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Government


Akron finances uncertain but economic development is positive
State of the City
by WKSU's TIM RUDELL


Reporter
Tim Rudell
 
A crowd of around six hundred gathered to hear how things stand this year in Akron. The Greater Akron Chamber of Commerce sponsored the luncheon event
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In The Region:

Economically, this past year and the two before it have been three of the worst years for the city of Akron since the great depression. That’s the backdrop chosen by long-time mayor Don Plusquellic for his annual state of the city address. WKSU’s Tim Rudell has more...

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State of the City address by Mayor Don Plusquellic

 

Thank you, and good afternoon.

My thanks to Dan Colantone and the staff of the Greater Akron Chamber for making the arrangements for today’s program. And as always, the Kiwanis and Rotary Clubs of Downtown Akron, and the Akron Press Club for being such long-time supporters of this event. And I’m pleased to welcome the Akron Roundtable organization as a sponsor this year as well.

I want to thank the members of my family who are here today. Your support has always been important to me.

I want to acknowledge the presence of many city workers here today, including my cabinet and office staff - who are like family - and thank them for their hard work this past year – under especially difficult circumstances.

And unlike many communities, Akron benefits from a strong vision and leadership from its city council. Too often, cities waste energy with constant conflicts between mayors and legislators. I feel lucky to have good people, sharing a vision for the city, and working together. My thanks to president Marco Sommerville and the city council members who are here today: Jim Hurley, Russ Neal, Ken Jones, Tina Merlitti, Kelli Crawford, Jeff Fusco and Linda Omobien.

I would be remiss if I did not acknowledge our loss of two community leaders: Dick Nichols, the President of Inventure Place and Atha Walker, whose kindess and patience made our neighborhoods and politics a better place. Both died this week.

This will be the fourth straight year - unfortunately - that the global recession will impact all U.S. cities including Akron. We continue to struggle to maintain revenue and balance our budget.

The reduction in employment in the private sector since the end of 2007 has profoundly impacted the way we deliver services to our residents, and the economic outlook for 2011 is at best - uncertain.

Our Income tax collections have improved a little, but remain fragile. In 2007 - the year before the recession, we collected $ 119 million in city income taxes. In 2008, it was 117-million. In 2009, 109 million ; and last year, 107 million dollars, which if you’re doing the math - means we have $12 million less in our primary revenue source than we did before the recession began.

Yet, I would place Akron’s performance above any major city in Ohio, as we all have done more with less. In large part, that is due to the sacrifices made by so many of our employees.

At my request, the wages of our all non-union employees have been frozen for a second year, and it’s the third year that my cabinet and I have not taken any increase in pay. By the way, I have 40% fewer cabinet members today, and even when we were at full strength, we still had less top people than the Mayor of Akron 30 years ago.

We have made changes to our health care plans. Employees pay more this year for certain prescriptions, and next year - for the first time - will contribute to their health care coverage. Almost all of our workers have given money back to the city through furloughs.

Thirty years ago, we had 3,400 city employees. With retirements and attrition, the city’s workforce is now 1,804 full time employees. A year ago at this presentation, it was 1,938.

That number reflects consolidations we have made to make city and county government more efficient and cost-effective. In 2010, thanks to the hard work by Summit County Health District director Gene Nixon and Akron’s interim Director of Health Tom Quade, we combined our city and county health departments. They were later joined by Barberton, and we are already seeing the benefits and efficiencies of these consolidations.

I first discussed combined services with county government years ago, We have combined our Weights & Measures Divisions. The county Building Department now does inspections in Akron instead of our maintaining a separate bureaucracy for that identical purpose. And other communities have joined the building department consolidation as well.

We have ongoing police collaborations thanks to Sheriff Drew Alexander and his chief deputy Garry Moneypenney, and we continue to discuss how we can leverage the investment we have made in our 9-1-1 dispatch center to provide these outstanding services not only to the county, but to other local safety forces as well.

During three of the toughest years, Akron has seen since the Great Depression... and certainly, the three toughest years of my life - Akron has shown strength, sacrifice, resiliency, and creativity.   That’s why I was profoundly disappointed with Governor Kasich’s budget last week.

I might come to like John Kasich some day, but probably for the wrong reason. The way he’s been characterized by the media as kind of a crazy, wild guy – he actually makes me look like a wallflower.

Seriously, though - last week, Governor Kasich announced- a 25% cut beginning July 1, and a 50% cut next year in Local Government Funds.  He is balancing the budget of the state on the backs of local government.

I would not fault him if he proposed that we take a cut in funds proportionate to decrease in the state’s income. That would be fair, and frankly, we have already seen that happen.

