2013 State of the City Address
City of Euclid
State of the City Address
February 4, 2013
By: Mayor Bill Cervenik
It is an honor to present the 2013 State of the City report. As I reflect on 2012, I am pleased with our performance and that we are well-positioned to face the challenges ahead.
The importance of maintaining the long-term financial health of the city remains the number one priority of my Administration. We must manage our operations efficiently, create and maintain adequate cash reserves, and continuously look for better ways to provide the services our residents expect.
I am happy to report that in 2012, cash reserves in the General Fund were increased by $1.4 Million resulting in a balance of just under $4 Million dollars. This was possible due to a number of reasons:
Income tax collections exceeded $24 Million for the first time since 2008, an increase of just over $1.4 Million over 2011. This is a good indication that the local economy is recovering and that many of our economic development initiatives are producing results. A number of other revenue sources increased as well, including the recently eliminated Estate Tax. And yes, a number of categories came in under budget as well.
Actual expenditures came in at 96% of budgeted amounts, resulting in savings of over $1.3 Million. This is a direct result of the consistent management of operations by Directors, Chiefs, Department Heads and most important, the efforts of all the employees of the city of Euclid who understand our job is to safeguard the residents’ tax dollars.
While 2012 met our expectations, 2013 will see further devastating cuts from the State. This year we will experience an additional $500,000 reduction in Local Government Funds. As mentioned earlier, the Estate Tax has been eliminated in Ohio as of December 31, 2012, which translates into a decrease in annual revenue of approximately $1 Million. The Governor presented his first version of the bi-annual budget today. While all the details are not yet available, I expect the budget will contain provisions that further reduce revenues to municipalities. I will be watching the developments closely.
I have more to report concerning the financial challenges facing us in the coming years, but first I would like to mention a few fun topics:
The Splash Park at Indian Hills Playground:
With Councilpersons Caviness and Scarniench, we are looking forward to the grand opening of the Splash Park at the Indian Hills playground this summer. It will be the first such facility in the city of Euclid and laughter, smiles and an escape from the summer heat will replace the disappointment experienced by the closing of the neighborhood pool. Improvements to the ball field and playground area represent a significant investment in the Indian Hills neighborhood.
Basketball Courts at Memorial Park:
Now under construction are the new basketball courts located in Memorial Park, on the former site of the batting cages. These courts will be a welcome addition to supplement programs offered by our Recreation Department. The courts will be used for instructional programs, youth leagues and open court pick up games. Expect them to be ready for play by June 1st.
Dog Park at Babbitt Road and St. Clair:
After years of discussion, Euclid's first Dog Park is planned to open in early spring at the old Sportsman Park location next to the RTA Park-N-Ride. The plan calls for a separate fenced-in area for both large and small dogs that will allow our four legged friends to socialize and exercise without being on a leash. Outdoor furniture will also be available for the comfort of their two legged owners. I thank Councilman VanHo for his "dogged" passion to see this park open while we negotiate the final details on the property lease.
Walking Paths and Pier at Sims Park:
These new paths provide a beautiful view of Lake Erie. The paths will also be connected to the soon-to-be completed fishing pier. We can see that the years of planning are beginning to pay dividends with the ADA accessible path and pavilion now complete. As mentioned, work is proceeding on the reconstruction of the fishing pier and it should open later this spring. This structure will attract countless people to the shores of Lake Erie to enjoy the beauty of the waters, the sunsets and sunrises.
With Phase I of the Lakefront Development plan nearly complete, we can now focus on Phase II, which consists of stabilizing the shoreline and extending public lakefront access east of Sims Park. Recently, Councilman McLaughlin proposed a creative and compelling idea for the possible utilization of the Innerbelt Bridge material for much of the base infrastructure needed for Phase II and III. We are pursuing that possibility, as it could certainly accelerate the timing and reduce the cost of construction.
As Councilman Langman has advocated for many years and as we proceed with the implementation of Phase II, we will be brought closer to constructing the final piece of our Waterfront Development project, the creation of a 200 to 250 slip public marina. Clearly the most expensive phase of the plan and certainly the most dramatic, the success we achieve in the first two phases will reflect positively as we seek funding for the marina. We will continue to work with our partners at the federal, state and county levels of government as well as developers and investors in the private sector.
The Waterfront Development plan, as well as other ongoing and future projects, is extremely important in our goal to attract and retain new residents to our community. We must continue to create new attractions and constantly strive to raise our quality of life. Our housing stock remains solid and it provides real opportunities for people looking for a great place to live, work and raise their families.
