2016 State of the City Speech
This is the mayor’s speech as written.
There may have been slight deviations in delivery.
May 4, 2016 --Thank you Commissioner Cagle for that gracious introduction. I look forward to working with you, Judge Emmett and all the commissioners during my term as mayor.
Two and a half weeks ago, I planned to start this speech with an emphasis on the financial health of our City, but the rainfall and flooding of April 18 had a dramatic impact on those plans and our entire region. Hundreds of people sought rescue in hastily opened shelters; hundreds more elected to stay in their flooded apartments and homes. Thousands of apartments and homes in Houston flooded, and some flooded for the second, third or fourth times.
Property owners throughout our area have become weary of flooding in the Bayou City, impatient with elected officials who offer explanations with no practical solutions, and some have and others are close to packing up and leaving our city unless we can convince them that we are going to do exponentially more than what they currently see. To that end, I believe there must be a person who reports directly to me and has the sole responsibility of developing and implementing drainage and flooding strategies that will achieve the singular goal of mitigating the risk of flooding in our city. This Chief Resilient Officer, or Flood Czar, will serve as the City’s focal point for integrating regional resiliency efforts in the Houston area. He will interact with TXDOT, Harris County, the flood control district, U.S. Army Corps of Engineers, State of Texas, TIRZs, super neighborhoods and developers. He will collaborate with city departments to design strategies for resiliency and will lead efforts to revise and update policies and ordinances to mitigate the risks of potential events like the flooding we experienced on April 18. I can think of no better person for this role than Steve Costello. Steve is a civil engineer who has worked on numerous drainage projects, he is a former City Council member with a passion for our city, and he’s someone who I believe can help us achieve our objective of reducing the risk of flooding. Steve, thank you for agreeing to serve!
Although there is still much to be dealt with in the aftermath of the April 18 storm, I am pleased to report that through your generous donations to the Greater Houston Storm Relief Fund, we were able to close all Houston shelters in four days, moving more than 400 people into temporary housing, and through your collective support, we have assisted thousands of others. City Solid Waste staff and private contractors completed the first sweep of storm debris removal from in front of homes and at 17 apartment complexes in the Greenspoint area at an accelerated pace of two weeks. In the aftermath of Tropical Storm Allison, it took at least six weeks or longer. We are also expediting the permitting process for those seeking to rebuild and, quite frankly, for those seeking to do business in this city.
As a candidate, I promised that we would work to repair reported potholes by the next business day. I sat down with the Public Works Department, the Department of Neighborhoods, 311 and other City departments to discuss how to meet that goal. We changed the definition of a pothole to be five feet by five feet, instead of the longstanding definition of two feet by two feet. As of yesterday at this time, the Public Works & Engineering Department had filled more than 2,750 potholes reported to the 311 system, and 95 percent of the time, these citizen reported potholes were repaired by the next business day.
Public Works staff did not stop there. Since the first of the year, they have also proactively filled nearly 16,500 additional potholes.
Credit should go where credit is due, and in this instance, the recognition and thanks go to the hard-working City employees who made this possible and continue to make it possible. With me today are ten Public Works Department employees who have been the boots on the ground for this initiative. I’d like to invite them to join me on the stage.
I, personally, thank each and every one of you and your colleagues who have worked to make this a resounding success. Those numbers are impressive and a reminder that working together, we can exceed expectations!
I am also proud of a number of our other City departments, including the Office of Business Opportunity, for their work to create the Turnaround Houston initiative, a series of resource fairs addressing the barriers to employment that many Houstonians face. Turnaround Houston offers access to job training, resume writing, social service agencies, counseling and intervention to help hard-to-employ Houstonians turn their lives around. It was inspiring to see people walk in unemployed and then walk out with a job and a heightened sense of self-esteem.
When I took office four months ago, the assumed budget shortfall was $126 million. Because of declining sales taxes and $32.4 million in tax refunds from commercial appraisal lawsuits and hundreds more in the pipeline, the shortfall has grown to $160 million.
