Looking back, and looking ahead – that was the theme for Mayor Tom Watson’s “State of the City Address,” which he delivered during the Greater Owensboro Chamber of Commerce Rooster Booster breakfast this morning.
There were no major announcements. There was no unveiling of any bold, new plans. Instead, Mr. Watson gave a very straightforward and honest account of the current state of City finances. It was not somber, but it was not celebratory either.
“Nobody can deny the progress we’ve experienced in the last ten years, but we have been living beyond our paycheck. We’ve made some big commitments, and we will fulfill them,” Watson said. “But we have been spending beyond our means.”
How did we get here?
In Watson’s words, it all goes back to 2006, when Senator Mitch McConnell worked a deal to pump $40 million into redeveloping Owensboro’s riverfront. At that point, the Gateway Plan was launched with funding from the Public Life Foundation and input from several public forums. The theme of the Gateway Plan was “placemaking.”
Placemaking, as defined by Watson, is a process that capitalizes on the local economy’s assets, inspiration, and potential that results in the creation of quality public spaces that contribute to the citizens’ quality of life.
The placemaking strategy was designed to attract outside dollars to Owensboro, and retain Owensboro dollars at home. The focus was to make downtown a destination with the hope that money would follow people. “Alorica is one example that demonstrates the overall plan was about economic development, not entertainment,” Watson said.
“Life has been good in Owensboro the past ten years because of the progress,” Watson said. Then came the warning. “But my observation after many conversations at City Hall is that the cost of these projects has outpaced our revenue. I’m confident in our economic growth, but many projects have been started without any increase in revenues.”
Raising expenditures without equally increasing revenue is not sound practice financially, whether it’s personal, business, or City finances, Watson said.
Because the City spent more than it brought in, surpluses were dipped into. As Watson takes office, the latest audit shows the depleting surplus will be exhausted by the summer of 2018.
The Gateway Commons (54) TIF and the Downtown TIF will help in the long term, but those revenues are not available in the short term.
A couple other glaring areas of concern are the fund for police and firefighter pensions and the 40-year road replacement schedule, which used to be a 20-year schedule. Watson compared the situation to the old Fram commercial: “pay me now or pay me a lot later.”
“We have been spending beyond our income, we have underfunded our basic infrastructure, we have not adequately compensated our public safety officers, all while living on a steadily declining savings account.”
But there is good news!
Alorica is coming. The Gateway Commons (54) project will bring a projected $1 billion economic impact. But that is a 20-year process and those revenues are not available today.
We are charged, Watson says, to “get our fiscal house in order” while those investments materialize by ensuring the 2017/18 budget is sound. “Solutions must be immediate,” he warned.
And with that, Watson laid out four guiding principles of 1) public safety, 2) sustained economic growth, 3) controlled spending, and 4) working toward a balanced budget. To do this, Watson offered these action steps:
- reviewing every revenue and expenditure
- showing fiscal restraint
- honoring commitments
- fairly compensating public servants
- ensuring the Triplet Twist development moves forward and Gabe’s Tower comes down
- expanding partnerships with City, County, and State government leaders as well as citizens
- focusing on economic growth and welcoming opportunities
It was alluded to that changes are coming, but it wasn’t directly said what those will be. Time will tell what “fiscal restraint” and “reviewing every revenue and expenditure” means.
For now, Watson pledged to operate an open and transparent city government. “Our meetings will be open. We will encourage public debate. We will not rush into decisions, especially when it concerns spending your tax dollars. We know where the strength of government lies, and that is with the people. We want an active an participating democracy to fourish. We welcome, we ask, we need you to participate.
So let’s grab hold of this shared vision so we can continue to keep this great city moving forward.”
