Oct. 17, 2005
Featured speeches given by County Executive, Ron Sims
Mr. Chair, Honored members of the Council, Prosecutor Maleng, Assessor Noble, Sheriff Rahr, Presiding Judge Eadie, Presiding Judge Harn, Chairwoman Cecile Hansen from the Duwamish Tribe, Mayor Mary-Alyce Burleigh of Kirkland, Mayor Noel Gibb of Burien, Mayor Steve Mullet of Tukwila, Mayor John Wise of Enumclaw, Councilmember Claudia Balducci of Bellevue, Presidents and Council members of our Unincorporated Area Councils, Ladies and gentlemen.
Thank you for being here. I am honored to come before you to present my proposed budget for the upcoming year. I have some very good news for us all.
This is a good day. We are here to celebrate. Today I am proud to tell you that King County has completed a remarkable financial turnaround that any corporation would envy.
My friends, the era of deficits is over!
To make sure that era never returns, we must remain vigilant and keep controlling our costs. We must reject the temptation to live beyond our means and this budget does just that!
But before I delve into the details, I'd like to step back for a moment and offer you my perspective on the importance of King County 's budget to everyone assembled.
A budget, particularly a budget as large and complex as ours, is many things. On the most basic level, it is a 472 page document spending 3.4 billion dollars impacting 1.8 million people -- and there is meaning in that.
But if you look deeper you will find that a budget is actually a scoreboard. Budgets, better than any other document, tell us where we are and where we are heading. Our budget tells us something crucial about how we are doing as a government, and as a community. Our budget holds our government accountable. Our budget demonstrates that we are acting responsibly with the taxpayer's money. That we are making wise investments in the human capital that makes our region unique. That we are coming together to meet the challenges collectively. You will be pleased with what our budget tells us today.
But if we look deeper still you will discover that a budget is more than just a scoreboard of good governance. Theologians remind us that budgets are also moral documents. They are the greatest expression of our county's core value system. Encoded within them is a fundamental test of these values.
As Thomas Jefferson once wrote, "the purse of the people is the real seat of sensibility." How we expend that purse shows how we really care about the poorest and most vulnerable ones and that our ideals are not just empty rhetoric. Our budget proves that we believe in the common good. Our budget demonstrates that we are more than an accidental collection of individuals whose only loyalty is to ourselves. We are a community where the total is more than the sum of the parts. Today, you will see a budget that meets the test of our values.And finally, if you dig deeper still, you will find that a budget is a promise. It is a promise to our children and to succeeding generations that we will leave them a society that offers more equality of opportunity than we ourselves experienced. That promise demands of us that we preserve and improve upon the things that make living here so special. Such a grand promise carries with it a great responsibility.
King County has met that responsibility and kept that promise.
Scoreboard
If this budget is a scoreboard of our financial performance, how do we know if your government is being managed well? How should we keep score?
Let us start where all financial organizations start, whether they are public or private. Let us start with revenues and expenditures. This is, perhaps the most important score of all— the bottom line.
So what does our budget—our scoreboard—tell us about the bottom line? I am so proud to say, on behalf of every council member, on behalf of every separately elected official, on behalf of our department heads, managers and every employee who has worked through some of the most difficult financial times in recent memory, that for the first time since 1998, the Current Expense financial plan shows no projected deficits.
And I can tell you that while the structural deficit has not been permanently solved, together we have brought it under control. Not by increased revenues, but by lowering and controlling costs. We have been faced with hard decisions over the past five years; and we have had the courage to make those decisions. And today I stand before you to say that together we have laid the foundation to serve our citizens with the programs they need without the fear of further cutbacks.
And I am equally proud to say that our bottom line is not just balanced. In recent memory, our bottom line has never been stronger. As you look deep into the numbers on these pages--as you look deep into this scoreboard--you will find that first we have maintained all of our reserves. We have met our financial policy goals for fund balance, and we have prudently set aside additional reserves to pay for costs we know are coming in the future – a reserve to fund an under-funded state pension system, a reserve to fund certain retiree medical expenses, a reserve to fund uncertain energy and inflation costs. Just as individuals need to plan for their financial future, so too must King County plan for the region's future. This is sound financial management.
