State of the City Address 2018

October 3, 2018

Mayor Susan Rohan:

Good evening and welcome to Roseville’s 2018 State of the City address. I’m your mayor, Susan Rohan.

I share the privilege of serving this city with a group of highly dedicated councilmembers. I’d like to acknowledge Vice Mayor Bonnie Gore, and councilmembers Tim Herman, John Allard, and Scott Alvord.

To my fellow elected officials, thank you for your commitment to our city and region. Only by working together can we realize our collective success.

And, welcome to our Roseville residents. And to our leaders from local government, business, education, and our community’s non-profits.

It’s fitting to open this year’s state of the City address by sharing with you ---the ways in which Roseville continues to grab the national spotlight when it comes to quality of life.

We’ve been recognized with rankings on many lists we’re proud of over the years, including

• Safest cities,

• Best place to raise a family in California,

• Top 3 places nationally for millennials to buy homes,

• One of the lowest cost places in California to do business

• And one of the most playful cities in the country.

Adding to that, last month, we were ranked one of the best cities for first-time homebuyers.

Roseville also rose to the top when other key data sets were analyzed.

• We’ve been recognized as the 24th best city to retire in America,

• And we’re the 37th Healthiest City in America.

• Among cities with the best public schools in America, Roseville ranks 45th.

• And in California, Placer County ranked second for English/Language Arts, and third in Math statewide.

We applaud our city’s five school districts and value our strong partnership with them.

Partnerships help us thrive in many areas.

On a regional level, our City has greater success when we act in our collective best interests rather than going it alone.

Economic development is one example. Companies we attract to the region will locate in one area, and hire people who live, shop, and play throughout the region.

That is why Roseville supports the regional economic-development research and strategy being developed by three heavy-hitters in the Capital Region: Greater Sacramento Economic Council, Valley Vision, and the Sacramento Area Council of Governments.

Their work is providing an external, impartial assessment of how our region is competing in the global economy.

It also looks at what our shared priorities should be in order to provide access to growth and opportunity for all communities over the long term.

Partnerships with business, educational, and non-profit groups are integral to Roseville’s success as a community.

We work closely with the Roseville Area Chamber of Commerce, the SacMetro Chamber, Invest Health, and the Roseville Coalition of Neighborhood Associations. And we work with non-profits to enhance the lives of our residents.

Collaboration has become a central theme to our future progress.

We also make it a point to meet regularly with our neighboring cities to coordinate on issues such as economic development, transportation, water reliability, and affordable housing.

These are also some of the issues on the table in our meetings with Placer County as well----- to ensure that new development planned by the County on our city borders will be mitigated.

This is because growth in unincorporated Placer County has the potential to impact our city services, including police, fire, roadways, parks, and libraries.

Our goal is to ensure that the impacts of unincorporated development on Roseville’s services will be thoroughly addressed.

This goal is consistent with our philosophy that development must pay its own way.

To that end, it’s been another strong year for our economy in Roseville.

People want to live here and businesses want to locate and expand.

Roseville remains one of the most desirable cities in the region to live, with permits for single-family homes holding steady at about 1,000 per year for the past four years.

We estimate that business will generate about $100 million in commercial investment this year—from new construction to tenant improvements.

This past year, work was started on many new, large, long-term commercial projects. These include:

A five-story corporate headquarters for Adventist Health,
New medical office buildings and a new parking garage for Kaiser Permanente’s Riverside campus,
Significant expansion at Sutter Roseville Medical Center,
A medical-supply distribution facility for McKesson’s new Roseville location,
232 apartments under construction in Campus Oaks,
Two new hotels under construction next to Top Golf,
An athletic-club facility to be operated by Villa Sport, and
The start of grading at the Sierra Vista Specific Plan site.

Here in our downtown, the City opened a new parking garage and a new fire station this year. We also started work on the downtown bridges and trail project. And this was all done without using General Fund dollars.

You’ll also see that a 58-unit, mixed-use project by Mercy Housing is underway on Vernon Street.

