Kordonowy: ‘Let’s work together to weather the economic storm’

Mayor Darlene Kordonowy’s State of the City address focused on the need for cooperation and long-range planning to pull the city through its financial troubles. She delivered the speech at Wednesday’s City Council meeting.

Read her address below.

Mayor Darlene Kordonowy’s 2009 State of the City address

We’re currently facing an economic challenge more sobering than most of us have encountered
in our lifetimes.

I’d like to take a moment to recognize some recent successes, which stand out against the darker
background of the daily economic news, and the news we’ve heard here tonight.

The commitment and hard work our operations and maintenance crews demonstrated in clearing our roads during the recent December storms, including staffing two shifts on Christmas day. Their
efforts prompted many messages of praise from island residents.

The school district’s new 200 Building, unveiled just a few weeks ago — it’s green, it
welcomes the whole community, and it came in on-time and under budget!

The success of city staff in winning 7 million dollars to date in funding for the Winslow
Way reconstruction project – over half of the project cost

The decisive passage last fall of the park district’s levy for open space, showing that
even in times of economic hardship, islanders support the vision of a green island…
initially championed by Dwight Sutton and the members of our Open Space Commission

IslandWood’s recent success in completing their $8.4 million capital campaign,
increasing the number of children they can serve, and providing opportunities to diversify
their funding

Bainbridge Graduate Institute’s receipt last summer of a national award for innovation for
its work in bringing sustainability front and center to our view of capital market decision-

Despite the grim economic news and the demands of the holidays, Helpline House ended
the year with 30 percent more in contributions than ever before, and while One Call for All still
has a ways to go to meet their 2009 goal, they’ve received donations from more
individual donors than ever before.

Finally, returning to city staff, I’d like to reference a letter I received recently from an
island resident. “As a victim of burglary, I entered the world of identity theft and
fraud…. my thanks to the BI police and their personnel who worked tirelessly…
especially Detective Trevor Ziemba. Having lived on Bainbridge Island for 30 years, I
have seen many changes on the island; some good, some not so good. But as times
change, it is good to know we have the Bainbridge Island Police working for the citizens
of our beloved island.”

As these examples, and many others that each of us could point to demonstrate, Bainbridge
Island is a community of talented, committed individuals with a history of resourcefulness and
success in responding to significant material and social challenges. I am confident that our
community, and our city staff, will respond with success to the challenges before us now… and
in the longer term.

In 2009, our work together will focus on two parallel paths:

The current climate of economic volatility makes it critical for the city to carefully manage our
cash flow, to maintain close scrutiny of our revenue stream, and to adjust our budget and
expenditures accordingly. We are not alone. The front-page headline in yesterday’s Kitsap Sun
noted that the county is facing a $600,000 year-end budget gap for 2008, even after adjusting
their original 2008 assumptions to reflect a $2.8 million year-end shortfall. Bremerton has shut
down city offices on Fridays to help narrow a $4.4 million budget gap, while Poulsbo closed
fiscal year 2008 with a $1 million shortfall.

As you heard a little while ago, under Mark Dombroski’s leadership, our staff have been
working since December to develop a monthly cash flow analysis. We will continue to revise
our forecasts as monthly information is received and actual results are achieved, allowing us to
alter our course as necessary. I am committed to making this information available to the City
Council and the community promptly each month.

We are more prepared than ever to provide detailed, accurate and timely financial information.
In just the past six months, we’ve seen the development of the financial capacity analysis,
which allows us to evaluate scenarios for capital improvements while accounting for anticipated
changes in revenues, expenses and inflation. We’ve incorporated a new level of detail and
context in our monthly financial statements. And now, to this set of tools we’ve added the cash
flow model which you learned about tonight.

With adjustments to our 2009 work plans for the budget revisions proposed tonight, we still have
plenty of work to do. We will:

Continue our transition to a performance based organization

Continue to make improvements in our financial analysis and reporting

Complete the code update, which will streamline the city’s municipal code and improve
its effectiveness as a tool for staff and the public

Develop a housing design demonstration ordinance which will encourage
demonstration projects incorporating green building, affordable housing and low impact
design elements in new developments

Complete the design phase for improvements on Wing Point Way

Approach completion of improvements at the wastewater treatment plant, and

Internalize emergency preparedness under the leadership of Deputy Police Chief Jon

I have been impressed throughout the past several months, and most particularly as awareness of
proposed layoffs has begun to emerge in recent days, with the professionalism and commitment
of our city staff.

Whether they’ve been with the city for 14 months, like Detective Ziemba, or 14 years, our staff
remain committed to accomplishing their work goals and providing quality service to this

Tonight, we have taken the first step in proposing actions for council consideration to mitigate
our reduced revenues. As Mark noted, in addition to rigorous management of cash flow,
reductions beyond those proposed tonight will be necessary to meet the goals set by council for
funding the city’s reserves and working capital targets. These will need to be determined by the
end of our first quarter – just two months away. Analysis of the short-term and long-term
options Mark has laid out for improving cash flow, and discussion of strategic solutions, need to
begin immediately.

To facilitate full analysis of options, I have asked the council to support the creation of a task
force made up of myself, the council chair, other council members as you see fit, citizens and
city staff. This task force would examine the options and prepare a proposal to bring
recommended solutions forward to the full council in early March.

Almost immediately thereafter, we need to turn toward budgeting for fiscal year 2010. Our
intent since this biennial budget process began was to revisit our 2010 numbers this fall, and to
make adjustments based on economic developments and emerging community needs. No one is
optimistic that the revenue picture will be rosy by that time. So, revision of the 2010 budget will
be a more challenging process than originally envisioned. We look forward to engaging in this
process with council’s input in late summer if not sooner.

As we wrestle with the uncertainties of our financial situation and deliver our 2009 work plan
commitments, it’s also important for us to keep our eyes on the long-term.

We need to fully engage the members of our community in a conversation about what it will take
to create a sustainable community in these economic conditions, while focusing on our core

With the community’s help – with the staff’s help:

We need to create a common vision for our future and develop a realistic strategy to
achieve it, and

We need to devise a new business model for our municipal government – one that
chooses thoughtfully, consciously, with discipline, about the services it provides, and the
service levels it can achieve.

These two challenges were identified in the letter I presented to you with the preliminary budget.
I also identified three others:

Maintain a skilled and dedicated work force that is motivated for public service,

Diversify our revenues and build our economic base to better weather inevitable
economic cycles, and

Ensure trust and credibility between our municipal government and our community.

I believe in this community, and I believe each of you do, too. I am continually awed by the
energy and intelligence of our friends and neighbors, of the known community leaders and the
quiet individuals who regularly step forward to assist in efforts to protect, preserve and improve
the quality of life for our residents.

I believe this government has a responsibility to work together, to listen respectfully and
earnestly, to respond in good faith and to be disciplined and thoughtful in our decision-making,
so that we can enjoy the privileges and bounty of this place.

The theme of building trust and credibility was echoed at the City Council retreat earlier this
month. I look forward to partnering with you, the council, with city staff, and with the members
of our community — those here tonight and those at home — as we work together in new ways to
identify solutions and develop strategies to weather this storm. I believe we will emerge
renewed, as a stronger, more efficient, more strategic organization that serves the needs of this
unique community.

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