The State of the City The State of the City The Honorable Scott Myers Mayor Mr. J. Michael Joyal, Jr. City Manager Mr. Brian J. Gottlob PolEcon Research 7:30 a.m. Tuesday, February 12, 2008 Cocheco Country Club Forum Series Forum Series
The State of the City The State of the City The Honorable Scott Myers Mayor, City of Dover
The State of the City The State of the City Mr. J. Michael Joyal, Jr. City Manager, City of Dover
The State of Our City is GOOD We must continue to find our way along a path towards GREATNESS
Volunteers Make Dover Great Volunteers Make Dover Great Arena Commission Arena Commission Zoning Board of Adjustment Zoning Board of Adjustment Recreation Advisory Board Recreation Advisory Board Utilities Commission Utilities Commission Cemetery Board Cemetery Board Solid Waste Advisory Commission Solid Waste Advisory Commission Transportation Advisory Commission Transportation Advisory Commission Cocheco Waterfront Development Cocheco Waterfront Development Advisory Commission Advisory Commission Library Trustees Library Trustees Conservation Commission Conservation Commission Dover Business and Industrial Dover Business and Industrial Development Authority Development Authority Dover Housing Authority Dover Housing Authority McConnell Center Oversight McConnell Center Oversight Committee Committee Open Lands Committee Open Lands Committee
Professional Staff Make Dover Great Professional Staff Make Dover Great Executive Offices Executive Offices Finance Finance Planning and Community Development Planning and Community Development Police Police Fire & Rescue Fire & Rescue Community Services Community Services Recreation Recreation Public Library Public Library Human Services Human Services Public Schools Public Schools
“If you're doing something you care that much about, and you believe in its purpose deeply enough, then it is impossible to imagine not trying to make it great. It's just a given.” Jim Collins, Author From Good to Great: Why Some Companies Make the Leap… and Others Don’t
Population growth Population growth 30,000 28,000 1.0% Annual Growth 26,000 24,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Population Trend Line Source: NH Office of State Planning
Student growth Student growth 5,000 1.5% Annual Growth 4,500 4,000 3,500 3,000 1998 2000 2002 2004 2006 2008 Students Trend Line Source: Dover School Department
Development activity Development activity 800 -0.4% Annual Growth 600 400 -1.0% Annual Growth 200 0 1998 2000 2002 2004 2006 2008 Total Perm its Dwelling Units Trend Line Trend Line Source: Dover Planning Department
Vehicle Registrations Vehicle Registrations 33,000 1.3% Annual Growth 31,000 29,000 27,000 25,000 1998 2000 2002 2004 2006 2008 Vehicle Perm its Trend Line Source: Dover Finance Department
Assessed value Assessed value 3,000 2,500 2,000 1,500 1,000 500 1998 2000 2002 2004 2006 2008 Valuation (m illions) Source: Dover Finance Department
Average Home Value Average Home Value 300,000 250,000 200,000 150,000 17.0% Annualized Return 100,000 50,000 1998 2000 2002 2004 2006 2008 Average Residential Value Source: Dover Finance Department
Average Home Tax Bill Average Home Tax Bill 6,000 5,000 4,000 8.5% Annual Growth 3,000 2,000 1998 2000 2002 2004 2006 2008 Tax Bill Source: Dover Finance Department
General fund balance General fund balance 8,000,000 10 8 6,000,000 6 4 4,000,000 2 14.9% Annual Growth 2,000,000 0 1997 1999 2001 2003 2005 2007 Fund Balance Percent of Budget Source: Dover Finance Department
Projects and Activities North End Fire Station Public School Renovations Streets & Sidewalks Repairs Downtown and Waterfront Development Master Plan Update Tax Cap Charter Amendment Implementation
North end Fire Station
Public School Renovations
Streets & Sidewalks Repair
Downtown and Waterfront Development
Master Plan Update
Our Most Immediate Challenge Successful Implementation of Tax Cap
Our Continued Trek to Greatness
“We must maintain unwavering faith that we can and will prevail in the end, regardless of the difficulties, AND at the same time, have the discipline to confront the most brutal facts of our current reality, whatever they might be.” Jim Collins, Author From Good to Great: Why Some Companies Make the Leap… and Others Don’t
