Mayor Canan's State of the City Address

MUNCIE - Mayor Dan Canan gave his State of the City Address today at the Horizon Convention Center Downtown. The event was co-sponsored by Muncie Rotary, Sunrise Rotary, and Muncie-Delaware County Chamber of Commerce. (listen, download)The text of the State of the City Address:I would like to start by thanking everyone for allowing me to be here today, especially the Rotary Club and all who participated in expanding the format for the State of the City and allowing it to be held in the Convention Center. The most important change this year is including our students, for they will determine the future State of our City.
Last year in closing my State of the City report, I listed my priorities for 2005 as follows:

•       To work with state officials and advocacy groups such as The Indiana Association of Cities and Towns, exploring ways to ease the property tax burden.
•       I pledged continued support for economic development.
•       I said I would not sidestep controversial issues.
•       I would work to improve our community with emphasis on our downtown and Southside.
•       In addition, I promised that we would live within our budget.

Therefore, what I would like to do today is go through each of these items and report on how this Administration performed.
"To work with state officials and advocacy groups such as the Indiana Association of Cities and Towns, exploring ways to ease the property tax burden"
The number one issue I talked about last year was the current property tax system and the harm it doing to cities in Indiana such as Muncie. The issues that I raised centered on:

•       Layering of taxes - This is where city residents subsidize services for county residents but do not use the services themselves.
•       Non-Profits - The proliferation of tax-exempt properties.
•       Reassessment - The tax shift caused by the new reassessment laws implemented in 2002.

I would like to bring you up to date on what has been developing in this area over the past year.
On Thursday, November 17, 2005, the State's municipal officials, through the Indiana Association of Cities & Towns (IACT), launched a proposal for the 2006 Indiana General Assembly called Hometown Matters. This proposal is a comprehensive plan to reduce reliance on property taxes, establish alternatives for financing local government, create efficient and effective local government, and assist the State in balancing its budget.
What happens in our hometowns is important to all of the citizens of Indiana. Municipal government provides basic services such as public safety, a clean and safe environment, economic development, a strong economy, and sound infrastructure, which benefits not only city residents but also the residents of neighborhoods that surround a city. Hometown Matters is a plan to enable elected officials to provide the best and most efficient municipal government possible to the residents of Indiana.
One of the main premises of Hometown Matters is that one size does not fit all when it comes to local government. Under the proposal, local governments would have the ability to establish Hometown Revenue Options to fund services through any combination of the following:

v      Local Sales Tax
v      Supplemental Income Tax
v      Local Innkeeper's Tax
Ø       This would be in addition to the any innkeeper tax already levied.

v      Local Food & Beverage Tax
Ø       This would be in addition to any food & beverage tax in place.
If the Indiana Legislature approves Hometown Matters, a community could enact any of the new revenue sources that were appropriate for their needs. With the initial proposal for each Hometown Revenue Option, the county would have a specified time in which to adopt the new tax. If the county did not act within that time, municipalities would have the option to enact.

I believe that the justification for enacting alternative funding options can be explained by answering two simple questions:
                First - Why do people travel into a city?
ü       The obvious answer is to work, shop or for recreation. The majority of the residents that live just outside Muncie depend on us for their income, or other activities.

Second - Why do people object to living in a city?
ü       The answer most people give for this question is because of the difference in property tax rates with city rates being higher.
The Hometown Matters proposal allows a community to use the advantages of the first question to solve the problem in the second.
I was very encouraged when I listened to Governor Daniels State of the State speech as he talked of this very matter. Governor Daniels stated:
"How curious that Hoosiers, strong believers in local control, have imprisoned mayors and county officials in a system that prevents major change without state approval."
The Governor went on to say:                          

