Year 2009
Mayor
John Callahan
State of the City Address
February 19, 2009
I want to thank the Greater Lehigh Valley Chamber of Commerce
and the Bethlehem Business Council for hosting and organizing
my sixth “state-of-the-city” address. I am joined
today by my city management team and by you, the private sector
leaders of the Bethlehem community. Each of you through your
daily activities of running your businesses, creating jobs,
and volunteering your time make this city work and this community
so special and I want to thank you. I do want to take a few
moments to introduce you to the members of my staff who are
here—many of whom you know…
It’s only fitting to place into context the current
state of the city in light of the bleak outlook for the country’s
economy for this year. It is no exaggeration to say that a
year ago the world was a very different place. In the last
quarter of 2008, our country’s economy went into a freefall,
which sent the global economy into a tailspin. Today, we remain
in a full-blown global economic crisis.
The local newspapers run front-page headlines that the unemployment
rate in the Lehigh Valley is 7.1%, the highest since 1993,
with the expectation that the number would go up, not down.
In almost every sector of the economy, companies are shedding
jobs. Nationally, we have lost about 1.5 million jobs over
the last few months, averaging close to 600,000 jobs per month.
Locally, Air Products, FL Smidth and PPL have all announced
major job cuts. The collapse of the housing market has been
well detailed and we have learned about new things such as
credit default swaps.
With that backdrop, you might think that we would have equally
bad news to report about the state of this city, and perhaps
that would be true if we were talking about a different city,
but this is Bethlehem. As bad as the current economic conditions
may be, in the last ten years this community has weathered
far worse. A less resolute people would have failed, but we
have not just survived, we have thrived. In a way, the end
of steel meant a re-birth of this city and prepared us to
weather this current economic storm better than most.
Certainly, the current recession has cast a shadow on the
city’s short-term economic growth. This is seen most
prominently in the delay of the opening of the hotel and retail
portion of the Sands development. And, given the dismal forecasts
for the upcoming year, one might think that the prognosis
for the city would be dramatically different than it was a
year ago. However, I am proud to report that the state of
the city remains strong and the future of the city remains
as bright, maybe brighter, than it was last year.
It was less than two years ago that we were simply looking
at pretty drawings of the casino and it was hard to imagine
that only a year ago we broke ground on the casino, then we
seamlessly progressed to a steel erection ceremony and then
a topping off ceremony. As the images show, carpeting has
been installed on the casino floor, and as we speak, the slot
machines are being installed. The casino is projected to open
on May 22nd, more than a month ahead of schedule, and we will
be ready.
Less than a month ago, Sands opened up its job center with
the promise to bring 1,000 new jobs to Bethlehem. In light
of the current economic conditions, it was great to announce
the opening of an employment center and not and unemployment
center.
Ironically, the employment center for Sands is housed in
the former Bethlehem Steel Corporation plant office, the very
building where tens of thousands of steelworkers and support
personnel for the massive steel plant that operated on the
site for almost 100 years, applied for jobs and were hired.
Not only are these jobs symbolic of breathing new life into
old steel, more importantly they are solid family sustaining
jobs that will help reshape Bethlehem. And these 1,000 jobs
could not come at a better time for the Lehigh Valley.
With the opening of the Casino comes the realization of the
much talked about Host Fee. In fact, the 2009 budget was the
first opportunity to budget the host fee revenues. Several
years ago, I laid out a broad vision for how best to use those
fees—to stabilize the city finances, reduce taxes, invest
in our existing business districts, and invest in public safety
and city services.
Due to sudden and dramatic collapse of the economy over the
last three months of 2008, my administration took the extraordinary
step of amending its previously published budget to recognize
the new economic reality and the potential for shrinking revenues
and actually cut an already tight budget by close to one million
dollars. In the end, we have a budget for 2009 that contains
a 1.1% increase in spending, significantly less than the rate
of inflation, all the while not including revenues from the
early opening of the casino and includes a very conservative
projection for the actual host fee the city will collect this
year.
The 2009 budget continues the fiscally responsible approach
of paying off more debt than we take on. Unlike so many other
cities, we have not mortgaged our future. Since I became Mayor,
we have decreased the city’s total debt by $54 million,
and we are on track to aggressively pay down debt by fifty
percent in the next seven years, and sixty percent in the
next ten years—a claim that very few governments can
make. And I’m happy to add that we have accomplished
all this without a tax increase in the last three years.
