Thank you, Judge Burrell and Clerk of the Circuit Court Loretta Knight, and thank all who have come here today to share this very special occasion with me and with members of the County Council, whom I look forward to working closely with over the next four years.

From the bottom of my heart, I want to thank the County voters who elected me to a second term. I am humbled and honored because of the trust you have placed in me.

I will continue to work hard and to always put the public interest above politics. In truth, doing the right thing is always the best politics.

I also want to thank my wife Catherine for putting up with late nights, endless phone calls, and weekends that were anything but weekends. I certainly could not do what I do without her. She is such a central part of my life.  I must have done something great to have her share my life.

Before we begin, let us remember those who were with us four years ago but have passed on after devoting much of their lives to leaving this County better than they found it.

I’m thinking of Marilyn and Don Praisner and Ron Resh, Neal Potter and Gilbert Gude, Blair Ewing and Wayne Goldstein, Jean Cryor and Carl Henn, Harry Sanders and Peg McRory, Bill Hussmann and Betty Mae Kramer, Stuart Rochester, Gene Lynch and Jane Lawton, Steve Abrams, Minna Davidson, Jim Gleason and Leonard Rubens.

Four years ago, when I was inaugurated as your County Executive I talked about keeping what was working and fixing what was broken. I talked about giving every County resident a seat at the table and a voice in the decisions that shape their lives.

I talked about putting Montgomery County’s fiscal house in order and investing in good quality jobs. I talked about sustaining a world class school system that helps all our children to realize their full potential. And I also talked about taking care of our most vulnerable residents.

Little did we know then how things would change for us over the past four years. Whether across the kitchen table, in the classroom, on the shop floor, in businesses large and small, and in government, we have experienced profound change in our economy.

We did not know then that our nation, our state, our County would experience the most severe economic downturn since the Great Depression. Some lost jobs. Many lost businesses. Others lost their homes. Retirees and those preparing for retirement saw nest eggs dwindle and timetables altered.

Some of those living close to the edge slipped over, while others moved nearer to that line. There were dreams deferred – and dreams lost.

If our County has been spared the worst of these challenges, you know we have not been spared altogether.

Despite the unthinkable challenges, I remain resolved to move our County beyond the economic difficulties we face today by continuing to build the foundation for a better future for all of us.

Our ability to build this foundation and to move on is more readily achievable than many may realize because we are not paralyzed by the difficult and intimidating choices of the present. We understand where we have been. We understand the challenge. We know what is important. We know that, working together, we can overcome our current economic difficulties and move forward.

My objectives when I was first elected as County Executive remain the same…

* To continue our work of putting the County’s fiscal house in order.

* To protect the basics – education, public safety, affordable housing, and the social safety net.

* To make government more accessible, more accountable and more effective.

* To invest in retaining and attracting business and good jobs, and

* To lay the groundwork for the County to emerge from this downturn stronger than ever

President Kennedy once said: “Our task is not to fix the blame for the past, but to fix the course for the future.”

This is the objective – to confront our economic difficulties head on, to do the right thing for our nearly one million residents – and to “move beyond our challenges” and build a better, more sustainable future for our County.

I see a Montgomery County that is one of the best places in America to live. We have a world-class school system and, we have businesses and neighborhoods bursting with vitality.

We have preserved for now and future generations a greater percentage of our County for green space than any suburban jurisdiction in America. We are on the cutting edge of investing more in renewable energy. And we are addressing our transportation difficulties with more mass transit options.

I also see Montgomery County as a special place because we are a community that truly welcomes people from all over the world. This gives us an edge in the global competitive marketplace and enriches us in many other ways as well.

I am optimistic that we can move forward.

There is so much in our community that reflects our ability to overcome our challenges and to move on. You can see it in the contributions of the people who live and work here every day.

For example -

• Honest Tea is a product that was conceived and developed here in Montgomery County by small business owner Seth Goldman. Not only has Honest Tea been a financial success, but it has literally changed the beverage market, prompting major beverage manufacturers to reduce billions of calories in snack drinks.

• Melvin Boyd, a welder in the Department of General Services, worked long hours during the snow storms last winter to help keep those plows moving. But I was inspired even more to learn that he and his family have spent hundreds of hours during the last two years in various activities at his church to raise money and other assistance for a school and medical clinic in Haiti.

• Sue Miller decided her hometown of Damascus was looking a bit shabby. She recruited her family, some friends, and a few businesses. Pretty soon, Damascus caught Sue’s fever. On Community Service Day in October, nearly 300 residents and 30 businesses of Damascus were hard at work sprucing up nine public buildings including the library, the high school, and the rec center.

