(Editor's note: The following is a transcript of the Folsom mayor's State of the City address, provided by the city public information officer.)

Good evening. As you all know, I am presenting this State of the City message during a time of unprecedented national and global economic crisis.

As we have shared and discussed as part of Folsom’s budget process, at the national level, we are continuing to see a slumping stock market, weak retail sales, and declining property values and real estate sales. We are also feeling the impacts of struggling foreign markets, and a 7.2 percent national unemployment rate, the highest this country has seen since 1993. According to the national experts, this figure is expected to rise in 2009.

Currently, we are watching our national leaders attempt to pull together a federal stimulus package, but at this point we do not know what the ultimate package will look like. However, based on early information, Folsom is positioned well to gain our share of this stimulus package if it comes to fruition. If it does, I know it will translate into many new jobs for this city.

The National League of Cities recently released its 2008 State of America’s Cities report, which reflected data from a survey of nearly 400 municipal officials. In that report, nearly 62 percent of the City officials reported that overall economic conditions have worsened during the last year, and 69 percent reported that overall economic conditions are either a major or moderate problem for their city.

Although it would be impossible for Folsom to remain untouched by this series of impacts, the silver lining in this economic cloud is that Folsom is better positioned than many cities and counties to weather this crisis because of the City Council’s careful and conservative fiscal planning as well as the prudent decision making by the City Manager and his management team.

In marked contrast to other cities throughout California and the nation, Folsom has maintained and still maintains a solid reserve fund. During brisk economic times, we resisted overspending. Instead we put monies away for the proverbial “rainy day,” and this new 18-month budget we are about to finalize reflects the conservative use of some of these reserve funds we had previously set aside.

We have worked hard through the years to promote Folsom as a place to live, work, and play. Those labors paid off with businesses like Intel, CalISO, Kaiser, Mercy, and many more companies locating and even expanding here in our community.

These companies are an illustration of how this city has cultivated a vast array of industries to build a solid base of stable economic growth. The companies I just mentioned are examples of companies that have come to Folsom, and have either expanded already or have plans for future expansion.

Our economic development planning and conservative budgeting are only a couple of reasons why Folsom has been recognized as the 34th best city in the country to live.

Folsom’s unemployment rate is 3.6 percent, approximately half that of the national average.

Property values in Folsom have declined, but substantially less than the national average and far less than our neighboring cities.

We have seen some fallout from the struggles of national chains like Mervyn’s, Linens N Things, and Circuit City, but we will overcome those setbacks.

Many of you in the audience tonight, or who are watching out there, know we are in the midst of making some tough decisions on Folsom’s budget. Again, we are in an extraordinary economic climate and the decisions we need to make may not be popular, but they must be fiscally sound and prudent. We don’t normally talk about adopting a budget in January; usually, the cycle begins in May, with a conclusion in June.

But we are seeing trends that we wanted to respond to as soon as possible. Some trends were anticipated, but they happened sooner than we had predicted -- and in our opinion, are due to the challenging economy around us.

For example, our property tax revenue is starting to level off and we will see only minimal escalation rates in the next few years.

Our sales tax is coming in at least 15 percent below what we had projected. People just aren’t spending at the levels they were in prior years and combined with the decrease in other City revenues, this Council and the management staff need to react and adjust our budget now.

We knew the budget that was adopted six months ago was no longer valid. Therefore, as part of our commitment to you as your elected officials to maintain our fiscal stability, we embarked on an immediate process to reset a budget that continued to operate this city within the revenues that are coming in and reduce program expenditures that cannot be supported at this time.

Our City Manager directed his staff and all employees in a zero- based budgeting approach. This means our staff literally combed through every program and service the City offered, and re-built them from the bottom up to achieve maximum savings -- yet guaranteeing that essential services, such as fire, police, and water, would not be compromised.

The result of these efforts is a proposed 18-month budget that is fiscally prudent and is a conservative response to the revenue trends we are seeing. This proposal balances our budget through June 30, 2010, maintains a strong reserve fund, and does not raise any local taxes.

This budget does NOT layoff any fire fighters or police officers. Our safety personnel are second to none, and they still will be able to service our community with the high level of skill and commitment that our residents enjoy and expect.

I wish to thank my colleagues for maintaining the conservative fiscal approach over the years, and for taking an even harder approach now when the community is looking to our leadership.

I want to thank the City Manager for his tremendous leadership, creativity, and expertise in these unprecedented challenging times.

