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BUDGET 2013-2014
2013-2014 Adopted Annual Operating Budget [PDF]
2013-2014 Proposed Annual Operating Budget [PDF]
Listen to Mayor's Budget Speech [MP3]
Budget Info for 2013
Transcript of Mayor Madeline Rogero's speech on the proposed budget

City of Knoxville's fiscal year 2013-2014

April 26, 2013
Mead's Quarry at Ijams Nature Center


Good afternoon. Thank you for joining us on this beautiful day in Knoxville, at this very special place in South Knoxville. Isn't this a jewel? I appreciate our hosts - Ijams Nature Center, represented today by Board chair Karyn Adams and Executive Director Paul James.

Vice Mayor Pavlis - thank you for emceeing today and for the great leadership you demonstrate as our Vice Mayor and as my city councilman from South Knoxville.

Reverend Johnnie Skinner, the Knoxville Fire Department Honor Guard, Kayla Brooks from Tennessee School for the Deaf, and the Knoxville Community Band, I am honored by your participation here today.

And a very special thanks to Emily Campen, wife of Fifth District Councilman Mark Campen, for the outstanding job on the National Anthem.

Mayor Tim Burchett, I appreciate your friendship and the opportunity to work with you daily. My goal has been to make the distance down the hall from my office to yours as short as possible. Thanks for helping me with that.

I appreciate all of the current and former elected officials who are here today, especially our two former city mayors Randy Tyree and Dan Brown.

To our current City Council, I am fortunate to be working with such a committed and thoughtful group of public servants.

I also want to recognize my leadership team, led by Deputies to the Mayor Bill Lyons and Eddie Mannis, Police Chief David Rausch, Fire Chief Stan Sharp, Law Director Charles Swanson, Public Works Director Christi Branscom, Communications Director Angela Starke, Community Relations Director Tank Strickland and Finance Director Jim York. And a very special recognition goes to my executive assistant, Terry Alexander.

I also want to recognize my daughter Carmen Pitt. She has blessed me with four grandchildren. And just 7 weeks ago, Gene's daughter Meg gave us our 5th grandchild, Vera Cecilia. She and her parents are doing very well.

Looking back: First 16 months

It's been 16 months since I took office, and I have to again tell the voters "thank you" for the confidence you have placed in me. I love my job, and I respect the great responsibility you have given me to represent the many and diverse interests of our city and to move us forward.

For 25 years, mayors have hosted this event where the community gathers to hear the mayor's vision for the future. For you see, this budget is not ultimately about finances. It's really about a vision for our city - how we will grow, what services we will provide, and what quality of life we all will enjoy.

I and my staff and City Council have a responsibility, first of all, to be good stewards of taxpayers' money - your money - and, secondly, to deliver good services, policies and programs that make Knoxville a great city in which to live and a more competitive city for the jobs and talents of tomorrow.

This annual budget address is also a time to reflect back on where we have been over the past year. And we have had a very good year!

We started the year with a major challenge. I'm talking about pension reform. The solution for us - a hybrid plan - was supported by 76% of city voters last November. Thank you to City Council and our employees for dealing responsibly with this serious financial issue.

We put ideology aside to reach a very practical, compromise solution. In addition to being good stewards of your dollars, we also must be stewards of good government, open process, and respectful dialogue and debate.

Last month, we held a very successful Neighborhoods Conference. Over 500 people gave up a Saturday to learn more about city government and how to make our neighborhoods and city better. Thanks to all who made it such a big success.

Just a few weeks ago, we opened the Knoxville Entrepreneur Center on Market Square, with support from the Knoxville Chamber, the city Industrial Development Board, and successful entrepreneurs Jim Haslam, Randy Boyd, and Jim Clayton, along with Cornerstone Foundation.

Staffed by successful entrepreneur Mike Carroll and his team, the center is a place for budding entrepreneurs to turn their dreams into reality and for people with technical and creative talents to learn how to build successful ventures.

A great city nurtures the entrepreneurial spirit, and that's what we aim to do. Stop by and visit the Center the next time you are on Market Square.