Our structural financial challenges in 2017 are exacerbated by the property tax revenue cap, the economic slowdown and rising debt and pension costs. We have taken a thoughtful, multi-pronged approach to solving these problems. In less than four months, we have reassessed and reduced City spending through various steps including:
- Stringent limits on hiring for any positions other than critical front-line roles;
- A freeze on pay increases;
- Elimination of vacant positions;
- Targeted layoffs;
- Tighter management of contracts;
- Issuance of Executive Order 1-52, which calls for new policies and procedures to improve accountability and transparency as we budget and invest the public’s money; and
- Working with our TIRZ boards to increase municipal service fees paid to the City to better match the service costs TIRZs generate.
Every department was required to submit reductions of 5-7 percent to their existing budgets for my review and those reductions were assessed on their impact to vital City services. Where there was an opportunity to refinance City debt to generate meaningful savings, we did it.
Repeatedly, I have emphasized the importance of shared sacrifice by all stakeholders for the financial stability of our City. On April 15, I delivered to City Council an executive summary of the budget I will propose on May 10. It assumes the worst: a budgetary shortfall of $160 million. This is the largest fiscal challenge the City has faced since the Great Recession. By bringing all parties to the table to engage in shared sacrifice, including members of City Council, we have closed the budget gap and started addressing the long-standing structural imbalance between available revenues and spending – even reducing overall spending by $82 million. We are eliminating 54 vacant positions, laying off 40 employees and offering early retirement for up to 100 employees. The good news is that libraries and parks are not affected by the reductions; we will maintain our commitment to Rebuild Houston for streets and drainage and CIP projects; no police or firefighters will be laid off, and there will be five police cadet classes instead of the usual four. For the first time in many years, the number of police officers at HPD is starting to inch up and with the added cadet class, we will have more officers on the force. In addition, I will soon announce a plan to internally restructure HPD to move 175 police officers out from behind desks and back on patrol.
The proposed budget maintains a fund balance of at least 9.2 percent of the total budget, well above the required 7.4 percent. By minimizing the drawdown from the fund balance, we send a positive message to the credit rating agencies that we are already preparing for the 2018 budget.
It is my hope that the members of City Council will pass this proposed budget on May 25, a month earlier than usual, to confirm to the credit rating agencies and Houstonians that we are focused on the things that matter most. I want to thank each member of City Council ahead of time for representing their districts, working cooperatively with me and putting the interests of Houston first.
But our work is not yet done. The expenditure growth rates above do not include full funding of the City’s unfunded obligations. That is why we are moving aggressively to address our long-term challenges with sustainable solutions. We have already met several times with representatives from the pensions and have initiated productive conversations about how to reign in our pension obligations in a manner that is least burdensome to employees, reduces the City’s escalating costs and does not produce unintended consequences that would jeopardize the health and public safety of all Houstonians. There are three specific objectives that I have laid out for pension reform:
- We must reduce the unfunded pension obligations now and in the future;
- The annual cost the City is obligated to pay must go down now and in the future, and
- We must have an agreement by the end of this year for the legislature to enact in the 2017 session.
I am under no illusions that this will be easy, but I am confident we can get there!
There are certain realities that cannot be ignored: the increasing costs to the City simply cannot be sustained. If we do not reach an agreement this year, come Fiscal Year 2018, City services will be adversely affected, hundreds of employees will be laid off and our credit rating will likely suffer. But this is a course we need not travel. My mom said, “tomorrow will be better than today,” and as mayor of this City, I still believe what she said. I appreciate the police, municipal workers and fire fighters who have recognized the status quo must change and are willing to move away from previously held fixed and non-negotiable positions. I appreciate them all for agreeing to work with me to achieve meaningful and sustainable cost reductions to the pension system now and in the future.
Assuming a resolution is reached and enacted by the legislature, I shall ask each of you, the Partnership and all Houstonians in November 2017 to remove the revenue cap imposed in 2004 which has been repeatedly criticized by all credit rating agencies. No other local governmental authority in this state is operating under similar constraints of population and inflation. The State of Texas, under its most conservative leadership, is not governed by a similar revenue cap either.
We are a growing, developing city with three million more people estimated to move into our region over the next 15 years. We are competing not just against Dallas, San Antonio and Austin; not just against New York, Los Angeles or Chicago, but against Vancouver, Berlin and Singapore. We are an international city, speaking 142 languages, with 92 consulates and two international airports within our city boundaries.
