OFFICE OF THE MAYOR

The State of the City Address
Honorable Stephen R. Reed, Mayor of Harrisburg before the Harrisburg Regional Chamber of Commerce
Noon, Wednesday, April 8, 2009 at the State Farm Show Complex


It is an honor to join you again for what has been, for more than two decades, this annual report on the progress of Pennsylvania’s Capital City and the largest municipality in our region.

This tradition has been noted by others, in counties and other towns, who now conduct similar events. The same is true regarding many of the projects and programs initiated in Harrisburg which have been subsequently implemented in other places.

The Harrisburg Region Chamber of Commerce and this city have been called upon many times to share ideas and examples of initiatives that have led to progress here and subsequently replicated elsewhere.

Our thanks to Sovereign Bank, the platinum sponsor, and to all the gold, sliver, bronze, media and video partners whose support make this event possible and has allowed for its growth over these years.

The value of the Chamber should be plainly obvious. Truly regional in scale and scope, it embraces all sectors of this region’s economy and is inclusive of the diverse population that lives here.

In this time of economic constriction, many a business, many a person, and many a community feels vulnerable---and uncertain of what the immediate future may hold.

We are stronger when we act together. We are more resilient when there is unity of cause and purpose. We are more successful in overcoming challenge when there is a shared vision and a partnering of resources.

For these things, the Chamber has always existed and acted and this is especially true today. Your active Chamber participation is invited, as is your support.

There is another tradition we continue today. Since our nation was attacked in 2001, America has been at war. The conflicts continue. The threats are real. A determined adversary seeks us harm at home and abroad.

Amidst the many distractions of daily life and the domestic economy, it is too easy to put out of mind what others are doing as they serve us.

We have long grown weary of politicians and candidates who badmouth others and every new idea---whose primary concern is personal advancement and not public service---and who have neither a record nor a real plan to get good things accomplished.

If we are looking for real heroes, they do exist. They are from around this city and region and from across America. They are the men and women of our active duty Armed Forces, the Guard and the Reserve. They are the ones committed to defending America, our freedom and our lives---even if it means the sacrifice of their own.

On this very day, there are more Pennsylvania National Guard personnel deployed overseas than at anytime since World War II. At this hour, many of our fellow citizens serve in harm’s way, including from the 28th Division and from Echo Company of the 2nd Battalion of the 25th Marines---both based in Harrisburg.

Many who experience combat return home as changed persons. Others sustain significant injuries that remain with them for life. Others have died in the line of duty and never came home alive leaving behind families and friends who bear the loss.

From this region, we remember the ultimate sacrifice of Tristan Aitken…George Mitchell, Jr.,…Zachariah Long…Corey Small…Craig Ivory…Timothy Hayslett…Kimberly Voelz…Matthew Sandri…Martin Kondor…Nicholas Morrison…Neil Anthony Santoriello…Brett Swank…Andrew Joden…Kenneth Zeigler…Brett Walden…Nathaniel Detample…Jason Frye…Keith Bennett…Brent Dunkleberger…David Dietrich…Orlando Gonzalez…Sean Thomas…Philip Murphy-Sweet…Aaron Michael Genevie…Michael Koch…Luke Runyan…Carl Carroll…Edward Shaffer…John Fralish…Scott Ball…Jonathan McColley…Bryan Willard…and, most recently, James Yohn, who was also a Highspire volunteer firefighter and whose wife gave birth to their first child weeks after his loss in Iraq.

Their names are forever on the honor roll of our Nation. To them and to all who are serving America today---and by extension, to all the veterans of military service who preceded them---do we now dedicate these proceedings.

As employers and citizens, we must do more than say words of gratitude and support. Hiring veterans, including recent returning veterans and surviving family members, and assuring no loss of income or benefits for the Guard and Reserve members called to duty, would provide real meaning to how America thanks and remembers their service.

We turn now to the domestic economy and how we are faring.

The present recession is broader and longer lasting than what most people have experienced in their lifetimes. Unemployment is up. Consumer spending has slowed. What began in the housing mortgage market had a domino effect in every sector. Access to most credit slowed to a trickle.

Extraordinary changes are underway as the private sector adjusts. The role of government has sharply expanded at the federal level.

The United States has, by far, the largest national economy in the world and the world economy is embroiled in this decline. Efforts to have a coordinated response amongst the 20 most industrialized nations have had modest success thus far.

In our own nation, our domestic response includes unprecedented amounts of new federal spending. Its theme and concept harken to what became the U. S. Government’s initiatives under Franklin D. Roosevelt, when faced with even greater and longer challenge.

Washington very recently advanced the Stimulus Package, intended to infuse new monies to retain and create jobs and create a stronger safety net for those most affected.

The Stimulus Plan includes hundreds of categorical appropriations for an array of purposes. In some instances, there are direct allocations to local entities and governments. The majority of the funds go to the states for their direct expenditure, while other monies are available on a competitive grant basis through federal and, in some cases, state agencies.

It is a maze of differing criteria, rules, applications and funding sources. Each week, new information arrives about some part of the Stimulus Plan. Much more is to come.

Harrisburg is eligible for direct funding related to further housing renovations, preventing homelessness, acquiring technical equipment and training for police, undertaking energy efficiency and conservation work and upgrading existing public housing units. None of these are enormous sums but they will help.

These monies do not count what may accrue to individual citizens by way of increased social security, unemployment, health insurance, energy conservation, and other benefits.

The School District receives some added funding, most of it intended to prevent cutbacks in existing programs and staff.