The bottom line may be the most important score of managerial excellence, but it is not the only one.
The next critical indicator of managerial excellence is the growth of health care costs. As any CEO of any corporation will tell you, scoring well on this indicator is necessary for your very financial survival.
Never in all my years of government have I seen a major expense grow so fast with no apparent means of managing it. But managing health care costs is exactly what we are doing in King County .
Over the last four years, like every other major employer, King County was struggling financially as our health care costs skyrocketed at an 11 percent annual clip.
But as I said in my budget speech two years ago, I refused to accept that our only options were to slash health care benefits or shift costs to our hard working and dedicated employees.
Instead the health care experts of this region showed us a third way. They taught us that 41 cents of every health care dollar we pay does nothing to make us healthier. They told us that we could recapture those 41 cents by transforming the way healthcare is consumed and supplied in this region. And that is exactly what we are doing.
In 2005, backed by strong support from labor and this Council, I launched the Health Reform Initiative. The Health Reform Initiative rewards accountability for health and health care related decisions. Employees and their families are given the tools to be responsible consumers of their own health care and to improve their health. We implemented five new pilot projects in 2005, and are set to unveil more cutting-edge strategies in 2006 and 2007.
But health experts told me that, in addition to changing behaviors, we will not fix the health care crisis without reforming our region's health care delivery system.
This is why I founded the Puget Sound Health Alliance, a unique consortium of public and private employers, providers and health plans that will bring the Puget Sound region the best health care system in the world by achieving healthier people, high quality care, and affordable costs.
Today, over 60 organizations – Boeing, Washington Mutual, the State of Washington, Virginia Mason, GroupHealth Cooperative, the PolyClinic, among others -- have joined, representing over 700,000 employees and family members.
Today, I am excited to report to you that our efforts are working. Through the first nine months of 2005 King County 's self-insured medical and drug costs have risen only 2.4 percent from the comparable period last year. Let me say that again: King County 's health care costs have risen only 2.4 percent.
While the reasons are many, this is a remarkable achievement when you consider that the state of Washington will see its health care costs rise 10.6 percent this year. This is even more remarkable when you consider that during the same period of time health insurance costs for businesses throughout the US increased by 9.2 percent.
With King County 's initial success with our internal health initiative, and with the Alliance 's promise to deliver high quality care and results, we are revolutionizing the health care system to provide better care and lower costs.
Finally no scoreboard is complete until it has been approved by a panel of judges. In the United States , those judges are three major rating agencies that evaluate the financial strength of organizations so that third party investors can loan them money. They are Moody's, Standard and Poor's, and FitchRatings.
These agencies are objective and non partisan. They don't care if you are a red county or a blue county. They only care about your financial management. So what does our budget--our scoreboard—reveal about how the agencies think King County is managed?
On December 21, 2004 when reaffirming King County 's highest possible rating of AAA, Moody's investment services said the following:
" King County has maintained its strong financial position despite significant challenges…The County has invariably been successful in meeting this goal."
On October 6, 2005 , FitchRatings rated us "AAA", stating:
"The ratings reflect the county's dependable economic base, strong financial position, low debt burden and excellent financial management."
And just last Thursday, on October 13, 2005 , Standard and Poor's upgraded the County from AA+ to AAA! Standard and Poor's noted in its rating report that the upgrade reflects, and I quote, "the county's exceptional financial management through the spectrum of economic climates."
And so, I am proud to say on our collective behalf, that for the first time in the history of our government, King County has received the very highest rating, the AAA rating of financial stability, from each of the three major bonding agencies. No government has a higher bond rating in the state and King County has one of the best in the nation.
I know that our council will be focusing their budget deliberations on performance measures. I ask you, what better performance measure of fiscal management is there than these bond ratings!
Effectively controlling our structural deficit and earning these glowing ratings of managerial excellence was not easy. We did the hard work to earn this praise.
We did it – you and I – by making smart decisions. These ratings save us millions of dollars in lower interest rates that we use to pay for vital services to our citizens. Every Councilmember contributed to this success, but I want to acknowledge the great work of two members of the King County Council who chaired the budget and fiscal management committee over the last four years: Councilmember Larry Phillips and Councilmember Larry Gossett.