By being responsible stewards of the host fee dollars, we
can grow our cash reserves, establish a taxpayer stabilization
fund, and ensure the financial stability of the city for decades
to come. Growing our cash reserves will certainly improve
our bond rating, which I am happy to report—in case
you missed it—was actually upgraded in December of 2008,
right in the midst of the banking crisis. Essentially, when
most corporations and governments were being placed on the
credit watch list, the city’s credit rating was increased.
The second goal of the Host Fee is to reduce taxes, which
must be done responsibly. In 2008, I released a five-year
financial model that continued an aggressive pay-down of city
debt, while growing cash reserves and showed no tax increases
for the foreseeable future. In fact, if things go as projected,
there is a very real possibility for a tax decrease.
The third goal for the use of the Host Fee was to invest
in our existing business districts. Last year, we embarked
for the first time in our city’s history on a citywide
parking master plan to evaluate capacity, utilization, anticipated
demand and the feasibility of additional parking garages.
We also recognize the need to be innovative in the way we
move people around the city once they get here. One of the
strengths of Bethlehem lies in its quaint and unique business
districts on both sides of the river. We need to let the anticipated
16,000 daily visitors to the Sands project know that Bethlehem’s
retail district stretches beyond the boundaries of the new
casino. And we need to encourage those visitors to explore
all that Bethlehem has to offer and we can’t leave that
to chance.
And that is why today I am pleased to announce that by June
of this year, we will have in place a downtown shuttle bus
which will enable visitors to easily travel between the Southside
Shopping District, the Historic Shopping District, and the
Sands Casino Resort Bethlehem.
We have been actively working out the details with the Chamber,
Bethlehem Marketing Council, DBA, the Parking Authority and
LANTA. This graphic shows a fairly simple route that does
exactly what it is intended to do—connect the two downtowns
and the casino. The impacts will hopefully be two-fold: one—it
will draw from the estimated 4-5 million visitors to the casino
making it easy for them to explore our city, and two—it
allows visitors using the parking garages on the northside
to explore the southside business district while reducing
the number of cars on our roads.
Right now, the shuttle is planned to run 7 days a week from
6:30 a.m. to 11:30 p.m. with 20 minute service during peak
hours and 40 minute service during non-peak hours. The loop
fair is estimated to be about $1.25. In the coming months,
more details about the shuttle bus will be forthcoming, which
could include a naming contest. Also, it is my hope that one
day this shuttle will run on hydrogen fuel.
The final goal for using the Host Fee dollars is to invest
in public safety and city services. There is no more important
indicator for a city’s livability and ability to attract
more economic growth, than safety. We can’t attract
millions of visitors to Bethlehem if they don’t feel
safe. We can’t expect someone to raise a family here
if they don’t feel safe. We can’t expect someone
to grow or relocate a business here if they don’t feel
safe.
Last year, we re-deployed our police officers in an innovative
community patrol model—to ensure that community policing
became more than just a division in a department, but rather
a philosophy that permeates the entire department. We empowered
our officers to make more decisions at the street level, bringing
greater accountability and resources to bear sooner, before
a small problem becomes a larger one.
We have also significantly increased our manpower. As this
chart shows, we have added more officers in the last five
years, than we have in the twenty years prior. Bethlehem is
the safest city in Pennsylvania with a population over 30,000.
In 2008, for the first time in sixteen years, Bethlehem went
an entire year without a homicide, and stands alone as the
only city or borough in Pennsylvania with a population over
30,000 that did not have a homicide.
Bethlehem is in the midst of the most rapid period of growth
and change in our 265-year history. Bethlehem is the fastest
growing, most prosperous mid-sized city in Pennsylvania. And
the Sands project is only part of that growth.
We anticipate breaking ground this year on Steel Stacks.
We anticipate further development of LVIP VII, including their
new headquarters and Synchronosis Technologies. To date, LVIP
VII has already brought 2,000 jobs to the city.
We anticipate that this summer Majestic Corporation will
break ground on phase one of its 441 acres development project.
This project alone is anticipated to bring 3 to 4,000 jobs
and 500 million dollars in economic development when it is
completely built out.
If you drive around the city you can see construction activity
in both our downtowns. On the northside, a new Hyatt hotel
is well underway, the first downtown hotel built in the Lehigh
Valley in thirty years, and at Moravian College, which is
finishing construction on its dormitory on the south end of
Main Street. Both are projects that will help support our
Historic Business district. On the Southside, Lehigh University
has broke ground on its 65 million dollar STEPS building in
the heart of our southside, which along with the KIZ, will
make Bethlehem a center for green collar jobs in our new green
economy.