Harrisburg shall be submitting applications for a variety of purposes---hiring 25 additional police officers, creation of a Summer Jobs Program, establishing further jobs training for inner-city adults, and infrastructure work. Included will be pursuit of a Second Chance Academy, for returning ex-offenders to learn employable skills in an effort to reduce the number of repeat offenses.

Various local agencies are also receiving funds, including the Community Action Commission and the Boys and Girls Clubs.

Of interest is that for all the highway and bridge monies to be spent in this region, not one cent will be spent on any project within Harrisburg. The same circumstance exists for the cities of York, Lancaster, Scranton and others. The exclusion of city urban centers from such needed work is clearly not what was intended in Washington.

To assure that Harrisburg maximizes what funding opportunities exist---and to assure that duplication does not occur and that good coordination prevails---we have formed a Stimulus Oversight Panel, comprised of City agency heads and grant personnel. This group shall be expanded to also include representatives of other recipient and applicant organizations. We intend that the highest beneficial effect for our citizens be brought about by this effort.

As the Stimulus and other funding begin to make its way to our region and city, it is our firm intent to assure the inclusion of minority and women-owned businesses and city residents in the opportunities that arise. Formal efforts to achieve this are already well underway and governmental agencies shall be pressed by the City to be aggressively inclusive. Tens of millions of dollars have been expended by the City with minority and women-owned contractors, vendors and professionals and I can affirm their quality and success.

How long the recession shall last is speculative, at best. There are some very recent hopeful signs, with slight increases in consumer spending, home sales, manufacturing orders, and lower mortgage rates.

We do see the coming days as an opportunity to refine economic development efforts in the areas where the greatest future growth is likely to occur, including in health care, alternative energy, and technology development. Jobs skills training will be centered on these pursuits and in broadening the ranks of those with higher construction trade skills as well.

Harrisburg approaches this future from a better position than what the National Economy would suggest.

In 2008, 1,623 building permits were issued representing $226,932,500 in new investment. Thirty-eight blighted structures were demolished.

The number of businesses on the taxrolls---which was once 1,908---is now 9,172---the highest number since records have been kept.

The pace of development work continued into the third and fourth quarters of last year. To the extent that there is constriction due to national economic conditions, it will occur this year but Harrisburg entered this new year with a better-than-expected momentum and experience.

2008 was amongst the best ten years in the level of new investment in this era. It now brings the total of building permits issued in this time to 39,594 with a combined total of $4,631,000,000 in economic development.

Since 2004, the number of restaurant licenses in the city has increased by more than 31%---and 8 more coffee shops, nightclubs and restaurants have been added in the past 12 months.

New construction and renovation work exist citywide. The notion that both the City and the private sector focus primarily on the downtown is nonsense.

The new Campus Square Complex is nearing completion at Third and Reily Streets. At 73,000 square feet, this $14.2 million, 4-story facility offers new office and retail space.

Across the street, in buildings assembled by the City, the $1.3 million project is getting underway to provide 8,400 square feet of space in 19th century buildings. Fulton Bank is moving its uptown branch to the premises.

New supermarkets have opened at the Save-A Lot at Seventh and Division Streets and the new Eagle Grocery Store in the 2300 Block of North Third Street, representing over $3 million in work. Both involved the considerable restoration and upgrade of buildings that are now stocked with great variety at affordable prices.

At the Comfort Inn, the $1.8 million upgrade has been completed for the 114-room complex. A second restaurant is planned for the premises.

The new Staybridge Hotel on Wildwood Drive---with 125 rooms, meeting space and pool and representing $11 million in new construction---will soon open.

Approvals have been granted and the final planning underway for the new Arts Hotel that involves both new construction and renovation of inter-connected structures in the 300 Block of Chestnut Street. The $9.5 million project includes 43,600 square feet, 44 guest rooms, lounge, meeting space and art gallery.

The Brother and Sister Food Service Company on S. 22nd Street is now starting a major building expansion to accommodate their growth in serving both the U. S. and European Markets from Harrisburg.

The Tri-County Blind Association took a long-vacant bottling plant and, with $2.5 million in investment, has created 35,000 square feet of splendidly renovated space on S. 19th Street.

Next week, the new Asian Mall---with grocery store and multiple retail shops---officially opens on S. 13th Street, representing substantial new investment and a broadening of the retail offerings in the city.

The Central Penn Business Journal, to accommodate the growth in its publishing work, undertook a $3.4 million renovation and upgrade of the former UGI headquarters site on Paxton Street.

The $2 million restoration of the mid-19th century structure on North Third Street, to become the Midtown Arts Center, is well underway. One of its components, The Theatre on Herr Street, has already opened. The project includes the Harrisburg Film Office, restaurant, studios, large meeting room and performing arts center, pool and sauna, and gallery space.

The inter-connective technology firm Digital Samba USA opened its U. S. headquarters in the city, further augmenting the City’s evolving technology corridor.

Nearing completion is the new 36,000 square feet office complex in the 3000 Block of North Front Street, offering Class A space and off-street parking and representing $4.2 million in new construction.

At Forum Place, which is the extensive office complex at Fifth and Walnut Streets, all remaining office space has been long-term leased. Upgrade work on the premises is occurring and the project will join the tax rolls under a payment in lieu of tax agreement as a result.

At the Olcam Office Center on South Cameron Street, major renovations and upgrades are started.

The Appalachian Brewery, based in Harrisburg but now with outlets in other towns, has expanded its amenities and off-street parking on North Cameron Street.