What the rating agencies understand is that we have gone through a truly remarkable transformation of King County government. Cast your thoughts back for a moment to the situation we faced four years ago:
The dot-com boom had gone bust. Boeing, the linchpin of our economic prosperity in the 20 th century, was flying to Chicago . Overall, our region lost more than 83,000 jobs.
As a nation, we had just been hit with the brutal terrorist attacks of 9/11, shocking our economy into an even deeper recession. Our fiscal prognosis in King County was dire. Dr. Martin Luther King Jr. once said, "The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy." What he said holds as true for governments as it does for individuals.
Those circumstances called for a complete reorganization of our county services. During that time, we laid out what I described as the most "fiscally conservative budget ever." Our reduced revenues just could no longer sustain the level of services we had in prior years.
Together we made the tough and timely choices. Together we made prudent investments with an eye toward capturing long-term gains. We avoided accounting gimmicks. We restructured the bureaucracy, streamlined the operations of government without cutting core services. We identified savings – some 137 million dollars over four years. And above all, we did not borrow against our future.
And so we are a county transformed. Our turnaround is complete and our deficits are gone.
But challenges remain. Nine major areas of urban King County still need to be annexed. King County 's world class regional parks and trail system is sustained by a four year levy that ends in 2007. Rising energy costs led by skyrocketing gas prices have created dramatic increases in our cost of living adjustments. If inflation continues to rise, it will threaten our long term financial stability. Storm clouds loom over funding for our mental health system and further federal and state cutbacks face many programs.
Meeting these challenges is why we must remain vigilant and stay the course. This budget does not squander the revenues of a recovering economy. It saves those revenues and invests them. And we must hold firm on controlling costs and maintaining the sound financial policies that led us here. That is why, with the full endorsement of Budget Advisory Task Force co-Chairs Bob Wallace and John Warner, I have proposed to this Council that we codify these sound financial policies into law. I urge the Council to adopt this ordinance, and hold all future Councils and Executives to the high standards that this Council and this Executive have set.
King County 's strategies are working.
Don't look to me for the proof of that fact.
Look to this scoreboard before you today.
Look to this budget.
Test of Our Values
The story of our budget does not end here. As I said when I began this speech, although a budget is a scoreboard of good governance that is not all it is. If you look deeper into this important document, you will discover that it is so much more. It is, indeed, the greatest measure of our values. It tells us, better than mere words – who we are and what we believe.
So what does this budget say about our core values?
The most fundamental duty for any government is to care for the health and welfare of its people. Indeed "promoting the general welfare" is written into the preamble of the constitution on which this country was founded. Caring for the health and welfare of the people of King County has become more challenging in recent years. Public health authorities are struggling to face the ominous threat of an outbreak of pandemic flu. The last major pandemic, in 1918, killed 50 million people around the globe. We could see similar loss of life if the current bird flu spreading across Asia and now Europe mutates into a lethal form. Thousands of people may die in King County alone if a pandemic materializes. The most at risk age groups are our grandmothers and grandfathers, our children and our grandchildren. Should such a pandemic strike, billions of dollars could be lost from our local economy. The lives lost and the economic devastation that would follow is simply unacceptable.
As the leader of this region, simply worrying about the possibility of pandemic flu is equally unacceptable. What this budget shows is that King County is taking action.
As the aftermath of Hurricane Katrina proved, we cannot wait and hope federal authorities mobilize to protect us in a time of crisis. We must hope for the best but be prepared for the worst.
Just last week I proposed an action unprecedented for a local government. I sent to the County Council a request for six million dollars to combat the pandemic flu threat. That appropriation will fund an outreach campaign to inform people how to protect themselves. We also will purchase major stocks of Tamiflu, the only medical intervention currently known to combat the illness. My proposal will buy enough Tamiflu for every doctor, every nurse, every police officer, every paramedic and every firefighter in King County and every city. Our supplies will be available to 62,000 front-line responders so that they can keep working to provide life saving treatment to those most at risk. We will also purchase additional Tamiflu to treat the estimated 57,000 critically ill who could be hospitalized by the pandemic. This initiative could well save thousands of lives and I urge its swift adoption by the Council. That we were able to make this request and yet continue to meet our financial policy goals speaks again for the sound way King County manages its financial obligations.
