State of the City Address
January 17, 2002
In Pasadena, the new year gives us the opportunity to move forward, to renew our commitment to build a greater City, and to respond to the needs of our residents and our institutions.
I want to start by offering a report on the City's economy and development activity, and a review of major projects and programs during 2002.
In summary, our economy is strong and vibrant even in the face of national and state economic weakness, there is significant new investment is taking place, primarily in regard to housing, and there is excellent news for Pasadena's electric customers.
Our economy performed well during the last year, and the indications are that this will continue. The economic weakness prevailing elsewhere was offset in Pasadena by several factors. First, the local economy benefits from broad diversification based on business and professional services, engineering, insurance, financial, e-commerce, and recently emerging high-tech and bioscience industries.
Second, the City's financial position is strengthened by cash reserves that have grown over the last 3 years from less than $9 million to nearly $45 million dollars. This gives us a base from which to look forward with confidence, even if the general economy is weak. In this regard, it is reassuring that several economists, including J.P. Morgan, Goldman Sachs and Morgan Stanley, have recently predicted that the first quarter of this year will mark recovery from last year's recession.
Our performance during the last year was bolstered by two major retail centers: Paseo Colorado, and the new Target store. Financial reports indicate the Paseo is operating ahead of projections. The economy was further bolstered by the high volume of construction, which provides jobs and related business activity, as well as revenues to the City from permit and construction fees. Based on all of these factors, I am optimistic that 2002 will be a strong economic year.
A significant amount of the construction activity involves new housing units, including for example over 380 apartments in the Paseo, and over 200 in the project on the site of The Peppermill Restaurant. Overall, it appears that during 2001-2002, Pasadena will have completed or have under construction more than 1,500 new residential units. That number, relating to the first two years of this decade, far exceeds the approximately 1,100 homes built in the City during all of the 1990's. One of our challenges is to assimilate this housing in a way that adds to our strength.
Clearly there are benefits from new housing. One is starting to meet the housing shortage in southern California as the population surges.
Another benefit is that the housing being built constitutes what some call "smart growth". Most of the new units provide living opportunities in situations that reduce the need for automobile use. Housing located near commercial activities and transit lines allows residents, at least in some cases, to work, to shop, and to have fun without using a car.
At the same time, though, the significant increase in housing poses major challenges to the City, relating to traffic, schools, parks, and other burdens on the City's infrastructure.
These issues are acute in the Legacy proposal for Ambassador College, which is expected to come to the City Council in the next few months. The developer's proposal to build 1,727 units is the subject of intense debate, which will continue as public meetings and hearings occur in the course of the entitlement process.
The Legacy application will not be easy to resolve. I am concerned because I sense a hardening in the thinking of both sides, the property owner and the property developer on one hand, and the residents of southwest Pasadena on the other. It is my hope that there will be meaningful, informal dialogue among the stakeholders as a means of achieving a better appreciation of everyone's views and starting to build a consensus about this development proposal.
Discussion of housing in Pasadena would not be complete without mentioning the need for additional housing for working persons, so-called "affordable housing". With Pasadena's increasing importance as a regional economic center, the cost of residential property moves relentlessly higher. The fact is that more than half of our residents cannot afford to buy a median priced home in Pasadena, and apartment rental rates exceed what persons of lower income can afford. Pasadena has a long record of addressing the need for more affordable housing, with a range of programs to build new units, to repair and maintain existing housing stock, and to provide other assistance. But these efforts fall far short of the need.
Last year, the Council adopted a new affordable housing tool, the inclusionary housing ordinance. It requires developers of larger projects to provide a percentage of affordable housing for working persons. The ordinance was highly controversial, even though it is likely to produce only 300 to 500 new units during the next 5 years.
In this regard, it is encouraging that earlier this week, the Council made a new commitment to address this need. A forum will be organized to review opportunities for affordable housing, taking advantage of all the work done last year in developing a new housing element for the general plan. We expect that after the forum, an implementation effort will move forward, involving among others, non-profit and perhaps private sector developers specializing in affordable housing. We must find new ways to make decent housing available to more of our residents.
There are two other projects this year of great importance to the City.
The first is a small retail and office project located on north Lincoln Avenue on the northern boundary of our City. It will offer retail services that serve the neighborhood, and start to create a climate of new investment and pedestrian activity. This project, created by J. L. Moseley & Company, a Pasadena firm with a record of successful projects, is important because it is based upon extensive discussions with neighbors as to what the neighbors want, and is being used to urge nearby businesses and property owners to help build a vital economy in the area by making new investment.
The other significant project is the seismic retrofit and upgrading of Pasadena City Hall. During the last couple of years, two advisory committees have worked hard to determine the best solution for City Hall's seismic deficiencies, and the best way to pay the cost. In recent weeks, an effort to inform the general public about the project has quickened, and an excellent opportunity to learn about it occurs one week from tonight on Thursday, January 24 in the Donald Wright Auditorium at the library.
