“The state of our city is good, and equally important, the trend line is positive,” said Mayor Terry Tornek in the fifth State of the City address of his administration, this time at John Muir High School.
As he has in his previous addresses, the mayor, a former city planner, unabashedly reveled in his favorite subjectthe Citys budget.
Several members of the City Council were in attendance, including Vice Mayor Tyron Hampton, who introduced the mayor, John Kennedy, Victor Gordo, Andy Wilson, Gene Masuda, and Margaret McAustin. Councilmember Steve Madison attended a District 6 campaign forum, scheduled for the same evening.
Also in attendance were City Manager Steve Mermell, Muir Principal Lawton Gray, Dr. Brian McDonald, PUSD superintendent; as well as most of the members of the PUSD School Board.
For the complete script of the State of the City address, click here
Framing the discussion by reminding the audience of last years successful passage of Measure I and J, which added revenues to both the City and the PUSD, the mayor noted that the citys current General Fund revenues are approximately $275 million, up from last years $245 million figure.
Property Tax accounted for $69.7 million, up $5 million from last year, said the mayor. Sales Tax revenue increased dramatically to $55.8 million, which the mayor said was largely due to Measure I.
The Citys Utility Users Tax brought in another $27.5 million, while the Transient Occupancy Tax, also known as the hotel tax, brought in an additional $18.3 million, up from last years $17.5 million.
City charges, fees, and what Tornek called unpredictable intergovernmental transfers accounted for the remaining $103.6 million.
According to the Mayor, new development and rising property values will continue to be the Citys primary source of revenue and revenue gains.
And, as revenues rose, said the mayor, so did expenses. Police costs rose 4.4 percent to $80.8 million, up from $77.3 million. Fire fighting rose 7.9% to $51.9 million , up from $48.1 million.
Public Works saw a 7.4 percent increase to $23.2 million, while the costs of libraries rose 3.4 percent to $11.9 million, up from last years $11.5 million.
Human Services, Planning, and Transportation spent the remaining $84.4 million.
As he has mentioned for a number of years, the mayor lamented the cost of the Citys contribution to CalPERS, the employee retirement system, which will rise from $33 million in 2011 to $78 million in 2030representing 11.9 percent of the General Fund Budget.
But Tornek said that the rate compares favorably to neighbor Glendale, which commits 18.2 percent. Tornek also noted that As newer employees with modified benefits and contributions represent a larger portion of our workforce, the pension bite begins to abate.
Tornek also explained that the Citys reserves are now greater than they were, pre-recession.
We have accomplished this, said the mayor, by balancing our budgets, eliminating some staff positions and adding savings generated by one time payments.
Additionally, he said that in June 2017, the City Council began funding an allocated $12 million to a special Trust account for future pension and other post-employment benefit obligations which now stands at $13.5 million.
The City Budget will always be under pressure from a desire to do more worthy things than we can afford to do, said Tornek. We have forecasted future revenues conservatively and there are several things that could have a big positive impact on our revenue.
The mayor explained that additional hotels, significant tax revenue from online sales, and restored Federal or State funding could bend the revenue curve up in a meaningful way.
We must continue to be very disciplined in how we manage our spending, Tornek warned, or we will be confronted with the looming threat of the Operating Deficit all over again.
Tornek also proposed that the City spend its additional available revenues with a combination of building reserves and investments in capital improvements.
This is the strategy that we adopted with the $11M surplus generated by Measure I this year, he said.
The City added $5 million to its General Liability Fund, and another $3 million to its FPRS unfunded liability, which are debt obligations without sufficient funds to pay for them, and paid for a new $3.9 computer-aided dispatch system for the Police Department.
I think that is the best way to spend available dollars and I hope that the public and ultimately the City Council will agree, Tornek said.
The mayor also discussed, positively, the end of the 710 Freeway extension and said, Now we can move ahead with a series of projects that will enhance transportation throughout the region and actually improve traffic flow in Pasadena.
Tornek pointed to a $230 million Metro allocation to build a grade separation or tunnel, underneath the California Boulevard Gold Line crossing.
This is a big, complicated project, said Tornek, It will require much public discussion, careful planning, and sensitive design, but I believe that the improvements in circulation and improved access to Huntington Memorial Hospital, will make the expense and short term disruption worthwhile.
In addition, Tornek said the City will begin earnest discussions over the fate of the stump Right of Way property left by the now-dead 710 Extension.
The Mayor also happily noted a $2.5 million County of Los Angeles contribution to the Army Corps of Engineers to begin a large-scale habitat restoration of the Arroyo Seco, Which could have profound long-term benefits.
LA County Supervisor Kathryn Barger has also committed half a million dollars in Prop. A park funding to the One Arroyo demonstration trails project, said Tornek.
We are grateful to the County for all of its support to this priceless resource, he said.
Tornek also called the Citys homelessness issue, the most pressing problem facing our city.
Though homeless numbers are down 20%, he said, There are still more than 300 people sleeping on Pasadenas streets every night and that is simply wrong. We will continue to work with our non-profit partners and the County to build additional permanent supportive housing and other facilities to drive this number down further.
The mayor also recognized Police Chief John Perezs reorganization of the Department with a renewed commitment to community policing and progressive policies to minimize the use of force and ensure that all of our residents can rely on equitable treatment.
While lamenting the problems incurred in implementing the Citys cannabis sales, Tornek said he hoped that local outlets can actually open for business this year.
Responding to an audience question, the mayor also recognized the Citys problem of unaffordable housing and its effect on the attendance in the PUSD. Tornek said the City is trying to increase the amount of affordable housing through new developments and the increase in inclusionary zoning.
The Mayor also pointed out the new EF Prep School to be built which will bring 1,000 foreign high school students to Pasadena, and the new Kaiser Medical School, as well as the Ten Walnut project, the largest development in the Citys history.
Concluded Tornek, The City Council and the staff will continue to work hard to maintain the positive trend, and to secure an improved quality of life for all of our residents.