Year 2013
Mayor
John Callahan
State of the City Address
February 14, 2013, 7:00 a.m.
Steel Stacks
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In 2003, I decided to run for mayor because I saw the potential
in this community.
Bethlehem was in the infancy of its renaissance and the opportunities
here were boundless.
There was also much uncertainty. I knew that this would be
a period of enormous transition and change. Our success –
or failure – over this last decade would in large part
determine the trajectory of this community for decades to
come.
This was not a time of status quo.
So in preparation for this – my last state of the city,
being billed as the kickoff of the “farewell tour”
by my friends in the Chamber of Commerce – I found myself
re-reading my 2004 address.
I said during that first state of the city, “Now, as
we look into the future, our challenge goes beyond just saving
the town, our goal must be to accelerate our progress and
make Bethlehem a great city, not only in Pennsylvania, but
also one of the best places to live in the whole United States.”
I said very boldly, and perhaps naively at the time, that,
“During the next two years that will be my goal –
and I will not settle for anything less.”
In April 2004 – just a month after that first state-of-the-city,
Fortune magazine published an article about the “sinking”
of Bethlehem Steel.
The reporter called the corporation’s main number and
heard on the other end of the phone an automated female voice
after navigating the extensive phone tree to reach accounts
receivable, personnel, etc. The call ends with the rather
ominous statement, “We have no one to answer questions.”
For 125 years, the answer to most questions in Bethlehem
was “Bethlehem Steel.”
But in 2004, both literally and figuratively, we were left
to find those answers for ourselves.
Today, I can say that over the last decade, we found those
answers.
Bethlehem IS a national example of a successful midsized
city, a prosperous place where success can be achieved by
every resident.
The state of our city is strong in many ways. And it continues
to get stronger.
In only one way is the state of our city poorer today –
and that is because of the loss of two of Bethlehem’s
best friends: Linny Fowler and Priscilla Payne Hurd.
These two women were great humanitarians who gave much to
this community and its people.
While their contributions will stand forever, the best way
we can honor their memory is to individually and collectively
take their lead.
They taught us that each of us in our own way, in our own
capacity should try to make our community better.
I think they would both agree that we must always keep our
eyes toward the future.
Most of you know I am not one for a great deal of retrospection.
I am generally focused on what’s in front of me and
always trying always to move forward, but being as this is
our last state of the city together, I feel it’s appropriate
that we take a chance to look back on how far Bethlehem has
come.
So with a tinge of nostalgia, I would like to share with
you a short video I prepared with my Community and Economic
Development team.
These projects, these initiatives, these new office building
and condominium complexes – these became Bethlehem’s
answers to the question of what we would become after the
loss of Steel. These pictures tell a tangible bricks mortar
story of our evolution from old steel town to a modern urban
community.
In 2012, the Federal Reserve Bank of Philadelphia, which
covers Delaware, southern New Jersey and the eastern two thirds
of Pennsylvania, embarked on a 13-city study of cities in
Philadelphia’s shadow.
The study set out to provide a picture of the condition of
these cities as they seek to find their way in a post-industrial
economy and evaluates the future of these cities.
All the cities had a population over 50,000 in 1950 where
25% of the workforce worked at once in manufacturing related
areas.
In 1950, 60 percent of Bethlehem’s population worked
in manufacturing – by far the highest percentage of
any of the cities in the study.
No City on that list lost more than Bethlehem.
They studied these cities and measured their vitality based
on a number of economic and social conditions.
While all these cities faced challenges, the report ranked
Bethlehem number 1 and clearly showed that we were in fact
a rebounding city. Serving as a third party objective fact
driven validator of how far we have come and that should bring
a great measure of pride to us all.
These results were not achieved by accident.
We recognized that in order to survive we had to remake ourselves,
both as a City and as a government, in order to ensure our
economic survival.
The plan was simple enough, deliver good basic City services
as cost-effectively and efficiently as possible, maintain
a well funded public safety operation and aggressively pursue
economic development opportunities.
It's not been all smooth sailing. We have led, governed and
managed tax dollars during an historic economic meltdown.
We have had to make tough calls to make sure our fiscal house
was in order and our fiscal house IS in order.
Bethlehem is in its strongest financial position in decades,
with a bright future. We have eliminated the deficit. We have
$90 million less debt today then when I first became mayor.
We ran back to back surpluses, including a million dollar
surplus this year. Few municipalities can say that.
Not only have we dealt with the fiscal issues challenge the
City today, we have also tackled perhaps our toughest challenge
– our legacy costs. Nationally we hear about the fiscal
cliff and entitlements. At the state and local level, we understand
how pension costs severely limit our ability to balance budgets,
forcing many municipalities to make some very difficult and
unpopular decisions.
