State of the City Address - March 22, 2005

MAYOR KWAME M. KILPATRICK
State of the City
March 22, 2005

State of the City - Text

Madam President, Members of City Council, Distinguished Guests, Citizens of Detroit.

Good evening.

We are here tonight to examine the State of our City.

As we look at our City we must look at the effect the national and state economy have had on us.

Nationally, the economy continues to be troubled.  We are fighting two foreign wars that have diverted billions of dollars away from domestic programs at a time when the need for those programs has grown.  Gasoline prices are approaching record levels that could seriously impact the auto industry.  The federal government is running record deficits.

Our national administration is systematically cutting assistance to local units of government across a broad range of programs such as community development block grants, homeless assistance and others.  For example, when I took office, Detroit was receiving $2.5 million per year under the federal COPS program to hire new police.  The new federal budget would cut Detroit’s grant to under $150,000 for the same program.

Closer to home, Michigan’s economy continues to be one the weakest in the nation, ranking 49th out of 50 states in unemployment.  For Detroit, that has meant deep cuts in income taxes and state revenue sharing, with nearly $100 million in revenue sharing cuts alone in the last two years.

Rising health care costs also have added tremendously to the city’s financial burden – rising $78 million, or 46 percent in the last three years– at a time when we can least afford that.

Rising City pension costs also have had a crippling effect on our treasury.  This year we had to pay $177 million to our general retirement and police and fire pension funds -- $120 million more than just three years ago.

That means rising health care costs and pension costs alone are costing us $200 million more than they did just three years ago. And these costs are rising outside our control  at a time when our revenues are falling.

We still are experiencing the outmigration that has seen our population steadily decline for more than 50 years.  Recently released figures revealed that even in the midst of the most sustained period of economic growth in the nation’s history and the most robust budget years the city has ever seen, from 1995 to 2000, nearly 90,000 people left Detroit.

Detroit, which stood close to two million residents in the early 1950s, tonight has shrunk to about 900,000.  Over the last 50 years, we have lost one million residents, hundreds of thousands of taxpayers and more than 15,000 businesses.

This is not an easy time for Detroit.  But, we are not alone.  The latest numbers tell us that around the world, one quarter of the world’s urban centers are declining in population – twice the number of just a decade ago.

As co-chair of the Michigan Urban Core Mayors, and as chair of the Investment Council for the U.S. Conference of Mayors, I talk to mayors all the time who are confronting budget shortfalls that they have never seen before.  Cities from Kalamazoo to Mount Clemens also face shortfalls.  Suburban neighbors from Plymouth to Clinton Township and Warren have been forced to impose major cuts in operations, including reducing their workforce.  Other urban centers such as Pittsburgh, Cleveland, Chicago and Philadelphia also are struggling with reduced resources.

If our march to a new future here in the City of Detroit seems less certain tonight, then I,  as Mayor of the City of Detroit must set a clear course, so that we may renew our city.  The clear course that I will set tonight will focus on four areas -- improving public safety, accelerating economic and business development, improving city services and improving the financial health of Detroit. 

Before I get into the details, I want to acknowledge the recent passing of two long-time friends of Detroit.

Last November, we lost one of Detroit’s most vocal cheerleaders and tireless public servants, City Council Member Kay Everett.  Kay was a long-time leader in our community.  She had been a member of Council since she won a special election in 1991.  Her love for Detroit was evident in all that she did.  Her distinctive style, complete with her unique collection of hats, is deeply missed. It is fitting tonight that we pay honor to her memory as a true friend of Detroit.

Earlier this month we lost a very remarkable man who, in so many ways, for so many years, was Detroit’s best friend – Max Fisher.  Max Fisher – who passed away March 3 – believed in Detroit.  He was very realistic about the problems we face, but he believed in this City’s future.  He never stopped caring for Detroit or working for Detroit, well into his 96th year.  He will be missed by all of us, but never forgotten.

His son-in-law, Peter Cummings, is with us tonight representing the Fisher family.  I ask you to join me in acknowledging him and the contributions made to Detroit by Max Fisher.

I also tonight want to call your attention to another Detroiter whose passing didn’t make huge headlines.  But he was a hero.  His life and the way he lost it are the epitome of all that is good about Detroit and Detroiters.  On Saturday, February 26, Havens Regis Morgan stopped to help a woman injured in a traffic accident at Van Dyke and Davison.  It didn’t matter to him that he was black and she was white.  He saw someone who was injured and who needed help.  Tragically, as he went to her aid, another car hit him, fatally injuring him.  His parents – Cheryle Houston and Lorenzo Houston – are here tonight.  They want us to know their son is an example of the young men we have in our community, who care about others and show compassion for those who need help.  I ask that you join me in expressing our sympathy, our love, and our admiration for their brave son who lost his own life trying to help another. 

