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Mayor's 2011 State of the City Address Marysville's plan for long-term financial stability Thank you for being here this morning as I present my first State of the City Address since becoming Mayor six months ago. I want to open by saying what a privilege it has been working together with the City Council, administration and City employees in my new role, and getting out in the community to meet many of the citizens, business and civic leaders, and organizations that give Marysville its diverse character. I have appreciated the welcome I have received. I’m grateful for the willingness shown by many to help guide and support me in my initiative to plan for long-term financial stability for our City, so that we can invest responsibly for a prosperous future, from a position of strength. I know that starting off a State of the City message with the budget can send some people heading for the exit, but it’s where I need to begin. We faced trying and challenging economic times during 2010, and while we hope for signs of a stronger economy, the reviews are mixed, suggesting that the recovery will continue – but at what rate is anyone’s guess. To outline this presentation for you, I’m going to talk first about the budget and planning for long-term financial stability. Then I’ll recap some of the City’s accomplishments in 2010 before I turn to the challenges and opportunities that lie ahead next year and beyond. During the process to adopt the City budget for 2011, my first initiative as Mayor was to plan for long-term financial stability as the way to invest more responsibly in Marysville’s future. We don’t budget based upon hopes of an economic recovery but rather based upon the realities of our current economic situation. Businesses and families have been making tough decisions adapting to the new “economic realities” for the past few years; your government should be expected to do the same. It is essential that we continue to reform the way the City does business in order to meet these challenges facing everyone. Government at all levels is facing this and there is really no substitute for decisive action as delay only enhances the size of the problem. A thorough process of prioritizing the essential core services of government, developing a disciplined spending plan and maintaining solvency across all our funds is essential. That is the approach we took when the City Council in November adopted a $119 million City budget for 2011, with a $34.9 million General Fund for basic services. The budget was deliberately drafted to look beyond 2011 to create financial stability for the long term, and establish a more predictable and stable workforce. We faced a 2010 revenue shortfall and 2011 revenue projections that forced immediate budget cuts. City departments reduced operating expenditures and the employee workforce was reduced 10% from 2010 through layoffs and removal of vacant positions. Budget reserves were replenished to a level that will help buffer the City against fiscal uncertainty – reserves are at 6.5% for 2011, with the goal of increasing those levels in the ---PAGE BREAK--- future to provide financial security and stability for the City. This is the model for future spending plans: More disciplined operating philosophy Balanced budgets that reduce overall expenditures Build up reserves to levels to offset unexpected revenue shortfalls or unanticipated events that undermine public health or safety Pay down our debt aggressively to ease our debt burden and boost our creditworthiness Ensure funds are solvent, including enterprise funds such as the golf course Cedarcrest Golf Course - an example of achieving a solvent fund I want to expand on why it’s important to keep our various funds financially solvent, and no place better illustrates this than Marysville’s Cedarcrest Golf Course. The Golf Course is an enterprise fund, so it has derived its operating revenue primarily from user fees since the property was dedicated to the City in 1971 for use as a golf facility. Due to use restrictions in the deed and existing debt, selling it is not an option. The golf course is an important community asset in our parks and open space inventory. Golf is a popular recreational pursuit in Marysville. It fits well in our Healthy Communities Project initiative to encourage fitness and outdoor recreation. In spite of the deep recession we just went through that typically sees a drop off in “pay to play” recreation like golf, Cedarcrest has actually seen an increase in number of rounds played, which is good news. The bad news is the increased play and an underperforming restaurant still hadn’t generated enough revenue to outpace mounting losses and the costs to operate the course. As a result, the City has continued to operate the course using general fund subsidies to address an average five-year loss of $304,000. In order to achieve solvency and make the course viable, we are making several changes that we believe will help reduce the deficit and achieve a balanced budget - where costs do not exceed actual revenues - by 2012. Among the changes: Public Works, Golf and Parks crews will assist each other by sharing course maintenance work We have streamlined management, with course oversight reverted back to the Parks Department We will generate revenue through a new lease agreement at the restaurant, with the City out of overall restaurant operations. The restaurant opened this week under new management with the owners of Bleachers sports restaurant in Marysville. Bleachers Family Grill is now open for breakfast, lunch and dinner options that are a great fit for Cedarcrest. We’re looking forward to their opening