At this forum, which was organized by Pasadena Heritage and co-sponsored by the American Institute of Architects, Pasadena/Foothill Chapter, the City Hall project will be described in detail, and questions will be answered. My hope is that many of you and many others will attend the meeting and thereafter follow this project as it comes to the Council.
Next, I want to report on recent developments relating to electric service. Everyone is aware that our utility, as an independent entity owned by the City, was able to maneuver through last year's energy crisis maintaining quality service with stable rates. I am able to offer assurance tonight that quality service at stable rates will continue not only during 2002, but for several years into the future. Moreover, in the middle of the year, Pasadena customers will receive a net reduction in charges for electric service.
The stranded investment reserve is now fully funded, which permits eliminating the 11% surcharge on electric service that has been in effect during the last four years. Once that change is implemented, when the utility's computer system has been reprogrammed, the effective date will be retroactive to last July, so a refund or a credit of surcharge payments made since then will be returned to each customer.
More importantly, at the same time, customers will get rate relief. This will reduce costs for electric customers across the board, but cost reductions for business customers will typically be in the 20 to 25% range. As a result, Pasadena finds itself in a strong competitive position compared to communities served by investor owned utilities.
But now water issues are beginning to pose challenges. Pasadena's water consistently receives high ratings from the U.S. Environmental Protection Agency and the State Department of Health Services. We are paying close attention to discussions in the California legislature about proposed new water quality regulations which, if passed, would be put in place not for practical or safety reasons, but for political reasons.
And we have begun a long term, multimillion dollar project to replace corroded pipelines along Pasadena's five hundred miles of water mains, some of which are more than one hundred years old. This will boost the capacity and reliability of Pasadena's water system.
Having reviewed the local economy, development activity and our utility operations, I want to speak more briefly about other aspects of city life: transit and traffic management, the City's parks, public schools, and arts and culture.
At City Hall, we continue to believe that traffic management is one of the biggest challenges facing the City. Part of the solution is the Gold Line light rail system. Construction of the project should approach completion during the coming year. The Gold Line is scheduled to begin operations in July, 2003, following several months of final installation and testing.
The proceeding pending before the Public Utilities Commission is expected to be resolved by May. At issue is the safety and the traffic impacts of various at-grade crossings. Many people hope that the train system can be constructed either below or above grade at certain street crossings, thereby avoiding the safety and traffic issues. At the present time, construction is proceeding apace, and the Gold Line Authority is cautiously optimistic that the 2003 opening will be maintained.
Meanwhile, the City wants to take full advantage of this light rail system by expanding local bus routes. The intention is to help more and more people make trips from their homes without using a car. In March, the existing ARTS bus system will establish four new routes and substantially increase hours of operation. Meanwhile, studies are underway concerning the financial feasibility of establishing a total of 10 routes comprising a community-wide local bus network.
The Council is committed to expanding transit facilities and improving traffic management to enhance quality of life and reduce the number of cars on our streets.
In regard to parks, during the last year the Council significantly increased maintenance Funding and appointed a team of park safety rangers who are working to enhance both the safety and enjoyability of our parks. At the same time, the Council is aggressively pursuing funding to expand and improve parks, such as Robinson Park, Central Park, Eaton Wash, and in fact, parks throughout the community.
Our public schools, of course, are governed by the Pasadena Board of Education, but the City has an important role to work with the school district to find ways to better use available resources. During 2001, a new foundation was laid for the pursuit of excellence in our public schools. A new, 7-person school board, and a new, highly energetic school superintendent have taken office. It is inspiring for me to observe the commitment and the energy of this new leadership team, and the City is working more closely with the schools than it ever has in its effort to support the schools' initiatives.
Let me mention some of the priorities that are being pursued under Superintendent Percy Clark's dedicated leadership:
A new, fully integrated academic curriculum.
A strengthening of teacher quality through enhanced recruitment standards and training.
Completion of the Measure Y program to rehabilitate the schools.
Establishment of a visual and performing arts academy.
Realignment of attendance boundaries effective next September to place students in schools located closer to their homes.
Possible selection of a site for a new school in Pasadena's most heavily populated residential area, the Northwest.
Joint use of school playgrounds for after school use for sports programs.
New funding sources for after school programs.
Dr. Clark has reminded us that this agenda can succeed only with the active support of the entire community.
Students of another sort will come to Pasadena from all over the world when our community hosts the 2002 Rachmaninoff International Piano Competition beginning March 22. Thirty accomplished young pianists from 15 countries will compete at the Norton Simon Museum and the Pasadena Civic Auditorium. One of the partners in this event is the Cultural Ministry of the Russian Federation, where the commitment to music and other forms of arts and culture is incredibly strong. Both the Pasadena Symphony and the Moscow Radio Symphony are scheduled to participate.
In closing, I want to return to the events of September 11. Two days following the attack on our nation, clergy from all faiths joined hundreds of persons from all walks of life for an interfaith memorial service on the steps of City Hall. Five themes were shared by those present during this memorial service: unity, grief, peace, hope, and remembrance.
Tonight, as we remember the thousands who lost their lives on September 11, let us move forward in the new year, as a city and as a nation, with these themes in mind and with a renewed commitment to our great future.