We are gathered here tonight during the Most Holy Week on the Christian Calendar and a holy time for many religions around the World.  This week provides us a unique opportunity for healing and reconciliation.  Before we take a deep dive into the State of the City, we need to spend just a moment to talk about the State of the Spirit of our City.

As your Leader, that begins with me.

As I was preparing my remarks for tonight, I came across this observation from Abraham Lincoln: “I do not think much of a man,” he said, “who is not wiser today than he was yesterday.”

I believe I am wiser today than I was yesterday. Life is, after all, a learning process.  I was raised amongst the awesome Spirit of Detroit.

In the Book of Matthew, Jesus tells us that “Whosoever will be chief among you. Let him be your servant.”

As Mayor of Detroit, I realize at times I have been an imperfect servant.

Tonight Detroit, I want you to know that I work every day, all day to be a better servant to the citizens of this great city.

It is important to this City’s future that you have confidence in your Mayor in these difficult times.  I am determined to serve you in a manner that earns that confidence.

I ask tonight Detroit that we work collectively to heal the spirit of our City.  Because when the Spirit is healthy, the body can rebuild.

One of the most unfortunate occurrences of my administration is that there have been diversions in attention from the tremendous progress we are making in this city on so many levels.  That progress is the result of a team that I believe is one of the most professional and experienced teams that have ever been assembled in any city anywhere.  They have joined together in a common cause to make Detroit all that it can be even at a time when they must do more with less.

They are running the business of Detroit better … building more houses than we have built in 50 years … reducing crime to its lowest level in 40 plus years … bringing in national conventions and sports events … building new police precincts … luring new restaurants downtown (22 in the last three years)… and making progress across the board in improving this city.  They are, in short, doing more with less.

Police Chief Ella Bull-Cummings left the private practice of law three years ago to return to the department she served for many years.  Under her leadership, we have made dramatic progress in reducing crime in Detroit.

As we announced last week, violent crimes in Detroit decreased by 15 percent last year.  Major crimes were down by more than 12 percent.  Over the past three years, violent crimes have been reduced by more than 26 percent.  Major crimes are down by almost 20 percent over the last three years.  In fact, major crimes in Detroit last year were the lowest since 1963.  Let me repeat that – major crimes in Detroit last year were reduced to the lowest total since 1963.

These dramatic reductions are the result of very dedicated and very detailed efforts by the Chief and her department.  She has increased the number of uniformed police officers out on the streets.  She has changed assignments to increase police presence during peak hours and in areas identified as hot spots.  She has instituted Operation Gun Stop, offering a $500 reward for reporting someone with an illegal gun.  It has produced more than 200 tips and 75 arrests since it was launched.

The department has also developed a “Most Violent Persons” list, which identifies persons who are wanted for violent crimes.  It has issued two separate lists, each identifying 25 suspects.  Each list resulted in at least 12 arrests.

While violent crimes gain most of the headlines and coverage on the 11 o’clock news, when the chief and I are out meeting with neighborhood groups the most frequent complaints we receive revolve around drugs and prostitution.  Both have a terribly corrosive effect on the quality of life in a neighborhood.  Both often serve as a precursor to, or companion to, more serious, more violent crimes.

That is why we are intensifying our fight in both areas.

The Chief, contrary to misinformation being spread in some parts of our community, has beefed up the organized crime and gang division, increasing its staffing and changing the way it operates.  As a result, last year the Detroit Police Department confiscated drugs with a street value of more than $85 million.  They also confiscated more than $10 million in cash from suspected drug dealers – more than double the amount seized in 2003.

At a 6th Precinct community meeting I attended in Warrendale not long ago both the officers and the members of the community group said they have seen houses busted more than once for prostitution.  But the people were back later that night or the next morning because all they paid was $50 or they got a personal bond.  I heard the same thing at a community meeting in southwest Detroit. The police are busting johns and prostitutes.  The police are taking them to jail.  But they were getting right back out.

Last October this administration proposed, and City Council approved, an ordinance raising the maximum fine for solicitation to $500 from the old fine of $50.  However, raising the fine does no good if the courts will not enforce it.