"The days of top-down control of local affairs from Indianapolis have run their course.  As I did last year, I call on the General Assembly to liberate localities to raise funds from sources other than the overused and unfair property tax."
It appears there is movement in Indianapolis to help cities.  Hometown Matters would also help the State balance its budget by reducing the state's second largest budget line item, the Property Tax Replacement Credit (PTCR). As municipalities reduce the property tax burden by implementing other funding options, the state's Property Tax Replacement Credit will decrease helping the State balance its budget.
It is imperative that the Indiana Legislature passes revenue options that will allow municipalities to select alternate sources of funding. It has always been my position that any new tax revenue should be applied 100% to property tax reduction. If cities in Indiana are to survive for the long haul, we need options that move us away from property taxes.
"I pledged continued support for economic development"
In economic development, this past year was a year of transition for the city. Muncie, like many cities throughout the United States is undergoing significant change. New opportunities and challenges are being presented to us on a regular basis and we must be prepared to deal with that change and position our community to take advantage of new opportunities. I am confident we can do that and the City remains committed to collaborate with Vision 2006 and the Chamber of Commerce in advancing economic development in this community.
This past year we have been excited to watch the construction of the new Magna Power Train facility. This two-phase investment will bring 410 new jobs to this community with an annual payroll of over 16 million dollars and represent one of the largest capital investment and new job creation projects to come to our community in decades.   One of the most exciting parts of this project is the potential for spin off jobs because of Magna's presence.  As the product line becomes more defined, I remain encouraged about the potential for additional job opportunities in the machine shop, tool and die, industrial supply, services and other areas.  This means that the true economic impact of this project will probably be 2 to 3 times the 410 jobs that Magna will create.  The City of Muncie was happy to be a financial player, along with the county, in helping to bring Magna to Muncie and Delaware County and I pledge that our administration will be at the table in the future when other opportunities to create good jobs present themselves.  Magna is a perfect example of how this community can work together as a "team" to make things happen.

As exciting as Magna is to our community I am concerned about the downsizing and plant closing that is taking place at the General Motors - Manual Transmissions of Muncie facility.  The loss of these jobs to our community is significant and will represent a drain on our economy in both lost wages and taxes.  The automotive industry is in a state of change the likes of which many of us have never witnessed in our lifetime.  The current financial status of General Motors, Delphi and others are changing the face of the automotive industry.  There will be winners and there will be losers as they struggle to return to profitability.  My Administration pledges to work with our existing businesses and any new business that looks at our community to help assure them Muncie can be a partner in their success.
The changing face of the automotive industry is also a constant reminder that we need to continue to diversify our economic base in Muncie and Delaware County. Information technology, health care, agricultural, advanced manufacturing, and transportation logistics are key business sectors critical to the future of our community.
Despite the challenges that face us, I remain excited about our future. Ontario Systems continues to grow, making investment and creating new jobs. The medical industry continues to invest tens of millions of dollars locally. Manufacturing companies continue to play a huge part in our economy. Companies like Borg Warner, Spartech Plastics, Delaware Machine, Twoson Tool, Keihin Aircon North America and others continue to make substantial capital investments. The attraction of new business and industry gets so much attention these days but we also know that nationally 80% of new jobs come from existing businesses and Muncie is no exception. We need to keep the jobs we have in our community and work with these existing businesses to grow, prosper, expand, and create new employment. My administration remains committed to this challenge.
I am also excited about two recent initiatives. The rezoning of 808 acres of land for development as an "Agricultural Industrial Park" is an exciting opportunity to bring new jobs to the community and diversify our economic base. While this development is in not in the city, the effect on existing businesses can be very substantial. As we bring new businesses into the Ag Park, opportunities for our existing businesses will be enhanced.
This year will be the first year of a new City/County "Asian Investment Strategy". This Administration is committed to growing the presence of Japanese and Asian companies in our community. I, along with County government, and economic development officials from Vision 2006 are planning to accompany Governor Daniel's next delegation to Japan in the first half of this year. Our delegation will not only take part in State events that will be planned but we are also in the process of working with a consultant to set meetings with Japanese and possibly Chinese business leaders during and after the State delegation departs to develop and strengthen our relationships.
My Administration continues to work closely with the Vision 2006 economic development leaders and county government in trying to bring new jobs to Muncie. The competition is intense but I am excited about the number of new companies and project opportunities that are being brought to us. With the current level of activity and quality of the projects we are seeing, I am confident that 2006 can be a great year in terms of new business attraction. The results of this Administration's investment in the "Muncie, INPROGRESS Regional Marketing Campaign" are still being realized. The "seeds" that were planted 12-18 months ago through radio, television, billboards and print media, are still bearing fruit. The effect of any marketing campaign is not always immediate as projects sometimes take months and years to develop. However, we know this initiative has definitely made an impression in our region.