In the banking sector, Graystone Bank has merged with Tower Bank and the headquarters shall be in the city.

Over $1 million in further upgrades have been undertaken at the Strawberry Square Complex.

At the Penn Center, the major uptown office complex on the former Polyclinic Medical Center site, over $5 million in major upgrades have started including energy efficiency retrofits.

The JEM Group, a general construction firm, has placed its headquarters in the city, undertaking $400,000 in project costs to acquire and restore its new quarters.

In South Allison Hill, where a considerable amount of commercial and residential development has now occurred, City crews have completed the clearance of a series of long vacant structures---making multiple acres now available for significant further investment.

The Mikayla’s Place Child Development Center opened at 2023 Market Street, offering education and day care services for the children of working parents, after a quarter million dollar renovation of the premises.

At the Harrisburg Hospital Campus of Pinnacle Health, the $26 million construction expansion of their emergency health services department is well along. The City’s economy is enhanced by the City role as a regional health service center. It is at this hospital campus that pioneering advancements continue to unfold, such as the robotic heart repair technology that has now been developed. The hospital’s multiple national recognitions in the past year underscore the further growth potential for this dynamic sector of the economy here.

The City is further evolving in its role as a judicial center. This year will see completion of the $107 million State Judicial Center with 425,000 square feet of new space---the first such facility in Pennsylvania history.

We also fully expect that, six blocks away, that the new Federal Courthouse will ultimately be constructed at North Sixth and Reily Streets.

In further contrast to earlier times, Harrisburg has also emerged as a tourism center. Most recent numbers show tourists spent $1.38 billion in Dauphin County, with the City growing in its share. This means city-based jobs. In this region, 32,000 jobs are related to tourism.

The Hershey-Harrisburg Regional Visitors Bureau has expanded its extent of marketing and bringing further business here. Their need for more room spawned the restoration of space on Market Square, where they are now headquartered.

The economic development honor roll, of those whose vision and investment have added to the City’s resurgence in these 12 months, is extensive and includes:

301 South 13th Street LLC
730 South Tenth Street LLC
Affinity Properties LLC
Asia Mall LLC
Barking Dog Venture LTD
Bartlett, Traynor & London, LLC
Caroline Lai
Clarendon Realty LLC
Commonwealth Realty III, LTD
David Trexler
Dilks Properties of Harrisburg
Doug Neidich
Downtown Associates LP
Front & Hamilton Street Associates
Gary Deimler
Green Street Properties LP
Greenworks Development
Harristown Development Corporation
James Pagliaro
Kenneth Anderson
Kevin & Maureen Lynn
Kramont Realty Trust
Lehman Property Management
M & T Bank Property Management
McNees Wallace & Nurick LLC
Midtown Development LLC
Moyer & Williams Development
Parks Realty Company
Penn Center Harrisburg, L.P.
Phuong Tran
Pinnacle Health System
Powers & Associates, LLC
PP&L Electric Utilities Corporation
Properties America LLC
Ralph Vartan
Riverview Manor Associates LP
Rosewein Realty Inc.
S & A Homes
Sage Market Square Plaza, LP
Second and Pine Investments
State Street Holdings LLC
Strudever Rouse
The Homeland Center
Third Street Development LP
TKP Schoolhouse Associates, LLC
Tom Flynn
Tony Pascotti
Tri-County HDC LTD
Triple J Associates, LTD
UGI Corporation
WCI Partners, LP
William M. Farrell
William Nichols
Winston R. Palmer
and the list goes on.

While credit markets and slowed demand in nearly all sectors serve to complicate economic development, we believe the future is bright and promising.

In Harrisburg, an array of projects is in the works. While developers and planners are reticent to do early release of details, until initial planning work is affirmed, there is much to come.

A major telecommunications company seeks to install fiber optic services citywide, with video, voice and internet capacity, at a cost in excess of $16.5 million.

Efforts also continue to create a wireless internet access system across the city.

For the further fulfillment of the extensive Midtown Master Plan, that includes over 3,000,000 square feet of new construction, Keystone Opportunity Zone designation is sought.

An equally bold strategic plan for South Allison Hill is being finalized, and will spur additional housing, commercial, recreational and other development.

The S. 17th Street Corridor, with its easy connection to Interstate 83, and where industrial land exists, is slated for targeted economic investment.

With final right-of-way acquisitions expected to be completed, the Northern Gateway Project will finally be underway. This project widens North Seventh Street between Reily and Maclay Streets, adding new sidewalks, curbs, traffic signals, streetlights and an upgraded intersection at Seventh and Maclay Streets. Further economic development will ensue.

For the largest single endeavor ever envisioned for the City---and prospectively the largest economic development project pending in the state---the Southern Gateway Project now shall move to its final design stage---eventually giving rise to a complete reconfiguration of this entranceway to the downtown and a future doubling of the size of the Central Business District.

In the 1500 Block of North Sixth Street, a major new, mixed-use complex nears its final steps to get underway.

The advancements and progress made in all the sectors of city life have given rise to greater demand for housing, including market rate residential units.

In 2008, 557 residential properties sold. Their average sales price was only 1.6% less than the preceding year, a telling circumstance considering what has happened to home values in many parts of the country.

In residential work, the long-term value of restoring older structures has been well proven. With their historic design and architectural amenities, their charm enhances city living, which will be the focus of the City Homes Tour of the Harrisburg Young Professionals on May 16th.

Housing development continues at Market Place Townhomes, where the next wave of new homes will soon be under construction. The same is true at Capitol Heights, an entirely new neighborhood created after clearance of hundreds of small lots and at which 188 single family residences will occur upon completion.

