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									                                               Preparing for the Future

Good afternoon. It is good to be back before you today to talk about one of my favorite topics, the City of Colorado
Springs.

When I stood here a year ago (7/22/04), we were all extremely grateful for the return home of our men and women
in uniform from Iraq and a surging economy. It was a time of celebration and tremendous optimism. For the first
half of 2004, our sales tax revenues were up nearly twelve percent and we were talking of restoring programs that
had been cut the year before. One year later our latest numbers show the economy continues on the right track.

May employment was up 6,100 jobs compared to one year ago. Those additional jobs represented an increase of
almost 2.5% over the last twelve months. And many of those jobs are in key industries essential to our economic
base.

Unemployment, at 5.3 percent in May, was only slightly above the 5.1% recorded for the nation as a whole, and our
housing market is booming. We are on pace to issue more building permits for single family houses in El Paso
County than in any year in our history.

That is good for the construction industry, and in fact the entire private sector.

We have a lot to be proud of over this past year and the good news didn’t happen on it’s own, no it took this
community working together to make it happen. We’ve done an excellent job preparing for our future and our good
work has been recognized.

The announcement of the repositioning of the 2nd Brigade Combat Team to Ft. Carson was the beginning of what
could be a total of 10,000 to 12,000 additional service members stationed at Ft. Carson and 400 plus at Peterson
AFB; 12,000 to 15,000 family members who will be joining them and the hundreds if not thousands of jobs that will
be needed to support them. We have to wait until the BRAC recommendation is final, but I’m feeling really good
about our chances. I firmly believe we are in this position because our community worked collaboratively to show
DOD that our military bases and our local communities were ready should they call on us. From our congressional
delegation, to our local and state elected officials, to our business community, to our veterans groups, to our local
commanders, past and present, and of course our citizens. It was a team effort that made this happen, and the
Pentagon planners know that there is no better community for supporting our men and women in uniform and their
families than Colorado Springs.

We created our destiny and I couldn’t be prouder of our community.

Well before we even had an idea we would be blessed with so many great Americans joining our community we
were planning and preparing for our future. We began a major collaborative effort in the fall of 2003 to gain the
confidence and support of our citizens for a November 2004 election. And ladies and gentlemen we were successful.
We’ve created the Pikes Peak Rural Transportation Authority that will provide our region with $65 million a year to
better maintain roads, fix our curbs, gutters and sidewalks, build new interchanges and expressways and
dramatically improve our transit system.

Our success in this effort required good leadership and I want to thank the Pikes Peak United Way, CONO, the
Chamber the EDC, and the many other organizations for your support and leadership in working with the City
Councils of Colorado Springs, Manitou Springs, Green Mountain Falls and the El Paso County Commissioners in
getting the PPRTA approved last November.

Here we are just six months into the RTA, and our city Public Works Department has done an excellent job of
implementing the city’s share of the RTA.

We’ve made several of our city’s busiest intersections safer and more efficient by adding turn lanes or striping or
medians…
           o Briargate Pkwy and Hwy 83
              o Star Ranch Rd and Hwy 115
              o Fillmore and I-25
Traffic now moves more smoothly through all of these intersections. And we’ve got a dozen more of them on the
schedule for this year.

   Last month we continued work on this year’s street resurfacing program. We’ll do 60 miles this year. That’s
    nearly twice what we’ve been doing in recent years, and will pump about $6 million dollars into the private
    sector.

   Even our alleys are getting a makeover. We’re going to pave 16 miles of them this year, and we’ve already
    done one quarter of that.

   Life’s getting easier for pedestrians, too. Anywhere we fix curb and gutter or resurface roads, we repair
    sidewalks and install pedestrian ramps. Remember, we didn’t do any of that until the RTA passed.

   We’ve upgraded traffic signals at over 20 intersections so far, and we are doing more every week.

   We’ve repainted over 65 faded school crosswalks with long life markings.

  And most importantly, almost 90% of the RTA maintenance and capital money being spent this year is going to
   local businesses… Almost $35 million dollars to companies like…
            o Ideal Concrete
            o AA Construction
            o Blue Ridge Construction.
Those are some of the smaller projects. Here is the news on three of the bigger ones.

This fall we’ll hire an engineering firm to begin environmental studies and design of the new Drennan expressway
between Academy and Powers as part of our South Metro corridor improvements. Next year we’ll be buying the
land we need, and we hope to be under construction sometime in 2007.