The story this budget tells about how we value public health does not end here.
As I said at a recent fundraiser for victims of the Hurricane Katrina disaster, there is no more noble thing you can do in this world than help someone else who has absolutely no idea of who you are or that you are even helping. Surely there is no more noble work than the work being done everyday in King County 's clinics and health facilities treating those who have little means and in many instances, little hope.
Yet, as the ranks of the uninsured and poor grow, funding for this essential work is actually decreasing as the federal government slashes Medicaid reimbursement for services such as nursing visits for high risk newborns and their mothers, immunizations for children, and comprehensive medical and dental visits for the most vulnerable families in the county.
So what does our budget say about how we care for those who would be otherwise deprived of the most basic necessities of proper health care? We refused to cut service to a single patient, despite the federal Medicaid deficits and the growing population we serve.
Instead, we replaced that lost revenue to public health with nearly five million dollars from our current expense fund.
I am proud to say that in both a 2005 supplemental request and in the 2006 budget, those babies will receive care and nutrition. Those children will receive their shots. And those elderly, sick and frail shut away in their homes will receive visits from nurses and doctors. We have made that commitment in this budget and we will continue to make that commitment as we develop the road map to a sustainable funding source and level of service for public health.
As the great 19th century British Prime Minister Benjamin Disraeli once said, "The health of the people is really the foundation upon which all their happiness and all their powers as a state depend." Funding these initiatives is a critical step in sustaining such a foundation.
If ever there was a benefit of managing our money well, this is it. There is no greater value that this government holds than the health and welfare of its people.
Don't look to me for the proof of that fact.
Look to this moral document.
Look to this budget.
Another of the core values that we as citizens of King County hold is our commitment to end homelessness.
We should all be proud of the fact that King County leads this effort and of King County 's moral and financial resolve to meet our goal. In 2005, King County managed over $32 million dollars in programs designed to prevent homelessness. In 2006 that commitment will grow by one fourth – to over $39 million dollars. We will commit $4 million dollars to renovate the facilities at the Cedar Hills Alcohol Treatment Center and partner with the YWCA, the King County Housing Authority, and other public and private funders to build a transitional home for 70 single women and their children who face homelessness. Another $3.5 million will create a challenge grant program for cities and non-profit partners to find and fix properties that provide safe and affordable housing for the homeless. King County will allocate over $3 million dollars in new state fee revenue to the Committee to End Homelessness to fund further strategies that will end homelessness in ten years.
Finally, I want to talk about the value of creating and maintaining safe, secure neighborhoods for all residents of this great county.
Public safety remains among the highest priorities at King County , with Criminal Justice agencies receiving 71 percent of our general fund. This budget fully funds our Sheriff's department, our courts, our Prosecuting Attorney's office, public defense, our jail, and our alternatives to jail. But we did not stop there. This budget includes a new Auto Theft Unit which will allow County Prosecutor Norm Maleng to stop the rash of car thefts in our region. This budget creates a new Prosecutor's Cold Case Unit dedicated to solving numerous cold cases that will provide justice and closure for many families in our community. Sir, I commend you for your efforts.
And I also commend King County Sheriff Sue Rahr. Sheriff Rahr has advocated successfully to invest in more officers. 12 Sheriff Deputies lost federal funding and faced layoffs. Instead, they are guarding our transit system, making our buses safer and saving our investment in these talented and trained officers. Sheriff Rahr has also proposed to augment the sexual offender unit in order to protect those we hold most dear from those we know are most dangerous. This budget funds both of those initiatives.
Our commitment to safe communities also means taking advantage of new opportunities to make the operation of our law, safety and justice agencies as effective as possible. It means we must seize opportunities to improve coordination with our cities. Included in this budget are resources to create an integrated regional jail system with our partner cities.
This initiative has the vast potential to save every city and police agency in King County money. But more importantly, it will keep cops from spending time in traffic transporting offenders and put them back on the beat. Uniting to make our neighborhoods safer while improving the bottom line is a value we all share, and King County 's budget will help produce a truly regional effort.