I also want to thank the City Manager’s executive management team as well as the entire Folsom workforce. The City Council values and respects your hard work, talent, and commitment to customer service every day. Whether you are a solid waste truck driver, a fire fighter, a police officer, maintenance worker, or any other employee at any level, we thank you for serving as our ambassadors with the residents we serve.

Lately, it feels that every headline you read, every web page you scan, every news story you watch or hear is filled with bad news.

Despite what the media seems to only want to cover, it is time that I share with you some good news about Folsom, and there certainly is a lot to report.

First, we have the new Palladio mall under construction. Although the current market has caused some retailers to pull back on expansion plans at this time, the Palladio project is proceeding and will have phased openings beginning in December of this year and continuing through the end of 2010.

The Folsom market is doing better than many retail markets nationwide. Retailers recognize that Folsom -- and Palladio in particular -- is an excellent location, and they will be coming in as consumer confidence and the commercial lending market returns. Again, you will begin to see some of these new stores around December of this year.

Palladio is owned by Broadstone Land LLC, which is a wholly owned subsidiary of Elliott Homes, Inc. I point this out to underscore that Harry Elliott is known in this community for his high quality developments, including the Broadstone Marketplace. Mr. Elliott stands behind his 17-year promise to deliver a first class shopping experience to Folsom, and I believe the Palladio mall will be that and much more.

New commercial office space, some additional eating establishments, and hotel projects are all under way and will be open soon.

Plans for our planning area south of Highway 50 continue to move forward. Environmental documents were issued in October, which is a key milestone in the eventual annexation of this property. These documents were prepared following the guidelines outlined in the voter approved Measure W charter amendment and the LAFCO approval.

I would also like to highlight some other key points regarding this property:

The Specific Plan for the area is approximately 80 percent complete.

The land plan is 100 percent complete.

The public facilities financing plan has been completed and submitted to the City.

The City Council will begin negotiating a tax sharing agreement with the County Board of Supervisors later this month.

At this time, I would like to share some updates on a few notable projects:

California Independent System Operator, or Cal-ISO, is currently located here in Folsom. We are proud to announce that Cal-ISO will be constructing a new 280,000 square foot campus, which when complete, will employ between 500 to 700 employees. A building permit for this project is expected to be issued in May.

Revitalization of the City’s Historic District remains a high priority and commitment for the City of Folsom. Construction level drawings are complete for the private development portion of the Historic Folsom Station project, including the Granite House development. This project will include ground level retail and second level residential.

The Folsom Power and Electric project, which will include a restaurant, new retail, and parking, should be complete this calendar year.

And we have begun implementation of stage one of the Sutter Street streetscape project, focusing on sidewalk, landscaping, and accessibility improvements.

The Federal Receiver is planning to construct a large medical facility on prison property here in Folsom as part of an overall plan to construct seven such facilities throughout the state. Similar to the other facilities, the one in Folsom is intended to house approximately 1,200 inmates and provide almost 1,500 new jobs between the medical staff and correctional employees. Many of these positions are expected to be in a high paying range, with an estimated payroll for this facility of about $100 million.

Along with Mercy Hospital, Kaiser Permanente, and Kindred Hospital, this state facility will greatly expand the City’s existing health care related cluster, providing economic stability during severe downturns like the one we are experiencing today.

The City is working with the Federal Receiver to identify the potential impacts to the city and the measures needed to mitigate those impacts to the satisfaction of the City, our residents, and our businesses.

We now have an official date for the opening of our new bridge. That date is Saturday March 28th.

I still remember the phone call I received from the City Manager that February evening in 2003 to inform me the Bureau of Reclamation was going to close the Folsom Dam Road immediately.

As the City’s Mayor, and with the assistance of Chief Sam Spiegel, then Sheriff Lou Blanas, and Congressman John Doolittle, we were able to delay this closure for one week in order to put in place some immediate traffic diversion measures, as well as inform the public they were in no immediate danger of a dam failure or terrorist threat.

Here we are some six years later from that phone call, and we will be cutting the ribbon on this new $130 million dollar-plus, magnificent structure. This new four-lane, bicycle-friendly bridge is truly the result of a tremendous amount of cooperation between the City of Folsom, the Army Corps of Engineers, the Bureau of Reclamation, and our elected representatives at the national level. We also need to thank our state elected officials, and all the local, county, and state departments that have contributed their part in bringing in this project months ahead of schedule.

I look forward, along with all of the residents, to the immediate traffic relief we can expect from the opening of this bridge. I also hope it will revive the businesses that have been suffering since the closure of the Folsom Dam Road.

Soon, you will see our Public Works Department embark on its annual pavement management plan. This two to three million dollar estimated work will consist of pavement overlays and slurry seals throughout the City. This work is totally funded by the Measure A sales tax dollars.