We must be sure that the growth and prosperity reach all Houstonians. Unfortunately, that is currently not the case. We are becoming two cities in one: a city of many contrasts. There are signature parks like Hermann, Memorial and Buffalo Bayou, and there are neighborhood parks desperate for swings and playground equipment. There are neighborhoods with abundant retail, grocery and transit options, but there are also neighborhoods with food deserts, little or no retail and a dependence on public transit. There are areas that enjoy opportunity but oppose the addition of new multi-family housing. And then, there are communities where blue tarps from Hurricane Ike still dot the rooftops of single-family homes and many apartment complexes stand abandoned and open to criminal activity. I want to thank Councilwoman Stardig for being a champion in removing abandoned buildings and all council members for working to restore neighborhoods.
The revenue cap works against creating one Houston with opportunity for all and the ability to address pressing needs like flooding, transportation and mobility, parks and added green space, affordable/workforce housing and homelessness.
Some may look at the homeless individuals on our streets and just see nameless faces. I, on the contrary, see mothers, fathers and children suffering from mental illnesses, substance abuse and other very personal issues. My administration will resist the temptation of ineffective fixes such as putting these people in jail. We will instead commit our energy to the long-term solutions that have helped our city lead the nation in addressing homelessness.
Let me tell you about George Aluoch, a homeless gentleman, who had been coming to the Houston Public Library Carnegie Center almost every week for six months. This homeless, dirty, unshaven man was an aircraft mechanic with years of experience with the Aerospace Center and the former Continental Airlines. A bad break happened and George ended up with nothing and on the streets. Library staff helped him edit his resume and apply for jobs. When he didn’t have money to print the resume, they printed it for him. They assisted in every way they could. George recently returned to the Carnegie Center to let them know that he had been offered a job and a signing bonus for a position in Oklahoma with an aircraft support company that provides services to aerospace and defense industries. He showed them his Greyhound ticket and said, “It’s over, and I am ready to go.” Library staffers Erika Arrington and Paula Loredo and their immediate supervisor is Cylenthia Hoyrd are here today. I want to thank them for treating Mr. Aluoch with dignity and respect.
Merely maintaining our momentum is not enough. I will work with the private sector, faith-based organizations and other nonprofits to achieve a long-term goal of effectively housing Houston’s homeless. We will do it, not for the NCAA Final Four or the Super Bowl, but because we are Houston, and we are a city of hope and opportunity.
Lastly, I want to make a personal appeal for your companies to join the Hire Houston Youth summer jobs program and hire our kids for the summer. The program runs from June 13 through August 6 and the cost to you is just $3,000 per job offered. Please visit www.hirehoustonyouth.org for more details and to sign up to participate.
These are our children, and they represent the future workforce for your businesses. Since word has spread about the program, kids and their parents have been contacting us seeking employment. The City of Houston is able to offer 450 jobs but more than 2,000 have applied. For many of these teens, a summer job is where they will learn their work ethic, the importance of showing up on time, the value of earning a paycheck and, in some cases, see a part of Houston they have never seen before. I hope and pray to the extent God has blessed you and your companies that you will extend that blessing to thousands of our youth. Fill out the card on your table or visit www.hirehoustonyouth.org and sign up to sponsor a summer job for our kids. Remember, it is not equal in giving, but equal in sacrifice.
When I was elected mayor, there were many who said I was coming into office at the worst time. They said the City is broke, has huge pension problems; the streets are in horrible condition, and the city is divided. They did not envy me. Now and then I ask myself what the Allen Brothers would say to those same people. What would Sam Houston or those who laid the blueprint for the medical center or the port or Johnson Space Center say to those people? I don’t know exactly what they would say, but I do know what Eddie and Ruby Turner would say, “Life is not fair, but you have to navigate through it and tomorrow will be better than today.” Though they did not graduate from high school, they knew the importance of education. Whether it was Encyclopedia Britannica or something else, they purchased books from every salesperson who knocked on the door. When I had to give a report in school about my summer vacation, I traveled through the pages of those books and wrote my paper as if we had actually gone. Facing challenges is our life’s story; creating opportunities is the reward.
I pray that you join with me and together let us build a city of opportunities that excels beyond our wildest expectations.
Our eyes have not seen, our ears have not heard, no mind has conceived what God has prepared for those who love Him.
This is our City, let’s protect it.
This is our City, let’s invest in it.
And, in the process, may God bless us all.
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