But the Local Government Fund is different from all other state expenditures. It is a 75-year old pact between state government and Ohio communities, large and small. Unlike other "discretionary" funds, the Local Government Fund was created in 1935 as a commitment by the state to its cities.

During the Great Depression, Ohio needed a fairer way of funding government services, since every level of government depended on property taxes. In exchange for local officials’

support of the sales tax, state government officials promised cities a share of the sales tax, and property taxes were cut to keep people in their homes.

Similarly, when Ohio officials proposed the first income tax in the late 1960’s, the state again promised to share revenue with cities in exchange for their support.  It is a historic commitment that Democrat and Republican governors alike have kept for 75 years.   In Akron, 100% of these monies goes into the police and fire departments.

Just a few years ago, Akron received $15 million in distributions from the state. Because of previous cutbacks by the legislature, Akron received about $12.5 million in 2010. It is our third-largest source of revenue to the city’s general fund.

I fear that as a result of this action by Governor Kasich, Akron will have no choice but to once again look at layoffs in the biggest part of our budget: police and fire salaries.

At the same time that we are being short-changed by the state, we are also in the sights of tea party radicals in Congress. They want to cut the Community Development Block Grant program 62 percent.

This is a program that (Republican) Senator George Voinovich called "the best federal program ever designed."

Let me make clear that this is not a partisan issue. The person who designed many of the programs that helped re-develop communities, including CDBG was Richard Nixon.

Problems weren’t viewed as Republican or Democratic problems. These were national problems. It was a partnership created by Republicans, and continued by Democrats.

In Akron, the Community Development program has allowed us to eliminate the blight of abandoned buildings; assist senior citizens to re-hab their houses so they have safer homes in which to live; build new housing to attract residents back to the city; and help small businesses provide jobs.

There is no certain cure for what ails our world economy, but I know today what I have known and practiced for all 24 years that I have been Mayor: our first priority is to retain the jobs we have, and to bring the world to Akron to provide jobs for our trained and talented workforce.

Things continue to move along with the Goodyear project, and I'm looking forward to a groundbreaking very soon, as the deal is finalized to keep 3,000 jobs in Akron. This 110 million dollar project on Martha Avenue, now called Innovation Way will also create construction jobs - about 300 each day and lead the way for even more development and jobs in East Akron in the future.

And it was good news last week to hear that Indy tires will continue to be made in Akron, as we see the new Bridgestone Technical Center on South Main Street going up, retaining a thousand jobs in Akron.

I want to thank the executive team at both companies for their commitment to Akron. Goodyear and Bridgestone are not only important brand names among the Fortune 500 - they are iconic definitions of what Akron has been, what it is today, and what it should be through the 21st century.

Yesterday, I had the great pleasure of participating in the ground breaking for a new manufacturing facility being built by the German high-performance plastics manufacturing company, Roechling (ROE shling) Automotive USA.

They are bringing more than a hundred new jobs to the city for Akron area residents. This15 million dollar 75,000 square foot facility will be built in the Massillon Road Industrial Park.

They are here in part, due to our efforts at land banking over many years for manufacturing companies, and is also due to the face-to-face meetings we were able to have with them in Germany.

We have been successful in attracting thirty companies to Akron from Europe, Asia and Israel, bringing over 2,000 jobs to the city and the region.    Roeschling will initially employ 123 skilled workers including machinists, with an annual payroll of approximately $5 million.

My thanks to Bob Bowman, who first met with the company in Dusseldorf, and Dan Colantone and the Greater Akron Chamber for the collaboration at international trade shows that has been in place for many years.

There have been other successes this past year:    Construction starts this year on new headquarters for Akron Polymer Systems on Summit Street. Some 40 people will be hired within 5 years – an initiative born out of the Polymer Science Department at the University of Akron.

I thank Luis Proenza and his team for the many collaborations that are creating new jobs in the city.

AT&T opened a new 120-million dollar data center last year, which handles every single text message on the AT&T network from the Atlantic Ocean to the Cuyahoga River.

We broke ground for a new data center in South Akron for Involta, which brings 40 new jobs to a new 20 million dollar data facility at the old Brown Graves site.

We hired Eric Johnson to lead the University Park Alliance and together with neighborhood and other interested leaders, we are developing a long term plan for the future development of our center city.     And we are getting a great deal of traction in Akron’s Biomedical Corridor, which I first announced in 2006.

This past year, Akron was designated as a ‘Biomaterials Commercialization Hub’ by the state and recognized as an Ohio Innovation Hub for Biomaterial commercialization with focus on orthopedics and wound healing.

