State of the City Address February 23, 2012 As Prepared for Delivery

INTRODUCTION: To begin, I would like to thank the Lorain Chamber of Commerce and the Lorain Rotary for once again hosting this event. Like at the federal and the state levels, this address serves as an annual update to our citizens of what is happening in government. I would like to also thank CenturyLink for their generous sponsorship at this event. Century Link is an outstanding corporate citizen and a valued business in Lorain, and I look forward to our work together in the future.

Before I begin my remarks, I want to take a moment to introduce my staff. The first month and a half have been intense and hectic, but this group of people is a fine group who are already doing a tremendous job under some very difficult circumstances. First, Safety/Service Director Robert Fowler. I took a little bit of heat for bringing in someone from the outside to serve in the top slot, but Roberts vast knowledge in public administration and willingness to challenge the status quo are already starting to bear fruit. I expect great things from him moving forward. Deputy Safety/Service Director of Human Resources and Risk Management Geoff Smith. Geoff is working on a myriad of issues relating to personnel, risk and other legal matters. Geoff has a big job ahead of him as we seek to form a true, comprehensive human resources function in the city that for too long has been fragmented and unmanaged. Derek Feuerstein Chief of Staff. Dereks been working with Members of Council, Department Heads and the public to address 1

their concerns and inquiries as well as working on several projects. Dereks background and innovative approach will yield great things in moving Lorain government into the 21st century. Louise Kilbane, my Executive Assistant. Louise worked for me in North Olmsted and is the lifeblood of my office. Simply put, she gets things done and goes above and beyond to perform her job, and in turn, she makes me a better mayor. And Sheryl Corbin on the Safety/Service side. Sheryl came from the City Health Department, and I can certainly say my gain is their loss. Her attitude, approach to service and abilities fit precisely in line with the type of customer service our residents deserve. I am happy to have Sheryl on board as she adds a critical piece to our staff. Ed Zaborniak our Health Benefits Officer. Eds knowledge of health benefits and insurance are is vast, and he has been a critical piece to our HR functions. I look forward to his work in the future on hospitalization and benefit issues. In addition, our department heads, city employees, elected city officers and city council are so critical to our mission. Whether it is city management, the water distribution employee, the firefighter, the wastewater treatment plant operator, the janitor or the police officer, we are all in this together, and these groups of people are critical to our future success.

BEGINNING OFFICE Nearly two months ago, I took office as the 50th Mayor of Lorain. Many have since inquired as to what the experience has been like. I have heard questions like Chase, is it everything you thought it would be? Chase, are you having fun? Chase, how big of a mess is it? Chase, what were you thinking? Before I answer, I have to say that I learned very early on in everything I have done or encountered that life is about

expectations. I expected many of the usual things that are present in a transition. I expected a monumental challenge. I expected many fires that would need tending to. And I must say, my expectations have been met. Whether it be deals that were supposedly done but are not, which I am sure in time you will be hearing about, projects that have languished that need resuscitation or a financial picture and outlook that is not only more challenging than depicted, but in some ways completely misrepresented, we have had some of everything. We have focused on breaking the culture of secrecy and combativeness that permeated from upper management, which ultimately hurt our department heads, mid-level managers and employees. We have worked to embolden our department heads as decision makers as they are in the trenches each and every day. Regular department head meetings, which had not occurred in years, have helped to communicate and to direct so that our managers can better serve residents. Even with with these many unnecessary fires that could have been better handled prior to January 1st, I am honored and humbled to be your mayor and to be the chief executive leading on tackling these problems and making Lorain a better place. I anticipated the first quarter of the year to be dedicated to addressing any remaining issues while working on crafting the citys budget. This, in conjunction with an organizational audit, was the plan to comprise the first half year. We are largely on plan. If you have read the Morning Journal or Chronicle Telegram lately, you will see that we have been busy with a variety of challenges and issues left to us. Fair or unfair, foreseen or unforeseen, this is life, and they are now our challenges, and some are major. But know that we will work each and every day to address these challenges to the best result for Lorains citizens. One such issue is the citys budget.

BUDGET A perception has been broadcast by some in recent weeks that the city had a $1.1 million dollar carryover balance so things must be okay. In fact, this misconception is that the city is somehow in a sound position financially. The carryover is the result of a 5 million dollar bonda bond that I do not argue had merit that must be repaid, and the carryover is the remainder of that borrowing. To say we were left with a surplus is disingenuous especially when considering what is to come. This year the city will lose 1.2 million in local government funding and 1.3 million from the reinstitution of the citys 100 percent tax credit. This is a 2.5 million dollar revenue cut that was foreseeable, making the assertion about a surplus that much more troubling. In 2013, the estate tax will be eliminated. This is a loss of $500,000 of budgeted revenue, which in many years actually comes in over $800,000. Lorain, like many other cities, is suffering from the State of Ohio balancing its budget on the backs of local government. The states answer to that was Senate Bill 5a deeply flawed bill that was resoundingly defeated by voters in November. Since the defeat of its sole remedy to making up funding shortfalls, the state has not developed or endorsed any structural remedies but, rather, 45 million dollars to be spread out over the entire state for feasibility studies for collaboration. Add to this the elimination of federal grants and debt service to remove the high tension wires from our lakefrontan important impediment to remove for the purposes of economic developmentand the picture for 2013 has even more challenges. And this picture is all contingent upon how business has always been doneeither deficit spend or balance the budget to the last penny with no reserve funds for the General Fund. This simply will not