Knoxville's sustainability efforts continued to receive national recognition. We were one of 20 finalists among over 300 applicants for the Bloomberg Mayors challenge. Though our proposed urban food corridor was not a final grant winner, we are still moving forward with plans to build a comprehensive urban food system that provides jobs, healthy food and re-use of vacant and blighted land.

We did win the IBM Smarter Cities Challenge competition. We are one of 100 cities world-wide that were selected by IBM for consulting services that are valued at $400,000. Knoxville asked for advice on the most effective way to connect weatherization and energy education services to residents who receive emergency utility bill assistance. Six IBM employees will be here for three weeks, meeting with dozens of local stakeholders and city staff to develop recommendations that will help our city create a long-term solution to this ongoing problem.

This past year we celebrated the installation of 24 electric vehicle charging stations at city facilities and we welcomed ZipCar, the first car-sharing service to Knoxville.

ZipCar allows you to take public transit or to bicycle to work downtown or at UT, and still have access to a car when necessary. I understand the first corporate member was the Knoxville Chamber and that Chamber President Mike Edwards drove a ZipCar out to this event today!

Downtown has continued to blossom, with new businesses opening like Tupelo Honey, and Urban Outfitters is opening soon. We continue to see reinvestment in older buildings downtown and, if you can put up with the inconvenience for just a little longer, we will have a new floor of parking at the State Street garage and a convenient pedestrian walkway over State Street to Gay Street.

By the way, Gay Street was recognized as one of the 10 "Great Streets" in America by the American Planning Association. Ten years ago, would you have imagined that Gay Street would have this kind of comeback?

Over $100 million in new commercial development has been announced along Cumberland Avenue, leveraged by the city's Cumberland Avenue streetscape improvements plan.

Legacy Parks Foundation has successfully branded the Urban Wilderness as an outdoor recreation destination, and we are seeing a growing interest in outdoor recreation opportunities and a commitment to a healthy lifestyle. Thanks again to the Appalachian Mountain Bike Club for their blood, sweat and tears in building 46 miles of multi-use trails here in South Knoxville.

This past year we received a series of excellent rankings from national surveys of economic and livability factors, but the most interesting may have been from the Brookings Institution, which listed Knoxville as one of three cities in the U.S. whose economy has fully recovered from the impact of the recession. While this is a great indicator of how Knoxville compares to other cities nationwide, we know there is still much work to be done to fully recover, and to grow and attract quality jobs to our area. And we work on that every day. This is just a partial snapshot of the past year, but it is clearly an indication that we are a city with great energy and forward movement.

Moving Forward

We face the coming fiscal year with cautious optimism. Putting together a budget is a lot like solving a puzzle. With limited resources, what is the right balance of investment in needs and services vs. saving for a rainy day; or operating vs. capital; or basic services vs. a higher quality of life?

As we balance the various interests and answer these questions, we are driven by the question I first raised at my inauguration: "What makes a great city?'

Good leadership requires not thinking just about the needs and hopes for today, but also thinking of the needs of tomorrow and future generations.

This budget keeps a strong fund balance well above both our own strict guidelines and national standards. It keeps our debt level manageable, and protects our excellent bond ratings.

I am proposing a general fund budget of $183.2 million and a $50 million capital budget. There is no tax increase.

In fact, when adjusted for the impact of inflation and countywide reappraisals, the current tax rate of $2.46 per hundred dollars of assessed value is actually lower than it was 10 years ago.

So how will we invest your taxpayer dollars?

The Knoxville city government at its most basic level is a service organization. We are an entity that exists first and foremost to protect the public and provide desired city services. That's why 73% of city employees are in the Police, Fire and Public Service departments.

Like most organizations, our effectiveness is ultimately based on the talent of our workforce. And like smart businesses, we must invest in the recruitment, training, and retention of a talented workforce.

We depend on these individuals - sometimes to literally save our lives.

Ask State Trooper Lowell Russell about KPD officer Andrew Keith, who pulled him from his wrecked car as it burst into flames.