The Austen BioInnovation Institute is readying new headquarters near Main and Market, thanks to another collaboration with Summa, Akron General, Children’s Hospital, NEOUCOM, the University of Akron and Summit County.

I want to acknowledge Dr. Frank Douglas for the great work he has been doing in the short time he has been in Akron. (GQ - Rock Star of Science)   The world is coming to Akron for it’s  needs in new procedures, new instruments and new materials for medicine.

At our nationally-recognized Global Business Accelerator, one of our start-up companies, FMI Technologies hired 15 new employees this year.

But the big news for them was a direct foreign investment of 18 million dollars from a Shanghai, China investor group that we met with in November in China. FMI expects to have 30 employees within the year, and possibly more than a hundred when it builds a new facility.

One of our recruits from Israel - Ni Medical - is in the process of hiring sales people and contracting distributors. It plans to establish its worldwide center for technical support in Akron.

And we were pleased to host a delegation from the Finnish Funding Agency for Technology and Innovation, which is returning to Akron this spring with several companies that are considering operations here.

The idea that I’ve been advancing since labeling the Biomedical Corridor, is that it has the promise to grow early-stage companies into nationally known brands and provide jobs for our local residents in the process.

Goodrich, Goodyear, and Firestone were once start-up companies too.

With investors, innovation, and leadership, they gained global identities.

Here is a book, "Start-Up Nation, The Story of Israel’s Economic Miracle," by Dan Senor and Saul Singer. There are more Israeli companies on NASDAQ than all Europe combined, more than India, China, Japan and Korea combined. The book looks at how in this most unlikely place, they have pulled off one of the fastest growing technology economies the world has seen, by nurturing start-up companies.

My proposal is to make Akron the "Start-Up City" in the U.S. And use the lessons learned from this giant of innovation and commercialization to improve the job opportunities for our people in the future while building our economic base.

I have believed that with the success of our Global Business Accelerator, and all that Dr. Douglas is doing, that we need a second incubator for the biomedical businesses that we are attracting. We had some very positive meetings in Washington where Bill Considine, Joe Kanfer, Russ Pry and others lobbied for funding new lab and development space, and I am hopeful that we will have the necessary resources to offer additional opportunities for new companies soon.

But, with that, we need to fertilize these growing companies with capital.   Today, I am pleased to announce the creation of the "Akron Development Corporation Seed Fund." And I am able to tell you that we have received the first contribution to the fund: One million dollars, from medical Mutual, a business partner to many companies and organizations in Akron.

Medical Mutual recognizes the importance of our efforts in establishing a Biomedical Corridor and Hub of Innovation in Biomaterials and commercializing products developed here into jobs here.   In addition, First Energy has pledged its commitment to also becoming an investor.

This seed fund will be directed at attracting early-stage home-grown and other biomedical companies to set up operations in our Accelerator and in the Akron Biomedical Corridor, then help them grow into their own space.

We want manufacturing companies that are home-grown. 40 out of 50 companies in our Accelerator are "home-grown.," But we cannot ignite the huge potential for job growth by not reaching out across the U.S. and global market place to get our share of investment and jobs.

This is why we need a presence on the global stage. Roeshling would not have brought 123 jobs to Akron without our meeting them on their home turf. FMI would not have received the 18-million dollar investment from China unless we had gone there to support them.

We will continue to aggressively market ourselves through trade shows and partnerships including the Greater Akron Chamber, NEOTEC, TeamNEO and Team Ohio.   This year, direct foreign investment in the United States is expected to be 237 BILLION dollars.

We need to get our share by presenting good and solid cases for investment in Akron.   Just last week, Deputy Mayor Bob Bowman and Council President Marco Sommerville were in Qingdao, China to sign an agreement with the Si-fong district on a future relationship that Akron will have with this region.

Like Akron, this region is where rubber and polymer companies have clustered. They’re hoping for a long-term alliance that may see Chinese companies look to Akron as the place where they might begin manufacturing operations.

This is a very big deal, we are being told by international companies. Akron has impressed Chinese decision-makers in a way that few American cities have done as quickly.

As we did in Israel - we now enjoy a special relationship with China that bodes well for the development of manufacturing jobs in Akron. As I said last year in my state of the city speech, and have been saying for over 30 years, we can’t be just a service economy and be successful as we can be with manufacturing as a staple of our economy.

And while capital is part of the equation, the other part is having skilled workforce who can be ready for the jobs that are coming to Akron.

As much progress as has been made in keeping companies and attracting new jobs, I realize that some people have been "left out," because of the lack of training.

