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Good evening. Tonight I deliver my fourth State of the City address. I thank all of you for being here to witness not only an annual message mandated by our Charter, but also to participate in our City government’s obligation to the people. The duty to deliver an assessment that expresses the achievements made and the challenges still to overcome. I would like to recognize our City of Syracuse Common Councilors here this evening; Syracuse School Superintendent Dr. Stephen Jones; and all of our Syracuse City School Board of Education Commissioners. I would like to acknowledge Debbie Sydow, President of Onondaga Community College; Father Charles Beirne, President of LeMoyne College; Dr. Cornelius B. Murphy, President of SUNY ESF; and Dr. Gregory Eastwood, President of SUNY Upstate Medical University – they continue their personal commitment through extensive school, neighborhood and community investment. And, of course, our new Syracuse University Chancellor Nancy Cantor, who inspiringly conveys her vigor, determination and vision in truly integrating the University within the City. I am thrilled about the extension of town and gown now more inter- connected than ever! I am energized with the working relationships with our elected officials in Albany with Assemblyman William Magnarelli, with Assemblywoman Joan Christensen, with Senator John DeFrancisco, and with our newest representative, Senator David Valesky. I am grateful for the support and advocacy of our United States senators, Senator Hillary Clinton and Senator Chuck Schumer. I am thankful for the efforts of Congressman James Walsh, who has had such an impact in revitalizing and restoring our hometown. And lastly, I want to acknowledge County Executive Nicholas Pirro, who will passionately continue – as will I – to conduct operations in the best interest of our constituents. I am continually grateful for the support of my wife Patty and my family, who are here with me tonight. It is an honor for me to deliver the 2005 State of the City address from this historical neighborhood setting. Michael Heagerty has been gracious and generous in his accommodations for this event. His dedication to Eastwood, and especially to his family’s heritage by restoring this treasured landmark, is truly remarkable. You elected me to assume the stewardship of the City of Syracuse in 2001. Since becoming Mayor, my administration has focused on improving essential municipal operations and delivering quality services to our residents. In order for me to accurately convey the current condition of our City, I must tell you from where we have come. In 2001, we encountered a City whose beleaguered systems and services were in need of regeneration – strained systems ranging from underfunded schools to police and fire; from fatigued parks facilities to unsightly gateways, and most importantly, inattention to financial management. During this same time period, the economic climate called for me to become the custodian of the transition so many rust belt cities have faced – changing from big business to small business development and from manufacturing to technology. I faced these responsibilities head-on and made the difficult decisions required. I instituted performance-based government with regard to efficiency and accountability to put City services on track in a cost-effective way. We raised the bar on employee productivity, and the City workforce showed they were up to the task. And as I will show, the City of Syracuse has profoundly changed in these last three years. We have created a culture for investment and have greatly succeeded as compared to neighboring cities that fought change in the face of evolution. Now, we must ‘Manage this Growth’. We are in a stronger place and we must capitalize on the resurgence of our government and continue to strengthen the foundations we have built. Our focus on management and improved delivery of vital services, and our insistence on performance accountability, has made your City government much more responsive to you, its residents. The City is also more fiscally sound, using your tax dollars in the most cost-effective way. 2 Plain and simple, we must continue to do more with less. Local governments in New York State continue to be under significant financial pressure to maintain levels of municipal services. While the City of Syracuse continues to feel the pressure of State mandated increases in expenditures, coupled within an environment of a shrinking tax base, each budget year brings a new and greater challenge. And cities with financially dependent School Districts, like Syracuse, face even greater difficulties. However, we have instituted measures so that we did not close schools as did Rochester, nor were we put under a Financial Control Board, as in Buffalo. Instead, when I perceived opportunities for reinforcement, I pursued them. When I saw potential revenue, I fought to secure it. The result of this? We have diversified our revenue base. The City has developed significant new sources of revenue to support municipal operations to take pressure off the need to resort to property tax increases. • The City successfully negotiated for a share of the new 1% Onondaga County sales tax that went into effect in September of 2004, resulting in new revenue of over $7 million per year. • The City reached an agreement with Onondaga County to receive $3 million annually for infrastructure improvements that went into effect last fall. • The City implemented the first sale of tax liens to the State Municipal Bond Bank. This action resulted in an infusion of $2.9 million in cash. • The City successfully lobbied for additional State aid and received a commitment of $25 million over three years in the form of spin-up aid. • As announced in the Governor’s budget message this year, the City will qualify for the highest level of funding under the new AIM program, which will bring in over $5 million in new funds in the coming budget year. • We secured a back taxes settlement of $1.38 million from the Bank of Oak Park for the Hotel Syracuse. • The revenue guarantee from Destiny progressively increases annually from $3 million in 2003 to $7 million in 2012. • As part of the final approval for Destiny, we successfully negotiated for a larger share of the basic 3% County sales tax from the Carousel Mall expansion. Under this legislation, the City will receive 30% of these revenues generated from sales in the expanded mall, and these revenues will not be subject to the existing sales tax cap. In early April, I will be submitting my proposed 2005/06 budget for the City and the School District to the Common Council for their review. This budget will reflect our success over the last year in fighting to diversify the City’s revenue base, and to moderate pressure on the property tax. While these new revenues will enable us to cover costs in the near term, as we look further into the future, we will face additional challenges to keep revenues and expenditures in balance. I am committed to working with the Common Council to address these challenges. 3 Looking toward the School District side of the budget equation, we raised property taxes for the City School District twice, to help make up for years of stagnant local funding. However, even with this infusion of funding, the School District operating budget next year will be extremely challenging. The District submitted a budget request that includes a budget gap of $24.3 million. This is primarily due to the fact that the current year budget includes a one-time revenue source of a $20 million lottery aid spin-up. Our School District is funded predominantly by the State, which comprises 76% of the School District revenues. I call upon our State elected representatives to do what is necessary to provide the appropriate funding levels. It is widely recognized that the strength of a city is directly tied to the success of its schools. When I became Mayor, I put top priority on adequately funding our schools. Over my tenure, the level of financial support for the City School District has grown significantly. This increase in support for education can be measured in two ways: 1. Overall budget growth: The City School budget has grown from $204.7 million in the 2001/02 budget to $248.2 million in 2004/05. This is an increase of 22.2% over three years. 2. Increase in local funding: Our local dollars earmarked for education have also been significantly increased. The amount of local property taxes designated for the School District has increased from $50.6 million per year in 2000/01 to $59.2 million in the current year, a growth of 17% over three years. By approving these higher budgets, I have with the Common Council put additional resources at the disposal of the Board of Education to allow them to improve the quality of education in the City’s elementary, middle, and high schools. But, these monies are simply not enough. I urged the Syracuse City School District to merge financial systems with the City’s oversight department, SyraStat. In spring 2004, the Transportation and Food Services departments participated in Syrastat for the first time. $500,000 in potential savings was identified in these two departments alone. In the coming year, I hope to see all departments of the City School District integrated within SyraStat for greater efficiency. 4 Next Steps: Joint City School Construction Board Our children have suffered from the deterioration of City school structures, and we have reached a point where we can’t afford not to fix them. We cannot continue on the downward path of relying on shrinking state aid made available to renovate, with our needs far out weighing resourses.

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