Olde Uptown Townhomes and Green Street Properties will be continuing with their renovation and home sales work involving over 100 units.

In the Riverfront Park Apartment Project, where 216 units will be fully restored and upgraded, the first phase of work is nearing completion in this $10 million endeavor.

At the former Boas School Building, dozens of new units are now under construction in this $1.2 million investment.

Continuing major renewal work uptown, the City has completed the complete renovation of 25 long vacant structures at North Sixth, Oxford, Schuylkill and Jefferson Streets, involving over $2 million in work, with more to come this year.

At Governor’s Place, which covers much of a nine square block area, 222 rental units are now done and 72 new townhomes for homeownership are underway---for a total project cost of over $30 million.

At Tracey Manor on North Front Street, which involves the restoration of an historic site and the construction of new additions, pre-construction sales have advanced and with another 6-unit commitments, will be underway. The project includes upscale condominiums, a luxury spa, bookstore and café.

The nearby historic Riverview Manor, with 76 units, is undergoing a total rehabilitation and upgrade, representing a $6.5 million investment for new condominiums that includes a major expansion of off-street parking that brings parking relief to that neighborhood.

In South Allison Hill, where multiple sites have involved restoration work, 25 new townhomes will occupy cleared land areas on Swatara and S. 16th Streets. It includes the first-ever zero-energy home prototype that will set a new standard for energy conservation and reducing carbon emission in the homebuilding industry.

Nearby, a private developer has already filed plans for constructing additional new homes on S. 16th Street.

From the beginning of the City-initiated revitalization efforts, the City has been a neighborhood residential developer. These efforts continue.

Through the City’s Homeownership Opportunities Program, vacant but structurally-sound homes are acquired and restored---and then sold to new owner-occupants.

Through the City’s Home Improvement Project, homes of lower-income owners receive upgrades to prevent the loss of that home due to deterioration and its eventual abandonment.

In 2008, the City’s lead abatement work cleared and upgraded over 50 homes of old lead paint, which poses a risk to small children and pregnant women. To date, over 250 homes have been done through this initiative alone, with the City’s efforts having been cited as a Best Practice Program by the federal government.

The number of residential units just completed, now underway, or soon to be started totals more than 1,100 homes and apartments---with more on the way.

Overall, the City itself, serving as developer or providing funding and other support to private and non-profit developers, has directly seen to the building and renovation of over 6,000 residential units---making the City perhaps the largest residential developer in central Pennsylvania in this time. The overwhelming majority of this work has always been in the neighborhoods.

Literally thousands of people today occupy these units, many of them achieving affordable housing and homeownership for the first time in their lives and even some of them having once been homeless. The advancement of housing renewal has inevitably given rise to the creation of markets for small businesses, restaurants, stores and jobs---now in greater numbers than in previous years. All these endeavors shall continue in the coming months and years.

There is another component to our housing work that is equally important---providing help and opportunity to those less fortunate. This has always been a need, and is more so today because of the loss of income and health benefits and sub-prime mortgages in this recession.

By this year’s end, the new Susquehanna Harbor Safe Haven will be fully constructed. This $2.2 million City project on N. 12th Street offers 25 permanent beds and 40 temporary shelter beds. Its focus is on ending chronic homelessness. Wraparound services, including dependency rehabilitation, job training and health services, will be provided to address the underlying issues that create homelessness.

Additionally, a new federal allocation under the Continuum of Care Program puts another $1.3 million into use with human service providers. This is the result of a city-county planning effort aimed at ending chronic homelessness in under 8 years.

The Bethesda Mission has undergone a $2.4 million upgrade to provide space for expanded services to achieve the same goal.

The Harrisburg Housing Authority has undertaken major capital improvements to many of its facilities, involving over $1.5 million in work last year and another $4 million now pending.

Habitat For Humanity, which does God’s work in creating new and repaired homes, is now embarked on a $500,000 fundraiser to restore a former printing company structure in Allison Hill to be their central staging area and from which building materials will be sold at low cost to citizens looking to upgrade their own homes.

In South Allison Hill, a culturally dynamic and diverse neighborhood, excellent planning is well underway to create a new Hispanic Services Center to replace the one that closed several years ago. It is critical that our Latino citizens be in the mainstream of community life and this will go a long way to assuring such.

Out of Washington these days, we are now hearing much more about the need for infrastructure repair and alternative energy. They are long overdue national priorities.

Harrisburg has been significantly engaged in these matters, although our doing so has received scant attention.

Last year, 38 streets were reconstructed and repaved at a cost of $1.9 million. Included was the rebuilding of stormwater inlets and installation of additional handicap access ramps. The City seeks funding to do another 50 streets.

Replacement of deteriorated walls at the Herr Street Underpass is now underway.

The Harrisburg Transportation Center, which serves as the hub for the region’s interstate bus and passenger train systems, is slated for $1.2 million in further upgrades. This will supplement the $5.4 million in improvements completed 18 months ago.

At 11 school sites, multiple safe street and student crosswalk projects are occurring to improve pedestrian and student safety, at a cost of $346,000.

At North Sixth and Boas Streets, first-ever traffic signals will be installed this year by the state.

To provide greater flood control, three inter-connected projects are underway or soon to start. In the upper stream levels of Asylum Run, rentention ponds will be built to reduce overflow levels. At Black Run, widening and deepening of the water corridor will occur. At Wildwood Lake, a diversion chamber will be used to redirect high water levels to the Susquehanna River.