Several storm drain improvement projects have recently been completed, including the first phase of a significant storm drain system in the Historic District.

The City and the City Council have continued Folsom’s regional transportation efforts by participating in the Sacramento Area Council of Governments, the Sacramento Transportation Authority, the Southeast Capital Corridor Joint Powers Authority, the Highway 50 Corridor Mobility Partnership, and the Folsom-El Dorado County Joint Powers Authority. All of these efforts have paid huge dividends in building a great number of the infrastructure improvements we have today, such as Lake Natoma Crossing, the Riley Street Extension, several of our freeway interchanges, and the previously mentioned annual street pavement management plan.

In our Utilities Department, our wastewater collection system was honored for the third year in a row by the California Water Environment Association.

Our water meter implementation program is well underway, and the City will achieve its federally mandated time schedules for this metering effort.

As we can see, Folsom Lake is at a record level low, currently at less than 25 percent capacity. The Sierra snow pack at this point will not be enough to replenish the reservoirs in this area, including Folsom. We all are aware Governor Schwarzenegger issued an Executive Order proclaiming a statewide drought in June, and that the Bureau of Reclamation made a decision in July to cut water deliveries to a number of agencies, including the City of Folsom.

The City of Folsom is currently in a Stage Two Water Alert, and we will need to move to a Stage Three Water Alert in the next few weeks as conditions continue to worsen. This will mean even more stringent water reduction and conservation measures, as well as related ordinances for consideration by this Council. I ask for our residents’ full cooperation.

Public safety remains the City’s top priority.

This past fire season, our Fire Department sent crews to support fellow fire fighters fighting lightning strike fires in Mendocino, Shasta, and Butte Counties. These strike forces were called to duty for up to 30 days in length. While these strike teams were out, the remaining fire fighters continued to protect this city at the highest levels attainable, and even battled some serious brush fires within our own borders that threatened lives and property. Not one home was lost, nor one resident hurt. During these trying times, not one fire fighter suffered any serious injury as well.

This City Council is committed to building Fire Station 39 in Empire Ranch in the near future and to continue the tradition and commitment we have made to our residents in delivering the best medical and fire suppression services we can.

My congratulations to the men and women of the Folsom Fire Department for their exemplary service and dedication to our community.

Our Police Chief has shared that Folsom’s part one crime rate, which means crimes like homicide, rape, robbery, assault, burglary, larceny and auto theft, is down 2.5 percent for 2008, with an overall 9 percent reduction over the past four years.

Injury traffic collisions are down five percent, and non-injury collisions are down nine percent in 2008.

The Department’s extensive crackdown on D.U.I. drivers has resulted in 437 arrests through the end of 2008.

Our Police Department dispatchers now handle cellular 9-1-1 calls. Additionally, our residents can now also register their cell phones or voice-over IP phone numbers for reverse 9-1-1 calls by logging on to the Folsom PD web site at: www.folsompd.com.

Our Special Enforcement Neighborhood Enhancement Team made 135 felony arrests and 106 misdemeanor arrests in 2007 and 2008.

These men and women work hard to protect our lives, our property, and our businesses. I would also like to thank the men and women of the Folsom Police Department for their courage, commitment, and exemplary service to our residents and businesses.

Successfully balancing a community’s needs requires providing the highest quality essential services, while also creating opportunities for everyone to enjoy all that Folsom has to offer. I am talking about our award-winning Parks and Recreation programs, services, and facilities.

We are just completing phase four of the Livermore Community Park project. This project included developing an additional five acres of this 26-acre park with two new lighted softball fields with a soccer overlay, tree and shrub plantings, pathway connections to the existing facilities, an additional 90 parking spaces, and an extension of the Class 1 Bike Trail across Carter Street.

FIDO Field at Cummings Family Park was completed by the City for an August 2008 opening after the Folsom Independent Dog Owners (FIDO) organization successfully initiated development of Folsom’s first off-leash dog park. Our thanks to this organization for their hard work and dedication to making this project a reality.

Folsom’s first Cyclebration Bike Festival featured 11 separate riding and racing options and promoted the health benefits of cycling, as well as highlighting cycling as an alternative mode of transportation. The event won an award from the California Parks and Recreation Society for excellence in recreation programming. It has also laid a great foundation for developing this event into one that will grow and boost economic development and tourism for the City by attracting riders and spectators to Folsom for three days of riding, racing, and viewing.