To give you some perspective on the impact of pensions in
the City, in 2003 our pension payment was $1.3 million, about
3% of the budget. Today our payment is $11 million, almost
16% of the budget.
Continuing at that pace was not sustainable. We had to make
a change. Here is what the system is now….
The changes that we made to the pensions system alone will
save the City approximately 30 million dollars over the next
20 years.
We’ve addressed the pension problem for future administrations.
More importantly, we’ve addressed this problem for future
generations of Bethlehem taxpayers.
Getting to this point wasn’t always easy and it required
strong leadership and tough choices.
Bethlehem’s reputation of being a well-managed city
is important to me. It was not earned by accident. We at city
hall take pride in doing more with less.
Our Continuous Improvement initiative has helped us do just
that. CI in the City is an innovative public-private partnership
with Air Products that eliminates waste, increases efficiency
and empowers employees to do their jobs better.
We have the smallest work force in our history. Yet, I’m
proud to say, we continue to deliver services at the highest
level they have ever been.
However, in all the right-sizing of our government we never
sacrificed public safety for short term financial relief.
In fact we increased our spending in public safety. In 2003,
public safety spending represented 41% of the budget, today
it represents 53%. Investments in public safety are some of
the most important any City can make and the results speak
for themselves.
We have been the safest City in the Commonwealth for 9 years
running, a remarkable accomplishment and I want to take a
moment to acknowledge the leadership of our Police Chief,
the dedication of our officers and the trust and partnership
they’ve formed with our community.
There is no more important indicator of a city’s livability
and ability to attract more economic growth than safety.
Without a sense of safety, people will not live in, invest
in or visit Bethlehem. We can’t be the setting for the
American dream if our city isn’t safe.
We have enjoyed over 2 billion dollars in economic investment
since 2004. You can see just how far we have come looking
at what has become one of my favorite charts.
The TIF has provided us with $28 million of improvements
to this very site – the Levitt Pavilion, the Visitors
Center and all the infrastructure necessary to compliment
this new building.
This year, we will be focused on the next wave of public
investment on this site will be projects like the restoration
of the Hoover-Mason Trestle, the elevated rail line directly
behind me.
This administration is making investments for the future
and practicing a great deal of delayed gratification –
concerned more with the next generation than the next election.
And speaking of that next generation, Bethlehem’s future
leaders are already here.
A fact you may not know is that 22% of the City’s population
– in fact, our largest population group – is between
the ages of 20 and 34.
These young people are highly educated and highly employable.
In Bethlehem they find opportunities, a place to start a
career and a place to raise a family.
We continue to target the technology sector as we continue
to grow Bethlehem as a City of Innovation.
Last year, with the grand opening of Pi: Partnership for
Innovation, our latest post incubator space we put out a call
to every entrepreneur, inventor, scientist, developer, hacker,
mathematician, student, professor and thinker: Bethlehem wants
you.
And they responded. Almost overwhelmingly so.
Pi’s 8,000 square feet is filled to capacity and the
demand for office space in the Keystone Innovation Zone remains
high.
As we move from a post industrial era and build an economy
with jobs for the 21st century, we must again reinvest in
technology centers, facilities where we can attract and grow
the best and brightest companies and individuals.
We recognized the ever expanding need for our next tech center
location and we answered that with a new project, Tau.
Tau will recast the former Bethlehem Steel General Office
Building East Annex as a fully integrated technology center
which attracts companies in every stage.
As an administration, we’ve worked hard over the last
decade because we want to be the LAST to say that Bethlehem
is still struggling from the loss of Steel.
We’re no longer the community with the largest brownfield
site in the country.
Today we’re the community with the largest shovel-ready
opportunity for investment, growth and new jobs.
In my first state of the city address, I said, “This
City’s future holds endless possibilities. Our only
limitations are self-created…that I was elected to keep
Bethlehem moving forward, to build upon the success that was
started and to lead us to a brighter tomorrow.”
I believe today, as I said then, that the continued success
of Bethlehem rests not with one person or one mayor, one company
or one institution but with the collective efforts of all
residents, all of its businesses and all of its institutions.
Ten years ago, I said, “In the next decade, Bethlehem
will become the benchmark for livable urban communities, where
people can live, work and play all in walking distance.”
That’s exactly what Bethlehem is today. We are the
safest, most prosperous and fastest growing city in Pennsylvania.
And we should all be very proud to have achieved that goal
together.
But there’s always more to be done.
So as I conclude my final state of the city address as your
mayor, and embark on what the Chamber has described as the
“kick-off to my farewell tour,” rather than bid
you a fond farewell, allow me to say, “until we meet
again.”
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