Ask the young, scared autistic man, trapped and hiding in his burning home, about senior firefighter Chris Medley who coaxed and carried him to safety, sustaining minor burns himself.

Ask the little girl crossing the street to Cal Johnson Recreation Center about recreation leader Elijah Clark, who pushed her from the path of an approaching car and was hit himself.

Now, our employees don't perform heroic actions like that every single day. But every day, they are on the job and they do their job to protect us and to serve us.

One of my goals is to ensure that our workforce is paid competitively. In order to remain current, this budget includes a 2.5% salary increase for all city employees. The salaries of the lowest-paid entry level positions will be increased as a result of an annual salary survey.

I am also budgeting funds for a competitive compensation study to assess and update our employee compensation structure. This is a follow-up to the "Mercer Plan" of five years ago.

While we dealt with the long-term impact of the pension system last year through pension reform, we have been clear that we continue to face an unfunded pension liability due to the recession's negative impact on pension investments. This budget includes a $1.6 million increase to the pension plan to keep it actuarially sound, bringing total budgeted pension contributions to $15.9 million.

Next year our contribution is projected to climb an additional $6 million dollars.

This is a tight operating budget that requires department directors to continue to find greater efficiencies while delivering exceptional services and achieving our goals of Strong, Safe neighborhoods; Living Green and Working Green; an Energized Downtown and Center City; and Job Creation and Retention.

Strong, Safe Neighborhoods

Of course nothing is more crucial to strong, safe neighborhoods than ensuring public safety. As in the past, the largest portion of the budget is devoted to the operations of the Police and Fire Departments. This budget includes new capital funding for police facilities and equipment. A new Police Academy is approved to bring staff positions back up to authorized levels.

The Fire Department will receive funding for fire station maintenance, turnout gear, a new fire station alerting system, and a new CAD system and web upgrade. It is essential that we put the most effective technology in place for use during tragedies and emergency situations.

One of my key priorities has been to reduce blight in our neighborhoods and to promote reinvestment.

I am recommending continued funding for the acquisition of blighted properties. These properties are then sold through the Homemakers Program to people who will return them to the tax base, making them assets rather than liabilities in our neighborhoods. I've budgeted $500,000 for chronic problem and blighted properties and $100,000 to enforce the "demolition by neglect" ordinance that protects historic properties.

We are continuing to help KCDC revitalize the Walter P. Taylor Homes development with the city's fifth contribution of $800,000. Drive down Chestnut Street and see the impact that these dollars are having in stabilizing the neighborhood with beautiful, new, affordable homes and duplexes. This new housing model is very important to the vitality of the neighborhood and the safety of residents.

Great neighborhoods are more than quality public safety and bricks and mortar. Strengthening the social fabric and ensuring success for families and youth are essential as well. I have budgeted $100,000 to expand Community Schools in center city neighborhoods in collaboration with the Great Schools Partnership, Knox County Schools and others.

This budget continues to fund homelessness prevention by providing case management for clients in Minvilla and Flenniken permanent supportive housing units and at four KCDC high-rises.

I have formed a Mayor's Roundtable on Homelessness and we are drafting a stakeholder-driven comprehensive community plan to address homelessness, building upon lessons learned from the Ten Year Plan to End Chronic Homelessness and recommendations from Compassion Knoxville. More information and opportunities for broader public engagement will be announced soon.

Funding is continued for the Office of Neighborhoods, including a $30,000 fund to provide resources to strengthen neighborhoods and to build the capacity of neighborhood organizations to be more effective.

Great neighborhoods have access to parks and recreational opportunities. I have budgeted $640,000 for improvements to ball fields, tennis courts, greenways maintenance and parks.

A total of $1.8 million is allocated to new and repaired sidewalks and crosswalks, including sidewalks along Pleasant Ridge Road to allow children to walk to school more safely.

The budget continues to provide support for KAT, our public transit system, with both direct city support and grant match funding to operate buses, trolleys, and para-transit service across the city.

