State of the City 2012

February 23, 2012

Good evening and thank you for being here tonight!

There have only been four Prattville mayors in my lifetime, and now for the past 13 months, I've had the privilege of being your Mayor here in our great City.

It is my honor to stand before you tonight to bring you the state of our city.

Over the past year, the City has seen many, many changes. Here at City Hall, we've had to change the way business was being done. We have been negatively impacted and encountered challenges just like every other service-oriented business due to the global recession. We could no longer do business in such a way that negatively impacted the financial health of the businesses around us.

As with any business when things have been going good, the mentality had become "this is the way we've always done it." Those of you who know me personally know that I think outside the box, outside the normal scope of an issue or problem to find solutions that work, that make sense, that push the creative envelope.

This sign sits prominently on my desk. (Mayor Gillespie pointed at the sign. It says "the way we've always done it with the international NO symbol over it.)

Our mentality and approach have changed. With those necessary changes and a policy of FULL DISCLOSURE, I'm proud to say that we have made numerous strides over the last year.

1. We have cut our expenses.
2. Tightened our belts.
3. Increased our revenue.
4. Decreased personnel costs.
5. Decreased accounts payable.
6. Decreased long-term debt.

In January of 2011, Wastewater was running $1 million a year in the red. This practice could not be sustained. We had to get this department running in the black. When presented with hard facts and figures, we had no choice but to implement the Wastewater surcharge last spring. This surcharge carried us over while the department assessment was conducted.

As part of changing the condition of our neglected departments, we have turned the Wastewater and Sanitation Departments into separate enterprise funds, making them self-sufficient, self-funded entities.

These moves should insure that these valuable, critical services are no longer overlooked, changing the thought process from "out-of-sight, out-of-mind" to one of proper management and viability.

Regrettably, rates were changed, but with removal of the surcharge, many of you did not realize a rate increase. Those of you who did shouldn't have noticed much difference. Businesses are now paying their fair share and all rates are being charged based on actual gallons used. These rates still remain some of the lowest in the state.

Some residents tell me that their overall water bill is lower now than before the rate increase.

I've also never been an advocate for tax increases. I do not believe you can tax your way into prosperity. I say that with a big HOWEVER...understanding that we had over $65 million in long-term debt brought the severity of the situation to light. We simply could not continue to take bridge loan after bridge loan to meet our interest payments. We were well on our way to taking bridge loans to pay the bridge loans. No matter how unpopular, no matter how politically incorrect, implementing the limited duration 1 cent sales tax increase was a necessary move. I'm confident standing here, telling you, that without this temporary tax increase, we would have soon found ourselves defaulting on those loans. We would not have been able to make payroll.

A few months back, my wife found this quote by Theodore Roosevelt...

"In any situation, the best thing you can do is the right thing; the next best thing you can do is the wrong thing; the worst thing you can do is nothing." I share that with you to say that if no action had been taken, it would have been irresponsible.

Whether you agree with these actions or not, they were taken after closely weighing the facts and figures before us. I believe the City is better now than when I found it because of these actions.

I want to assure each of you that I'm looking over all expenses. My purpose in overseeing expenditures, along with our finance director, is to make certain we're buying local first when at all possible, we're maximizing our dollar when spending, and that we're providing the best quality product at the lowest possible cost...those products being public safety, environmental services, and quality of life programs.

In prior years, the budget passed by Council was routinely exceeded...spending was out of control. I'm proud to say that reduction in expenses and the elimination of capital outlay between January and September 2011; the City spent roughly $4.5 million less in 2011 than in the previous fiscal year.

Thirteen months ago, we had 353 full-time and 33 part-time employees. Through natural attrition and minimal layoffs, we now have 288 full-time and 33 part-time employees. This has reduced our budget in the salaries, wages, and benefits line item approximately $1 million. This reduction would be even higher, but we are budgeting actual holiday pay and overtime for the first time ever which offset the actual savings. It still remains that we've realized a 9.9% reduction in personnel costs since cuts began. This savings brings our overall decrease in expenditures to $5.5 million between January and September 2011.

Thirteen months ago, our accounts payable was a little over $3 million. The last report given by our interim finance director shows that accounts payable are roughly $50,000 and in the current column, meaning 30 days old or less.

Thirteen months ago, our long-term debt was a little over $65 million. The last report given showed long-term debt has decreased over 14% and is now just under $56 million, meaning we've reduced long-term debt by almost $10 million in a year. We are updating the website with a new report each month.

For full disclosure, we have most community initiatives paid but are waiting on requests or contracts from a few. For those of you who are not familiar with the term community initiatives, these are community organizations that the City helps to fund. That funding requires a contract between that organization and us before we can make payment.

We now have the mindset that "cash flow is king" and that full disclosure is our new way of life - meaning if we don't have the money on hand, then we don't spend it. If we spend it, then the customer, YOU THE TAX-PAYING CITIZEN, knows where and why.

