Office of Mayor From Staff: Here is the text of the 2014 State of the City address which the Mayor gave last night: 2014 State of the City Address President Hyslop, members of the Council, President Curtin, members of the Board of Education, members of the Administrative Staff, Clerk Caron, distinguished guests, and my fellow New Londoners: After a difficult winter, standing tonight on the threshold of spring, I am called upon again to report to you on the state of our City. I am reminded in this moment that spring can bring new hope, an opportunity for new life. For our City, opportunities abound, but so too do challenges. As a City, we are on the brink of capitalizing on some of the most exciting opportunities our City has ever seen. And yet, in order to realize the potential of these opportunities, we need to extricate ourselves from a very real, and a very grave, financial peril. First, however, the good news--and there is a lot of it. Although much of it isn’t yet visible, New London is going through a period of significant economic development. Kyle Klewin, the developer for Parcel J--the lot on the corner of Bank and Howard streets—expects to break ground on a major project this fall. After forty one years of vacancy and neglect, instead of a lawn full of Canadian geese, we’re going to have a downtown supermarket, which will support downtown living, and approximately forty high quality apartments. In the streets behind Harbour Towers, Gaspar’s and Dev’s on Bank, Tony Silvestri’s City Flats project is well underway. By preserving historic homes and converting them into reasonably-priced condominiums, City Flats is stabilizing a neighborhood and helping families move into home ownership. Owner-occupied housing, people living downtown, is key to the economic revitalization of our central business district. The City Flats project and the Parcel J development serve as models for how this revitalization can be achieved. The CreateHereNow project is also underway, bringing at least eight new stores to downtown by next January. This project, spearheaded by Annah Perch of New London Main Street and special advisor Margaret Bodell, is not only attracting new businesses to open their doors but is also providing ongoing mentoring to help those businesses succeed. Regarding development on the south end of the City, bids will be opened on May 28 for the sale of the Lighthouse Inn. If a responsible developer is identified, we can save the Lighthouse Inn and reverse the sad trend our City has had in the past of tearing down our architectural treasures. On the Waterford border in our City, Mike’s Harley Davidson is open on Boston Post Road. Downtown, Mambo’s has expanded into a great new space. Cruise ships are returning to the port of New London this summer, and when they arrive, their passengers will be able to take Segway tours of historic sites downtown. Thanks to State Senator Andrew Maynard, a State pilot program will institute a water taxi service on the Thames River by September. This service will further expand historic tourism. Historic tourism is recognized by urban planners as a principal economic driver in the Northeast. In east New London, residents of Hodges Square are planning improvements to their neighborhood. With broad community partnerships, including a closer working relationship with Connecticut College and the Coast Guard Academy, our City has the real opportunity for the first time in decades to make a significant impact on the redevelopment of Hodges Square, a key connective neighborhood for our City that cannot be overlooked any longer. Perhaps most significantly, step by step, we are working towards bringing the National Coast Guard Museum to our downtown. This museum will attract hundreds of thousands of visitors annually to our City. One month from tomorrow, on May 2nd, I will be proud to transfer the deed to the land on which this museum will be built, on behalf of the people of our City, to the United States Coast Guard. While the Coast Guard museum is a great achievement for our City, other community efforts this past year are also deeply significant in their own right. Last year, hundreds of volunteers came together to build Emilie’s Shady spot in Riverside Park. This playscape will bring joy to countless children while serving as a permanent memorial to the life of Emilie Parker. The entire City thanks all those who made this possible and who have done so much to remember Emilie and bring comfort to her family. But the most important news for our children, and for our City, pertains to our schools. This past year, the Board of Education approved a strategic operating plan which outlines the conversion of our system to the first all-magnet regional school district in our state. Once this conversion is complete, I believe New London’s schools will give each of our students an education tailored to their interests and needs; and I believe our schools will be funded in a way which rectifies many of the inequities in our property tax system. This will make our schools the envy of every other district not only in our state, but in the entire country. I can also report to the Council and to the community that conversations are now taking place between the City and the State government at the highest level regarding the future of Fort Trumbull. I hope to be able to make an important announcement regarding the status of development on the peninsula shortly. So why, with so much good news, do I find it difficult to stand before you tonight as your