The Folsom City Zoo Sanctuary finished construction of the new Zoo operations center in September 2008. This new center has space for staff to acquire and store significant amounts of donated produce and other miscellaneous supplies. It is energy-efficient and more accessible, and improves staff efficiencies tremendously.

The new Kikkoman Trail Connection completes another segment of the Folsom Parkway Rail Trail that extends from Bidwell Street to Natoma Station Drive. This trail is unique because it makes a connection to all three light rail stations.

The Parks and Recreation Department was awarded a grant for $249,000 from the Environmental Enhancement and Mitigation fund to go towards the construction of a bike/pedestrian over-crossing at the new Folsom Lake Crossing. This grant is in addition to a grant received the previous year from SACOG for an additional $575,000.

The Folsom Sports Complex saw an increase in total participation by about 16 percent in 2008. We have a tremendous 54 percent increase in youth sports participation, which includes leagues, camps, and classes, and a 9 percent increase in adult sports participation. The Sports Complex is also the home of the Folsom Teen Center. That center continues to be popular among our teenage population and its use continues to grow as well.

The Senior and Arts Center at 48 Natoma completed its first full year of operation and attracted some 28,000 participants to programs offered at the center.

Seniors enjoyed a variety of programs, including health and fitness and art classes; social activities, including club programs and drop-in lounge activities; and a full range of services, including a nutritional lunch program, seminars, and support groups.

The art center hosted a variety of art classes and seven different gallery exhibitions, including a national touring exhibition of Norman Rockwell art. The center also hosted an array of workshops held by the Folsom Arts Association and the Patrons of the Arts.

This is just a sampling of the new things going on in our Parks and Recreation Department. Please check out all the wonderful programs, activities, classes, sports, and trails that Folsom has to offer by visiting the City’s web site or picking up the latest version of the activities guide.

Looking ahead to continuing to ensure Folsom’s economic stability, the City Council directed staff to develop a five-year economic development plan and strategies. This plan was ultimately approved and adopted by the City Council this last October. The plan emphasizes five key areas for economic development: Business Retention and Expansion, Business Attraction, Tourism Development, Workforce Development, and Capital Projects.

Recognizing the tremendous importance of tourism and economic development to the City of Folsom, particularly in these times, the City, FEDCorp, and the Folsom Tourism Bureau will use this plan and its strategies to organize and coordinate economic development efforts over these next five years.

As an example of these efforts, staff visited 27 key local businesses as part of the regional business retention and expansion program, known as MetroPulse. Through this program, local contact is made with particular businesses, thus providing insight into the local business climate and issues affecting the business community. Armed with the knowledge of the business climate, staff was successful in negotiating a renewal to an Owner Participation Agreement with a local developer and Verizon Wireless, thus preserving 1,000 jobs in Folsom.

Congratulations to staff for a job well done!

In coordination with Sacramento County, City staff completed an economic development strategy for the Greenback Lane commercial corridor in Folsom and Orangevale.

Coordination and close collaboration with Sacramento County is extremely important so we can ensure the successful revitalization of this major entrance corridor into the city.

Finally, as part of a coordinated regional effort, the City has submitted projects such as the Folsom Lake Crossing, the Empire Ranch Road interchange, the Historic District Streetscape Project, and many others for consideration for funding as part of the federal economic stimulus program I spoke of earlier.

The City’s submittal totals over $151 million in funding requests. While competition for funding from the federal economic stimulus is expected to be quite intense, the City will make every effort to secure as much funding for Folsom and our projects as possible.

I am hopeful that I succeeded in showing you that all news is not bad in this economy, and especially here in the City of Folsom. As I have pointed out in just a few examples, there is so much good going on in this city. I request that all of you who have heard what I have said this evening go out and spread the word that Folsom is alive and well.

This city is positioned, in my opinion, as the best place to live, work, and play in this state, if not in this country. The City Council and its management staff have worked hard to live within our means, while still delivering the highest level of quality essential services and recreational opportunities.

All of us are directly responsible for helping our own economic health and recovery. Every time you spend your money, please think about spending it here in this city. Your sales tax dollars have a direct impact on the services and opportunities this city can provide for you.

So, take a moment to walk or bike around this community. Look at all of the positive attributes your city has to offer.

I want to thank my colleagues on the City Council for all of their hard work, dedication, and commitment to this community.

To the City Manager and all of the City employees, thank you for the incredible quality service you provide for the residents you serve. It is an honor for me to be a part of your team.

I hope you can feel my optimism and enthusiasm for the City of Folsom. We can choose to concentrate on bad news, or we can choose to motivate ourselves and others to make a positive change and help guide and lead Folsom into a faster economic recovery.

Thank you.