That’s why I’m so encouraged about the initiative that county executive Russ Pry announced last month, the Summit Jobs Partnership. Summit Workforce Solutions and the Job Center will bridge the private side and the public side of job training providing more opportunities for our residents to have the skills necessary to land a good job.

This is all good news for Greater Akron. But our challenges continue.

Our unemployment rate continues to hover between nine and ten percent. That’s too many people without work. It means that we have families who are hurting, and the demands on our social service agencies are at an all-time high.

Additionally, our loss of population presents something of a psychological loss to our community. It also means less representation in Congress for Ohio, and smaller grants from the federal programs that use population as a guideline.

Akron may have fared better than any major city in Ohio except Columbus, but it is small comfort that our population declined less than other cities in the industrial Midwest.

We have to continue to do more to re-build Akron as a place where people want to live.

We have used the stimulus funds we received from the Neighborhood Stabilization program to buy properties out of foreclosure, demolish old housing that could not be re-habbed, and we’ve built new houses at market prices that families can afford to buy.

We’ve had great cooperation from the Homebuilders Association, and we will continue to demolish as many dilapidated houses as possible, so that when the economy rebounds, we are ready with buildable lots.

One neighborhood on Hawkins Avenue at Wooster Avenue is being re-built with inspiration provided by Pastor Joey Johnson at the House of the Lord. Working with Testa Builders, the Village at New Seasons has taken over an old strip mall that was vacant, and turned it into an 11-million dollar investment put together by the East Akron neighborhood Development Corporation. So far, 100 people are on the waiting list for the 50 apartments that will be modern and energy-efficient. And the project has a retail component as well, plus a clinic that will be operated by Summa.

We work hard every day to ensure that in neighborhoods where people live now, we are addressing the issues that matter most.

Last year, over 200-thousand calls were made to our 3-1-1 service center. We did 9-thousand high weed and grass inspections, removed 300 junk vehicles, took care of 600 trash complaints, and maintained 1,400 city properties by mowing them and cleaning them. With Council support, we changed the laws to speed-up the process of clearing up those nuisances, and getting the repeat offenders who ruin neighborhoods to pay... saving taxpayers money.

And in this neighborhood - Highland Square - I am pleased to tell you that we have received four viable proposals that we are reviewing to finally bring a grocery store to the corner of Market and Portage Path. I am encouraged that we will see real progress this year.

One of the positives in our neighborhoods is our Block Clubs. We have dozens of block clubs who are on the front line of reporting nuisances and suspected criminal activity. This past year I convened presidents of our block clubs and a group of community leaders - about 100 in all - to join a Task Force on Community Policing. They met with consultants from the Police Executive Research Forum - no city officials or police officers present - to discuss how to improve policing in our city, and the qualities they want to see in a new police chief.

Akron is well-served by a police force that has a historic reputation for integrity. That’s due in part to the funds we have invested in new technology and training, and due to the culture of honesty and high ethical conduct that our chiefs of police have led.

I want to acknowledge the good work of Chief Craig Gilbride and retired chief Gus Hall, who are here today, for their combined 63 years of service to the people of Akron.

We have begun the process to find their permanent successor. It will be a chief from outside the department, in an effort to ensure that we learn from the best practices of departments around the country as we move to a day when police work is more technology-driven and evidenced-based.

We will also be appointing a new fire chief as well this year, and I am pleased that our interim chief Rob Ross is here with our deputy chiefs. They have a history of responsible innovation, and they should also receive our thanks.

We were able to re-hire 38 firefighters in 2010 with a SAFER grant from the federal government, and because they are here today, I want to personally thank Congresswoman Betty Sutton who spearheaded the effort to insert this relief for cities in the stimulus legislation and Congressman Tim Ryan for his support of our request, as well as all of those other projects they have successfully supported for our entire community.

I have always said that we must honor the brave men and women who are willing to place their lives on the line for us every day.    But those noble sentiments come-up against the hard reality of diminishing budgets, and there has been great tension over this issue - not just in Madison, Wisconsin and Columbus, Ohio, but in Akron, too.

When the state’s so-called "fact finder" issued his report last year, he took a snapshot of our income tax collections on only 2 days- May 20th and 21st to forecast "growth" for the entire year - when we were actually down 1.7% at the 6-month mark. He bootstrapped one error into a grotesque result: pay raises to the police union that we could not afford.// And when firefighters in Akron and police officers around the state were agreeing to sacrifices, that’s a broken system.