All these efforts will reduce the severity and the frequency of Paxton Creek flooding that, in the past, has affected many structures and streets. Over $824,000 is being spent to do this.

The City has now been recertified as a Class 6 Municipality under the Federal Flood Insurance Program. We are the only municipality with this high of a rating in Pennsylvania---and one of only a few in the nation. It is the result of considerable work the City does in emergency management and floodplain management. It also means that city property owners in the floodplain get an automatic 20% reduction in the base premium for flood insurance. Meanwhile, thanks to Congressman Tim Holden, the Susquehanna River Flood Warning System will undergo its long-needed $1 million replacement and upgrade.

Specifications are now done for the removal of the bridge over Paxton and Cameron Streets, with the intersection to be widened, roadways straightened, and new traffic signals installed. The work is expected to be underway next year.

At the State Street Bridge, rusted and deteriorated streetlights are now being replaced with unique, antique-styled globes. This will triple the number of lights, create a dramatic visual effect, and use the latest in energy-saving technology. The Soldiers’ and Sailors’ Plaza will be highlighted with lights, as will the underside of the bridge at Cameron Street. The $2.9 million project is nearly all federally-funded. A similar project is slated for the Mulberry Street Bridge.

PP&L Electric Utilities, to assure long-term efficiency in its operations, is performing a $9 million upgrade to its Allison Hill facilities, from which the entire region is served.

The long-overdue Regional Rail Transit System is now the focus of more aggressive pursuit. Its first segment, from Harrisburg to Lancaster, is fully funded for construction. Assuring a stable operating subsidy allocation must occur before the start of work. Its second part will be to connect to the SEPTA System in Lancaster, allowing ease of travel to the entire East Coast.

The plan also now includes premium bus service, potentially followed by rail transit, from Harrisburg to Hersey to Lebanon. It additionally includes the creation of a grade separation in Lemoyne, to accommodate Norfolk-Southern Rail freight traffic and to assure the ability for regional passenger rail to ultimately go to Carlisle.

The longer-term vision is to also have a Harrisburg to York segment, with possible service to event other parts of the region.

Harrisburg is the hub for the entire system---a system much needed to relieve present and future traffic congestion. There will never be sufficient transportation dollars to build more highways and bridges to accommodate this vehicle traffic congestion, which serves to drive-up the costs of living and doing business.

Alternative energy production and conservation have been staples of Harrisburg’s operations---long before it became politically fashionable.

For two decades, we have been burning methane gas at the City-operated Wastewater Treatment Plant---a facility that serves seven municipalities. Methane gas, one of the most damaging of the greenhouse gases, was once vented into the atmosphere---as it is today at many other places.

By burning it, we create electrical energy, which is sold to the power grid. The heat from this process is used to heat facility buildings.

At the same facility, we take in sludge from other communities’ plants. This produces more methane gas, more electricity, and further prevention of harmful emissions.

At the City-operated Water Treatment and Filtration Complex, we use the gravity-flow of water to generate hydroelectric energy And for the incineration of solid waste, we created a steam-fueled electrical generating station.

From these projects, over 1.1 billion kilowatts of electrical energy have been produced, bringing in over $60 million in revenues, and saving over 150 million gallons of foreign oil.

For 20 years, the City has conducted citywide recycling, one of the longest periods for any municipality in doing so. Where once we had to pay to dispose of and transport non-metallic recycled materials, today we are paid for these items and the private sector hauls it away.

Twice per year, the City does the pick-up of leaves and yard waste in a special citywide drive. Last year, 554,000 pounds were collected. This is green waste and is then used for composting

All 93 intersections with traffic signals have been upgraded to LED technology, cutting energy consumption by over 40%. Buildings have undergone energy conservation measures---and more are planned.

The City supports and annually subsidizes the CAT Bus Transit System---the only municipality to do so. The City has purchased hybrid vehicles, uses a blended fuel of an ethanol and diesel mix for other vehicles, and reduced unleaded gasoline and diesel fuel consumption for vehicles from 443,000 gallons in 2007 to 275,000 gallons last year, a 38% reduction.

By City efforts, significant park and open space preservation and expansion have occurred. New segments have been added to the Capital Area Greenbelt, the latest of which was dedicated months ago in the uptown area. Highway projects to reduce idling and congestion on roads are underway. Buying of recycled content products occurs. Floodplain and erosion control standards prevent erosion, loss of topsoil and preserves wetlands.

The City has initiated an energy-related program for not only itself but for any other large energy customers and governmental entities that want to join.

It has now saved $4.8 million in reduced energy costs, saved another $4.1 million in energy that is bought through a negotiated bulk-buying process, and, by reviewing energy bills for pricing errors, has saved an additional $700,000.

The South Central Assembly---the only 8-county consortium involving the public, private, non-profit and civic sectors in this region---and which was co-founded by the City---has now adopted this program and making it available regionwide. Hampden Township in Cumberland County is the most recent to join last month.

In an effort to help the power grid in times of peak energy demand, the City has agreed to reduce its energy consumption when asked. Harrisburg will be paid up to $75,000 for its availability and participation to do so per year.

Alternative energy and conservation were not seen by many as a basic part of governmental operations in the past. Today, it is a necessity and the City’s record of progress in these areas has saved money and provided on-going, non-tax revenues. It is one of the reasons why over 70% of Harrisburg’s annual budget comes from non-tax sources.

In all of our work to create, sustain and advance Harrisburg’s resurgence, we have been intentionally broad in the definition of economic development.