We’re proud to see the opening of a new animal-care facility through our public/private partnership with the Placer SPCA.

The revitalized Placer County Fairgrounds opened, too, with upgraded facilities and landscaping through the joint efforts of Placer Valley Tourism, Placer County and the City of Roseville.

Economic indicators

Space is at a premium across all sectors of Roseville’s commercial property.

The office sector is at 95 percent occupancy.

Industrial space is 97 percent filled and remains a premium in the city.

Retail space showed a strong 95 percent occupancy, confirming Roseville as the region’s retail powerhouse.

We have a well-educated workforce, which attracts employers.

And, Roseville’s job growth remains strong, with an unemployment rate at 3.5 percent.

Our quality of life is a key factor that helps us maintain this competitive position in the marketplace.

The state of our city is strong today. And we’re well aware that we can’t rest on our laurels.

With the tremendous growth that’s occurred over the last 20 years, we have thousands of new residents who don’t know a Roseville without the Galleria, the Automall, the Fountains or Top Golf.

Many people don’t remember a time before our well-connected trail system, parks, indoor pool, Riley library, Maidu Museum, parking garages or Vernon Street Town Square existed.

It’s important to note how recently this all took place because these amenities didn’t happen by accident, nor did they happen overnight.

Our City Council and staff have remained laser-focused through decades of careful planning that gained the attention and respect of a savvy business community.

Our “all important” community engagement ensures that Roseville remains on track with providing the amenities that young professionals, families and seniors want.

It’s resulted in a City with a retail and business climate that ensures a diversified tax base.

It’s diversified to the extent that 60 percent of our sales tax revenues come from visitors and businesses. This means our residents don’t shoulder the full cost of the quality-of-life municipal services they enjoy.

But we’re at a critical juncture in our City’s development.

Factors outside our control are driving down our revenues and increasing our expenses.

We must recognize the significance of the responsibility we have as residents today, to decide the kind of Roseville we want to live in for the next several decades.

Introduction of City Manager Dominick Casey

Our new city manager, Dominick Casey, has a pivotal role in this future.

After serving as acting city manager since April, the City Council hired Dom as city manager on August 15th.

Dom impressed the Council with his leadership, vision, energy, and commitment to our community for the long term.

Dom moved to Roseville in 2011 to be our parks, recreation and libraries director—after 10 years in various management positions at the City of Henderson, Nevada.

Three years ago, he became an assistant city manager—overseeing police, fire, public works, parks, recreation and libraries, and central services.

Dom lives here in Roseville with his wife and four children. We’re so pleased to have Dom running the day-to-day operations of our city. And I’d like to invite him to podium now.

City Manager Dominick Casey:

Thank you, Susan. It’s been a pleasure serving this city where my wife and I are raising our family. We truly love Roseville.

When you come to Roseville, it doesn’t take long to realize that it’s a special place. Roseville was founded on a vision—with a spirit of self-determination and the desire for local control to ensure a high quality of life.

As the mayor described, the city and community have worked hard over the last several decades to implement the vision we enjoy as a reality today.

The city has faced challenges head on, taking action to address problems without delay.

This catches people by surprise, when they hear we’re tackling budget issues.

I am asked …“How can Roseville have budget problems?” “It’s such a great community; it doesn’t look like it has any money issues.”

And that’s exactly my point. We take action before things deteriorate. We do what we can behind the scenes before changes are noticeable to the public.

In fact, we’ve been at this for 10 years, making cuts… Because as a city, the only side of the ledger that we control is expenses.

Since the Great Recession, we’ve been working hard to close a budget gap as expenses have increased. And like all California cities, we are facing shifting consumer habits, from the growth in online shopping, to the shift from buying more services than goods. These trends means less sales tax dollars and are slowing our revenue growth.

We’ve been correcting a lot of misperceptions about tax revenues that are important to understand.

Roseville has the lowest sales tax allowed by the state. Many people think that all 7 and a quarter cents in sales tax on each dollar goes to the city.