I respect and appreciate the work that the judges and magistrates do, and I challenge them to help us confront this problem in our community and impose the increased fine.  If we have a lack of support from the courts, it is demoralizing to both our police and our community.

We also know, quite frankly, that more than 60 percent of these johns are not Detroit residents.  All you johns, no matter where you call home, we are going to put the heat on you.  This practice will not continue in our community.

In another area that touches on quality of life in our neighborhoods, we are continuing our inspections of party stores around the City.  In the first two months of this year, the vice section inspected 39 establishments.  Of those that were inspected, 26 were cited for a variety of violations, primarily selling alcohol to minors.

They also have been going back to re-inspect 110 establishments that were issued violations in 2004.  To date 31 of the 110 locations have been re-visited, utilizing undercover underage decoys.  Unbelievably, every one of those 31 stores was found to be in violation again.  They again sold alcohol to minors.  That is simply outrageous.

We are going to continue this vigorous enforcement effort.  We are not trying to drive anyone out of business.  But we are going to insist that if you do business in Detroit, you will conduct your business responsibly, you will follow the law and you will respect the community that you serve.

Finally, in the area of public safety, I want to talk to you about several investments the Kilpatrick Administration has made to make our city safer.  We will soon open a new $20 million public safety mall in southwest Detroit, the first new precinct built in this city since 1991. We also will open our new state of the art Computer Aided Dispatch Communications Center, which will for the first time coordinate our 9-1-1 operators along with Fire/EMS and DPD dispatch.  The new system replaces an antiquated 911 system that is 32 years old and was housed in hopeless outdated surroundings in the Beaubien headquarters.

We also will be breaking ground soon on a new $30 million detention facility in the city of Detroit, thanks to the voters of the city who approved Proposal S last summer.  This facility will advance our ability to meet the requirements of the Department of Justice consent decree.

These are just a few of the investments we are making in public safety.

No area is more important to our future than economic development.  Our Chief Development Officer, Walt Watkins, former president of Bank One of Michigan, heads up our Economic Development Organization.  His team is made up of six City departments plus the Detroit Economic Growth Corporation and the Housing Commission.  There is a great deal going on in the area of economic development.

One of the most exciting projects we expect to begin this year is the new Far Eastside Community. This area - bounded by Jefferson, Conner, Mack, and Alter – has been renamed Fox Creek.  It spans more than 1,200 acres of predominantly vacated land and was selected as the best area to conduct a complete revitalization of a blighted and deteriorated community.  I want to thank the Council for passing the development agreement and moving this project forward.  This development will transform this east side community into a community of high quality housing opportunities that will rival the neighboring suburbs.

Another major step forward will come this spring with the opening of the $56 million NextEnergy Center at Wayne State University.  For Michigan to retain and rebuild the manufacturing sector of our economy, it must diversify its manufacturing base and attract clean technology companies.

The NextEnergy Center is designed to assure we play the same pivotal role in the development of alternative energy sources as we did in the development of the automobile.  There will be seven distinct laboratories within the center that will focus on alternative fuel development and electrical power development.

The center also has made grants of more than $1.3 million to seven Michigan institutions to develop and train a new workforce for these new fuel sources through the development of alternative energy technology degrees and certification programs.  More than 1,500 students have already enrolled in these programs.

The City also has launched an historic partnership with Harvard University, Dr. Michael Porter and the Initiative for a Competitive Inner City, (ICIC) a non-profit organization founded in 1994 by the Harvard Business School.  The ICIC’s mission is to promote a market-based approach and cutting-edge solutions to build healthy economies in America’s inner cities that create jobs, income and wealth for local residents.  Its long-term investment will give Detroit the competitive advantage it needs for future growth, particularly in emerging industries like health care and technology. 

We also will begin construction later this year of the infrastructure for the new Garden View Estates housing development to be built on the site of what used to be the Herman Gardens Public housing project.  This is a project that had stalled since receiving the HOPE VI funding approval in the 1990s.  This 139-acre site will be the home to more than 920 housing units when completed.  In early April we will be making a major announcement on another exciting development scheduled to be a part of this project.

The past year has seen significant movement of new jobs into Detroit:

• Fourteen Brownfield Development Plans have been approved since last July 1, for a total investment of $345 million, 430 new jobs and 1,320 market rate and affordable housing units.
  
  
• Excel Automotive moved into a 360,000 square foot new facility in the I-94 Industrial Park, located at Van Dyke and I-94, creating 254 new jobs, with 83 percent of those jobs held by Detroiters.
  
