Dearborn State of the City 2012

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S TAT E O F T H E C I T Y
D E A R B O R N 2 0 1 2 MAYOR JOHN B. (JACK) O’REILLY, JR.
The Presidential election cycle reached maximum intensity for most of us last week in Michigan with the first of three voting opportunities in 2012. I don’t know about you but I can’t remember anything of positive value that I learned from any of the candidate contacts and ads. Given that fact, can anyone believe the millions of dollars spent on advertising and publicity? Here’s the irony. The more money that’s spent, the more muddled the overall picture becomes. Misrepresenting people and their positions takes its toll, leaving us as voters to wonder if anyone can make a real difference. It’s a shame, especially during times like these when we need real leadership to set the stage for true dialogue, compromise and positive action. How can we attempt to solve our very real problems if we can’t talk about them with honesty and civility? The answer is we can’t. I’m raising this unfortunate reality because it stands in direct contrast to the way we have and hopefully will continue to operate here in Dearborn. And that has everything to do with the state of our City today. In Dearborn, our focus is on results. We can not worry first about satisfying this group vs. that group. We worry first about our whole community. We pursue what’s best for the future of our City because we know that’s what is best for all of us in the long run. This effective approach was clear to see this past November. That’s when Dearborn residents decided to approve the temporary millage increase and invest in the long term interest of this community once again. Thank you. You’ve given us time to continue the necessary restructuring of our operations in an urgent, but orderly way. A different outcome would have meant a very different discussion this evening. We view your endorsement of the millage in November not as a blank check, but instead as a five-year annual contribution to the future of Dearborn. The money you are contributing is providing the opportunity to keep Dearborn desirable and successful for the next generation.

With that “investment,” we know you demand real results. As far as I’m concerned, to honor your trust in us, our deadline to produce is not five years from now, but “now.” The best way to achieve these results is through a straightforward process I continually rely on—identify priorities, define goals, and measure progress. A good example of how we’ve applied this process is the Performance Dashboard we created as part of the State’s Economic Vitality Incentive Program. That’s a long title for this program that was recently initiated by the State. By complying with its three required phases, Dearborn secured critical additional revenue from the state. But even more importantly, the dashboard is a meaningful tool to measure our efforts and assess how we are doing as an organization. Essentially it’s our report card. And because many other communities will have dashboards as well, you can compare our results with others. The categories in our report card are good indicators of our financial strength, the power of our local economy, and our quality of life. Our 2011 version is on our website. Although the state doesn’t require us to update it until October, we are measuring our latest progress now. The dashboard is designed to demonstrate how we progress from year to year toward reaching our goals. But it is also designed to bolster your trust in us, because you can have confidence we are measuring our progress, and in a very public way. I’m going to walk through a few of the dashboard categories. An important category measures our fiscal stability. Not surprisingly, we have challenges here. But what our dashboard shows is we are holding our own in this critical area, which is an achievement given the economic forces impacting us, and the news from communities around us. It’s also a reflection on the proactive steps we’ve already taken to position Dearborn for the long term. Another category is Economic Strength. There are signs of hope in this category that slowly but surely our recovery is moving in the right direction. We’re issuing more certificates of occupancies and more construction permits for businesses, indicating more entrepreneurs and companies are choosing Dearborn.

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Here is another interesting indicator. We know that employers look for a well-educated population when deciding where to locate. In Dearborn, our college and university enrollment continues to grow, now to more than 30,000 students. This is another way we are being positively positioned for the future. Our quality of life is reflected in the number of activities our community offers, and the dashboard shows participation in adult programs is relatively consistent, with youth programs steadily rising. The amount of our investment in neighborhood amenities and infrastructure, like roads, is another indicator. Given our recent financial challenges, our General Fund spending for this broad category has decreased. There is at least one positive trend here: we’ve actively looked for, and been successful at, lowering some of our maintenance costs. And we continue to make progress with our neighborhood stabilization programs, which we’ll talk about later. Public safety is always a concern and measured on several levels on our dashboard. While we know our perception of safety is as important as the numbers, the data give us solid reasons to remain confident. When crimes are reported, police are dramatically arresting more suspects. That amplifies a core message: if you commit a crime in Dearborn, it is likely you will get caught. A lot of that has to do with good police work and excellent response times to high priority 9-1-1 calls. The data shows that response times are also great for our Fire Department on fire-related calls. These are just some of the markers, but you need to know we are going to keep using the Performance Dashboard tool for ongoing improvement and as a powerful and objective way to report to you. We’re also going to keep talking about our financial challenges, because they’re real and will continue to impact our service mix. We’ve been dealing with them since 2001, before it was common understanding that the economics of our nation, state and community were permanently changing in historic ways. That early recognition and planning is why we remain in better shape now than many other cities.