The city's on-going street paving and maintenance program will again receive $5.45 million. Another $2.97 million is budgeted for roadway safety, alley paving, bridge replacement, traffic signals, traffic calming, flooding and neighborhood drainage problems, and water quality improvements.

These are basic infrastructure improvements and repairs that we must fund year after year to protect city assets and meet citizen needs and expectations.

Living Green and Working Green

I am committed to making Knoxville a greener and more sustainable city. This budget continues to fund the Office of Sustainability, which guides our comprehensive sustainability efforts. Our green initiatives show up in almost all departmental budgets as each department seeks to be more energy-efficient and environmentally friendly.

Here are some examples. I have budgeted $1.5 million for a new work order and AVL system that will improve logistical and planning practices for city departments, and is expected to reduce fuel consumption.

I am also budgeting $500,000 for a grant match for an Advanced Traffic Management System for the Engineering Department. This system will modernize traffic signalization to improve traffic flow, thus reducing fuel consumption and air pollution.

Transportation is not just about automobiles. But often we design our streets with only minimal attention to how they function for pedestrians, bicyclists, and public transit.

This budget funds a traffic engineer with expertise in alternative transportation. The alternative transportation coordinator will assist with the city's goal of building complete streets, which means ensuring that bicycle, pedestrian and transit needs and opportunities are fully considered in every project. Also funded is $60,000 for bicycle infrastructure improvements.

An Energized Downtown and Center City

We will continue to concentrate on the heart of our city, focusing on reinvestment from the center and then out along the commercial spines that extend from downtown - north, south, east, and west.

Our policy has been to use strategic city investment to incentivize and maximize private sector development. Our vibrant downtown is a testament to the success of this strategy.

Downtown Knoxville and the Old City are returning as the center of commerce, entertainment, and culture for our region. As the economy improves, this energy will be felt south of the river and soon we will see the results of our citizen-driven planning process for Cumberland Avenue.

This budget allocates $550,000 for capital projects in the Magnolia Avenue Warehouse District and Downtown North, and for downtown improvements and the Cradle of Country Music Park.

Job Creation and Retention

Another major goal is job creation and business development. I already mentioned the new Entrepreneur Center that we opened on Market Square. This budget includes $400,000 for Innovation Valley to promote regional economic development, and additional funding to the Knoxville Chamber and The Development Corporation for economic development efforts on behalf of the city. We meet every two weeks - or sooner when necessary - to strategize on economic strategies and monitor progress.

This year I am budgeting $170,000 for a new regional effort to secure sustainable low-fare air service to the Knoxville airport. This will be a public/private effort with Knox County, other local governments and private businesses. Low-fare air service will allow us to compete more effectively to attract businesses, conventions, and tourists. We will be releasing more details on this in a few weeks.

This year's budget continues to fund our Office of Business Support and the Business Liaison whose job is to help businesses navigate city regulations, policies and departments, making it easier to do business in Knoxville.

This fiscal year we will implement a new Small Business program with the goal to reduce disparity in the awarding of city contracts and increase opportunities for locally-owned small businesses to be awarded city work. This is the result of a previously commissioned study by City Council. To implement this program, a new position will be added to the Purchasing Division and new ordinances will be presented to City Council for their approval.

A vibrant arts and culture sector is good for the heart and soul of a community; it is also an economic development strategy. This budget grants $408,000 for 26 arts and cultural organizations. I have also budgeted $700,000 for facility upgrades to the Civic Coliseum.

Another $304,000 is budgeted for grants to 29 nonprofit partners who provide essential social services that address special needs in our city.

Strategic Use of Financing Options for Long Term Obligations

Being a good steward of taxpayer money means knowing when to make significant capital investments that produce long-term community or economic impacts.

We have three major capital projects this year that deserve this type of investment: the city's Public Works Complex, Lakeshore Park, and the Knoxville Zoo,

The first major capital challenge is our Public Works Complex. For many years, public service employees and city engineers have worked in an inadequate and inefficient structure under extremely poor conditions.