  
• TDS Automotive moved into a 360,000-square foot new facility on Freud that created 250 jobs, 80 percent held by Detroit residents.
  
  
• Arvin Meritor opened its Light Vehicle Systems headquarters facility in Southwest Detroit, with a manufacturing facility and tech center creating a total of 530 jobs.  80 percent of the manufacturing facility’s 350 employees live in the two closest ZIP codes to the plant.
  
  
• Mobius Microsystems, a start-up technology company that could have located anywhere, chose to locate its headquarters in Grand Circus Park.
  
  
• PriceWaterhouseCoopers is relocating its headquarters to Ford Field, retaining 300 jobs and relocating an additional 150 jobs from its suburban office.
  
  
• Onstar, EDS and SAAB have moved 1,600 new jobs into the Renaissance Center.
  
  

There are a number of other major economic development initiatives underway:

• Using Empowerment Zone and foundation funding to spur private investment, we partnered again with community development corporations to renovate 68 building façades in 11 neighborhood commercial districts across the city.  The most investment has been in Mexicantown, Corktown, on Grand River near the Southfield Freeway and on Michigan Avenue between I-94 and West Grand Boulevard.
  
  
• In June we will complete the relocation of the Le Farge Cement facility from the east riverfront to the newly built Springwells Industrial Park near the Ambassador Bridge.  The new environmentally friendly plant includes state of the art technology, and is emission and fugitive dust free.
  
  
• We then will begin demolition of the Le Farge Cement silo and the Holnam silo on the east riverfront – another milestone in our ongoing redevelopment of the riverfront.
  
  
• One of the most exciting indicators of progress in Detroit is the number of permits that have been issued for new housing construction.  For the first time in 50 years, Detroit is near the top of the list in southeast Michigan for new housing construction.  Last year we issued 925 new housing permits, more than four times the number issued in 2001.
  
  
• The Riverwalk is becoming a reality along the Detroit River with the opening of the plaza located behind General Motors.
  
  
• In the downtown, both the Merchants Row and the Kales Building renovations, worth a combined $50 million, are nearing completion.  Housing units are starting to be occupied.
  
  
• The new Joe Dumars Field House opened last fall at the State Fairgrounds.
  
  
• We also are taking action related to every city-owned building in the Central Business District.  Many of these buildings have been dilapidated since I was a child – some since before I was born.  But now, each and every city-owned building has either had a developer picked, had a project designated for it, been sold, or, in the case of the old Statler-Hilton, we have secured a demolition permit and have it slated for demolition this spring.
  
  
• After an extensive review process, we have chosen a developer for the old Uniroyal site, another site that has been dilapidated since I was a child. We are negotiating a development agreement at this time.

Even with all of these developments underway, we still often hear the comment that this administration has made big announcements, but has not been able to follow through. Those comments really center on four projects – the Book Cadillac, the Michigan Central Train Depot, Cobo Center and our city demolition program.  Three of these projects are very tough projects, which is why no one has attempted them, in more than 15 years.

We initially announced plans to renovate the Book Cadillac in the summer of 2003.  Unfortunately, after the announcement some of the planned financing fell through and the project has been at a standstill.  Walt Watkins and George Jackson of the Detroit Economic Growth Corporation continue working to put in place the final pieces of the funding package for this project with a total value of $150 million.  If that funding is realized and we get a favorable ruling from HUD, we could begin work before the end of the year.  This has been a long, difficult effort, but one of Detroit’s greatest landmarks is worth the attempt, even if it refuses to be finished “right here, right now.”

We continue to move forward with engineering, structural and environmental studies on the Michigan Central Depot.  What we do know is that if we don’t do anything to reuse it, it is going to continue to sit there looking like it looks right now, a symbol of dilapidation and urban decay.  That is why we are determined, if at all possible, to develop its reuse.  At the same time, it is important to remember at this point we haven’t spent a dime on the project and the city has not incurred any financial obligations.

We also continue to seek a way to expand Cobo Center.  The Tourism Action Group which Walt Watkins chairs has conducted an extensive study of the center.   The study concluded the current facility can be expanded in a way that will give us one million square feet of exhibit space, add a little parking, showcase the river and give us the equivalent of a new, state-of-the art convention center.

Further, they concluded the expansion can be achieved for about $670 million.  Since that is about the amount of economic activity generated each year by the North American International Auto Show and other events, that looks like a pretty good investment.