Mayor? In short, because, quite simply, I’m not from here. I love our City. New London is my home, in so many ways the only true home of my own that I have ever known. I’ll spend the rest of my life in New London. But I didn’t grow up in our neighborhoods. I didn’t lifeguard at Ocean Beach. I did not graduate from New London High, or St. Bernard’s. I love New London, as much or even more than anyone, but unlike my husband, I am not originally from here. I wish tonight that I was, because what I have to say next would be easier for you to hear, I believe, if it came from a native New Londoner. I say to you now out of love for our City and concern for its future: We are out of money, and we are out of time. Understand: we will not be running an annual operating deficit. I will do whatever it takes to balance this year’s budget, as I balanced last year’s. But with no wiggle room in our cash flow, it’s not enough to balance the budget by year’s end. We need to balance it every two weeks if we are going to meet payroll. A balanced budget is only half the solution to our financial problems. We need a fund balance to stabilize City operations. I have been saying this for 2 years, but now time is running out. Even with a balanced budget, according to our professional financial staff, if we do not stabilize cash flow and replenish fund balance, we could run out of cash in May and face the possibility of a takeover by the State. This would be disaster for the City, one I have worked tirelessly for two years to avoid, ever since the financial condition of our City was revealed in January of 2012. In the past two years we have raised taxes, slashed spending, cut staff, examined asset and property sales to gain revenue, proposed a supplemental tax bill, lobbied the state for additional revenue, asked for voluntary contributions from non-profits in our City. In short, we have exhausted every option to replenish fund balance and permanently stabilize the City’s cash flows. It’s hard for me to say, but I have to say it. It’s hard for you to hear, but you have to hear it. We are out of money, and we are out of time. That is why the Finance Director has proposed a bonding package, now pending before the City Council, that will close out over twenty years of bad management of our capital accounts, double our fund balance, and resolve our cash flow problem. By including a clause for the reduction in bonding if state payments are received in time, and by designating any state payments received after bonding to a debt service account, this plan would resolve our difficulties, improve our bond rating and ensure that, combined with adoption of a good budget this year, the City permanently turns the financial corner. This plan is a last resort, but that is where we are. It has been endorsed by our Finance Department, supported by our Bond Counsel, and, with the clause for bonding reduction for receipt of State refunds, has the support of the City Council’s independent financial consultant. The approval of this bonding will address our cash flow situation, but it’s not just cash that we don’t have enough of. We don’t have enough cops on our streets. Graffiti is on the rise. Enforcement of basic “broken windows” quality of life issues is lagging. The effects of that neglect will increase exponentially if we do not take remedial action now and begin to hire more officers. As if this were not enough, our City buildings are falling apart. And if we have to plow the streets in a snowstorm, we don’t have the manpower to also pick up the trash. Without enough manpower for bulky waste collection, couches are piling up on sidewalks throughout the city. This moment has been a long time coming. Two years ago I stood before you and said that New Londoners had not been paying the true cost of their government for quite some time; that in the year I took office, under a budget adopted before I arrived, the City was running a deficit of almost four million dollars, and that our fund balance, essential to maintain cash flow, meet payroll, and preserve our bond rating was nearly exhausted. It was a hard truth. I don’t blame anyone for wanting it verified by an independent auditor before they believed me. These audits have been done, however, and the numbers have been confirmed. Since then, even with tax increases to correct the deficit, we’ve lost twenty five percent of our municipal employees due to budget cuts. We increased taxes, but not enough to cover what we had been spending by eating up our fund balance while holding taxes artificially low. I understand the adage “do more with less” but there comes a point when you can only do less with less. People don’t want icy sidewalks, empty lifeguard chairs and trash barrels sitting full for more than a week. My office is besieged with phone calls from people angry about the loss of services. We can’t continue like this. If we don’t change course, we won’t be able to attract investors, our small businesses will continue to close, and residents who can afford to leave will leave. In this precarious moment, either the city is going to crash or we’re going to come together as a community and fix this. Tonight, I am presenting a budget which paves the way forward. This budget isn’t frivolous. It doesn’t contain luxuries. Neither does it put band aids on gaping wounds. It rebuilds departments which have been decimated over the years, and it begins, in a small and reasonable way, to rebuild our fund balance. The total price tag is not cheap, but I believe the