Today, Bethlehem has more than 2 billion dollars of investment
ongoing or on the horizon and anticipates more than 5,000
new jobs as a result. All told, in the last five years, Bethlehem
has seen over 1 billion dollars in economic investment, which
has grown the city’s tax base by close to 100 million
dollars, and we have created or retained over 3,500 jobs.
Today, Bethlehem enjoys a reputation of being a well-managed
city. This reputation was not earned by accident. We take
pride in delivering more with less. The Continuous Improvement
initiative has helped us do just that. CI in the City is the
innovative public-private partnership with Air Products that
eliminates waste, increases efficiency, and empowers employees
to do their jobs better.
Government must always be reforming to stave off bureaucracy.
Helping government workers more effectively serve citizens
is one way of maintaining a responsive government.
The city’s greatest assets are its people. It takes
people to run a city and as I have mentioned in the past,
80% of the city’s budget is wages and benefits. If we
don’t seek to maximize this important resource, we will
have missed our largest opportunity to improve government.
After 12 years in the private sector and 12 years as an elected
official, I have found public employees are every bit as talented
as those in the private sector. However, we need to bridge
the gap between talent and performance.
To improve performance, we need to first be able to gauge
and facilitate performance. Providing this quality management
means defining clear job expectations and offering quantifiable
indicators of progress toward defined goals.
And that is why today I am please to announce that starting
this year, for the first time, the City of Bethlehem will
be administering employee performance appraisals. This valuable
tool will provide both employee and supervisor an opportunity
to document and discuss organizational priorities and set
and meet performance goals for the employee.
Appraisal training will begin in March, and the actual performance
evaluations will be kicked-off in the second half of the year.
The department heads will be charged with evaluating 35 bureau
chiefs and 89 TAMS employees. Bureau chiefs will be involved
in the program as well, appraising our blue and white-collar
workforce that number 244 strong.
Bethlehem also enjoys a reputation as a very livable city.
Livability is one of those intangible, “you know it
when you see it” qualities. An essential component to
a livable neighborhood is parks. This year we will break ground
on the much-anticipated Greenway and the Skatepark and a new
pavilion on the west end of Sand Island.
But what has always made Bethlehem so special is our quality
of life, and quality of life starts with neighborhoods. Neighborhoods
are the foundation of any city. Good neighborhoods have three
essential elements: cleanliness, livability, and safety. This
year, along with our annual southside clean up, we will have
six neighborhood clean-ups in our Elm Street neighborhoods
on the northside. Residents and volunteers working side by
side with city employees is an excellent way to keep neighborhoods
clean and get more done with less. These clean-ups also help
to build pride in our neighborhoods. And that is why today
I am pleased to announce that by April we will have cameras
in place in Friendship and Fairview parks to ensure that clean-up
activities are sustained.
I have repeatedly said it is not about a Mayor or a Council
or even city government, it is the people of this city that
are its cornerstone. Without people dedicated to keeping their
neighborhoods clean and safe, no one would look to Bethlehem
to build their new business or raise their family. Today,
we need the time and talent of our residents to ensure that
the City will remain a model and we are willing to work with
them and teach them how government can and does work for them.
Nationally, there has been a renewed calling for individuals
to public service. While Bethlehem has a long history of dedicated
residents, we must seek new ways to capitalize on more of
our residents’ renewed desire to strengthen their country
and communities through civic participation.
AND that is why today I am also pleased to announce the creation
of the Bethlehem Citizens Academy, to my knowledge the first
of its kind in Pennsylvania, modeled after our successful
Citizens Police Academy.
The Citizens Academy will offer individuals interested in
getting involved, the opportunity to be directly exposed to
city operations, learning more about what city government
does, and direct exposure to a variety of city operations.
This ten-week course will be designed to expose up to 30 residents
to the various functions of city government, which will in
turn empower them with knowledge to more effectively participate
in shaping their communities. The program will include visits
to the various city operations, everything from meeting with
elected officials to a visit to the wastewater treatment plant.
Together we can expand the city’s volunteer capacity
and build a new generation of leaders in Bethlehem.
In closing, our City has become a shining star among Pennsylvania
cities and is receiving national and international accolades—making
three different top ten best places lists in just three years.
We have shown what fiscal discipline, decisive leadership,
and smart investment can do to turn around a city. Together
we can continue to be a model for mid-sized urban America,
a model of hope for other communities that they too can rise
up from the ashes and remake themselves. Together we will
accomplish great things and build a better Bethlehem.
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