Also next year, the County will begin design work on the widening of South Academy between I-25 and Hwy 115
and the improved connection to Fort Carson and Pikes Peak Community College. Improvements that we need to
support the influx of our new military families.

We are completing the design of the new Austin Bluffs and Union interchange. We’ll see construction before the
end of next year, and by mid-2008, we’ll be driving through the new grade-separated intersection.

We’ve been talking about upgrading Woodmen at Academy since the 1980s. This intersection is one of our two
busiest and we’re making progress. We’ve had public meetings. We’ve had meetings with individual property
owners. We’ve submitted an “Environmental Assessment” to the Federal Highway Administration. And before this
month is out, we hope to have their approval back for our plan. Once we get that we’ll open up for a final round of
comments from the public and elected officials and we’ll be on our way with that project, too.

Preparing for the future in Colorado Springs spans our entire
organization. We are very fortunate to have one of the country's only
community hospitals that, without taxpayer support, is successful by
virtually all measures while still providing outstanding care to all
citizens, as well as multi-millions of dollars in community benefits and
support. In fact, in 2004 alone, Memorial Hospital provided $62 million
in un-reimbursed care. In its commitment to continue meeting the ever
growing and changing health care needs of our community, Memorial is
expanding. The hospital is expanding its presence in the community
with additional facilities, as well as more services and programs.
Memorial is adding a 250,000 square foot addition to the main hospital
campus on Boulder Street. Its expected to open by early 2007, and will
house the new Colorado Springs Children's Hospital at Memorial


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Hospital, as well as expanded and centralized emergency/trauma care
and women's/maternal services. This will provide welcome relief to
the busiest emergency room in the state.

Memorial Hospital is also expanding north. They are taking the lead in
providing for the healthcare needs of the fastest growing part of the
county. Memorial Hospital North is planned to open by early 2007,
and will be a full service, state-of-the-art 85-bed hospital.

One of the health care developments we are especially excited about is the new Colorado Springs Children's
Hospital at Memorial Hospital. Strengthening its focus and commitment to specialized care for our community's
children, Memorial received designation for a children's hospital within a hospital in April 2004 and continues to be
the second largest provider of care for children in the state.

Memorial Hospital has also been recognized as a top 100 Cardiac Care center in the nation and our nurses have
received numerous Nightingale awards for excellence in nursing. I’m very proud of Memorial Hospital and the
contributions it makes to enhancing the health and well being of our community.

As our community continues to enjoy economic success, we place increased demands on our utility system and I’m
proud to report that Colorado Springs Utilities is meeting those challenges and preparing for our future. We know
that if we want to remain globally competitive in attracting new business we have to be very sensitive to rising
utility rates. Springs Utilities management and staff have spent the better part of this year identifying and putting
into practice process improvements and cost controls at all levels of the organization in order to operate more
efficiently and better meet customer needs.

For example:
A new approach to power plant maintenance has already this year saved customers $2 million. Work is scheduled at
night or on weekends when replacement power and natural gas prices are lowest. In the area of natural gas main
installation, now, whenever possible, Springs Utilities is using underground directional boring to excavate these
lines. This innovative technology will result in a sustainable annual savings of more than $350,000 a year.
A new laboratory at the Las Vegas Treatment Plant not only ensures more reliable testing; its efficient design will
save $50,000 a year in utility costs. These are just a few of the many cost-saving initiatives being implemented by
Springs Utilities, and management continues to challenge the organization to meet rigorous cost targets going into
the 2006 budget process.

And for those customers who may have difficulty paying their bills, I’m pleased to say that up to $500,000 in
matching Project COPE funds has been made available again this year from the sale of non-regulated products and
services.

Colorado Springs Utilities is also committed to incorporating renewable energy into the overall fuel mix..

The Springs Utilities is considering a few small hydro projects, and is looking into developing electricity from
biomass and biogas. (byproducts of waste treatment). We are also investigating the possibility of building of a small
wind farm south of the Ray Nixon power plant.

We were also proactive at the state legislature. This year Amendment 37 was modified to include electricity
generated at our Tesla Hydroelectric Facility. The decision will potentially save ratepayers millions of dollars,
simply by recognizing this renewable energy source which harnesses the power of water flowing from Rampart
Reservoir.

And thanks to the conservation efforts of our citizens, the community saved about 7 billion gallons of water in 2004,
improving reservoir levels. And when it comes to water here in the West, you either lead or get left behind. And
since the early 1900s, Colorado Springs has demonstrated the foresight to plan and provide for this community’s
water needs.