I believe the costs should be shared by those who benefit from Cobo Center and the Auto Show… Wayne, Oakland, and Macomb Counties, and the City of Detroit.  We will continue our efforts to make this badly needed expansion a reality.  I urge all parties to come to the table and get this deal done.

This administration will never back away from a project that is worthwhile, that is good for Detroit, that will move Detroit forward, just because it is difficult.  I’m proud that we have the vision and the team that dares to take on the challenge of breathing new life into these symbols of dilapidation in our City.

Finally, there is the city’s demolition program.  Originally we came out and said we would knock down 5,000 structures.  Well, we fell short.  We ran out of money.

Because our population went under one million people in 2000, our CDBG grants for demolition funds were reduced.  In addition, the previous administration borrowed $60 million from HUD for demolition. We are paying that back each year as well.  So now we have less money to use for demolition, and we run out of that money each year.

But we also have said demolition is not the only solution to this problem.  We have developed the most aggressive infill house building program that has been here in 50 years.  We can’t just demolish.  We also have to build.   That is one of the reasons we have had the most housing permits issued in 50 years. 

One of the most challenging issues we face as a city is the question of what to do with vacant land.  The City of Detroit covers 138 square miles.  Fifty years ago that area contained almost two million people.  Today we have half that many people.

Yet, we still have the same miles of streets for police to patrol and DPW to maintain, the same water and sewer infrastructure, the same number of street lights, the same area to cover with our fire department, but serving half the number of people and receiving half the tax revenue.

Yet, the reality is that if we were to build 10,000 houses a year for 15 years we wouldn’t fill up our city.

I will be calling on business leaders, community development organizations, grass roots organizations, real estate people and other interested parties to participate in developing a Detroit land use strategy. We need a smart plan that deals with managing a much smaller city.

We’ve already begun putting together some of the pieces.  Planning Director Burney Johnson and her team have developed a new master plan that is state of the art and is the first complete master plan since 1992.  You can actually take virtual tours through our city.

This administration also has been working for an extended period of time with a broad cross-section of community groups who are all concerned about and working on a solution to this problem.  This activity has been a true collaborative partnership between the city government and the nonprofit community involving:

• Detroit LISC
  
  
• Community Legal Resources (CLR)
  
  
• Detroit Renaissance
  
  
• Community Development Advocates of Detroit (CDAD), and
  
  
• MOSES

The result is a proposal submitted to Council last Thursday to create a Detroit Land Bank Authority.  The Authority would be a tool to be used by the City and its development community to preserve, revitalize, and redevelop areas within the City of Detroit. The Detroit Land Bank Authority would accelerate development and increase tax revenue by putting nonproductive property back into productive use.

I believe, and the community groups supporting it believe, that this proposed Authority can be a major step forward in managing our available land in a strategic, constructive way.

While much of our attention as a city is occupied by public safety and economic development issues, the efficient operation of many other line departments is equally important to our daily quality of life.  These departments operate under the supervision of Carolyn Williams Meza, who we recruited from Chicago to become Detroit’s Chief Operating Officer.

With her leadership, we have made substantial progress in a number of those operations and continue to make improvements.  We’re running the business better.

For example:

• In the area of customer service, we must improve.  On May 1, the City will institute a new 311 system.  If you want to report a street light out, if your trash wasn’t picked up on time, if there is a broken water main on your block, if you want to secure a building permit or get a bus schedule, you will call 311.  It literally will be, “One call to City Hall.”  We have trained 20 operators in customer service and phone etiquette who will handle the calls and route each call to the proper department.  This brand new system is designed to significantly improve our customer service for all Detroiters and we look forward to having it up and running.
  
  
• Since 2003 and including this construction year, we will resurface 346 miles of city streets, the most ever in that period of time.  When we took office our Department of Public Works routinely carried over 30 to 40 percent of the street resurfacing projects each year.  We now complete more than 99 percent of them in the same year.  Conner Avenue, which hadn’t been resurfaced in 40 years, was completed in 2004.  We challenge the state and the county to do the same with their roads.
  
  
• Under the leadership of Parks and Recreation Director Charlie Beckham, we are making steady progress on a number of fronts.  Last year I announced we would be building two new family fun centers in Detroit.  Next month we will break ground on both centers.  The first will be known as the Baseball Family Fun Center and will be at Jayne and Lasky adjacent to the Lasky Recreation Center.  It will feature seven softball diamonds … four baseball diamonds … 27 batting cages … a playscape … eight new basketball courts … a rock climbing wall … a nine-hole disc golf course … a remote control race car track … an 18-hole putt-putt course … and a 350-car parking lot.  The second, the Farwell Family Fun Center, will be on Eight Mile Road near Ryan and will offer an even larger variety of activities, including a new paint ball course.
  