If that were the case, we would not have any budget problems. The fact is that the city receives just one penny on the dollar in sales taxes. The rest goes to the state.

It’s similar for property tax. Consider that a typical Roseville home pays about 1% in property tax, or $4,100. (If you think this sounds low, keep in mind that Prop. 13 caps assessed home values.)

The City’s General Fund receives about $615 of that. The rest goes to the state, county, schools, and special assessment districts.

Turning to the expense side, our biggest expense is labor since we’re a service organization.

We’ve successfully worked with our labor groups to reduce salaries, reduce the growth of salaries, and reduce benefits to new hires. The number of city employees has declined even as the city has grown.

We’ve trimmed costs and conducted independent audits to ensure we’re working at maximum efficiency. We’ve made cuts. We’ve tightened our belts.

We’ve been open about the fact that pension costs are part of our rising expenses. And we’ve shared the steps we’ve taken to contain them.

With pension reform and having our employees pay 100% of their share of pension costs, there is relief in sight. But not for a while. In fact it’s the only one of our expenses that will decrease over the long term.

The challenges we face are much more than pensions, they have do with increased costs from federal and state mandates. Increased costs for materials, supplies and labor. And the need to repair aging infrastructure.

In general, our fiscal challenges are due to the cost of business increasing and city revenues flattening. It’s not a sustainable model.

We’ve been successful closing the gap these past 10 years in ways that haven’t been too noticeable to the public.

But we’re at a point now where budget cuts will be increasingly noticeable in our community.

The standards and services the community has come to expect are starting to decrease and decline.

We’ve spent the past year reaching out to our community with EngageRoseville – in person and online.

We gathered thousands of your ideas and opinions for ways to close the budget gap. You’ve told us what services are important to you - and our budget reflects that. We’ve done a lot of hard work. The options are limited and the choices are getting tougher.

Through the EngageRoseville effort, you told us you’d prefer to increase revenue over cutting services in order to protect public safety, roads, parks, recreation and libraries.

This is why the City Council put a sales-tax measure on the November ballot for a half-cent sales tax. So voters can decide the level of funding and services Roseville will have in the future.

Fall is when we kick off the budget-planning process for the next fiscal year. We start by projecting our revenues from sales and property taxes, then work on matching our expenses so we live within our means.

This year we’re starting with a big unknown since our revenue projections depend on the outcome of the November election.

When our City Council held its annual, public Goals Workshop last month, it had to consider two budget scenarios.

One is if Measure B doesn’t pass. In that case, the City estimates there will be a $1 million to $3 million operational budget shortfall in Fiscal Year 2019-20 to pay for things like police and fire, parks, recreation, libraries, and public works.

That is in addition to an ongoing $10 million to $14 million dollar annual shortfall in funding for long-term obligations such as deferred maintenance, infrastructure, facilities, technology, and pension obligations.

The other scenario is if Measure B passes. In that case, projections call for an additional $16 million to $19 million in sales tax revenue annually.

While this doesn’t solve our budget problems, it would protect essential services, stabilize our General Fund, and allow for growth in priority areas.

At the workshop, the Council expressed its funding preferences. This was based on a list of services and fiscal options generated through EngageRoseville input and Council goals.

A report from that workshop will be presented at tonight’s Council meeting, where public comment is always welcome.

There are other unknown factors to consider for Roseville’s budget outlook as well.

On the legislative front, we’re keeping an eye on the statewide tax overhaul being discussed. Changes to the way the state collects and distributes sales tax could be detrimental to our revenues.
We’re also keeping an eye on whether the gas tax remains in place. It’s a $30 million question for our road maintenance budget over the next decade.

No matter the outcome of any of these decisions, several principles will guide what we do as a city and how we do it.

One is…we will become more data-driven. We will make sure that the decision we are making today serve the long-term best interests of the entire city.

Every day we are asked to consider different approaches, scenarios, and agreements.

