Sept. 28, 2010

Remarks by Executive Pat McCarthy

Mr. Chairman and members of the Council,

I am Pat McCarthy, Pierce County Executive. And I am here today to present my proposed Pierce County budget for 2011.

This budget reflects commitments - that is, a commitment to stay focused on Pierce County's priorities, AND a commitment to do things smarter, better and more efficiently. County employees are highly motivated to help us do just that.

So let's talk about the priorities and assumptions that guided my budget process and deliberations.

First, the priorities.

As you will see, my budget proposal cuts overall spending by 6 percent, or $49 million dollars. It's important to note that I prioritized the budget cuts to minimize the impact on public safety and judicial services -- which is consistent with this Council's commitment to public safety.

We all agree that public safety is our top priority. That's why we devote more than three quarters of our General Fund to those departments.

In fact, public safety and judicial services would consume more than 78 percent of the General Fund in my budget proposal. That's up 2 percentage points from this year's budget.

This budget also reflects a commitment to prevention programs.

A number of them are listed in the Executive's Message in the budget. Programs like Drug Court, Breaking The Cycle, and Offender Work Crews offer alternatives to incarceration and help reduce future jail costs. These programs provide a hand up and out of a life of addiction and crime.

A second priority is maintaining our commitment to economic development. Denise Dyer and her staff in the Economic Development Division work every day to retain existing businesses and recruit new ones to Pierce County.

It's not an easy task in this economic environment. But this isn't just the responsibility of the Economic Development Division. All County departments factor the importance of creating family-wage jobs in our community as part of their mission and responsibilities.

A third priority is to keep making strategic capital investments. My proposed capital facility program - while reduced - still includes improvements for parks and recreation facilities, including Sprinker Recreation Center.

It also includes improvements to our infrastructure, including transportation, our surface water management system, the sewer utility and other key facilities. These areas of spending help build and support livable communities.

Finally, a priority of my administration is to pursue opportunities to reorganize or reset areas of county government. There are two significant efforts under way right now.

One is the merger of the departments of Community Services and Human Services. After a thorough analysis, I believe the consolidation of these two departments will actually improve our service delivery - especially to the vulnerable populations we serve.

A second effort involves an in-depth analysis of work done by Planning and Land Services and Public Works. I expect that a team of experts studying the work processes in those departments will come back with recommendations to improve our service delivery in those areas.

Now let's talk about assumptions in this budget.

Most of the 6 percent decrease in overall spending in my budget can be attributed to a decline in federal and state grants, as well as a decrease in budgeted capital dollars across the board.

My total proposed budget is about $760 million dollars.

As the Council knows, most of the attention will be focused on the General Fund. That's the fund that pays for the majority of the traditional services we provide, including public safety.

My proposed General Fund budget is $268 million dollars. That's an increase over the 2010 budget of just 0.4 percent. That is an extraordinarily small increase.

This budget assumes the local economy will remain sluggish, but with a gradual improvement over the next 15 months.

We assume inflation will be moderate next year, and interest rates will remain at historically low levels.

Property valuations are another indicator of the economy, and current trends show we still have a long way to go in the recovery. We assume the county's assessed valuation total will decrease for the second year in a row - from $88 billion dollars in 2010 to $80 billion dollar in 2011.

The budget assumes the county will continue to provide contract services to cities, primarily for law enforcement and jail operations.

My budget anticipates some built-in fee increases, especially at Planning and Land Services.

My budget also assumes property tax revenue collections will increase 2 percent, and sales tax revenues will increase a little over 3 percent.

That sales tax estimate is based on the most recent data available from the state, which shows an upward trend of nearly 4 percent compared to the same period last year.

And here is one last assumption in my budget proposal: as is the case in 2010, my 2011 proposal does not use any fund balance reserves for General Fund departments.

On the expenditure side, I anticipate continued reductions in staffing through layoffs, attrition and furloughs.

My budget estimates cutting 43 positions, including 32 in the General Fund.
In addition, we have saved $1.3 million dollars in unpaid furloughs for employees in various departments since 2009.

I'm also moving County departments to a new performance management system that's based on what are known as the Baldrige Criteria. While that sounds wonkish, let me assure you it's a nationally-recognized system that assesses whether we're reaching for the right goals, and then helps us measure our performance.

We have also solicited the State Auditor's performance measurement team for input with this process.

I believe the decisions we made last year for the 2010 budget have left us in reasonably good shape heading into 2011. We all did some heavy lifting last year, and we are managing our way through these difficult times.

Pierce County will continue to provide vital public services to a growing population that now tops 813,000 people.

The deep recession and slow recovery presents a number of challenges. The recession's impact on revenues has been the sharpest since the Great Depression. Cutbacks in programs and staffing are unavoidable.

But this economic turmoil also provides opportunities and motivation to push for more efficiencies. In some cases, we are resetting county government.

It's a chance to stop doing something the old way just because we've always done it that way, or to seize an opportunity to combine resources and improve service delivery.

There's a lot of bad news these days about government budgets. Every day, we see headlines about the federal deficit, or the state's multi-billion-dollar shortfall, or the big cuts being considered by local governments such as King County or Bellevue.

If I've said it once, I've said it a hundred times: we operate a lean machine here in Pierce County.

I'm proud of the way our employees strive to make every dollar count. Our department heads have worked very hard to reset their operations while maintaining a high level of customer service, despite in many cases, a reduction in staff and resources.

Delivering this budget proposal to the Council marks an important step in the process.

I honor and respect the job the Council will do in the coming weeks to review and finalize the budget.

My team and I are ready to work with you. I am confident we will end up with a budget that maintains our focus on the priorities, and provides the best services possible to the citizens of Pierce County.

Thank you for your time today.

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