What is not always understood is the need for a comprehensive approach to renewal. Growing the base of jobs and businesses is obviously central. As this occurs, it creates the market and demand for living in the city.

Restored and newly built affordable and market rate homes give rise to small business enterprises.

Giving reasons for people to work, visit and live in Harrisburg also includes creating the places, the events, the parks, the art, culture, and the historic preservation that serve to define a city and contribute to quality of life. These factors are key to residential development especially, and in the broader definition of economic development, these initiatives are also critical.

Our gains are many: Undertaking extensive park and playground improvements and creating the largest municipal parks system in central Pennsylvania; establishing six historic districts and multiple historic sites; opening museums; spawning a dramatic expansion in the arts and cultural facilities and offerings.

An ever-growing special events schedule was created. Recreation programs were crafted and largely based in the parks.

As part of this effort, the Whitaker Center was born in the Executive Office. With substantial support from the Commonwealth and the private sector, it became the largest facility in the nation to house both science and the arts when it opened.

Now it celebrates its 10th anniversary this September, with over 3.6 million having visited thus far.

Open Stage of Harrisburg was accorded space. The Arts Village and the upgraded Levitt Pavilion at Reservoir Park were built. The citywide Summer Concert Series at Italian Lake, Reservoir Park and the Waterfront was started and continues to grow. The Greater Harrisburg Arts Council is housed in city-owned space. From there, they organize the annual Arts-Fest that draws so many.

The City-sponsored American Musicfest and Kipona Festival involve the arts and over 100 different performing groups.

In separate efforts, the Susquehanna Art Museum occupies its first permanent home. The Olewine Nature Center celebrates the art of nature at Wildwood Lake.

All this has occurred in this time and is joined by the longstanding excellent work of the Danzante Cultural Center, whose facilities the City helped to create, as well as the Art Association of Harrisburg, , the Harrisburg Symphony, the Harrisburg Community Theatre and dozens of other groups.

The arts and cultural scene will be further enhanced with the Midtown Arts Center, now under construction. Meanwhile, three art galleries opened in the last 12 months.

The arts are one of the few aspects of civic life that is universal to all citizens. It brings people together from diverse backgrounds. It is essential to the human spirit.

A similar effect exists also with sports. Today, Harrisburg is home to all but one of the professional level sports franchises in this region. The most recent addition is the indoor football team---The Harrisburg Stampede---which is off to a great first season start at the Farm Show.

The events, the arts and other attractions have been good for the City economy. Over 314,000 people were overnight or banquet guests at the Hilton last year. Over 300,000 were the same at the Crowne Plaza.

Farm Show events brought in another 1 million attendance. The City’s special events, including activities conducted in the parks by other groups and sports teams, drew 2.3 million in 2008. 128,000 visited the State Museum.

Since their inception, over 5.4 million have gone to baseball games on City Island and another 500,000 to the National Civil War Museum.

All this means business and jobs.

What is to come builds on these gains. The two-phase major upgrade to the baseball stadium is underway. Final completion will be in April, 2010.

In Capitol Park, a two-year project started last week. It involves major new landscaping, sidewalks and public amenities.

Further improvements at the Farm Show will include widened entranceways, an additional traffic lane, new relocated ticket booths, a rain garden and landscaping.

In a practical use of open space, the Joshua Farm was opened on S. 18th Street for citizens to sustain themselves by growing their own food. 175 Harrisburg School students assisted with the project.

City crews performed major upgrades to multiple parks, including at the Skyline Sports Complex.

The Downtown Improvement District is now sponsoring a public art project to paint fire hydrants, inspired by the success of the Shipoke Neighborhood that did the same last fall.

The City’s Public Mural Project further expands this summer, involving training of students by professional artists. The funds for this and literally dozens of other art-related projects for this year were raised at the highly successful Mayor’s Black History Gala held in February.

The Dauphin County Library System is doing major upgrades to its downtown branch, after having built two new branches in the uptown and east Harrisburg in the last two years.

Starting to unfold is the range of activities to celebrate the 150th anniversary of Harrisburg’s incorporation as a city in 1860.

The SusqueCentennial Commission, created by Executive Order, is now conducting the Living Legacy Project, interviewing persons about their life experiences and remembrances of the City.

The agenda includes mural projects, geneology workshops, Old Home Week, family reunions, Founder’s Day and a Futures Forum. Highmark Blue Shield awarded a grant of $500,000 in support. All are invited to contribute and attend upcoming events.

The considerable growth in the arts and cultural community here is being sustained and augmented by the teaching and training of the next generation of artists.

The Capital Area School for the Arts is a first rate institution, involving high school students from throughout the area. It moves into new, larger quarters on the first floor of Strawberry Square this August, after completing $850,000 in renovations for which donations are now sought.

It is in the area of education that some of the most compelling and strategic initiatives of current time have been launched.

For the first time in its history, Harrisburg is evolving into a center for higher education. The impact of this shall be profound and long-term.

This year we dedicated the new 16-story, $73 million Academic Center of the Harrisburg University of Science and Technology. It provides the laboratories, classrooms, library, meeting space and other state-of-the-art amenities that will now accommodate increased numbers of students and faculty.

The University, born in the Executive Office, is the first comprehensive university chartered in Pennsylvania in over 100 years. It is a non-traditional institution, with special focus on the stem skills of science, technology, engineering and math. These are the skills most in need today and which shall drive the 21st Century economy.