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And because the City is primarily a service provider, personnel costs represent the majority of our expenditures and it’s also where we have and continue to make the biggest changes. You’ve heard these statistics before: We’ve reduced our non-public safety full-time staff by as much as 35 percent, with some departments experiencing even greater cutbacks. That means our employees are working harder with fewer resources, and reductions in staff will continue this year, with as many as 20 more fulltime jobs lost through attrition. We plan to implement a 20/80 percent cost-sharing measure for employees’ health care premiums in July. We continue to negotiate with the City’s unions for an overall $4 million reduction in personnel costs. We look to our unions as partners in developing realistic and sustainable benefits going forward. We’ve already made great strides over the last 6 years with reducing future costs by restructuring retirement and benefit options for new employees. By contracting out certain services, we’ve not only saved some personnel costs, but we’ve eliminated the need to buy or maintain expensive heavy equipment, like streetsweepers. But despite these effective actions, we know we can’t cut enough to meet our financial challenges. So we look to other options, one being leveraging our resources through aggressively pursuing grants from other levels of government and foundations. Just a sample of our recent successes: we were awarded more than $900,000 for projects directed at improving the environment, more than $250,000 for recreation, $300,000 for cultural arts, and more than $3.5 million for public safety. We’ve also looked at controlling costs by relying on our community partners even more. In 2011, the nonprofit Dearborn Community Fund accepted an important role in managing Homecoming, eliminating the need for Dearborn tax dollars to be dedicated to the festival in the future. They’ve also amplified the message that Homecoming is the premiere fundraiser for two dozen Dearborn nonprofit groups, which provide additional support to our community all year long. That means when you spend money at

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the festival, it is these nonprofit groups and the people they serve, not the City, that benefit. We have another example being pursued by our Recreation and Parks Department. With our Recreation Commissioners, a dozen partner sports organizations and the Dearborn Public Schools, we are looking at eliminating duplication, lowering costs and strengthening sports programs for youth. As a community, we need to be willing to try even more innovative approaches to keep Dearborn moving forward. We’ve been actively working with the Save Our Pools group on a funding alternative for the six neighborhood pools. This option would let property owners vote on whether they want to pay a special assessment to operate their nearest neighborhood pool. By exploring this with the Save our Pools supporters, we’re trying to preserve services residents have enjoyed in the past, while at the same time recognizing our new economic reality. In these times, advocating for your favorite service or program also means coming forward with a willingness to seek solutions and to keep an open mind. We must accept change as inevitable if we’re going to remain a viable community. And, we also need to recognize an inherent part of change is acknowledging that it can be a messy process. It involves starts and stops. As we explore many ideas, we’ll find some are better than others. But the consideration of all of these ideas is important to finding the best ideas. As we explore ways to preserve the heart of Dearborn, we must always focus on our core services, especially public safety. As we’ve seen the economy decline, it seems like we’re feeling more vulnerable now in our neighborhoods, and that is not how we want to feel about Dearborn. Well-publicized cases can add to that uneasiness, like a string of home burglaries. But when that happens, you need to be confident our Police Department takes a comprehensive approach using targeted tactics, engaging with citizens, and when criminals cross city lines, teaming with other agencies. This proved successful once again by recent arrests, leading to the resolution of some high profile cases. Our sense of security is also dependent on our Fire Department and responses in medical emergencies.

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Dearborn has an outstanding example through its collaboration with Oakwood Hospital. Outcomes for heart attack and stroke patients have dramatically improved through greatly reduced treatment times. For example, the national target for emergency angioplasty treatment is within 90 minutes. Dearborn Fire and Oakwood do it in 40 minutes. And, in one recent case, a Dearborn patient received angioplasty in an incredible 22 minutes. But maintaining those types of remarkable services is harder as we face financial threats not within our control. Property values, our main source of tax revenue, are still in decline. Most of you saw that with your assessment notices delivered last week. You may have been temporarily pleased because you will get a lower than expected tax bill. But for the long term, we know declining values are a liability for all of us. For the City, this additional average 9 percent drop in residential value represents a loss of more than $3 million in annual revenue. In fact, the City now has lost 33 percent of its residential property tax revenue over the last 6 years. Try to imagine how the loss of one third of your own household income would impact how your family functions. We have gotten good news on one front. Dearborn’s inventory of houses, which is measured in the number of months it would take to sell these homes, has dramatically improved. In 2004 that inventory averaged 8 months. This number spiked to 14 months during the worst of the recession in 2008. Today that inventory stands at 4.3 months. The corresponding bad news is that actual prices don’t reflect this increase in demand. This is due to flawed financing policies of non-Dearborn based banks which are not willing to finance prices that sellers and buyers have agreed upon because their appraisers do not understand our local market. Another potential financial threat is the proposed elimination of the industrial personal property tax being discussed in Lansing. At risk for us is about $12 million in City revenues each year. That’s a staggering 20 percent of our general tax collection. Without any reliable replacement for this tax established in 1893, our services will have to be remarkably different.