• I recall cutting the ribbon at Mary’s Center, a health clinic for the uninsured in Long Branch. Maria Gomez saw that hundreds of area residents, including many pregnant women, were without primary care. With a group of volunteers and some help from local foundations, she founded Mary’s Center to provide health care to the poor and,

• When I talk with Bill Marriott, chairman of the Marriot Corporation in Bethesda or with Steven Joyce, the CEO of Choice Hotels in Silver Spring, I quickly sense they know their business and serve their shareholders well. Each of their corporations love being in and serving Montgomery County. These are just two examples of the many companies that generously support community organizations. Their employees are outstanding contributors to the County as well. We need and want more companies just like these.

These Montgomery County residents, each in their own way, have moved beyond the challenges – and labored to make things better for themselves and others, despite the current economic conditions.

All of us can assist in helping rebuild our community by continuing our work to enhance a culture of giving and serving. We do this by actively promoting volunteerism and strengthening our non-profit partners.

Now, let us also reflect on the building blocks we as a County have assembled that I believe will assist us in moving beyond our challenges.

First moving beyond our challenges requires a solid fiscal foundation.

Without it, all talk of the future is just that – talk.

I said four years ago, even before the current economic downturn, that County Government spending was not sustainable. I have made getting our fiscal house in order a top priority.

In the four years before I took office, County government tax-supported spending increased over 41 percent. By comparison, for my entire four years, the budget has actually decreased.

The cumulative amount of budgetary shortfalls we have resolved totals $2.2 billion in the last four budgets. That, simply put, is unprecedented.

We have eliminated nearly 1,100 positions in County government over the past two years – about 10 percent of the entire County workforce.

I have sought to minimize the impact of these budget reductions wherever possible and have carefully scrutinized viable alternatives. But let there be no mistake, there has been pain – for our community and for County employees.

None of this could have been achieved without the sacrifices of our employees, who received no cost-of-living increases last year and this year.

In addition they were furloughed, and, with the abolishment of many positions, most employees are being asked to do a lot more with less.

These employees are the people who are protecting our families and property, inoculating residents against the flu, picking up the trash, filling the potholes, plowing out our neighborhoods, running our after-school programs and educating our kids.

They deserve our thanks for their service during this difficult time. Please join me in thanking them.

I would like to tell you this is the last “bad” budget year and that recovery is well on the way. But I cannot tell you that. We are projecting a budget gap of nearly $300 million for the County for Fiscal Year 2012.

Due to the outcome on Question A, we have an immediate $14 million shortfall in our Fire & Rescue budget this year – and will lose $170 million over the next ten years in premiums already paid that insurance companies will now simply pocket.

State income tax revenues are coming in tens of millions below our already downwardly adjusted projections.

The State of Maryland is facing a $1.6 billion deficit and the realignment in Congress may dampen our regional economy.

Despite these challenges, the County has retained our Triple-A bond rating, saving current and future County taxpayers millions in borrowing costs and further demonstating that Montgomery County is a reliable and stable place to do business.

That’s great -- but we can’t stop there. There can be no “business as usual.” We must plan intelligently for a new “norm.”

We have to continue to make the difficult choices now.

As I have said before, we cannot resort to one-time solutions and quick fixes alone to fully address this challenge. We need to continue to restructure the organization of county agencies and streamline the way our County does business to realize all possible efficiencies – including initiatives that some might find politically difficult to do. To this end, I have put forth 100 proposals that, taken together, will help to restructure and redirect County Government operations.

Moving beyond our challenges means strengthening our school system.

Our schools represent half the County budget. We have one of the top school systems in the entire nation. That didn’t happen by accident. And, as a teacher myself, I know we will not maintain our top flight system without continuing to invest – in our kids, in our teachers and in our facilities.

Despite the fact that overall County spending has decreased from its level four years ago, I recommended funding 99 percent of the MCPS operating budget request over that period – for a 6 percent increase.

In our most recent six-year capital projects budget, we increased schools capital funding by 9 percent, taking advantage of low interest rates and low construction prices to get more schools built for the same money.  This investment now will yield a better harvest later.

Moving beyond our challenges means staying with our efforts to boost affordable housing.

In my first three years, we increased our Housing Initiative Fund from 18 million to 58 million dollars.

Over the past four years, we added, or preserved, nearly 6,000 affordable housing units – with thousands more units on the way as we transform the area around the Shady Grove Metro from light industrial to transit-oriented residential development. And we’ve done this while reducing the County’s per unit affordable housing cost by one-third. 

Moving beyond our challenges means maintaining the County’s social safety net.

We’ve seen a 40 percent increase in the demand for Health & Human Services. Our Montgomery Cares program for the uninsured has increased by 50 percent. Requests for food assistance are up nearly 50 percent and child welfare investigations are up nearly 20 percent.

Special thanks to our Health & Human Services front-line staff and their many non- profit and faith-based partners who are holding the line on helping the most vulnerable.