  
• Charlie also has led the way in improving Belle Isle.  It looks better than it’s looked in years.  In the past year a state-of-the-art playscape opened and the streets were completely resurfaced.  The Giant Slide is up and will return this year. More than 600 family reunions were held on the island last year and more than 2.5 million vehicles and almost 8 million people visited the island.
  
  
• The Nature Zoo is moving forward on Belle Isle and is set to open this fall.  For those of you who like it, you’ll be able to feed the deer and other animals.
  
  
• We completed major renovations to 10 parks throughout the City last year, with renovations to 20 more planned this year.
  
  
• Our Recreation Department implemented a 10-day mowing cycle for all our parks in 2003 and 2004, making them safe and inviting.
  
  
• The Detroit Department of Transportation and Director Norman White, through a very careful analysis of its operations and meetings with the community and the people who ride our system, developed service cuts as a part of the City’s effort to maintain a balanced budget that will allow it to preserve service to more than 99 percent of the 110,000 Detroiters who ride DDOT buses daily.
  
  
• DDOT also is in the process of adding 120 new buses to the fleet this year.  The new buses are low floor models that are in compliance with the Americans with Disability Act standards.  The 120 oldest buses in the fleet that were bought in 1998 are basically unrepairable and will be replaced.  Our ability to serve those with disabilities will be improved and the general reliability of the fleet will improve as well.
  
  
• Our leadership team also includes Detroit Water and Sewerage Director Victor Mercado, under whose leadership the department has managed the budget so effectively that operating costs in the department have risen a total of less than one percent in the past four years.  As a result, we were able to hold water and sewer rate increases to the lowest amount in 12 years -- the fifth lowest in the country and because of the new technology in the ozonation process, the very best water in the world.
  
  
• Victor’s aggressive efforts to keep modernizing our system also will help keep costs under control for the foreseeable future.  Not all cities have managed their systems as effectively or responsibly.   For example, last year the City of Atlanta adopted new water rates that will nearly triple the water bill for most of their customers by the year 2008.
  
  
• The Department of Health’s Lead Elimination Program has resulted in a 40 percent reduction in the number of children under the age of six with elevated lead levels in their blood.
  
  
• Our Movement for Life Program is in full swing and has moved us in one year from the fattest city in America to third place.  The Today show even said that the Mayor has taken real leadership in this effort, so I guess the 20 pounds I lost helped.
  
  
• Our Build Detroit program, which is an effort to coordinate all of the construction projects, that are going on, both public and private, also has been a success.  There are about 100 different construction projects in downtown Detroit alone.  Build Detroit makes sure that all of the projects are coordinated so that the work is carried out as smoothly as possible and people can get to work or any other destination without unnecessary interruptions.

We also have created a new Department of Administrative Hearings to step up the City’s enforcement of codes related to quality of life issues such as zoning violations and illegal dumping.  Under the leadership of attorney Medina Noor, this department, which began operating in January, gives us the ability to prosecute unlimited numbers of code violations and to order fines and fees that are collectible through garnishments and liens if necessary.

It gives us a new weapon to go after those who are so disrespectful of their property that they have a cancerous effect on surrounding properties.  And it gives us a much more effective tool to use against illegal dumpers.

I am also proud that we are making progress building relationships with our suburban neighbors.  Last year in my State of the City I announced I was reaching out to our suburban neighbors to form a Tri-County Mayor's Conference to meet quarterly to work on issues of common interest to southeast Michigan.

I’m pleased to report tonight that the group has been formed and we have had two meetings, with some 30 Mayors participating in this effort to build regional cooperation.  Three of my colleagues are here with us tonight and I ask you to recognize Mayor Ron Gillham of Huntington Woods, Mayor Dennis David of Southgate and Mayor Tom Jankowski of Hamtramck. We also have Lt. Governor John Cherry with us as well.

We also have another Mayor with us tonight, Mayor Eddie Francis, the young Mayor of Windsor.  (He’s actually younger than I am.)  We are working with Windsor to market the Detroit-Windsor area as a region to give us a global presence and marketing our global position.  What we have found in our research is that many people who have never been here, don’t know Detroit is on a waterfront, let alone an international waterfront.  This new effort will help correct that misperception and help us improve our tourism and our economies.