The "Angel Network" continues to attract the interest of "high tech" companies. This new initiative provides a forum in which key business and community individuals can view potential business opportunities. This initiative has brought Muncie statewide attention and we are now seeing technology, information, knowledge-based, and advanced manufacturing business opportunities. This program should play a significant role in bringing new high paying, high skilled jobs to Muncie in the future.
Downtown development is also a critical ingredient to the economic development of Muncie. New apartments, refurbished buildings, new retail businesses, implementation of the Hope IV initiative and more are all part of transforming Muncie's core. Muncie's downtown is once again becoming a major asset in helping to sell our community to potential businesses and people that are considering living here.
Finally, my Administration considers economic development a top priority in Muncie. You have my pledge to continue to support ongoing initiatives and to continually look for new and innovative ways to enhance the economic vitality of our City. My Administration has, and will continue to step forward to advance job opportunities and investment in Muncie.
"I said I would not sidestep controversial issues"
                Youth and Family Programming

Since becoming Mayor, I have stirred up several controversial issues, but my opinion is that the only way to avoid controversy is to stand still, and that is not acceptable to me.
Last year there were many discussions about a plan I developed to form a collaboration of resources in facilities involved with youth programs in Muncie. The spark for this initiative has been the revitalization of Munsyana Homes. In the HOPE IV Grant proposal that was submitted and funded, the demolition of the present South Madison Community Center was necessary in order to make room for housing, with a new relocated community center to be built. Under the present operational structure, the South Madison Community Center property is owned and maintained by the city, but all programming and staff are controlled and funded by a Coalition of Local Churches. This coalition was formed in 1996 when I made the decision to close all of the community centers due to severe financial problems in Muncie. Because the new community center was to be owned by the city, I took on the task of defining the location and size of the new building.
As I was going through this process, I realized that there might be a potential location partnership available with the YMCA because it is located only three blocks away from where the proposed new community center was to be built. A short conversation with Martin Fink, then Executive Director of the YMCA convinced me that this discussion needed to continue forward. I then set out to determine if there were any other organizations that should be involved in these discussions and I identified a total of 5 organizations that I thought should be included, the YMCA, YWCA,  the Boys and Girls Club, the PAL Club and the South Madison Community Center. In the summer of 2004, I had the first meeting with several of the executive directors and some board members of these groups to gage their interest. At the end of this first meeting, it was the consensus that this concept needed more discussion and research.
There were several reasons why I needed to push forward with the concept of collaboration. The first was from a facilities standpoint. Several of the buildings housing the entities I mentioned had either major repair or utilization needs, which would be addressed with a new building. There was also the issue of sustainability, as we are all aware; the demands on our local funding agencies are ever increasing so as a community we need to be more creative in our operations. I felt that a new building that combined two or more of these entities together would help address these issues, so the discussions moved forward.
In 2005, many meetings were held and a consultant was hired to move the process forward. I want to publicly thank the organizations that came together to help fund our consultant for this process, the United Way, the Ball Brothers Foundation, the George and Francis Ball Foundation and the Mutual Federal Foundation, these groups have been instrumental with their support. As with any new and radical idea, there were supporters, skeptics and opponents, but we kept moving forward to arrive at where we are today.
Right now, our group has been meeting and we are developing an agreement of understanding between the South Madison Community Center and the Boys and Girls Club Boards, which will result in the combining of these two boards. The new center will bring together the best of these two organizations under one roof. In addition to combining the programs of The South Madison Community Center and The Boys and Girls Club in Heekin Park, my vision of the new center is to involve programming from the YMCA, YWCA and the PAL Club. By involving the Y's and the PAL Club with the new center, we then really start to maximize our family resources. It is my vision the through cooperation and collaboration more will be accomplished, or as Vince Lombardi said:
"People who work together will win, weather it be against
 complex football defenses, or the problems of modern society."