do. While the city now has a rainy day fund, the citys General Fund reserves are essentially non-existent. We cannot continue to operate a city like this and expect to be sustainable. And sustainable does not just mean general government operations; it means sustainable in all funds and as a city in attracting investment, jobs and people. We must change, and we will change. The organizational audit is underway, and with it will come structural changes in how we do business. The structure of Lorain City government is going to look very different; departments are going to look and function differently. Increased cooperation and collaboration will be the norm and not the exception. Regional collaborations regarding healthcare, health department operations, waste water and dispatch operations will be addressed in the upcoming year along with collaborations with other cities and villages for service delivery. In todays economy, replicated government services must be eliminated in order to improve service efficiency for residents. We simply cannot continue down our current path and expect to be sustainable and competitive. Along with discussion of the 2012 budget, conclusion of the organizational audit, and as we look forward to 2013, my administration will be taking a proactive approach in formulating plans for what we will need to do in order to make the structural improvements that are so overdue and so necessary. The expense side of the ledger is typically the focus with respect to the budget and will be the focus with respect to the organizational audit. Unfortunately, because the deep cuts from Columbus have been pushed down to us local governments, I would be remiss if I did not discuss revenue. With the deep cuts in city revenue from cuts in local government funding, the estate tax, and the return to the 100% income tax credit reduction, revenue increases are not off the table. We will analyze our options very carefully, but the losses to local

revenue in the name of balancing the state budget are severe and painful and may mean that a plan for Lorains future includes a hybrid program of revenue increases and expenditure cuts. This, folks, is our realitya reality I discussed in depth last year and one that we face every day. But it is a reality that must be faced if Lorain is to make progress. 2012 FOCUS Aside from the budget and the organizational audit, and aside from the serious challenges we face as a city and as a region, we are working hard to lay out our agenda. And while we have challenges, we have some very positive things that are happening in the city. I want to say unequivocally that I have been so very impressed with our police officers. The work they are doing and how they are utilizing technology and data in fighting crime is revolutionary for this county. Our officers are always thinking of new ways to fight crime and are dedicating themselves above and beyond the call of duty. The creative, intelligent minds in our police department serve us well and will be a key component to Lorains progress. Challenges in our Police Department, like any department, remain, but we are dedicated to working with our first level responders to make our city a better place. The same can be said about our Fire Department, who already in 2012 received a $161,000 grant for training and equipment. While the fire levy in 2011 was unsuccessful, the capital challenges facing the Fire Department have been well documented and will continue to receive our attention. The courts are another component critical to our public safety as the clerk and courts handle what results from our Police Departments work. The courts have taken on an aggressive agenda focused on updating their software as well as taking a role in improving City Hall security. Their

goal for a paperless court system is one that clearly has an eye for conservation and for the future. I am happy to say that earlier this week Lorain City Council unanimously approved a resolution supporting the creation of a Land Reutilization Corporationbetter known as a land bank. My counterpart in Elyria, Mayor Brinda, will also be pushing for a resolution of support. At that point, I look forward to working with her, the Board of Commissioners, and our County Treasurer Dan Talarek in identifying the best way to establish a land bank in Lorain County. A land bank is a critical first step in beginning to address the pervasive vacant housing problem we have in our city. We need all the tools possible to tackle this incredible problem, and a land bank is one of those tools. My administration will be proposing other polices with respect to housing that include a proposal for a vacant housing registry. In order to combat the problem, we need to know where the problem is located. Additionally, we need to hold absentee owners and lenders accountable and send a message that Lorain is no longer a city that ignores abandoned and dilapidated homes. I have also met with the Lorain Metropolitan Housing Authority and have discussed my desire to design a plan in which the City of Lorain reduces its overall percentage of subsidized housing vouchers within the city. Our citys population is not even one quarter of the countys population; yet, we have nearly 60 percent of vouchers. Changes to the voucher program were made to disallow this type of situation, and it is up to us to fight for equitability. As in many areas, it needs to be about fair share. In my first month and a half, I have had multiple meetings with Dr. Branham of the Lorain School District and have also met with Superintendent Sayers of Amherst and