We have paid off our $1 million line of credit. This has been presented previously in our long-term debt because we owed it and it was not getting paid down. Tonight I'm including it in accounts payable because we can now utilize this tool as it was originally intended.

When I took over, there was no bank account set up to segregate fuel tax dollars. We have now established that fund in order to:

1. Make it more accountable
2. Keep funds readily available for paving projects, and
3. Make planning for future projects a reality

City employee healthcare is self-funded. We owe this account its proper funding and are providing our employees updates monthly on the health of the account. We continue to make deposits to fund the expenditures from this account and are beginning to make a dent at the balance that should be in place. All claims have been and will continue to be paid.

The 2014 annexed area is another concern of mine. I have formed a team of department heads to assess the work ahead so that we can best meet our needs and requirements. I want to assure you that we are working on a long-term plan to meet our obligations when the time comes.

We reactivated the Independence Day Celebration Committee. This committee, comprised of community leaders, worked together to raise $21,075, which funded the biggest, and longest fireworks show that Prattville has ever had. They found sponsors for our fireworks show, the cardboard boat races, advertising for the event, and the sponsorship stars to recognize those businesses and individuals who gave so generously to the day's events. They were also able to honor our World War II veterans with a great tribute; our veterans deserved this and so much more. The committee did such a great job that we were left with seed money of $2,725 towards this year's event.

Speaking of committees, you might have heard about our citizen-based committees. I believe that Prattville is blessed with many great people who want to be involved and give back to our community. I feel certain of this because I'm one of those people.

My philosophy is that small government is better than big government. Because we can no longer afford big government, I've implemented my idea of citizen-based committees. This is a new concept for the City of Prattville. In my opinion, it serves multiple purposes:

1. Multiple ideas to a common cause.
2. Community pride and ownership of a cause or project (which tends to guarantee success).
3. Community spirit and a workforce only limited by the number of people who are interested in getting involved.

A Pratt Pool Committee with staff and interested residents was formed. They've worked hard to come up with workable solutions to keep the pool open.

The Autauga Creek Improvement Committee was formed and in a few short months has made a visible difference to this vital natural resource. We came up with short and long-term goals for our untapped natural resource. From this committee, a group of citizens has held multiple clean up efforts with unbelievable results. Our Canoe Trail is reopened for business. We've become part of the Alabama Scenic River Trail. The committee is in the process of becoming a 501(c)3 non-profit organization. I'm pleased to announce that they have received notification of their first grant award.

We're now kicking off a new project and forming more citizen-based committees to bring multi-use trails to Prattville in the coming months. This project should include several new green trails including one running along Autauga Creek. These trails will not only help make us healthier but also provide a new revenue source through tourism and increased sales. I, personally, want to thank every resident who has volunteered and participated in these efforts. I appreciate you and look forward to us continuing to work together.

Change is hard. Change requires that we adapt and adjust. Our dedicated employees have stepped up to these challenges and adapted in order to continue to provide superior environmental services, public safety, and quality of life programs that the citizens of Prattville have come to expect in exchange for their hard-earned dollars.

These dedicated public servants have been cross training and multi-tasking in order to get the job done. Without these committed employees this service-oriented business that we call the City of Prattville, would not nor could not function.

I have challenged department heads to reduce this 2012 budget by $1 million and I have full confidence that we are well on the way to achieving this goal.

At this time, we are on track to pay the May 1st $1 million bond payment without the need of a bridge loan. This is a first since the saga of bridge loans began.

Our 2013 budget will need to be $2 million less than this year's budget. The Council has spoken and with the temporary sales tax increase falling to ½ cent at the end of December 2012, we will be required to make that adjustment. With this change will come another round of hard decisions. I will continue to call on you, our customers, for suggestions throughout this process. My suggestion form is noted on the home page of our website – please use it!

Remember the strength of our economy revolves around you, our citizens, buying local.

2011 and 2012 have been good so far with jobs being created in our private sector by Fras-Le, Medline, and others. The recent job fair held at the Chamber of Commerce was positive for this community and provided an opportunity for our citizens to have access to job openings at area companies.

When you link all of this positive activity and change with new jobs, I envision a great 2012 for Prattville.

The Dow Jones Industrial Average crossed 13,000 on Tuesday for the first time since May 2008. While it didn't stay above 13,000, I feel that signs are there that the economy is moving in the right direction.

I feel good about reports from both Continental Eagle and High Point. I hope to be able to share some definite, positive news about these properties in the near future as those things firm up.

In closing, I'm very optimistic. I look forward to 2012 being another year of record-breaking achievements for our city.

Please check the city website for more information and upcoming events. Please continue to pray for us and the decisions we make, I assure you that those prayers are being felt.

I remain committed to you and our city. My only interest is to keep Prattville on the right track. I look forward to continued work with the City Council for the remainder of this quadrennium.

THANK YOU.

Bill Gillespie, Jr.
Mayor, City of Prattville