - or are having trouble sleeping - feel free to go to our web site to see the detailed reports.

A common theme emerged as we looked into every agency. Namely, that there is enormous potential out there. For too long, that potential has gone uptapped and in some cases, even unnoticed.

City departments – and our community in general – have been crying out for leadership and new direction. This is where as Anchorage’s mayor, I believe I can help.

We have set a new direction based on a simple vision: community, security, and prosperity.

Community is who we are - families and individual Alaskans taking pride in their neighborhoods, the fabric of any great community. Doing so isn’t just the job of a mayor, but of every citizen.

Security is our most basic need, a foundation that must be strong before we can build. Thanks to the efforts of my predecessor and police, fire fighters, emergency responders, and our active military personnel, we have a safer, more secure community.

Prosperity is the dream of the future, the wealth of Alaska that each of us hopes to pass on to the next generation. When it comes to Anchorage’s prosperity, I believe we stand on the edge of greatness.

To achieve this three-part vision, I’ve reorganized city government. Instead of the five groups of city departments we inherited, we’ve shrunk them down to three. This streamlines operations and saves the taxpayers money.

One grouping is municipal operations – the nuts and bolts of city services: police, fire, public health and everything in-between.

Another grouping is new and what I consider to be the toolbox of city government: economic and community development. It involves city development and quality of life agencies with nearly 450 employees and budgets totaling $49 million.

The final grouping in our three-some of city departments is financial. As you’ve read, Anchorage faces a $5.2 million budget gap. And that’s just for the remaining five months of the current year.

It would have been worse – nearly six and a half million dollars. But the Legislature recently altered the governor’s allocation of funds to cities and villages. The Legislature gave Anchorage slightly more, but at the expense of rural villages which can least afford it.

For next year, projections are a budget shortfall for Anchorage in the $25 million range. That’s the result of what I’ve called a “perfect storm.” Big state budget cuts, the constraints of our property tax cap, and increased demand for services for a growing city.

We’ve been focused on this budget problem since the day I walked into the mayor’s office. Let me introduce our man who has led the charge on balancing our budget - my new OMB director, Paul Wiltse.

Today, I’m pleased to tell you that because of the commitment of our employees and some good old fashioned belt-tightening, we’ll close the 5.2 million-dollar gap. And we’ll do so by cutting expenses, increasing revenues and better managing debt.

First, cutting expenses. We’re eliminating more than 2 million dollars by deferring the hire of non-essential staff at several departments - Health and Social Services, at the library, and museum. And through a more streamlined command structure at the Fire Department. We’re maintaining roads to existing standards, rather than new higher standards which had been considered. And we’re limiting overtime and cutting back on supplies.

Second, raising $1.6 million in new revenues. This is a combination of more inspection fee revenues due to a robust construction industry and more fire mitigation grant dollars. We’re also collecting $800,000 as a result of an audit of the city’s health plan, which showed over-charges by our insurance carrier.

Another unusual revenue-raiser is the city’s system of procurement – the purchase of everything from paper and pencils to contracts. Several years ago, the municipality embarked on a credit card system for relatively small purchases. This paperless system earns us rebates from manufacturers. In just the next five months, we expect to see $100,000 more.

Finally, we’re better managing debt service. By issuing bonds when they’re needed – and not before – we’re saving $1.4 million in interest payments for the rest of this year.
I won’t say finding $5.2 million in a total city operating budget of $250 million, excluding debt, has been easy. But it certainly has been easier than the task facing us for next year. Then, our budget gap is projected to be in the neighborhood of $25 million.

One place where we’ll have no choice to look for savings in the future is personnel costs. Over the past five years, the cost of city worker salaries and benefits have grown dramatically.

Four years ago, the total cost of municipal salaries and benefits was about $139 million. Today, that number has jumped to $160 million. Just to continue a maintenance level budget for next year will cost us $8 million more.

Two of the 10 collective bargaining contracts the city has with unions come up for negotiation later this year and early next year. Seven more contracts expire in 2005.

As we contend with this huge budget shortfall, my approach with employees must be this: I want fair contracts which take good care of our employees, but they must be relevant to our times.

As I told the AFL-CIO convention yesterday, my administration will be generous where we can, but we have a small bottom line. The healthy increases we’ve seen in the past will now have to reflect a tighter budget environment.

The best way to balance our budget is to create new economic opportunities that contribute to our tax rolls. Economic and community growth for Anchorage is not only good for our city, but for our state as a whole.

As Alaska’s commercial headquarters, we know that development beyond our municipal borders benefits our community. From the Ted Stevens Airport to the Port of Anchorage to rural resource development, what goes around outside of Anchorage comes around inside Anchorage.

That’s why we have an ambitious agenda for Anchorage’s economic development. Let me name a few of the assets we have where we are building partnerships to get these projects moving.

We are aggressively redeveloping one of our city’s hidden neighborhoods of enormous potential by converting Mountain View into Anchorage’s arts and cultural district with a 50 million public-private investment.

As Anchorage continues to make its mark as a global logistic center, a new industry is emerging – our city as an International Financial Center. In midtown, we will muster the financial resources of banks, investment firms and real estate companies to better capitalize on our time zone advantages.

At the airport, we will realize the promise, once again, of “air crossroads of the world” as we become a world aviation leader.

At the Anchorage port, we are moving forward on a quarter-billion dollar expansion to accommodate our state’s growth and serve our nation as a strategic port.

In Girdwood, we will resolve land use conflicts to take advantage of the unique opportunities as a year-round, world-class resort for Anchorage residents and visitors alike. That represents a $400 million public-private investment for expanded skiing and yes, a new golf course.

Here in downtown, we will build a flourishing shopping and entertainment district, with a new convention center, a world-class museum, and a fully utilized Town Square. This represents a 200 million dollar public and private investment.

Together, these ambitious projects represent a 1 billion-dollar investment and will create hundreds of jobs in the next 5-10 years.

I’m one who believes it is important to learn from our past. As you look around Anchorage, think of the vision that brought us what we have today - our library, our museum, our performing arts center, our convention center, our accelerated roads, renovation of this hotel and others.

If the advocates of those projects waited until the time was right, the time would have passed us by. The time to move forward on Anchorage’s economic progress is now.

We need the same spirit of cooperation to break the deadlock on other issues that will turn Anchorage into the world class community we know it can be. We need to resolve the issues like the ball fields, extension of the coastal trail, gravel pit developments, and even dog parks.

The time of tight budgets and tough times create new challenges and opportunities. Will we make mistakes? Of course.

But we are in this together. Anchorage is a great city with great potential but it is up to all of us to make it happen.

Just as I started my campaign in February with just people, once again I’m relying on the people of Anchorage to join my administration to make Anchorage all it can be.

Our future is bright because we share a vision of Anchorage, a vision rooted in three simple words: Community. Security. Prosperity. A vision we can achieve if we work together. 

Thank you for having me here today.