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We continue to make progress on the Southern Delivery System, a raw water system from Pueblo Reservoir to
Colorado Springs.

The Southern Delivery System is the most cost-effective and the most environmentally responsible way to supply
businesses and residents needed water through the year 2040. The future of Colorado Springs depends on our ability
to fully utilize the valuable senior water rights we already own and the Southern Delivery System makes this
possible.

The Southern Delivery System is currently undergoing an environmental review by the U. S. Bureau of Reclamation
before construction can begin. Results are expected by 2007.

Colorado Springs continues to work with Pueblo and the lower Arkansas River valley to create positive, productive
relationships, and to better understand the impacts our project may have on communities in southeast Colorado.
There’s still much work to be done. But I’m confident we can obtain the support needed to build this critical water
delivery system.

We are also meeting with our neighbors to the south to insure them we are taking aggressive steps to improve our
waste water collection system. We recently experienced three wastewater overflows in one month, and
understandably, these spills concern not only our citizens but our downstream neighbors. Although we have one of
the highest performing wastewater systems in the country, our system, like any, is vulnerable to vandalism, severe
storms and blockages. We regret these overflows and I want to assure you and our neighbors along the lower
Arkansas River that we are doing everything possible to prevent them. Over the next 20 years we plan to invest
more than $300 million to improve our wastewater collection system. This includes a second wastewater treatment
facility to be completed in 2006 and improvements to our collection system along our creek corridors. Let there be
no doubt that we are committed to responsibly managing our utility operations and protecting the Fountain Creek
Watershed.

For nearly a century, Colorado Springs Utilities has earned a solid reputation as a leader in the utilities industry and I
want to thank Phil Tollefson for continuing that legacy during his tenure and passing on a well run, top notch
organization to his successor. CSU is prepared for the future.

We all know how important low cost, reliable utilities are to remaining competitive in a global economy and City
Council understands how important a strong economy and job creation is for the future of our citizens. In June, City
Council finished updating our 5-year Strategic Action Plan which contains six ranked Focus Areas. When we were
finished, we had moved “Economic Development” from Number Five to Number One. We leap-frogged it past
several areas – including “Public Safety” and “Transportation.” Not because those two areas are not important, but
because we feel we are making good progress in both those areas with the passage of the PPRTA in November of
last year and the Public Safety sales tax in November of 2001. Since June of 2002 we have completed or are in the
process of completing 16 major PSST projects and we have added police officers and firefighters and their
associated equipment. Those facts say a lot and it reflects what citizens told us in our April survey. Our April survey
told us that economic development and good quality jobs were a top concern of our citizens. We have been working
with our economic development partners to create an environment where business can flourish, but it’s time to do
more

Last year, the City and the EDC identified three areas to become the focus of our economic development efforts:
Downtown; North Nevada Avenue; and our Airport area.

In April of 2003 I committed to make our airport and the surrounding area a priority for economic development. I
want to thank the City Council for supporting that vision and the City Manager and Airport director Mark Earle for
putting the airport in high gear.

In February, United Airlines added two daily flights to San Francisco, something our community has been
requesting for years. United reports that the new service is extremely successful. It not only connects us with
northern California, but also provides excellent connections to United's international flights out of the San Francisco
International Airport. Earlier this year, American Airlines added two MD-80s to its Dallas service, and just last




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month added two flights per day to Chicago. All of American's flights have high load factors and their new Chicago
service is doing especially well, running at 90 percent of capacity so far this summer.

If you’ve been out there recently you know there are upgrades underway everywhere… inside and out. In the
terminal…There are new restaurants already open, and more under construction. Other concessionaires are
remodeling. Once they are done we’ll begin work on the new larger seating area. Outside, we’ll be adding short
term parking spaces and improving passengers’ movement between the terminal and the parking lots.

The most exciting part of our airport is what the future holds. Two new capital projects on the horizon are a new
SkyWest Airlines Maintenance Facility and the joint Air Force and Army Arrival Departure Air Control Group or
ADACG facility.

SkyWest is in the final design process for an $18-20 million maintenance facility that will be located on the west
side of the Colorado Springs Airport. The building will bring up to 150 aircraft maintenance jobs to the Springs.
This facility will also serve as a crew base for Skywest aircrews. It was nice having a Colorado Springs based crew
on the first and last leg of my recent trip to the east coast. Skywest tells us that once they get construction bids in
hand and know the actual costs, they will be able to make a final decision on the project.