Finance is always a key issue, whether we are talking about our individual household, a business or a unit of government.  We are fortunate in Detroit to have the leadership of Chief Financial Officer Sean Werdlow, whose steadfast efforts have been critical to weathering the very difficult financial circumstances I referenced at the beginning of my speech.

Despite our difficulties, we have been able, for three straight years, to have our credit rating affirmed by all three national credit rating agencies.  We’ve also received the Excellence in Financial Reporting Award from the Government Finance Officers Association.  It’s the first time the City has ever been awarded this honor.

Under Sean’s leadership and aggressive efforts by our department directors, we have cut non public safety overtime 43 percent from where it was in 2001, we have cut more than 3,000 positions from city government.  We are continuing to do more with less.

When we took office, we faced a combined budget deficit of $169 million that we closed with a variety of steps. Adhering to strong principles of fiscal responsibility has been critical in managing our way through the financial difficulties that we have experienced as a result of the weakened national and state economies.

On April 12, I will present the budget to City Council for 2005-2006.

It will be one of the toughest budgets ever presented to Council.  It will cut spending, it will eliminate programs and it will reform government in ways that we have never seen before.  This year we must again make the hard choices to live within our means.  I will tell you tonight we will make tough decisions in this budget, decisions many of us will not be happy with.  But in order for us to grow, we have to start now.

Of our total budget, 64 percent of our costs are personnel costs – salaries, health care and pensions.  If any companies had that much overhead, it would be bankrupt and out of business.  We have to continue to reduce that overhead.  I will be calling on organized labor and our employees to meet with us and develop ways to keep our costs, particularly health care benefits, under control.  Just like General Motors, Ford and DaimlerChrysler, the continuing rise of health costs for our city will definitely cripple us unless we restructure our benefits now.  If we are going to save jobs and provide the quality of services Detroiters deserve we have to come to the table and restructure our benefits, now.

Another in issue improving the financial health is improving the financial health of families and citizens of Detroit.  Detroit has been the number one city in the country over the last 10 years to lose people between the ages of 24 and 40.  We have to address the serious issues helping to drive this exodus if we are going to keep families in our city.  Those issues are taxes … insurance rates … and education.

With Detroit’s total tax levy of 67 mills, a newly purchased home can have a prohibitive tax bill.  For instance, I talked recently to a resident who had just bought a home in Palmer Woods and was hit with a $26,000 property tax bill.  On the other hand, if you have owned your home since the Proposal A cap on property taxes went into effect, you are paying about half of what someone would pay if you sold your house and the cap went off.

This means if someone wants to move from East English Village to Indian Village, or from the Bagley District to Sherwood Forest or Rosedale Park to Palmer Woods, the combined burden of insurance and taxes will kill them.  The result is that many move out and it is harder to attract new people in.  We must roll back taxes now to keep families in Detroit and stabilize our community.

Last December we submitted a bill to the Legislature in Lansing that would allow cities to use the Neighborhood Enterprise Zone law to take the sting out of property taxes in older cities.  This legislation will help make Detroit’s real estate more marketable and affordable by making tax rates on newly purchased homes more even across the board with rates on homes that have had one owner for 20 years.  It would mean as much as a 20 to 50 percent cut in taxes, depending on when a person bought their home.

I would like thank Detroit State Representative Bill McConico, who has really worked hard to bring this legislation forward.  I also want to thank House Speaker Craig DeRoche and both Senate Republican Leader Ken Sikkema and Democratic Leader Bob Emerson, who also have been very supportive of this concept.  Our intent is to approach this program with a three year phase-in period, rolling back taxes in 23 neighborhoods in the first year, 12 neighborhoods in the second and 10 neighborhoods in the third.

We will have more information in the coming weeks as the legislation moves in Lansing.

The second area of concern is insurance rates.  The reality is that the regulation of the insurance industry in Michigan is largely in the hands of the insurance industry itself.  We have reached out to the insurance industry, the insurance commissioner and others to put together a comprehensive plan on what we need to do in that area.  We also will reach out to City Council.  They have started a process as well.  We must end the completely racist practice of insurance red lining in Michigan.  Lucius Vasser, our director of corporate and civic affairs, is coordinating this initiative.