In evaluating these, we have to be committed to open and frank discussions. We have to weigh short term gains with the unintended long-term consequences of actions we take today.

We have to be open for business. It’s an attitude engrained in our culture.

Being “open for business” guides how we approach opportunities and navigate challenges.

We have to ensure that business-related decisions are beneficial and not detrimental to the long-term health of the city.

This approach to growth has brought many amenities to our community and made Roseville a community of choice in Northern California. We all should rise together on the same high tide.

There’s a balance. It takes collaboration and engagement.

We have to make sure that what’s best for the city and community is part of every decision we make.

We also have to protect our essential services and quality of life. I have been out in this community in hundreds of meetings.

I hear over and over how proud people are of the decision to move here or to start their business here. They are fiercely protective of the things that drew them here. They don’t want to see the community erode.

It’s not only a financial investment people make in Roseville. It goes way beyond that.

It’s an investment in living in a community where we feel safe. Where we know that when we call our police or fire departments, someone will come, and come quickly to help.
It’s an investment in a community where our kids can receive a top-notch public education. An education that prepares them to succeed in a changing workforce and society.
It’s an investment in retirement. And being a place where we can remain active and connected with so many recreational amenities and volunteer opportunities.
It’s an investment in a community where we can find jobs and where we can grow a business.
It’s an investment in a community where people have access to the same quality of civic and educational resources regardless of where they live.

We protect our community’s investment by hiring great people. People who have a passion for public service and a desire to make Roseville better.

It’s a calling that is evidenced in the high marks we receive on community-satisfaction surveys.

Ninety percent of our residents give our city high marks for service. It’s a credit to the dedicated, hard-working staff we have.

They truly care about our businesses and residents, particularly since so many of them are residents themselves.

We’re in a situation these past few years where 30 to 40 percent of our workforce has been age-eligible for retirement.

That’s a huge amount of turnover to manage and a lot of institutional knowledge that goes with it. Finding ways to capture and transfer that knowledge is an ongoing quest.

Our performance audits have demonstrated that we’re able to operate with exceptional efficiency.

That’s because we’ve had a workforce with a long tenure and the depth of knowledge that goes with it.

It’s how our community enjoys high levels of service despite a 30% per capita reduction in staffing since 2007.

As our workforce turns over and our population continues to grow, we will need to hire more people to maintain the same service levels we have in place now.

Those are some of the big-picture, long-term challenges, choices, and approaches in front of us.

Now I’d like to share updates from some of our departments.

Roseville is the only full-service city in the Capital region. This means the City itself provides the full range of municipal services…electricity, water, parks, libraries, public works, police, and fire.

In other cities, many of these services are provided through a maze of entities such as private-sector companies, special districts or contracts. But here, we’re singing from the same sheet of music.

It’s an advantage we have in managing a General Fund budget of $140 million and a citywide budget of nearly half a billion dollars.

Public safety remains a top priority of the Council. This is reflected in this year’s budget, which allocated 69 percent of our sales and property tax revenue directly to police, fire, and medical services.

With the current budgetary constraints, our goal is to maximize the value to the community.

One example is our police department’s social services unit. It has been successful in connecting those needing services with government and non-profit organizations that provide them.

It’s a prevention-focused approach that’s ultimately less expensive than enforcement.

The increase in homelessness has become a bigger and more visible issue in Roseville. This is due to recent court decisions at the federal and state levels.

Impacts from a growing homeless population have increased our calls for service to our dispatch center and have increased our cleanup costs.

The development of our Police Department’s social services unit is helping to address causes of problems—and not just the symptoms. But more is needed.

We coordinate with local non-profits to address the issue, we’ve partnered with Sutter, and we engage in regional discussions with the County as we continue to address this issue.

On the prevention side, our Housing Authority makes the most of funds we receive from the federal government.

The Housing Authority provides safe and clean housing for 663 families through rental assistance from the Housing Choice Voucher Program.

It’s the City’s single strongest tool to prevent homelessness in our city. The program brings about $5 million a year to the Roseville economy.