And while we continue to face the challenges brought on by the national foreclosure crisis and the collapse of the housing market, the city has taken numerous steps to combat this issue and has achieved some success. The administration of the Neighborhood Stabilization Grant (NSP) has allowed the demolition of the worst houses in our neighborhoods. These funds have allowed us to rehabilitate and sell houses when it made sense to do so. In fact, we have now sold six completely renovated houses creating new owner-occupants. Demolition efforts will continue in 2013 utilizing NSP funds as well as resources administered by the Cuyahoga County Land Bank. However, with limited demolition resources and an improving housing market, we will adhere to our strategy that targets only the most dilapidated houses for demolition, while ensuring opportunities are available to support reinvestment in existing houses.
Another partner in our housing improvement efforts, the Euclid Development Corporation (EDCOR), continues to assist new and existing residents with purchasing a home utilizing the newly created Down Payment Assistance Program. Fifty three loans were made in 2012. The Weatherization Department continues to assist moderate income and elderly members of our community with a variety of home repair and maintenance services. Through the foresight and assistance of Councilman O’Hare, we are currently exploring partnerships with the Restoration Society and the County Landbank to make additional resources available and increase homeownership opportunities in Euclid.
Major planning efforts are underway in Euclid with the goal of creating a vibrant and pedestrian friendly environment in our downtown and Euclid Avenue districts with the Transportation Livable Community Initiative Grant (TLCI). In coordination with our partners in the City of Cleveland and the major institutions of Euclid Hospital, University Hospitals, Villa Angela St. Joseph High School, Hospice of the Western Reserve and the Greater Cleveland Regional Transit Authority, increased efforts are now underway to improve the gateway area of East 185th Street. Councilman Lynch has been a driving force behind this initiative, and we value his participation.
The Euclid City Schools are doing their part as well in making Euclid a great place to raise children. Four new elementary schools were opened this past August, and they are more spectacular than we ever imagined. These building are technologically, environmentally and functionally state-of-the-art. A true atmosphere of learning and excitement has been created for our children by these new buildings. I want to again publicly thank retired Superintendent Dr. Joffrey Jones for his vision for these new buildings and his ability to give the residents the confidence in the school system to support the bond issue needed to fund these facilities.
I also want to thank Superintendent Keith Bell for his efforts as he, his administration, and staff of the Euclid City Schools strive to bring the education of our students to the next level. The expectations of the residents of our community are high, as they not only funded the new buildings, but also recently supported a new operating levy. Our schools have been rated in “continuous improvement” for a number of years. It is now time to break out of that category and achieve a ranking of “effective”, with the ultimate aim of excellence. Mr. Bell and his staff cannot do it alone. They need the help of each and every parent to work with their children and play an active role in each child’s education. And they need each and every student to set serious goals concerning his or her education.
While the national economy remains fragile, there are signs of improvement in Northeast Ohio, including the reduction in vacant commercial and industrial space. It was recently reported that approximately 3.3 million square feet of property was absorbed and put back into productive use in our region last year. This trend is apparent in the City of Euclid at Heritage Business Park, achieving its highest occupancy level in decades. Major new tenants in 2012 include Tremco with 300,000 square feet and 21 new jobs and Premium Steel Sales, with 100,000 square feet and 24 new jobs.
The key point here is that as existing property is absorbed, the demand for new industrial and commercial facilities will be on the rise. Euclid is well-positioned to capitalize on this new development with over 80 acres of prime shovel ready land available at Bluestone Business Park. Additional development taking place is a sign of the enduring strength of Euclid’s Industrial Corridor. The Ohio Department of Transportation (ODOT) is constructing a new maintenance facility located at Babbitt Road and St. Clair Avenue, slated to open this fall and creating approximately 40 jobs.
Babcock and Wilcox Company was awarded $225 Million in funding for the accelerated development of a small, modular nuclear reactor by the U.S. Department of Energy. The City strongly supported B&W’s application with the tremendous possibility of additional high technology jobs being created at the company’s Euclid facility.
And who can forget how the year began, with Lincoln Electric announcing the relocation of the recently acquired Techalloy Co. to Euclid with 200 new hires and a $40 Million dollar retooling of its facility. The city, the State of Ohio and Cuyahoga County assisted Lincoln by providing a significant long-term incentive package that makes sense.
It is clear that our economic development activities are paying big dividends. As I have stated many times, with the cooperative attitude and leadership of Council President Holzheimer Gail and the entire Council, we have created an atmosphere of trust and cooperation with the business community. We work hard to maintain our reputation as a city that supports businesses, both large and small, so they may grow and prosper
These businesses know that they can depend on our assistance when needed. We will continue our strong relationships with the State of Ohio, Cuyahoga County, Team NEO, Jobs Ohio and the Greater Cleveland Partnership and others, and use our shared resources to strengthen the local economy.
