This is the complete text of Mayor John Peyton's speech to the Jacksonville City Council in which he appoints City Ethics' Carla Miller as Ethics Officer.
August 28, 2007

Peyton apologizes, promises reforms, looks to the future

These are demanding and difficult times for Jacksonville, a city with a proud tradition of fiscal responsibility.

For the past 12 years, we have enjoyed the lowest property tax rate of any major city in Florida, and we have lowered that rate every year. And, until now, we have also been able to avoid charging fees that others throughout the state have been paying for many years.

The Florida Legislature changed that scenario dramatically, necessitating a major shift in how we manage our finances.

Its sweeping changes to the state's property tax system significantly reduced the amount of revenue Jacksonville could expect in the coming year, leaving us with a $65 million shortfall.

To address that shortfall and make provisions for the city's future, my 2007-08 budget proposes a blend of reductions and cuts, combined with the institution of three fees similar to those already in effect throughout the state.

Make no mistake about it: We are not making these changes just to "fill a hole" in the budget. We are making them to ensure we can continue to provide core services like public safety and infrastructure maintenance.

We are also taking steps to make sure that Jacksonville's quality of life - the thing that sets us apart from other cities - is maintained.

On one hand, we are asking citizens, city employees and the nonprofit community to tighten their belts and make do with less. On the other, we are asking Jacksonville residents to pay the three fees I have mentioned.

These fees are moderate, and they have been structured so as not to impose an undue burden on any individual or business. They are also smaller than comparable fees throughout the state. Still, I regret the need for them, because they represent a change in our way of doing business, and change is not easy, particularly when it involves money.

Hiring mistakes were 'inexcusable'

We are asking for these changes at the same time that we are working hard to correct deficiencies in the way the city procures professional services. The hiring of two contractors who were personal friends of mine, one of whom was a former staff member in The Mayor's Office, should not have happened.

Our government is only as good as the processes in place and the people who administer them, and these incidents were a failure of both. They are inexcusable; and, although I was not involved in the hiring process, I am ultimately responsible. I am deeply sorry about this lapse in judgment and I apologize.

Over 2,800 formal contracts, worth in excess of $1 billion, have been executed since I took office, along with an average of approximately 16,000 purchase orders per year. However, even one incorrect or inappropriate award erodes the public's trust, and it is important to address citizens' concerns in the most immediate, conscientious and transparent manner possible.

I have taken corrective actions to ensure that incidents like these do not occur again. Some of these actions were begun prior to the discovery of contract improprieties, and others directly address deficiencies that were recently revealed. The action steps are as follows:

• The establishment of a high-level, in-house ethics officer for the city of Jacksonville. I have asked Carla Miller to take on this important responsibility. She is a former federal prosecutor, former chair of the Jacksonville Ethics Commission and internationally recognized expert on government ethics who has served our city well over the past few years as a volunteer.
• She has been an invaluable resource to municipalities throughout the nation and governments throughout the world in this regard. I have asked that she work closely with the Jacksonville Ethics Commission, chaired by Mary Alice Phelan, upon assuming her position. The commission has done important work that should be built upon.
• The establishment of an ethics hot line to facilitate disclosure of ethical concerns by city employees. It will be completely confidential. I encourage any city employee who believes they know of a legal or ethical breech to call this hotline immediately if their concerns are not appropriately addressed by their supervisor.
• All reports will be investigated, and we will use the information received to identify opportunities to improve internal controls in the future. The hot line number is (904) 630-1015.
• All city employees will be asked to agree to a code of conduct developed by my team in conjunction with Miller, and will be required to attend a training class regarding the code. The jobs we hold in government are a public trust, and we must execute our duties in a manner that is above reproach.

New auditing oversight

• As part of the government reorganization I have proposed, we will create the position of inspector general for the city of Jacksonville. I have asked Pamela Markham, presently the deputy chief administrative officer and a longtime auditor in the Office of the City Council Auditor, to carry out this important function, reporting directly to me.
  Markham will establish an internal working group to assist in the implementation of new compliance and internal control systems. Our city employees are good people, and rules already exist to ensure that the public trust is maintained. However, we need to make sure those rules are being followed.
• I will recommend the city engage a nationally recognized accounting firm to assist in the establishment of an internal controls program, primarily in our procurement department and each using agency that purchases goods and services. While I am hopeful that a firm will participate on a pro bono basis, I am prepared to dedicate up to $50,000 to such a project.
• As part of my proposed reorganization of the government, internal functions like human resources, procurement and accounting will be consolidated into one area. This will eliminate duplication and redundancy, improve communication within the government, and eliminate "silos" that have come to exist over the years, promoting greater transparency and collaboration.

Procurement reforms

In addition to the steps detailed above, we will review the city's purchasing code and tighten our practices. Devin Reed, the city's present director of procurement, has suggested a number of improvements, including:

• City procurement staff will establish specific minimum requirements in all bid documents. Minimum requirements will be located in a prominent place within the solicitation document and will consist of objective pass/fail criteria that clearly communicate whether the bid or proposal can go forward. Only after a procurement buyer and the applicable awards committee establish that a potential vendor meets the minimum requirements will the vendor's bid or proposal be considered. Procurement staff will bear the responsibility of ensuring that all minimum qualifications are met in every instance.
• All requests for awards will be advertised, so the public has the opportunity to know what services the city contemplates using.
• All scopes of work must be incorporated into a written agreement and approved by the mayor or his designee prior to the commencement of the work. Change orders must also be written and approved in writing.
• Using departments will no longer be allowed to open any bid documents. Bids may only be opened by procurement staff, and failure to comply will disqualify the award of the bidder.
• The Procurement Department will continue with the implementation of new software for contract monitoring.
• City awards committees, when reviewing proposals, will no longer be allowed to approve any vendor or service with any conditions attached. At the time the awards committee meets to make selections, the proposals must be complete or the committee will reject the award.
• All personnel throughout the government who deal with procurement will receive intensive training to make sure they know what is expected of them and to eliminate future errors.

Much of what I will propose is contained in the Taxation, Revenue and Utilization of Expenditures (TRUE) Commission's recommendations from this spring. In this report, they identified substantial strengths in our processes, but they also found important opportunities to improve.

Moving forward

These are demanding times for our city. We are grappling with financial issues that will affect us all for generations to come, while adjusting to the fact that our state Legislature is now willing and able to interfere with home rule. At the same time, we are working to address serious lapses in judgment that led to the contract awards described above.

When I took office, I pledged to work day and night to be the best possible steward for the taxpayers of this city. Implicit in that pledge was a promise to maintain the highest standards of accountability and integrity in the operation of our government.

I deeply regret that recent events have cast doubt upon that promise and my administration, and I am committed to addressing the failures that resulted in these errors.

I want to thank the people of Jacksonville for their faith and confidence. I have recommitted my efforts to making sure that your city government is worthy of your trust.

As we prepare to move forward, I ask you to join me in refocusing on the priorities we established four years ago: growing our economy; creating jobs; raising per capita income; responsibly managing growth; enhancing early literacy; and maintaining our quality of life, including public safety, infrastructure, and the preservation of our rich and diverse natural resources.

I ran for mayor because I believed in the future of Jacksonville and I wanted to make a difference.

I still believe in Jacksonville's future, and I know that the challenges we face today can be resolved if we meet them together.

With hard work, forthright attention to our weaknesses and faith in each other, we can make Jacksonville the great American city in which we all want to live.

Thank you again for your confidence.