In our nation, there is a disconnect between local education, higher education, workforce development and economic development. In this nation, we spend billions each year on education, yet competitor countries out-graduate us in the key job skill areas.

It is not solely because of lower wages that jobs in America have gone overseas. It is many times because there were not enough citizens here to fill the posts.

Unaddressed, this threatens America’s position in the global economy for the coming years. Unaddressed, it will diminish our standards of living.

The places that prepare a workforce with relevant skills---the places where research and innovation apply these skills to new advances and products and services---are the places that will attract the investment, the companies and the jobs that need them.

Harrisburg University connects higher education to workforce and economic development. In few places in America is such a new initiative taking place.

The expanding role of higher education is also seen in other ways. The splendid new HACC Midtown Center, opened in the past two years, has over a 1,000 enrollment and poised to increase to 2,500.

The former AMP World Headquarters, where the original Midtown classes were held, is undergoing a complete renovation and upgrade. It will further expand the Campus. The buildings are connected by a pedestrian walkway and urban meadow, now in place, utilizing a street the City abandoned for this purpose.

At the HACC Midtown Center, displaced and jobless workers in need of new jobs are being taught new job skills, some of them at no tuition cost.

The HACC Main Campus in the city’s northern end continues to anchor the HACC System that now has facilities throughout the region.

The Dixon University Center in the City’s uptown, where the headquarters of the State System of Higher Education is based, underwent a $1.4 million upgrade months ago, creating new high tech classrooms and programs. 2,100 students now attend this campus, where classes are offered by 11 different colleges and universities.

The Messiah College Harrisburg Institute, now occupying a retrofitted older structure after $2.5 million in renovations 18 months ago, offers students an urban-based learning experience, with students also participating in community service work.

Temple University and Penn State continue to offer their continuing education programs at downtown and midtown sites.

It is not a coincidence that the efforts to expand higher educational opportunities in the City run concurrent with the arduous efforts to reform and improve the urban education system.

When these efforts began, the abysmal circumstances were daunting. The high school could not issue report cards. Many classrooms had not had books or teaching materials in years. The system had failed most students. The State Education projections were that by now, the School District would be down to 4,000 students. This would have decimated every neighborhood. Today, we have over 9,100 students.

The initiatives have been many:

- Creating the first-ever Early Childhood Program for 3 and 4 year-olds; these are some of the most formative years in a child’s life and a time when, in a nurturing environment, good habits of learning can last a lifetime
- Restoring and upgrading all-day kindergarten
- Establishing the Science and Technology High School and, in grade levels 5 through 8, the Math and Science Academy
- Starting the After-School Program, which is an extension of the school day, and the Summer School Program, an extension of the school year
- The Vo-Tech Program, now known as the Career and Technology Academy, was upgraded
- The Alternative Education Academy was created, so that at-risk students could achieve learning in a more structured environment
- In-school health and dental services have been established
- A range of new opportunities have been spawned---the Gear-Up Program to prepare students for college---the Dual Enrollment Program, where students can earn high school and college credits simultaneously---The Credit Recovery Program, through which students can make-up work they previously did not complete and attain their graduation---the Youth Build Program, through which dropouts are trained in construction trade skills while also earning their high school diploma. The list could go on and on.
- During this same time, renovations and upgrades to all but one of the school buildings have been completed. They are modern learning facilities, with the expanded and restored John Harris Campus likened to a Division II college campus when it was completed 18 months ago. The William Penn Campus remains to be done when funding allows.

Let us take a moment to get a clearer picture of some of what is happening. A child in Harrisburg can start in the Math and Science Academy at Grade 5, to study these subject areas. He or she can then go to Sci Tech High, which has the same curriculum focus. When graduating high school, this student can literally across the street, to Harrisburg University of Science and Technology, where the focus is on the same. You never have to leave Harrisburg.

We are now doing the same career-track programming in other growth fields for this 21st Century, including health services.

In few places in the nation are such academic innovations being emplaced.

This is but a glimpse of the change that continues underway. Urban school reform is a work in progress. The correlation between the stability and income level of a student’s family and their academic performance is the most profound of the challenges to be overcome, which is why more intensive instruction and social and emotional support functions are so critical and involve costs beyond the expense of the conventional classroom.

Thus far, results include:

- That the graduation rate has increased 141%
- The number of graduates going on to higher education has risen 388%
- Enrollment has increased by nearly 2,000 students
- The dropout rate has declined 46%
- Most test scores are up, with the District expected to accelerate this pace

Further curriculum upgrades shall occur, additional professional development in Best Practices will be conducted for staff, and even greater participation by parents and the public in encouraging student academic performance will occur.

It is vital that achieving a good education be a centerpiece of community life---in every home, every neighborhood and every place.

These historic efforts receive support from a variety of corporate and community groups. The Harrisburg Public School Foundation has raised significant sums. The Mayor’s Literacy Commission focuses on giving students books they can keep, while mentoring them in reading. This Commission’s April 20th annual reception will help fund their coming activities.

Our work here is vital. By the year 2025, if not earlier, the majority of the American workforce will be comprised of those who are considered today’s minorities. The overwhelming majority of today’s minority students are in America’s urban school systems.

The ability to effectively address reform and improvement in America’s urban schools directly determines the competitiveness of this nation in the global economy for the coming years.

In Harrisburg, Pennsylvania, nothing less than determining the viability of American urban education is taking place.

In other City endeavors, a considerably improved website is now in place. New content is being added monthly. Creating an e-commerce platform to submit applications, pay fees and perform other functions is planned.