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As a realist, I’m convinced that the days of levying this tax may be numbered. I also understand that over the past fifteen years, the share of the total tax burden for supporting all City functions has been shifting to the residential taxpayers and lessening for industrial taxpayers, due to policies at the state level. That is why I am determined to help craft a suitable alternative. As a member of a special task force of business and local government leaders organized by the Southeast Michigan Council of Governments, I proposed a way to lessen the burden on industry and still protect critical local services. Ford Motor Company was represented on this task force and has been a crucial and positive part of the development of this proposed alternative. We have had several positive meetings with Lt. Governor Calley and his staff to discuss this concept. I’m hoping for a resolution that is workable, if not ideal, for businesses and the communities they rely on for services. The financial struggles of cities that border Dearborn represent another real threat. While we can’t do anything directly to assist, we can and we have reached out to partner with these communities to offer services more efficiently. For instance, our Management Information Systems Department – I.T. to most people – will be paid for providing tech support to Dearborn Heights. Another approach is reciprocal agreements to better leverage resources. Under this model, Dearborn and Dearborn Heights residents can share libraries, a successful arrangement now entering its second year. Another long term strategy is to work with neighboring communities to create more efficient ways to deliver services across the region. Our vision going forward can be guided by Dearborn’s past but it needs to recognize the very different dynamics we’re facing as we fight for our future. Consider the depth of those differences. One example is the impact of Ford Motor Company on the economic vitality of Dearborn. At one point Ford Motor Company paid the bulk of the total general tax revenue collected by the City of Dearborn. But that was a long time ago and today that figure is dramatically reduced. Ford has had an impact on our economic vitality another way. Dearborn’s economy has always been bigger than its geographic size and population. That’s because of a daily influx of people, historically brought by Ford and Ford-related enterprises. The Rouge Plant once employed more than 80,000 people daily. Another 150,000 or more worked for Ford at other locations in Dearborn.

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The collective demand of employees living in and working in Dearborn, and people visiting Dearborn, could be felt everywhere—in our neighborhoods, in our schools, in our restaurants, our retail stores, our professional shops, and in our collective sense of vitality. Ford has dramatically restructured since that time and therefore many fewer Ford employees spend time in Dearborn. Additionally, those that do come to Dearborn have less opportunity to eat or shop due to significant lunch policy changes that have been very effective for Ford. This has been good for productivity, traffic patterns and security for Ford Motor Company, but challenging for many Dearborn businesses. I recognize that Ford made these changes because it was part of an effective business plan and we are all pleased with their success. But it leaves us with the challenge to create a new economic model for Dearborn. This requirement to be more self-reliant comes at a time when the City’s resources have been compromised due to other factors. So, not only do we have to take on the burden of these new roles, we have to do it when we have less capacity to manage significant change. To say these are vastly different times is underselling the reality we are facing. But I didn’t take this job to shy away from challenges. So I started to focus on a couple of key factors in Dearborn’s equation of success. One of those factors is people. We need to do whatever we can to bolster demand and that’s why I’ve been working so hard on finding other ways to attract more people to Dearborn. One of those ways is with our new intermodal train station. Once completed, once track improvements are made for high-speed rail, and once commuter runs are established, I strongly believe it will mark the beginning of a major revolution in how people use mass transit. It will be a magnet that will open up Dearborn to new markets all over this region and further on to the west. For instance, with improved travel time we can market weekend packages to Chicago-area residents. Another approach is with a convention center next to the 772-room Hyatt Regency in the Fairlane Town Center development. Imagine 1,800 to 2,000 new people coming to Dearborn in 3-day cycles throughout the year. The study supporting the Convention Center said it would bring $137 million in new spending to our area. That’s another tremendous magnet and would represent a boon to countless businesses and institutions in our community.

