Chamber of Commerce State of the City Address
May 18, 2016
City Manager John Bohenko
Good morning. Thank you again to the Chamber for hosting Mayor Blalock and I today, and to the Mayor for his remarks.
While there have been many developments over time in the City of Portsmouth, one theme remains constant: our ability to instill a stable and predictable tax rate with a high level of services to residents, despite the continued downshifting of State and County costs. This ongoing trend of downshifted costs not only reflects the necessity of smart planning by the City, but the importance of the activities by the Chamber in unifying the community and local businesses as well.
A culmination of State activity over several years – the elimination of shared revenues, state aid grants and retirement contributions, along with limited return from the Meals and Rooms Tax – has led in over $35 million lost since 2000, and therefore led the City to propose creating alternative funding sources.
Due to the efforts of the City's Legislative Subcommittee, City officials continue to work with delegates in an attempt to create enabling legislation to allow for added local revenue resources. In meeting regularly with various House members and our State Senator, our staff can better explore the intentions behind proposed and emerging bills and the consequences or benefits they could have for Portsmouth citizens and businesses. Recently, we focused on proposed bills concerning meals and rooms taxes and hotel occupancy fees, in which the Subcommittee collaborated with the Chamber to provide thoughtful testimony in supporting a reexamination of how State funds cycle back to Cities based on populations, not by how much revenue our economy generates. Given that our City receives about $1 million each year when we generate over $20 million for the State annually, we feel this process should be reviewed. The work of this group and our staff continues in discussing new alternatives – to this bill and to others – to help offset the overreliance on our City's property tax.
For the FY17 budget process, the City Council reinstated the Joint Budget Committee – also known as the JBC – which was charged with recommending to myself and the City Council guidelines for the preparation of the proposed FY17 Operating Budget. The JBC recommendation focused on the Operating Budget that finances expenditures associated with the
day-to-day operation and services provided by Police, Fire, School, and General Government Departments. With increases in costs such as cost-of-living adjustments (COLA), retirement, and health insurance premiums, the preliminary operating budget was presented with an overall increase of approximately 3%.
Our budget is built to maintain and expand programs and services that our citizens want and are supported by the City Council. The budget is produced at a time, as the Mayor noted, in which much progress is being made on many significant and complex issues and projects – all while maintaining a core of high quality local government services in all areas of operation.
As the Mayor mentioned, the Peirce Island Wastewater Treatment Facility upgrade, beginning this summer, will be an important project. The design of this project was completed in late December 2015 and a schedule was negotiated as part of a modification to the City's Consent Decree with the EPA. The City is now preparing for this major construction project to begin this summer and will initiate plans to mitigate the impacts of construction on nearby residents and businesses. Although this project has been a point of concern for many, it is the best plan in leading to a healthier Piscataqua River and water system for our community in the years to come.
During construction, recreation impacts will be limited, and designated haul routes during construction have been identified to minimize the commuting and economic impacts on the Downtown and the South End. The additional construction traffic is not anticipated to result in a significant measurable impact on businesses. The City anticipates an agreement with regulators which would allow for an appropriate construction schedule for this project so as to avoid unnecessary evening and night work and thus minimize noise and other impacts to important evening and weekend cultural and business activities.
The Mayor also mentioned the development of the Deer Street Parking Garage. Parking is essential in keeping Portsmouth businesses desirable for both locals and visitors. This new garage, which is expected to be complete in about two years once construction begins later this year, will help alleviate the ongoing frustrations of parking availability but also serve as a connector towards the North and West ends by offering the opportunity for new businesses, inexpensive living spaces and public spaces for residents to enjoy. From an economic standpoint, there will be an increase in jobs and income from construction activity and ongoing operations, as well as business activity of properties included in and around the project.
Supporting expanded parking and transportation, the Wayfinding Program has identified appropriate wayfinding types, messaging and locations in a uniform and recognizable design menu that is unique to the City. The entire wayfinding system will be implemented in four total phases and includes a combination of citywide signage as well as online and mobile tools to assist pedestrians, bicyclists, motorists and transit users. The second phase of this program is currently underway, including installations of approximately 60 signs placed in the downtown area as well as along the primary road corridors into downtown, including Islington Street, Middle Street and Sagamore Avenue.
Interior wayfinding for the Hanover Parking Garage will also be continuing. Improvements being considered will include guidance for drivers and pedestrians accessing and circulating through the Parking Garage, as well as aesthetic enhancements and information to guide visitors to key destinations from the Parking Garage. Once the City's consultant completes the design plan for the interior improvements, visitors to the garage should expect to see improvements being implemented by the end of the winter this year.
The Hanover Garage also has undergone a technological upgrade with the introduction of its credit card system. City staff are also researching and testing a "pay by app" system to allow customers to pay for their parking session with their smart phone. This tool could ultimately lead to business incentives in partnering with the application to appeal to new and returning customers.