A Promise
Just as surely that a budget is a scoreboard and a statement of values, it is also something more. Behind all those numbers and graphs and charts, the budget is a promise. The promise of a future that ensures that we live in strong, dynamic, safe communities that celebrate the best of our traditions while offering new possibilities for economic and social advancement.
For King County it is also a promise of a future where the air you breathe will be clean, the water you drink will be pure and the open spaces that frame our vibrant cities will be protected and preserved forever.
What does our budget say about creating a better future?
This region remains stuck in traffic and choked by congestion. Solving the transportation problem with both roads and mass transit solutions is one of the biggest challenges we face. As King County Executive I have stepped up to save Sound Transit, proposed billion dollar RTID roads packages, and advocated at the legislature to merge Sound Transit and the RTID into one comprehensive transportation agency. But the ultimate solution may take years. We cannot wait. While King County cannot solve the problem alone we are doing our part.
Our Metro Transit system is cherished by those who ride it and the envy of the nation, with the one of the cleanest burning fuel-efficient fleets in operation today. This budget continues that excellence, spending 469 million dollars to provide 3.8 million hours of service. This budget will allow King County residents to step on a bus 98.6 million times in 2006.
Even with rising gas prices we will add thousands of hours of new service next year, helping commuters save time and money and get quickly and safely where they need to go.
King County will continue to emphasize safety and preservation of our transportation system by fulfilling our promise to take care of our bridges and roads. By the end of this year, we will have strengthened 110 bridges against earthquakes. We also add $1.2 million dollars to shore up the remaining bridges by the end of 2008.
This budget also invests 45 million dollars in roads next year and 300 million over the next 6 years.
And finally, this budget embraces our ongoing promise to preserve our natural environment.
This year, our region celebrates 40 years of clean water, and environmentally sound waste water treatment. Our health, quality of life and economy all depend on this fundamental public service. Next year we break ground on ensuring the next 40 years of clean water with Brightwater.
Construction of Brightwater will create 20,000 jobs over the life of the project including 6,000 building trades jobs. Brightwater also prevents a building moratorium in King and Snohomish Counties and protects our economy, our water and our health. But we are building more than a treatment plant.
In this budget I am proposing to spend 26 million dollars to create a backbone for a regional reclaimed water system. This investment will provide future generations with 36 million gallons of a drought proof source of water that will be invaluable as we face the effects of global warming. We must seize that opportunity.
This budget proposes a $20 million dollar investment in acquiring natural lands and open space and building regional trails. Our Brightwater settlement includes a $70 million dollar investment in trails, sidewalks, parks and wildlife habitat that will leave a legacy for the people of both Snohomish and King Counties . Taken together our combined commitments represent over $90 million dollars in King County expenditures for parks, trails and open space. Not since the 1960's, when Jim Ellis sparked a parks and open space revolution with his "Forward Thrust" agenda, has local government made such a promise to future generations.
When I became Executive in 1996, King County had only 25,000 acres of open space and trails under permanent protection. When the 2006 budget year is over, we will have set aside a total of 124,000 acres in perpetuity; almost a five-fold increase over 8 very tough budget years.
These are the legacies we will leave our children and our children's children. They are opportunities we have now and opportunities we must take.
The list goes on. Each project is a promise kept. And with each new project we are sowing the seeds of a better future.
Conclusion
I end today as I began. I told you that this budget is many things. Our budget is a scoreboard. Our budget is a statement of values. Our budget is a promise.
Our budget is fact, not fiction. Our budget demonstrates that we have the courage of our convictions, that we are acting today with an eye on tomorrow, and a vision for generations to come.
We are all blessed to live in the greatest region in the world. We are Microsoft, and Boeing, and Starbucks. We are farmers and foresters and thousands upon thousands of small businesses.
We are Seattle, and Bellevue, and Auburn. We are of many races, and diverse backgrounds, and countless different walks of life, but we all share a commitment to realizing the full potential of what this especially blessed region of our nation has to offer. We are many, and yet we are one. We share a belief in opportunity, in equality and in responsibility. We understand how good it is to live here, without losing our thirst for making it even better.
I am proud to say, this is who we are as a people.
And, this is who we are as a government