alternative is even more expensive and unacceptable. The largest increase in this budget, accounting for $1.4 million dollars, is in our Police Department. The City Council has mandated that we increase the number of officers from our current level of sixty five to eighty, and I agree that eighty officers is a reasonable minimum staffing level. This increase will allow us to have a more visible and active police presence in our neighborhoods and in our downtown, and will give our existing officers a break from the grueling hours they’ve been forced to work. As I’ve promised, I’m also including funding to honor the previous Council’s mandate requiring a four dog K-9 unit. In our Public Works department, I’m including funding for twelve additional positions. This barely begins to reverse the losses this department has suffered over the years. This budget request, if approved, will raise the total number of field staff in the department from forty to forty nine, whereas in fiscal year 2003-2004, Public Works had a field staff of sixty. To further underscore the necessity of this increase, consider that we currently don’t currently employ a single municipal plumber, electrician, or painter. Our buildings don’t look the way they do because of incompetence, bad management, or lack of caring. Deferred maintenance, lack of funding, and lack of staff are causing our buildings to deteriorate, and we need to reverse this trend before we lose these assets altogether. This budget will also accurately balance the Fire Department budget for the first time in over a decade. I thank Chief Kydd and the members of his department for the continued standard of excellence that they strive to maintain. Their quick response time and hard work under grueling and dangerous conditions have saved buildings, businesses and lives. Balancing this department’s budget will be a significant achievement and will correct one glaring area of past underfunding and overspending. In Finance—another department which has suffered little-publicized and little-understood staffing losses over the years—I’m adding an Industrial Safety/Risk Manager position. I anticipate that this position will save us much more than it costs by helping the City reduce its liabilities. I’m also including funding for a Grants Coordinator in the Office of Development and Planning. I campaigned on this issue, and I firmly believe that this position will be a good investment, reducing the overall cost of our City’s government. A Grant Coordinator would bring in dozens of times his or her own salary, funding necessities such as vehicle purchases, building maintenance and street improvements. The ODP budget also contains a request for $30,000 for updating our Plan of Conservation and Development, as mandated by state law. This $30,000 is an initial payment, spreading the $100,000 cost out over several years in order to minimize the impact on any one budget year. In my own office, I’m including a $50,000 request for a state mandated Harbor Management Plan from our newly invigorated Port Authority. Our waterfront, our deep water port, is our City’s greatest asset, but without this funding we’ll be unable to fully exploit its potential. I’m also requesting minimal increases in funding for the Library, Senior Center, and for the Recreation Department. These are important resources for our most vulnerable residents, run by people who know how to stretch their dollars, but their dollars have been stretched too thin for too long. Perhaps the most important line in the entire budget is a $500,000 request for fund balance replacement, which our bond rating agencies and financial advisors say we must establish. Even if the bonding ordinance submitted to Council is passed, and fund balance doubles, it will still only be 25% of what it should be. If we are not going to institute a supplemental tax, then we need a plan, built into our operating budget, for total fund balance replacement. On the Education side of the budget, I’m supporting the Board of Education’s 1.9% request. This continues to honor contractual obligations, and stabilizes our education system as it converts to an all magnet district. All told, my proposed budget for 2014-2015 calls for total spending of $87,128,467, an increase of 7.24% over last year. 7.24% is a big increase for one year, and I don’t enjoy presenting you with this increase. But I want to make several points in order to put this increase in perspective. First, because it comes after several years of deep spending cuts, we would still be spending less under this budget than we spent in 2012. My total proposed budget is about $400,000 less than the $87,537,926 we actually spent during the fiscal year ending in 2012 when I took office. This is despite unavoidable increases in contractually mandated obligations and other fixed costs. Second, a 7.24% budget increase does not mean a 7.24% tax increase for everyone. In fact, many New Londoners will see their tax bills go down. This is because we just went through a city-wide, state-mandated, property revaluation. Most property owners saw their properties lose value considerably. Our taxable grand list went down almost 25%. Even though this budget would require a high mill rate, that mill rate will apply to your new assessment, not your old assessment. Until you compare your new assessment to your old assessment, that mill rate is meaningless. To make this situation even more confusing, New London properties didn’t lose value evenly across the board. Large commercial