Superintendent Mounts of Clearview. We cannot underestimate the importance of education in our community. I vowed to be a partner with all three of these gentleman as they all have a stake in the City of Lorain. Specifically, Dr. Branham, his staff, my staff and I are looking for ways to collaborate to the benefit of the taxpayers as well as to the benefit of the well being of the city and of the school system. We must support our schools as they are critical to any communitys success. Today, Ohio ranks 38th of 50 states in educational attainment. Yet, in populace, we are 9th. This is unacceptable. Yet, our gem is our community collegea college that boasts partnerships and an entrepreneurship institute rooted in preparing people for 21st century jobs. In LCCC President Roy Church we have a man who understands the importance of delivering the community college menu of services across a wide spectrum. He is cognizant of the role of a community college in a changing economy, and we must push our high school students to take advantage of programming available. 8.3% of our county has Associates Degrees, higher than the state average of 7.1%. However, our 12.4% holding a Bachelors Degree is lower than the 15% state average. Each extra year of schooling equates to an 8% increase in earnings. When an areas share of degree attainment increases by 10%, per capita gross metro product increases by 22%. Togetherschool district, city and community collegecan close that gap, and we must close the gapthe human capital gap. We must push education for tomorrows Lorain. With that being said, this spring, the Lorain Schools and I will be holding a joint event showcasing support for the school district. While final details are not yet available, I ask that you make yourself available. We need all of you in this room to commit to being there for our schools. As such, this summer I am going to host the First Annual Mayors 5K run in

Lorain. Proceeds are going to go to a scholarship program for Lorain students. Likewise, I initially decided to forego a Mayors Ball as a political fundraising event. Some have inquired about it, so next year the Mayors Ball will be back, but it will be back as a way to raise proceeds for the scholarship program. Again, I would request your involvement in making all of these events a success. In addition, I am asking that you take your individual or group talents not to South Beach but to a new level and sign up to be part of Volunteer Loraina volunteer force we are putting together for various needs throughout our city. Volunteer Lorain forms are available in the back of the room. Please join in; we need you now more than ever. Making Lorain an attractive destination for business and development requires a multi-faceted approach that includes much of what I have discussed today. Each and every day we are striving to make that a reality. In January, I convened a meeting with downtown business leaders. The second meeting since then has grown. The goal is to get everyone and every group on the same page and moving in the same direction. I am not interested in those who value the individual interest over the group interest nor am I interested in those looking to be off on their own creating redundancies that are contrary to a unified front. The goal is to create a strategic plannot a studybut a plan of deliverables that are needed to get our city moving. Additionally, I am happy to report that since I have been in office, and really, prior to taking office, we have fielded diverse interests about our city. According to some of our Community Development staff, development interest in Lorain in the last few months has been greater than any time in the last 10 years. The business community, both in Lorain and outside of Lorain are watching, and they are expecting a city government rooted in high standards,

expectations and results. In order to continue this interest, and really, in order to turn this interest into a realitya reality that I know has crossed your mind when thinking about what Lorain could bewe must maintain a focus on our core competencies as well as on removing the impediments to development. As much as high tension wires and the substation and the waste water plant on the waterfront matter to developers, so do safety, housing and schools. We must always strive for improvement on these fronts as a progressing city is a city that is more competitive in the marketplace. We must also work to heighten our collective standards as a city. One aspect that sometimes escapes that conversation is culture. We have much to be proud of about our Lorain culture, but I am talking about a different type of culture. I am talking about the culture of no and the culture of negativity. The paralysis of poisonous politics, personal vendettas and negativity about who we are needs to stop, and I am asking that all of you be ambassadors to root it out of conversations or groups where you are present. We have our challenges, no doubt, but if we are ever to improve ourselves, we need to rise above the negativity that has caused our city to fall behind. We are not a doormat and not a lost cause. With our location, our workforce and our access to water, we are primed for a turnaround. Never, ever let the negativity take root and hold of you; we have been left a situation that has been created for decades. But we must directly address our challenges and, day by day, we are going to improve our citys ability to attract business. The state of our city is that we need improvement in the structural areas outlined above; however, the immediate goal is to move us to continuous improvement by making progress on these goals. The end result in all we do is to create a Lorain that is thriving; a

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Lorain that is a destination. So many iterations exist of what Lorain can be. We see glimmers of the past on the manufacturing side and signs of the future in new technology making its way to Ohio and to the region. We have an untapped resource in our waterfront that has what so many businesses needaccess to fresh water. And we have growth in industries both here and in the region that are going to need complementary services on the supply side. Pieces are present, and through hard work and good public policy, other pieces can be identified and our core competencies refined to create a Lorain that is truly a regional example. These are lofty goals that may take years to achieve, but if we do not have something for which to strive, we will never have an idea of where we want to be. Some weeks ago the New York Times was in town and wrote a piece about the 530 shop in downtown Lorain and talked of the economic hardships the city has been through. It is my deep hope and my goal that I can give the New York Times a call back once we have forged ahead to invite them back to Lorain for a followup story, perhaps a side by side with their first story, titled Lorains Roaring Comeback. We are a city of resilience and grit and tenacity, and we can, together, join to make Lorains comeback a reality. Please join with me on our journey. Thank you, and God Bless you and God Bless the United States of America.

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