When a second conciliator attempted to make corrections, she still awarded raises in a year when everyone else in Ohio was sacrificing. Her report saddled the City with raises to police officers who engaged the city in a protracted and expensive legal fight. Our other bargaining units - who made sacrifices to save their members’ jobs were unnecessarily punished by this finding because we had to make more cuts in those departments to pay for police raises.

Akron’s firefighters and AFSCME laborers worked hard to negotiate a settlement that is fair to them and to taxpayers.

I have always fought hard to make sure that we have the best equipped and best trained police force in Ohio. I recognize the special job they are asked to do. But a decision that elevates them beyond our hard-working crews in public works, firefighters, and our other employees - compromises the ability of the people’s elected officials to effectively manage the city for all the needs we are obliged to serve.

I have been a very outspoken supporter of a system that gave adults - essential government employees - a way to settle their differences, without strikes.

But the system needs fixed. But just like the cancer patient who undergoes radical treatment to save their life, the legislature has prescribed a drug that kills the "good cells" along with the cancer cells.

It’s not like I needed one more fight this year.   I’ve already taken on a federal judge over his unreasonable and unprecedented decision to delay our cleanup of the River, pay millions in attorney fees, and impose astronomical rate increases on Akron’s sewer users.

Anyone would get weary of battling with people who have a personal or political agenda. But this job requires someone to stand up and fight for them.  I have been willing to be that fighter for issues that matter to the people of Akron.

Years ago, I fought annexation battles with our township neighbors to make sure that Akron could get open space to build new factories to keep our people employed.

For 28 years, I fought to get the very same kids who attend our public schools to get back into those buildings after school and on weekends.

I have fought to get our fair share of tax dollars from Washington because we still send more to the federal government than we get back.

I fought EPA bureaucrats on rules that would dramatically increase sewer rates for citizens and businesses.

I successfully fought Governor Taft and the legislature to keep the Local Government Fund from being eliminated 4 years ago.

Five years ago — I was credited with leading the successful fight as president of the nation’s mayors and joined with leaders from the NLC, NACO, and the Governors’ Association to keep the Community Development Block Grant program.

I even fought some of my best friends over the residency issue because I was standing up for the citizens who chose to live here and should have the right to require people they pay to live with us. It’s ironic that so many people now – including many from Ellet and Coventry Crossings – come up and ask me why the police officer or fire fighter who used to live next door is moving. We lost that battle to the Ohio Supreme Court.

But some of those fights have had great resolutions - creative solutions like Joint Economic Development Districts instead of annexation; Community Learning Centers that are in use as centers for one of the best after-school programs in the country, and restored funding from the state and federal government.

The main reason I’ve decided to continue my work is because so many people in Akron remind me regularly that they are glad someone is standing up for them.

Just this weekend, I had a gentleman and his wife stop me in a restaurant to thank me for fighting for them. And on St. Patrick’s Day, a man who hated me for a number of years apologized for all of the bad things he had said, because he realized that he had been wrong - I was just doing my tough job. It’s those moments that actually keep you going.

It was January when I decided to seek election for another term. Believe me, I thought long and hard about it, with my family and close friends probably correctly lobbying that I had more than paid my dues.

Two things happened that had an impact on me to make me realize that I’ve been able to make a difference in the lives of Akron residents, and I want to continue to stand up for them.

On January 14th - I remember the date - Chuck Collins of WAKR, assembled a series of sound bites from the comments following the horrific Tucson shootings, and set it to the song, "Through the Eyes of a Child." It really made me think about where we are as a society, and what I wanted to do for the rest of my life.

I want to stand up for people, and continue to fight for what’s right and not let some fringe elements win.

Then a week later, to almost confirm my decision, I was in Washington for the Conference of Mayors Winter Meeting, I attended a special event at the Kennedy Performing Arts Center on January 20, the 50th anniversary of President Kennedy’s inauguration. I listened to Caroline Kennedy talk about her father’s life and legacy.

It was that speech in 1960 that drove many in my generation to believe we should be of service to the community.

I wanted to be involved - not so much helping our entire country - but helping our community, because America is really made up of thousands of communities.

I thought of the original reason I ran for council, and I realized that even though we are in the most difficult economic period of my lifetime, even though it is tougher to serve now than ever before, "Cutting and running" was not something that is part of my fabric, and I honestly get up every day thinking about how to make Akron better.

So as I look honestly at our city’s future - even in this difficult period - I have hope because of so many of you who believe as I do that Akron is a place worth fighting for- to be an even better place for our children and our grandchildren.

And I want to use my experience, my proven track record of accomplishment, and yes - my god-given talents - right here serving the

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