To compliment these transportation efforts, avenues for biking and walking will continue to progress as well. Market Street, Islington Street and Maplewood Avenue are major corridors that are undergoing design and reconstruction to include bicycle lanes and pedestrian amenities, and the design of an on-road bicycle route along Middle Street and Lafayette Road between the High School and Downtown is in development as well. The City is also waiting on funding to begin construction that would turn the abandoned Hampton Rail Trail into a dedicated bike and pedestrian path that would eventually run from Portsmouth to Hampton and potentially down to Massachusetts.
The City is also taking big steps to improve its overall environment with the exploration of LED street light technology, and expanded recycling branding efforts and education. Currently, several City street lights have been upgraded with LED bulbs and smart controls as part of a testing pilot program to explore the efficiencies of LED technology. By replacing three lights at City Hall, we are anticipated to save $475 in cost and prevent 5,000 pounds of carbon dioxide emissions per year. It is our hope that ultimately all 1700 City street lights will be upgraded to allow for reduced energy, cost savings, upgraded aesthetics and a safer environment for the public.
In regards to solid waste and recycling, pickup routes are currently being re-evaluated to ease the process for downtown businesses. New public receptacles will also be added in the downtown area, along with new branding efforts to alleviate confusion for the public on how to appropriately dispose of trash and recycling items. Education outreach to downtown businesses and neighborhood groups is also being organized to unify the community on new ways to maintain an even cleaner, healthier Portsmouth.
Both our budget and ongoing projects have achieved recognitions and awards. The City's AAA bond rating is affirmed by Standard & Poor's Rating Group, citing the City's very strong economy, very strong management conditions with strong policies, strong budgetary performance, very strong budgetary flexibility and strong debt and contingent liabilities position as positive factors. Standard & Poor also notes that the City's strong reserves and policies will support long-term stability.
For over 20 years, The Government Finance Officers Association of the United States and Canada (GFOA) has awarded the Certificate of Achievement for Excellent in Financial Reporting (CAFR) to the City of Portsmouth for its Comprehensive Annual Financial Report. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such reports must satisfy both Generally Accepted Accounting Principles and applicable legal requirements.
In regards to ongoing initiatives, the City has received the New Hampshire Department of Environmental Services' "Source Water Sustainability" award, recognizing numerous conservation and efficiency efforts. Last summer, the League of American Bicyclists recognized the City of Portsmouth with a Bronze Level Bicycle Friendly Community award, joining 350 visionary communities from across the country. The Bronze Level award recognizes Portsmouth's commitment to improving conditions for bicycling through investment in bicycling promotion, education programs, infrastructure and pro-bicycling policies. As demonstrated in the described projects, City staff is working hard to next achieve Silver Level accreditation.
This year also marks the 17th time that the City has been recognized as a Tree City USA Community for its investment and strong commitment to street trees as well as for the use of native species in public parks and public rights-of-way. This recertification recognizes the City's commitment to, and investment in, urban tree planting. It also acknowledges the work of the Portsmouth's Trees and Greenery Committee in implementing the City's Tree Ordinance.
Portsmouth's strong commercial and industrial tax base contributes to our low property tax rate, with Portsmouth having the lowest total tax rate amongst New Hampshire Communities with a population of at least 20,000. Other factors that contribute to the City's economic advantage include: our AAA Bond rating; a highly educated population and skilled workforce; high per capita income and low poverty rates; a diverse business base; inclusion in Greater Boston Technology Center; and accessibility to Manchester and Pease Airports.
Pease International Tradeport continues to be an important regional economic driver with over 275 companies and over 9,500 workers, many in well-paying technology and advance manufacturing jobs. According to a recent report on the 25th anniversary of the Tradeport by Applied Economic Research entitled "Pease Tradeport, Economic Impact 2015, the Seacoast economy has outperformed the New Hampshire economy in both the short and long term, due largely to the success of Pease. The Tradeport generates an estimated $16 million annually in Business and Meals and Rooms taxes to the State.
The Portsmouth Naval Shipyard employs over 6,000 highly skilled, technical workers. The Seacoast Shipyard Association's regional economic impact report of the Naval Yard for calendar year 2015 shows an economic impact of over $732 million.
Portsmouth has fared well during various economic shifts in part to its diversity and lack of reliance on one industry or workforce. Our variety of businesses and arts groups has led to accolades from USA Today, Huffington Post, Buzzfeed, Travel and Leisure, Coastal Living and Yankee Magazine just within this past year. The projects addressing our environment, parking, transportation, public spaces and more are being implemented to facilitate ongoing growth and support this range of organizations far into the future.
The City is fortunate to have great companies and business people in the community. I remain optimistic about the state of our City and believe Portsmouth remains well poised for further economic growth. We plan to continue working with the Chamber, Economic Development Commission, Pease Development Authority, and appropriate City departments to ensure that happens.