On a sour note, the home values in the City of Euclid fell on average 25% according to the reassessment conducted by the Cuyahoga County Fiscal Officer. I have already mentioned a number of steps we are taking to improve the local housing market, but this reduction in tax valuation also poses serious consequence to the City of Euclid’s budget as well. Borrowing for capital projects and the resulting outstanding general obligation debt is limited by the total assessed tax value of the city. We have reached those limits due to this decline in property values and will lose approximately $500,000 in revenue to the Bond Retirement Fund, which is our source for paying our debt service. We will need to turn to other financing methods and strategies that are available to us in order to fund future capital projects and equipment purchases. This includes the pledging of income tax revenues, non-tax revenues, possible financing through the Cuyahoga County Port Authority and the use of special revenue notes, to name a few. As discussed numerous times with City Council, we will also significantly reduce the annual capital program for the next two years. This will allow us to strengthen the balances in the Permanent Improvement and Bond Retirement Fund.
With the help of the Council Safety Committee chaired by Councilperson Jones, we plan to undertake a major capital project in the reconstruction and retrofitting of our existing correctional facility. Although certainly not an exciting project on its face, the resulting remodeled facility will achieve operational efficiencies exceeding $750,000 annually over current costs. This savings will not only cover the debt service on the estimated construction cost of $3.5 Million but I expect approximately $450,000 annually to be transferred into the Bond Retirement Fund or used to strengthen the operations of our safety forces or other programs. Considering using the existing facility will require close to $1 Million in repairs over the next three years, this project ends up being just a little bit more exciting, or at least more interesting, than first impressions.
In May, we launched Euclid “Blackboard” Connect, an alert and notification service. The Euclid Connect messaging system allows us to communicate with residents and businesses about important events and urgent situations by sending out phone calls, emails and text messages in just minutes. The system was a valuable tool the day prior to the Hurricane Sandy storm, when we used it to send out messages concerning storm preparation. Following the storm, information was released addressing power outages, the availability of shelters, and delays in trash and recycling collection. Notifications can be issued for situations less critical and can be limited to the immediate households involved. Our residents and regular visitors may also sign up to receive non-emergency community announcements and recreation program cancellations on the city website.
Finally, I would like to call attention to a few events that take place in our city that really bring people together to enjoy each others’ company, promote the community, celebrate our diversity and quite frankly just make Euclid a fun place to live.
The Euclid Holiday Festival, for the second year in a row, brought thousands of people together to celebrate the spirit of the holidays. Sponsored by many community organizations and businesses, this event has and will continue to grow and become part of our holiday memories for years to come.
The Euclid Wind Festival premiered in the summer of 2012, on one of the hottest days in recent memory. The community celebrated wind technology and other alternative energy sources, and rightfully so considering the beautiful turbines that complement our skylines. There will be an encore appearance this summer on June 22nd at the Triangle Park in front of Shore Cultural Center. Many thanks go to our sponsors of this event, including Lincoln Electric and William Sopko & Sons. The Ss. Robert & William Parish International Festival is held every August on the parish grounds, a great way to spend a weekend with a diverse menu of food, entertainment, neighbors and plenty of family fun.
And, as always, remember the Memorial Day Parade and ceremony to honor our veterans who gave their lives so that we may enjoy the freedom and privileges that we so often take for granted. Relay for Life, a community fundraiser for the American Cancer Society, in its fifth year, will be held June 7th and 8th at Euclid High School Stadium. It’s an 18-hour event where neighbors, friends and co-workers form teams to not only walk the track, but share experiences, stories and laughter while raising dollars and creating awareness for cancer prevention, detection and survivorship.
There are also countless events that take place in Euclid, which complement the small town feeling in our neighborhoods.
The East 219th Street Fourth of July Parade, having been held for over 80 years, brings neighbors, past and present, together to enjoy a day of fun. The Heritage Park Homeowners Association, celebrating 20 years of service, hold an annual Easter Egg Hunt, complete with an appearance by the Easter Bunny. These are to name a few.
In closing, it is clear the City of Euclid has its challenges and we must face them together. We will continue to work harder and smarter to strengthen our financial future, our neighborhoods and our schools. We must continue the development of our Lakefront, and maintain our aging infrastructure. Despite our challenges, Euclid is our home. We know all it has to offer. We are all charged with the task of making it even better. I am certain that with the help of each of you, we will.
Thank you and God Bless.
Mayor Bill Cervenik
February 4, 2013