Planning for this new complex began under Mayor Haslam and continued under Mayor Brown as they purchased land adjacent to the existing Loraine Street facility. Last year's budget included $750,000 for design services. This budget includes a $15 million investment for construction.

This modern complex will be energy-efficient, allow for centralization of operations, and provide covered storage for valuable equipment and inventory that are now exposed to the elements. This is a long-term investment that will greatly improve operations and working conditions for employees. This facility will serve us for 50 years or more.

The second capital project is the incredible opportunity we have at Lakeshore Park. As you all know, the state closed Lakeshore Mental Health Institute last year. As a result, 61 more acres and several additional buildings will now be transferred by the state to the city.

Though it is great news that additional park land will be transferred, there will also be significant expenses for the demolition of existing structures. I am budgeting $5.2 million for demolition.

The completion of demolition at one time will eliminate the risks associated with vacant, hazardous buildings at a heavily-used park; and allow us to plan with certainty to meet existing and future needs. City funds will leverage significant private dollars for park enhancements through our nonprofit partner, Lakeshore Park, Inc.

We will soon hold public hearings to develop a new master plan for the park. We encourage you all to participate as we plan for this latest expansion to our outstanding park and greenways system.

The Knoxville Zoo is the third major capital opportunity, and I have budgeted a $10 million allocation.

The zoo is the city's most-visited year-round attraction - with over 400,000 guests last year. In fact, it is a top 20 attraction in the state of Tennessee based on annual attendance.

The Knoxville Zoo is a key economic driver for our city with an estimated $22.8 million in economic impact from the out-of-town tourists who visit each year.

The Knoxville Zoo board has adopted a strategic 10-year capital plan that will increase the economic impact to our city by investing in outstanding collections and the zoo experience. The plan is to become a national leader in the conservation of Malayan tigers, build a state-of-the-art Amphibian and Reptile Conservation Center, and further enhance Kids Cove.

Currently the city allocates $750,000 per year for capital improvements to the zoo. A front-load capital investment of $10 million, instead of smaller yearly allocations, will help leverage additional private dollars, reduce overall costs, and create a more rapid return on investment with better integrated outcomes.

I appreciate the leadership of the Knoxville Zoo board and staff, for bringing this proposal to us and for their tireless advocacy for the zoo.

A companion capital project that significantly impacts the Zoo, Chilhowee Park and east Knoxville is the flooding of Prosser Road. I am allocating $1.2 million for construction to fix this ongoing problem. We have previously funded design and engineering, and this will allow us to complete the project.

To fund these major capital projects - the Public Works Complex, Lakeshore Park demolitions, and the Knoxville Zoo - as well as the Prosser Road flood mitigation project, this budget requires $31.4 million in bond financing.

Over the last 10 years, city debt has been reduced from $250 million to $177 million. And just last year we refinanced $92 million of existing debt for a total savings of $18.2 million. This leaves us with sufficient borrowing capacity that, combined with the current low cost of borrowing and a competitive construction environment, makes an extremely compelling case for going to the market for these projects.

We are already committed to these projects, and they will provide real benefits to our city for an extended period of time. While they could be financed in a piecemeal manner over the next several capital budgets, we believe this to be a wiser and more strategic approach.

Conclusion

The budget that I have presented today is balanced and affordable. It meets basic needs and it positions us for greater opportunities. City Council will soon hold their own public hearings before they vote on the budget.

I want to thank all the city staff who worked with me on this budget - with a special thanks to Finance Director Jim York for his commitment to fiscal soundness and to prudent investment.

Thanks to all the city employees and others who helped with this event today.

I will repeat what I said last year. Great cities plan ahead. Great cities squarely face their problems. Great cities respect all of their citizens.

This budget keeps us on track to be the great city we know we can be. But this budget alone won't do it.

Remember the question is not only what makes a great city, but who makes a great city. And the answer is... we all do.

Thanks for what you do every day to make Knoxville a great city.

May God bless each of you and may God bless our great city.

 

 

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