The State of the City The State of the City Mr. Brian J. Gottlob PolEcon Research
Trends and Directions in The Dover Economy Presentation to the Greater Dover Chamber of Commerce “State of the City Forum” February 12, 2008 Brian J. Gottlob PolEcon Dover, NH (603) 749-4072 bgottlob@poleconresearch.com
U.S. Economic Overview • Slowing Economy Through Summer (Recession is Semantics – Weakness Will be Clear) • Housing and credit markets are biggest risk • Impacts spreading to consumer & business confidence as well as spending • Labor market continues to weaken • Large monetary (interest rates) and fiscal stimulus will limit severity of downturn
Nationally, Business Confidence Has been Eroding Since the Summer “Subprime Shocks” Weekly Business Confidence Index 35 30 25 20 15 10 5 0 7 e . 8 h t 0 n 0 p c 0 r u 0 e 2 a 2 J S M
N.H. Economic Overview • Performance will be better than the rest of New England • But we are not immune to weakening national economy • Housing just beginning to affect the labor market • Business access to credit is key – remember the 1990- 91 recession? • Long-term success depends on our ability to continue buck unfavorable regional demographic trends
Delinquencies and Foreclosures in NH Showed No Signs of Slowing Through Q3 of 2007 5.5% 2.0% % NH Loans Past Due 1.8% 5.0% % NH Loans in Foreclosure 1.6% 4.5% 1.4% 1.2% 4.0% 1.0% 3.5% 0.8% 0.6% 3.0% 0.4% 2.5% 0.2% 2.0% 0.0% 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
Unfortunately, Home Price Trends Will Determine How Many Loans Eventually Fall Into Foreclosure. NH Housing Price Appreciation (OFHEO Index) & Loans in Foreclosure 16.0% 1.4% 14.0% 1.2% 12.0% 1.0% 10.0% 0.8% 8.0% NH Home Price Aprreciation 6.0% 0.6% % NH Loans in Foreclosure 4.0% 0.4% 2.0% 0.2% 0.0% '00 '01 '02 '03 '04 '05 '06 '07 -2.0% 0.0%
Price Appreciation in NH Has Been Negative Since Mid-2006. NH is one of 21 States as of October, With Negative Appreciation NH Home Price Appreciation 12% 10% 8% 6% 4% 2% 0% 2005 2006 2007 -2% -4% -6% -8% Source: Loan Performance Inc., First American Core Logic
The Housing Market Won’t Stabilize Until The Supply of Unsold Homes Declines, but Inventory Continues to Rise (Albeit a Bit More Slowly) Houses Added to Strafford Co. Market and Home Sales 3,000 2,599 2,246 2,500 2,000 1,260 1,500 1,085 1,000 500 0 2006 2007 Added to the Market Houses Sold Source: Northern NE Real Estate Network (does not include all inventory and sales in the state)
The “Wealth Effect” of Reduced Home Values. Home Equity Lines of Credit (and Cash-Outs Refi’s) Fueled Consumer Expenditures. Now HELOC’s are Trending Downward in NH While Delinquencies Increase $1,600,000 $7,000 HELOC's at NH Banks $1,400,000 $6,000 Delinquencies $1,200,000 $5,000 Delinquencies ($000's) HELOC's ($000's) $1,000,000 $4,000 $800,000 $3,000 $600,000 $2,000 $400,000 $1,000 $200,000 $0 $0 2 3 4 5 6 7 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2
One Fallout From Subprime Crisis - Tighter Credit The Federal Reserve Senior Loan Officer Survey Shows All Types of Credit are Tightening % of Loan Officers Saying Credit is Tightening 100 Tightening for Large & Medium C&I Borrowers 80 Tightening for Small C&I Borrowers Mortgages 60 Prime Subprime 40 Comm.Real Estate 20 0 2003 2004 2005 2006 2007 2008 -20 -40
To Date, Commercial and Industrial Lending By NH Banks Does Not Seem To Be Affected by Credit Market Woes (Well Functioning Credit Markets are Essential for Economic Growth) C&I Lending by NH Banks 2,300 2,100 C&I Lending by NH Banks 1,900 1,700 Millionss 1,500 1,300 1,100 900 700 500 2003 2004 2005 2006 2007
NH Employment Peaked This Past Summer (and the Peak Will Likely be revised Downward) 655 650 645 640 635 630 625 2006 2007 2008
New Claims for Unemployment Offer One Sign That We May Avoid Recession Average Weekly New Unemp. Ins. Claims in NH 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
The NH Leading Index Has Turned Down Sharply (Recession Risk Jumps to 60%) 40 6% The NH Leading Index Dipped Further Into Negative Territory 30 4% % Change in Emp. Over 12 Mos. Prio 20 2% 10 NH Index Value 0 0% 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 -10 -2% -20 NH Leading Index Value -4% Index Value: -20.3 -30 Rate of NH Emp. Growth -40 -6%
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