State of the City Hotel Syracuse Grand Ballroom Wednesday, February 27, 2008 Good Evening Ladies and Gentlemen. Thank you for attending this year’s State of the City message. We are blessed in this community to have grand architecture and majestic rooms, such as this one, that remind us of our heritage and allow us to revisit the splendor of the past. I want to thank Mark Belanger and the management of the Hotel Syracuse for their hospitality tonight. As always, my wife Patti, my children and my family are here to support me and I wish to acknowledge and thank them. With us tonight are members and representatives of our State and Federal delegations and the Governor’s office and I personally want to thank them for their continued support and strong advocacy for our City and its people. 1
I thank the members of our Common Council, our City’s Board of Education, Superintendent Lowengard and our County Legislators for their untiring public service. I wish to extend a warm welcome to our new County Executive Joanie Mahoney. We have met several times and speak often at joint events. I wish her well as she begins a new administration and brings her own approach to leading our County in the years ahead. As I reviewed the information and data from this past year, I was immediately struck with the unmistakable conclusion that, the powerful combinations of public and private partnerships we have forged in this community have produced an amazing array of productivity and progress. Tonight, I am proud to display these results. I would be remiss, however, if I did not highlight and thank the men and women of our city departments for being the backbone of this productivity. Our police and fire departments are the best throughout this State. Our DPW department is there when snow and other weather conditions threaten our travel. Our parks department has maintained, updated and nurtured our recreational areas for our children and elders. Our water and engineering departments carry the heavy load created by our aging infrastructure and often 2
go unnoticed and unrecognized. Our community development, economic development and aviation departments are at the front lines of people interaction and red tape and balance this unrelenting challenge on a daily basis. And our administrative departments often get the least recognition, but keep our city going through the finance, assessment budget, legal, research, information systems, purchase, personnel and collections services. I am proud of our City’s public employees and prouder yet to have served with them as Mayor over the past 6 years. Thank you. Last year we set out an aggressive agenda to invest in our neighborhoods and protect our housing stock. We did that while holding the line on taxes. We’ve created a rental registry to monitor our housing stock. Today, a strengthened code inspection staff is getting inside to inspect for the first time ever 20 to 30 small rental properties each working day. We supported efforts at the South Side Innovation Center and today there more small businesses up and running thanks to loans we provided and the advice and counsel they are receiving from Syracuse University. 3
We appointed an urban designer to work with developers and neighborhood planners. We created the position of Public Arts Coordinator to steer the work of the newly appointed Arts Council. We began new dedicated parks patrols and continued our successful Crime Reduction Team efforts. City staff held 56 meetings with developers in 2007 to cut the time and cost for permitting a project. At least once a week city departments and other representatives meet to help projects as small as a restaurant and as large as a $100 million expansion of Upstate’s Children’s Hospital in a process we developed in concert with the Chamber of Commerce. 4
There is a new spirit of collaboration, momentum and cautious optimism in Syracuse and our region. But any discussion of the City must start with a thorough review of the bottom line. Due to prudent financial management and the diversification of our revenue stream, the City of Syracuse ended its most recent fiscal year with a general fund operating surplus of $15.5 million. The magnitude of the surplus was primarily due to the receipt of $9.8 million in unbudgeted developer fees from the Carousel Mall Expansion financing in early 2007. 5
When added to the prior accumulated amounts, this 2006/07 operating surplus resulted in a total fund balance of $46.9 million as of June 30, 2007. After subtracting the amounts already approved for use in the current fiscal year, $41.1 million remains free and clear. Our success in marshalling and saving these funds over the last several years is an essential element of our strategy to address budget needs in the immediate future without raising property taxes. As in past years, the City has prepared a multi-year financial plan which was filed with and reviewed by the New York State Comptroller and the Governor’s Budget Office. This plan includes calculations showing that the City’s budget gap is approximately $23 million. Simply stated, this structural deficit is the difference between the money that the City takes in and the expenses it must pay out over a one year period. This deficit will have to be addressed as the City enacts its budget for the next fiscal year that begins on July 1 st and for subsequent years. Normally, such a large imbalance would be a cause for an immediate alarm. However, the City is indeed fortunate to have a significant fund balance to address this gap next year. Therefore, when I unveil the details of my proposed budget in March, for the second year in a row, I will submit a budget to the Common Council that does not require a property tax increase. The use of fund balance is a non-recurring revenue, a “one-shot” budget item. By using fund balance to pay for ongoing operations next year, we have an opportunity to identify and implement other measures that will grow our revenue base and manage expenditures. 6
We have already implemented measures to ensure that the City collects the moneys it is owed, including such initiatives as: • the automobile booting program for individuals who are seriously delinquent in paying their parking fines • use of the internet for collection of unpaid property taxes and parking tickets • aggressive collection of delinquent water and sewer bills In furtherance of this approach, I will be proposing legislation to the Common Council to authorize the transfer of delinquent water bills onto property tax bills. This measure will provide an additional tool to collect approximately $3 million per year in delinquent water and sewer use bills. And at the same time we must continue other strategies that have proven successful such as, • making economic development investments that will pay off in the form of future growth of the City’s tax base • to continue to control costs through initiatives as the SyraStat management system Such efforts will play an important role in ensuring a stable future for the City. Like each of the Big Five New York State cities, Syracuse and its financially dependent School District are highly dependent on New York State for growth revenues. Indeed, in the combined City and School Budget, over 54% of our total revenues come from Albany. 7
The economic development momentum that began last year from University Hill through downtown to the Lakefront will accelerate this year. In the coming weeks, steel skeletons will rise for the new Center of Excellence in Environmental Systems and Energy, and for the expansion of Carousel Center. Upstate Medical has begun a $4 million transformation of the long-vacant Four Winds site into a day-care center along South Salina Street. Design and construction will begin this year on the new building to house the JP Morgan Chase collaboration with Syracuse University that will bring 500 new jobs to University Hill. 8
An experienced development team is ready to move forward with the 438 North Franklin project thanks to a City by City grant we secured. This $12 million project will include 36 residential units and 12,000 square feet of retail space. The list goes on. Thanks to support from Governor Spitzer and the Legislature’s RestoreNY program, this year renovation will begin on four buildings in and around the 300 block of South Salina Street. This collaboration with 40 Below and the MDA will add 77 units of housing and add ground floor retail space. Also, 7 additional buildings will be renovated. 9
Work is already underway on the Masonic Temple on Montgomery Street to create new affordable artist housing. And here at the Hotel Syracuse, the developer is constructing 75 new apartments right now. King and King Architects will relocate downtown, providing 75 jobs. And finally, in news we should all celebrate, developer Joe Hucko will break ground soon on the first new private sector building built in downtown Syracuse since 1992. Now, we need to adjust public policy and make strategic expenditures to support the remarkable amount of private investment we’re seeing across Syracuse. 10
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