One of our number one problems in car insurance, for example, is the number of stolen cars reported in our city.  Historically in Detroit all you have had to do to report a stolen car was phone in your report.  While this was a convenience for true victims of auto theft, we know that is also made it easier to file false claims.  So, beginning April 1, the chief has instituted a new policy requiring auto theft victims to go to the precinct in which the car was stolen to file the report and sign an affidavit.  There will be penalties for filing false claims.  

As other initiatives are developed, we will announce them and request that the citizens of this community be a part of them.

The third key issue affecting the future of Detroit is education.  Education remains one of my passions.  As many of you know, before I sought public office I taught at the Marcus Garvey Academy in the Detroit Public Schools.

Last year we had a campaign that centered on the issue of education, specifically educational governance and the need for coordination between the City and the Detroit Public Schools that is critical to our future.  The community spoke in a loud voice and I accepted that decision.  But I will never back away from our children. It is time now for all of us who care about our children to do our part to assure our children have the quality education they deserve and need if they are to compete in the 21st Century economy.

I want you to know I will do anything I possibly can to help and provide leadership in the area of education.

As we work on this issue, we also need to keep in mind that only 63 percent of children in Detroit go to a public school.  The remaining 37 percent go to charter or parochial or private school.  Education – both public and private – as we know it is changing.  Last week’s announcement by the Archdiocese that they were closing so many Catholic schools underscored the profound changes underway in education.  Our efforts must recognize and reflect that change.  And our focus must be on assuring that every one of our children is provided an opportunity and supportive environment to fully develop their skills.

We also will continue working with Sheriff Warren Evans to encourage a real law enforcement partnership with DPS.  The sheriff is ready to assume responsibility for making our schools safe, making our children safe and addressing the problem of truancy in our public schools.

I look forward to working with the people of this community to assure that we have a strong future for our children and that our focus stays on our children.

As I close tonight, and as we look to the future, I would ask you all to remember the example that was set for us by Max Fisher – his energy, his innate optimism and his love for Detroit.

Max Fisher dared to think big.  And he dared others to think big.

Working closely with Mayor Coleman A. Young and Henry Ford II, he made a powerful impact for the better on Detroit.  Even after Mayor Young and Henry Ford had passed from the scene, Max Fisher continued on.

In 1995, the Chair of the Detroit Symphony, Peter Cummings, and Mayor Dennis Archer approached Max Fisher and asked for his support of a plan to revitalize Orchestra Hall.  He looked at their proposal and told them it was too limited.  If they wanted his support, he said, they would have to earn it with vision.

They went back to the drawing board.  The result is what we see on this site today – the addition to Orchestra Hall known as “The Max” and a brand new Detroit High School for the Fine and Performing Arts – the finest of its kind in the nation and the first high school anywhere to partner with a major symphony orchestra.

Max Fisher was 85 when his challenge produced the concept for this center.  It took almost 11 years to complete, but he lived to see it come to full fruition.  On February 28 of this year, the ribbon for the Detroit High School for the Fine and Performing Arts was cut. The first students walked through its doors.  Three days later, Max Fisher died.  Right up to the end of his very remarkable 96 years, he was building the city that he loved and helping build a better life for thousands of students for decades to come.

Eleanor Roosevelt once said, “You must do the thing you think you cannot do.”

Max Fisher inspired us to do things we think we cannot do.  He didn’t care who got credit.  He just wanted to get things done.

Those things didn’t always happen overnight, or even in a year or two.  It took 11 years to build the Performing Arts High School.  But that didn’t mean he was wrong.  It didn’t mean the effort wasn’t worth making.  It did mean that when his goal was worthwhile, he didn’t let temporary setbacks derail the effort.  He kept on keeping on until he achieved it.

As we move forward in 2005 let us remember the example he set for all of us.

Let us move forward with vision … and imagination … and selflessness … remembering that we all love this city, remembering that we have much to be proud of and remembering that, working together, we can rebuild this city.

The world is coming to Detroit.  This year’s All Star game … next year’s Super Bowl … the NCAA Regional finals in 2008 and Final Four in 2009 … the NCAA wrestling championships in 2007 … the Head Start conference in 2006 … the AKA Boule Convention in 2006 … the NAACP convention in 2007 … the annual North American International Auto Show and others are bringing the world to Detroit.

In this week of the most holy period of spiritual renewal, the world needs to see a Detroit that loves itself, because no one will love you if you don’t love yourself.

I love Detroit because we are Detroit. We are proud to be Detroit.

With vision, and energy and love for our City, we can make Detroit the City Max Fisher envisioned.  The City I believe it can be.  The City that together we can make it be.

Thank you.