It is also important to be aware of all of the progress that is happening at the Munsyana Homes site. Today all of Munsyana is gone and 269 units are being rebuilt providing a better quality of life for the residents. This administration has succeeded in providing better housing to those in our community in need, and we will continue forward developing the best programming and facilities we can for the youth and families of Muncie.
                Yorktown
I would also like to talk about the issue of Yorktown's annexation and our position against it. In January 2004, the Muncie City Council passed a resolution allowing the Town of Yorktown to proceed with the 2004 annexation plan they had. It was necessary for Yorktown to obtain permission from the City of Muncie because state law required towns within 3 miles of a municipality to obtain permission to annex and the Muncie City Council granted this permission.
Before the passing of this resolution there were three meetings instigated by Yorktown that were held in my office that included the Town Manager of Yorktown, four of their five town board members, their attorney and four Muncie City Council members. It was during these meetings that the issue of the Muncie Sanitary District came up and the Muncie City Council members present and I told the Yorktown officials that we would not allow them to annex areas that were either in or proposed for the sanitary district, but they could annex outside of these boundaries. We were very clear about our position. The reason we took the position of protecting the sanitary district is because the district has a direct dependency on the City of Muncie. As you can see by examining the map being displayed, the intent of the sanitary district in expanding outside of our city limits was to create residential growth and annexation opportunities for Muncie and this strategy did produce development. The three Deerbrook subdivisions would never have been developed without the services of the Muncie Sanitary District, and the additions further west, Finnlandia, Forrest Hills and Western Hills pleaded with the district to accept them because many of these residents had raw sewage in their yards. I might add that Yorktown refused to accept these homes into their sanitary system, as evidenced by the letter on the screen sent in 1998 from the Town of Yorktown to a resident of Forrest Hills. In 1999, the Muncie Sanitary District expanded into these additions with the understanding, signed by 90% of the residents that they would not object to annexation into the City of Muncie. The residents of these three additions did not have a problem in 1999 identifying with Muncie when Yorktown, given the first opportunity to accept them, turned them down. Without the services of The Muncie Sanitary District, which is directly tied to the City of Muncie, all of these homes cease to exist.
The resolution that was passed by the Muncie City Council did not contain express language-prohibiting Yorktown from annexing in the Muncie Sanitary District because state law prevented this anyway because of the 3-mile rule. It simply provided that Yorktown would not seek third-class status, which would avoid the consent law. The 2005 General Assembly amended the three-mile consent law by providing that consent was not necessary if the annexation was petitioned voluntarily by contiguous owners. This change was promoted by three towns, Yorktown, Westfield and McCordsville, and became effective on July 1, 2005. The City of Muncie was not aware of this amendment and we certainly would have opposed it. After the State Legislature passed this amendment, which the Governor refused to sign, we were told that several Yorktown town officials approached additions in the sanitary district area encouraging them to petition into the Yorktown area.

The City of Muncie has filled suit against Yorktown because of the agreement we had with Yorktown that they would not seek to annex into areas of the present or proposed boundaries of the Muncie Sanitary District. This issue clearly revolves around trust and integrity, quoting William Shakespeare:
"No legacy is so rich as honesty"
I feel that it is ironic that those who benefit the most from Muncie can claim that Muncie does not benefit them. Most of the persons petitioning Yorktown are employed or retired from a Muncie employer; in addition, they shop, bank, worship, eat and find their entertainment in Muncie, but will say that they do not identify with Muncie.
"I would work to improve our community with emphasis on our downtown and Southside"
We experienced continued improvements in our downtown in 2005 such as:

•       Indiana & Michigan provided a grant for the purchase and installation of 15,000 plus lights silhouetting 46 buildings in our downtown that were lit during the holidays.
•       The City of Muncie has received $750,000 in federal grants to develop a downtown green space and concert area.
•       The Downtown Round-a-bout and Wheeling Avenue Cantilevered River walk are scheduled for bid openings on March 15.

Downtown Muncie has made a lot of progress in the last 5 years. These accomplishments include:

•       Fifty-six businesses have opened.
•       Over 173,000 square feet of previously empty space has been developed and occupied.
•       Twenty-two buildings have been renovated.
•       Fifteen million dollars of private investment has taken place.
•       One and one-half million of public investment.
•       Over 200,000 people have attended downtown events.
•       Sixty-five apartments are now occupied.

Southside Redevelopment was also moving forward in 2005:

•       The new Wal-Mart store is scheduled to open in March and we are sure that this will encourage more development.
•       A new housing development on Fuson Road is progressing forward, which will bring new homes to the Southside of Muncie.
•       The improved Gateway design has been approved and construction should start this year providing a more pleasant entry into South Muncie.
•       The Southside Redevelopment Committee has developed plans to bring new excitement into Heekin Park with the addition of a gazebo and walking trials.
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