Our Fire Department is continuing to examine trends to ensure we’re meeting changing needs in our community.

Our Fire Department has experienced a significant growth in calls for medical service.

At the same time, the calls for fires have remained flat. We’re fortunate to have that trend in our community. A lot of it can be attributed to newer construction, building codes and infrastructure in our city.

We’re asking outside experts to help us analyze the data, identify trends and optimize our response models.

As we continue to align expenses with revenue, we must ensure limited resources are put to their highest and best use.

We’ll also look at opportunities to work with our neighboring jurisdictions to meet community needs more broadly on local and regional levels.

When we talk about quality of life, the conversation usually turns to our robust and well maintained park system.

For over 30 years, Roseville has been known statewide for the quality and size of our park system. It remains a source of great pride, which is why our ability to maintain our parks and facilities is so important.

While we’re in this period of fiscal uncertainty, we’ve put the development of new parks and the expansion of existing parks on hold. We’re doing this to ensure that our existing parks are maintained today.

This philosophy does not apply to neighborhood parks that have a dedicated funding source; those will be completed as planned.

In the meantime, we are working to maintain the services we have today, recognizing that while we may have money to build the next phase of a park, until we have a revenue stream to maintain it, there’s no point in spending the dollars to construct it.

The same funding challenges hold true for all of our infrastructure, including roadways.

Providing an effective transportation network, both regionally and locally, is not only a quality-of-life issue, it’s also an economic development driver.

We’re underfunding our roadway maintenance by $5 million a year.

If the gas tax is repealed, Roseville will lose $3 million a year for the next 10 years towards roads. This would add to the City’s General Fund deficit.

Infrastructure is also more than parks and roads. It includes Information Technology—for public safety needs, cybersecurity, and our entire financial system. These costs continue to grow and will put additional pressures on the general fund.

Switching gears to our utilities. I’m pleased to report to you that Roseville’s utilities are recognized nationally and statewide for leadership in policy, new technologies, and innovation.

While we can’t predict the next drought, the record-setting pace of the state’s fire season indicates that things aren’t getting easier. The issue of water-supply reliability remains front and center.

New development plays an important role in our water strategy, by helping to fund infrastructure that allows us to obtain, share, and store water. Our City Council took a significant step last year with its support of the Sites Reservoir to be developed near Chico.

This will further diversify our water portfolio by expanding storage opportunities in wet years.

We’re also working hard at the state level to ensure that regulations regarding conservation and water efficiency makes sense…since a one-size-fits-all approach won’t solve our state’s water issues.

Changes in the energy industry continue to evolve quickly. Roseville Electric Utility is offering new opportunities and solutions to customers. And we’re remaining vigilant in a changing legislative and regulatory environment. We’re weighing how new laws regarding renewable energy will affect our customers and the utility in general.

Roseville has one of the highest solar densities in the nation. We continue to innovate. This helps our customers conserve, be efficient, and have access to new energy technologies.

We are launching our first community solar project, allowing more solar access to residents who are interested in going green.

We’ve only scratched the surface, but as you can tell, there’s a lot happening in our city.

We recognize that you have busy lives and don’t always have the time to participate in our public process. That’s why we make extensive use of social media and online digital engagement tools.

We want to help you understand the complexities of policy decisions.

And we want to make sure you can participate when and how it’s convenient for you. Informed input makes for a more meaningful dialogue about critical topics.

One thing is for certain: We have a community that cares. I was shocked when I went to my first community meeting here nearly seven years ago and there were 100 people. It’s a testament to the fact that we have volunteers, residents, elected officials and staff who truly care.

It’s at this intersection where the City Council and staff meet residents and businesses that good government happens.

It’s a pleasure to serve this city with the kind of leadership we have on our City Council ... the kind of staff who enacts Council policy so skillfully ... and the kind of strong community support we have for the vision of what Roseville could be.

This is a great community, I am proud to serve it, and together we will all make Roseville a better place.

Thank you for joining us today.