The Bureau of Codes performed 6,107 inspections. A Citizens Code Inspector Academy will be holding training over the coming months to further engage citizens in neighborhood improvement.

In the weekly trash collection work, Public Works crews picked up nearly 60 million pounds of waste and another 130,000 pounds from street-side trash receptacles. The streetsweepers removed over 2 million pounds of on-street litter.

Public Works and most other City agencies have been subjected to budget cuts in the last several years which reduced staff. Public demand for services did not diminish and backlogs of deferred work were the result.

The City ended the last two years with a surplus. No tax increases occurred. In the past two months, the Neighborhood Nuisance Abatement Squad proposed in each of the last three years could finally be hired.

Last year, the City collected 772,000 pounds of illegally dumped debris. In the past four weeks, more than 1.4 million pounds were picked up. The new squad is now doing a citywide bulk pick-up drive for residents and, year-round, will be focused on illegal dumping removal, grafitti clean-up and other quality of life issues.

The City-operated Wastewater Plant processed 8.5 billion gallons of flow, the majority of it from suburbs. The City-operated Water System supplied 3 billion gallons of potable water to 5 municipalities.

Five police officers were hired last July and another seven this January. New police and other vehicles have been acquired for most agencies. The Fire Bureau has a new tower and a new wagon. The Juvenile Firesetter Prevention Program started in Harrisburg has now received both state and national certifications as a model program.

Police responded to 2,373 vehicle accidents, towed 2,947 cars and trucks, and the Animal Control Officer handled 1,381 calls about dogs, cats and wildlife.

The Crime Rate rose 1% last year over the previous year, essentially because of a spike in the number of auto thefts. Overall, crime is down 48% in this era.

The Fire Rate in 2008 dropped almost 16% over the preceding 12 months. Thus far, the overall Fire Rate has come down 79%---the lowest since citywide records have been kept.

The City received the Highest National Award for Financial Accounting and Reporting, for the 21st consecutive year. 24 other municipalities in Pennsylvania did the same. Also attained was the Highest National Award for Budgeting, for the 18th consecutive year. Of the 2,564 municipalities in the state, only 3 won both.

For the 22nd consecutive year, the City will receive the Tree City USA designation on Arbor Day this month. Habitat for Humanity presented the Outstanding Government Agency Award to the City’s Department of Building and Housing Development.

Last November, Bottom Line Magazine listed Harrisburg as the 9th Best Place to Live in the United States. MSN, the Microsoft web portal, listed the City and Immediate Area as Third Best Real Estate Bargain in the Country.

Just yesterday, Forbes Magazine ranked Harrisburg and the Immediate Area as 12th Most Livable City.

None of these recognitions would have occurred absent the renewal progress in this City.

The White House has designated the City as a Preserve America Community because of historic preservation work. Harrisburg Magazine readers voted the City "The Best" in two leisure time categories.

As with every American city, we always have challenges. Public Safety and dealing with the effects of poverty are certainly among them---and engage significant city resources.

For us, an additional challenge exists in the form of debt associated with the Incineration Facility, where revenues are presently insufficient to cover this cost. This cost is higher because the private company engaged to upgrade the facility---an upgrade mandated under federal rules---grossly underestimated the expense.

This issue can be resolved. By increasing the trash flow, increasing the rate of return on the sale of electricity, selling the steam not used for generating electrical energy, and through the sale and long-term lease of the plant and other assets, the matter can be effectively settled.

We hope and expect that, in due time, there shall be sufficient will and cooperation to make this happen.

In this presentation, much has been devoted to specifics and details. The focus has been to report on the past year and the future.

It is a bold agenda for that future.

We conclude, therefore, with the broader perspective that experience and our progress allow. We are continuing on an historic journey---a journey that has taken Harrisburg, Pennsylvania from the worst depths of American urban decline to new levels of advancement and progress unequaled in Harrisburg’s past.

Our future is as a center for technology, health services, judicial affairs, the arts, tourism and higher education---a place where more people will live and work.

These have been transformative times of great change and gain. The future shall hold more jobs and opportunities because of it.

We have come a long, long way from when this city was listed as the second most distressed in the nation.

The result of arduous and unrelenting effort is a city positioned to further excel in the future---a city where the idealism and energies and ideas of the entrepreneur, the aspiring student, the dedicated civic servant---shall serve to invent a future that is even brighter and more promising.

It is a city where, no matter the hardship and economic circumstance, there is hope and there is opportunity.

Many is the time we have dreamed the impossible---and many is the time we have made it happen.

That which today defines Harrisburg---amenities and progress that were thought inconceivable in earlier years---is the result of vision, initiative, and unconditional commitment to the highest ideals of public service. These ideals inspire us. Many are those who have answered the call to make this a better place, for which we are grateful.

These gains were achieved neither by accident nor with ease. As George Will wrote and we have repeated: "The inevitability of progress is a myth."

Our endeavors are based on belief and confidence, ideas and hard work---embracing the adage of Theodore Burtis that "great things do not get accomplished by setting safe goals."

It is from this belief that our capacity to constantly change and improve has been based. Thousands of projects have been born from this---from City Island to Morrison Park---from New Fox Ridge housing to Allison Hill’s Mt. Pleasant Apartments---from Restaurant Row to neighborhood stores.

Harrisburg has not yet reached its potential and that potential constantly grows because of the advances that have been achieved. Ever-changing to bring new progress, we embrace the future with ardor, spirit, passion and resolve. This, ladies and gentlemen, is the State of the City.

May God Bless this city and region and each of you and may God Bless the United States of America.