Through our Neighborhood Opportunity Network at three centers, and our neighbor-to-neighbor outreach located in the hardest hit areas, we are increasing our ability to deliver essential services.

Moving beyond our challenges means boosting transportation options, especially transit.

Without transit, many of our economic development and planning efforts cannot mature.

That’s why I will convene a Transit Implementation Task Force to devise a roadmap for how we fully implement the transit we want and need – the Purple Line, the Corridor Cities Transitway, and a feasible county-wide Bus Rapid Transit system.

Moving beyond the challenges means protecting our families and our property in the present and in the future.

We’ve seen decreases in our crime rate in recent years and it is imperative that we maintain this trend. 

We continue to provide excellent fire, rescue and police service while at the same time significantly reducing overtime hours. In the first quarter of this fiscal year – overtime hours decreased by 31 percent for the Fire & Rescue Service and 47 percent for the Police.

We opened our first new fire stations in 25 years this year. Still, we need to find new resources to meet critical Fire & Rescue needs in the future. And we need to get back on track our five-year safety plan to increase the size of our Police force as soon as practicable.

I want to pay special tribute to the magnificent professionalism, teamwork, and courage shown by our Police and Fire & Rescue during the Discovery hostage crisis.  Our Fire and Police personnel saved the lives of three hostages from an armed suicide bomber.

Please join me in honoring them.

Moving beyond our challenges means continuing to make government accountable, responsible, ethical and transparent.

Over the past four years, I have held 16 Town Hall meetings and 20 separate budget forums. This is twice as many as all previous County Executives combined.

Knowing that our diversity is our strength, I have broadened our outreach to all segments of the County. 

Whether you’ve come from around the world or around the corner, there is room for all at the County table. You are not only welcome – you are important to helping make Montgomery County a complete community.

Our 311 Customer Service Center is making it easier for county residents to obtain information, make service requests, and track progress on those requests – all by calling one number, 311, or going online. This system has already saved the County about $10 million in annual operating costs over two years.

Our CountyStat initiative continues to track the County’s performance in addressing challenges using real-time data and holding departments and agencies accountable for the results.

In its first two full years of operation, it has already improved government services and helped to save tens of millions of dollars.

Moving beyond our challenges depends on maintaining a strong and diverse local economy.

We are one of the nation’s foremost centers for biotechnology and the life sciences.

Revolutionary companies such as MedImmune, Human Genome Sciences and others help to save and change lives and put our County on the world map. But we cannot rest on our laurels in creating good quality jobs.

I will continue our work to attract the “best and brightest”, the cutting edge employers and employees - whether from California or Korea, China or Colorado, India or Illinois and elsewhere – in order to further enhance economic opportunity in Montgomery County.

We have positioned ourselves well for excellent transit oriented growth in the County. On both the Great Seneca Science Corridor Master Plan and the White Flint Master Plan, I actively waded into these initiatives to help make the case for adoption because both are essential to the long-term success of our county.

Both provide opportunities to solidify our economic strengths, to strike the right balance between jobs and housing growth, and to provide much needed public facilities.

In addition, my Smart Growth Initiative will help to shape the Montgomery County of tomorrow. It will significantly strengthen the County's tax base by creating new, high-quality jobs. It invests capital spending already planned for necessary and new County facilities that can serve us for decades to come, rather than putting that same money into obsolete or inadequate facilities. It moves the County out of more expensive leased space and saves money.

This is exactly what I mean when I talk about moving beyond the challenges of today by investing in the future. Our children – and grandchildren – will benefit from this vision.

In closing, it is important to fully understand and accept the fact that our challenges are real. There can be no sugar-coating it.

But we cannot flinch from the hard choices that must be made. In order for Montgomery County to remain one of the best places in America to live and work, we must move beyond those challenges.

We must adjust to difficulties in changing times yet remain steadfast in our commitment to unchanging principles that have made this County the finest place in the United States to live, learn and work.

As Dr. King said: “The ultimate measure of a person (and, I would add, a community) is not where they stand in moments of comfort and convenience, but where they stand in times of challenge and controversy.”

County residents want a County government that is ethical, responsive and accountable.

They want a County where everyone has a seat at the table – no matter the color of their skin or the bent of their creed, no matter where they were born or how different their dream.

They want a County that is just and compassionate to its most vulnerable people.

They want a County government that can stand up and do what’s right for the community – not just what’s “politically popular.”

This is our task: To weather the present, while at the same time building a new acceptable “norm” -- that advances our common objectives to move forward and beyond our present challenges.

I thank all of you for your trust in me to continue to lead our great County and the confidence you have in me to help move us forward. May God bless you and bless our great community of Montgomery County.

Thank you and good day.