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We’re also continuing to be supportive of Ford Motor Land and its recruiting efforts to attract more business, employees and traffic to Dearborn. They’ve also developed an effective business plan and it is producing great results for Ford and for Dearborn. Among the successes, its Business Ready Suites for small and start-up companies; Carhartt’s headquarters expansion, and the new Henry Ford Medical Center on Ford Road. Our other major health care provider, Oakwood, is also expanding its presence in Dearborn, and that is positively impacting our local economy. Yet another way to attract people is through an Artspace real estate project. Artspace is a nationally recognized, non-profit developer and owner of 31 live/work complexes in major metropolitan areas throughout the country. Their success is built on a time-tested redevelopment strategy that has seen artists rejuvenate business districts in urban areas by living and working in publically accessible venues. Their presence continues to attract new residents and visitors, which bring documented economic benefits. In addition to attracting visitors to Dearborn, my second goal is making sure that we have a service mix that continues to appeal to both current and new residents. Our bottom line is that Dearborn must remain a community with more draw, better standards, and a higher level of customer service than other cities in the region. Our service mix is unique and plays a huge role in meeting that goal. My intention is to find smart alternatives to services we need to change, and to maintain what we reasonably can. Protecting our neighborhoods is a priority. Since our comprehensive Neighborhood Stabilization Programs began in 2008, we’ve purchased more than 205 eyesore homes. Most were demolished, and about 20 are or have been earmarked for rehabilitation. Five are ready right now for first-time home buyers. Since 2008, we reduced the number of reported vacant homes by 34 percent. We continue to require that vacant property be registered. And we are assertive in monitoring outside appearances. Maintaining our property standards is even more important as the number of rental homes has increased. It’s a trend in other respected communities as well.

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And I know it’s a trend that makes residents uneasy about their property values. So I’ve organized a task force of City Council members, landlords, realtors, neighborhood leaders and staff to review our rental housing practices. We’re looking at measured approaches that have successfully bolstered neighborhoods in other communities. This has lead to some changes already and we’re looking forward to more. But, remember that we already require that all rental properties be registered. Neighbors can report suspected rentals online, by email or by calling us. We inspect rental properties every three years, or if there is a change in ownership. So it is often the case that we are inside inspecting rental properties more often than single-family homes. We want all of our housing stock to be attractive and up to code to meet standards that neighbors, and home buyers, can have confidence in. We know it is a goal we all share. We are reorganizing our team of field inspectors to heighten efficiencies and serve you better. It will help increase our fair and consistent application of property maintenance rules throughout our neighborhoods. We also hope to partner with two groups, including Habitat for Humanity, to build new homes in southeast and east Dearborn. They may bring fresh options for people perhaps looking at Dearborn for the first time and who hope to be home owners. We not only want to attract new people to Dearborn—we want to convert them from visitors into residents. And, we want to do what we can to retain the residents we do have who already appreciate the many advantages of living in a real community. One where neighbors know and care about each other, where children can thrive in a safe and nurturing environment, and where City government is committed to supporting a quality of life that is second to none. And that quality of life must also include environmental sustainability. This summer, we will be installing 300 new, high-efficiency LED streetlights. We’ve expanded our electric vehicle charging stations; our new train station will be LEED certified through environmental design standards; and since July 2010, we’ve increased our residential curbside recycling by 40 percent. I strongly believe we have our priorities properly identified. To meet our goals, I know we have the talent and determination. During my time as Mayor I’ve experienced the extraordinary skills and commitment of our City workforce.

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As important, I also know that we have the flexibility to change our course if necessary to realize better results. I can’t honestly tell you where the country will be heading after the election in November. But I can tell you that this City will be meeting its many challenges and positioning itself for a bright future. Our way has proven to be the right way. And as someone who has worked at all three levels of government, I can confidently tell you that the local level is the level where government operates as it was intended to work: By, For and Of the People. It is participatory in the most direct sense and is truly accountable to the people it serves. Because of this we can face the future with confidence knowing that Dearborn’s history is full of difficult challenges overcome by a community that has always pulled together. There’s no reason to believe that we can’t do the same today. While we may be facing some of the toughest challenges we’ve ever faced, our commitment and our capacity has never been greater. We proved that last November and we’re going to keep proving it. Because we are one community, one considerable force standing united in making sure that this City remains the best place in the world to make our homes, to raise our families, enjoy our friends, and to follow our dreams. Thank you.

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