The ADACG will be a $50 million investment in the airport business park to build a deployment facility that will
enable the Army and Air Force to deploy and redeploy combat forces quickly and efficiently wherever they are
needed in the world. It will also include $7 million to $9 million in defense access road money. This could be the
shot in the arm the airport business park needs to attract even more business and will also secure our region’s role in
the global war against terrorism. It’s the anchor for economic development in southeast Colorado Springs.

I’m extremely proud of our progress at the airport.

Our downtown is also showing promise. For our downtown to reach the next level, I’m a firm believer that we need
more downtown housing and new businesses. Well, we’re getting it. Already, there are two additional downtown
housing projects in the planning stages… one near the Giddings Building, to include street level retail, and one that
would convert the historic Mining Exchange Building into 22 units.

And then there’s the ambitious Pikes Peak Place, to be just north of the Post Office. This project would be state-of-
the-art, and would link an office tower and a housing tower with ground level retail. These projects along with the
Lowell Neighborhood projects and CityWalk, will bring the number of residences downtown to several hundred.

Speaking from experience, downtown is a great place to work. But we need more jobs downtown for all these new
downtown residents and we’re working on that too.

Vice Mayor Larry Small is chairing a new task force to attract primary jobs to downtown: He’s working with the
Downtown Partnership, the Urban Renewal Authority, the EDC, and City staff to make sure that our downtown is
positioned to attract new employment centers and offices. I want to thank Larry for his leadership and I’m confident
the task force will meet with great success.

We all want to see a continued focus on downtown jobs, downtown housing and downtown culture and I believe the
City can play a much bigger role than it has in the past.

One major resource the City has downtown is our Parking Enterprise. I believe that we should work collaboratively
with downtown office and residential developers to help provide the parking facilities for new downtown residences
and jobs. The City should be able to construct parking facilities partially financed by long term parking leases with
those property owners. It makes more sense to have pre-sold spaces to help service parking construction debt rather
than to build it and hope they will come. If it makes financial sense for the City, we should encourage it.

North Nevada Avenue may not be an economic engine for us yet, but it won’t be long. Last year when I spoke about
this region of the City I referred to the Network Information and Space Security Center, or N-I-S-S-C. It’s mission
is to study computer networks and space systems, and to make them more secure against any form of attack.




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The program was originally conceived to support U.S. Space Command. But when the world changed on
September 11, the NISSC had a head start on its state-of-the-art work. So today the program also serves two entities
that did not even exist four years ago: the U.S. Northern Command and the U.S. Department of Homeland Security.
Not only does the program conduct research, it also offers specialized training, classes and graduate-level
certifications. And they aren’t just for military and government workers, either. There are more and more private
sector customers for this sort of training.

NISSC is bringing millions of dollars into Colorado Springs... through the University of Colorado at Colorado
Springs and their partnership with our neighbors at NORTHCOM and Air Force Space Command. UCCS is
becoming a center of excellence for homeland defense and security, cyber security and a host of related fields. Their
work is creating jobs and these are the kind of jobs you cannot outsource to China or India. And they are the kind of
jobs we want in Colorado Springs.

We have an opportunity to help UCCS grow that reputation and create an environment that attracts students to the
fastest growing campus in the CU system, highly skilled researchers and well compensated jobs.

The North Nevada Redevelopment project isn’t just a mechanism to bring in new high quality retailers. It’s an
opportunity to create a grand entrance to Colorado Springs and a research park corridor in that stretch of North
Nevada. UCCS has started the process for creating a center of excellence and we can to do our part to grow that
vision.

City Council will have the opportunity to review and perhaps approve the financing plan for this redevelopment
project in August. It may require us to step out of our comfort level so we can support the vision and prepare for our
future.

As you can see Colorado Springs has had a great year and is well prepared to implement our vision for the future.
But we need to insure our future generations will be ready when its their time to lead. Insuring our kids have a
chance to succeed is everyone’s responsibility. I’d like to give everyone in our community an opportunity to help.
Our community is blessed with many non-profit organizations that provide outstanding services to our families in
need, but all of them can use more help. With that in mind I would like to announce a new initiative that I’m calling
the Mayor’s Faith Based and Community Initiative. It’s a simple concept that will tap the tremendous
people resources found in the congregations of our mega churches and churches throughout our City and match
those new volunteers with human service organizations who need their help.

speak about programs in Miami and Charlotte
introduce guests
close with the RTA




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