properties like Electric Boat held their values fairly well. Waterfront residential properties on the south end of town held their value, too. On the other hand, residential properties north of the hospital, particularly multi-family houses, lost value significantly. That’s bad news if you want to sell your property and your mortgage is underwater, but it’s very good news when you get your tax bill. In other words, although I don’t wish a tax increase on anyone, this is one of the few times when a property tax increase will fall largely on those most able to pay. Many of the people in our City with the least breathing room in their personal budgets will see their taxes decrease, or increase only slightly. Taking a closer look at the numbers, the average New London single family homeowner’s house has dropped in value from $166,000 to $126,000. That average homeowner would see a tax increase of about $38.00 per month, or slightly over a dollar a day. But someone on Dart Street, for example, whose house fell in value from $130,000 to $88,000, would see their taxes drop $5 per month. The average duplex owner in the City would see their taxes drop $23 per month. Meanwhile, most of the downtown commercial property owners won’t see a large tax increase. I expect, however, that my budget proposal will be controversial. A spending increase in combination with property revaluations isn’t easy to understand or break down, and it isn’t fun. I wouldn’t be standing here giving you this news if I didn’t have to. I will say that if this budget passes without major changes, I won’t be coming back next year asking for anything new. This is the budget that pulls us out of the hole, stabilizing our tax rate and our services. This is the budget that signals to potential investors that New London is a good place to start a business or raise a family, that we care about our streets and our schools, and we won’t let ourselves die a slow death, or worse, in our inaction at this critical moment, die by suicide. I know, however, as I said before, that I wish I was a native New Londoner. I wish all people in this City knew my heart and understood my motivations. Too much of the debate in our City for the past two years has been focused on me, instead of on our real financial problems. We cannot face the challenges before us if, for the next two years, this political paradigm persists. The City must be put first. I cannot simultaneously lead the City out of this situation, do what is necessary, and continue to speak uncomfortable financial truths, if every proposal from my administration is perceived as a political maneuver designed to get me re-elected. It is for that reason that I have decided I will not be a candidate for re-election next year but instead will dedicate myself fully to the task at hand. We all need to do this, to put our own interests aside and to put our City first. I began this address by saying that after a difficult winter, this spring offers new hope. I check the weather each day, and wonder how long it will be before I can mothball my winter coat. Likewise, I wonder how long it will be before our City’s hard financial times come to an end. But the analogy only goes so far, because whatever happens or doesn’t happen with the weather is up to fate. Whatever happens to New London is up to us. I hope that we’re strong and wise enough to come together. I think that we are. After all our City is made up of people like Jimmy Diaz-Saavedra, for example, who offered to purchase wayfaring signs for the City’s parks if the City would install them; and people like Peter Roberts, who shows up at 5:00 a.m. week after week to serve breakfast in a church basement to our indigent fellow New Londoners; it’s made up of people like Laura Natusch, who led online fundraising efforts to help a New Londoner fix his wheelchair. It’s made up of people who volunteer for the Jennings School Block Party, who volunteer at the Senior Center and at FRESH New London, of people who use social media to save the dogs at Animal Control. And yes---it’s made up of people like our Office of Development and Planning Director, Tammy Daugherty. Tammy postponed her own cancer treatment surgery in order to finish the work of gaining approvals for the Coast Guard Museum land transfer. Her dedication should serve as a lesson to us all that we can come together and face any challenge. She is home tonight recovering from her surgery, she is a fighter, and the thoughts and prayers of our entire City go out to her and her family. Tammy has shown us all how to put personal desires aside for the common good. If we all do the same—if we choose to set aside our political, our personal, and our socioeconomic differences—New London can be stronger than any of us imagined, with a bustling port, world class schools, revitalized neighborhoods, and a vibrant downtown anchored by the National Coast Guard Museum. We can have all this. We can be the City we have always known we could be. The signs of our renewal are as abundant as the new roots growing under spring soil. Either they will wither and die, or else we will choose, in this New London spring, to nurture them, and in so doing give new life to our City. The Renaissance New Londoners have waited for too long to see is finally within our reach. Let us have the strength to do what is necessary to make that Renaissance a reality. Thank you, God bless you, and God bless New London.
Posted on: Wed, 02 Apr 2014 13:13:21 +0000
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