Office Of The Mayor
Thomas M. McMahon


State of the City Report
January 28, 2008

Each January we present a summary of the condition of the city. Tonight I will talk about our progress and our issues, next month Leon Churchill our Managing Director will present a detailed report on the financial condition of the city of Reading.

Let me start with the good news on crime reduction.

Crime reduction remains our no 1 priority and we are making good progress. In 2007, serious crime was at its lowest level in 30 years. The murder rate was the lowest in 19 years, and nonfatal shootings were down by 40 percent. But as Deputy Chief Talbot recently pointed out, it is not about statistics, it is about people and creating an environment where we all feel safe.

Our plan is oriented toward crime reduction, not just criminals. And while we focus resources on the 10% of criminals that produce 60% of the crime, we also are finding ways to reduce crime, fear, and disorder so we can elevate community livability. This approach is often called problem-oriented policing.

The question is not simply "Can we catch the criminal?" It is also "What can we do so that there is less crime?" This effort does not only mean more arrests, it also includes working to change the factors that enable crime such as improved environmental design, education on crime prevention, and the use of security cameras and canines which will come about in 2008.

Citizens play a key part in crime reduction. We constantly encourage the flow of information from the public to the police and we act on information received. When citizens understand and practice their role in keeping a neighborhood safe, then safety and livability for the entire community will improve. That is why we have encouraged the development of more active neighborhood groups.

It is a myth to think that just dialing 911, or even adding security cameras and canines will by themselves bring about the safest community we can have. Instead it is all these plus police and citizens working together and sharing a common set of duties that will greatly improve our community.  

We will continue and enhance our past efforts.

The message to drug dealers and users is: If you deal drugs or buy drugs in Reading be prepared to pay a price you do not expect. Go somewhere else or you will find yourself in a vice grip by our vice section of the police department.

Parents and guardians: I have a message and plea for you. When your children come home from school be there with them, or at a minimum call and ask what is happening, preferably homework.

A recent survey of Reading students finds far too many coming home to empty houses. These children are most vulnerable to crime and gangs right after school up until 8pm.

Get your children involved in after school programs. Use the resources in the schools, at the Olivet Clubs, the YMCA, churches and city recreation centers, at the libraries, the Goggle Works, at area gyms. There are opportunities for learning for every child ranging from sports to the arts all over the city.

Most are free and some charge a nominal fee. Financial help is available at many agencies. Mentoring works, job shadowing works, internships work, but the best thing is for youth to have a parent who cares.

Parents: Get your children involved in something other than TV watching, computer addiction or video games. You can’t leave it only up to us to save our young people.

When we step in with the law enforcement actions, it is often too late, and then we are processing your child into a system that many times ends with prison or a funeral.

Thefts and burglaries are still too high. We are working hard to bring those down and create a safer environment.

The perception of the city is still not where it needs to be. We can fight crime and get results, but perception lags reality. We will reduce crime, and we will continue to make downtown a more exciting place. We have come a long way on that, and in the coming years, there were be a lot more. People on the streets all the time make a safer city and that is the goal. To get people on the streets means reducing crime and having reasons for people to come downtown. That will begin to change the perception of Reading.

Let’s talk about economic development.

The bad news on economic development is that the economy is in a slump. The housing market is off, and it has affected ICI Paints and caused them to close much of the Reading operations. Hershey is moving manufacturing operations to Mexico and we will lose more than 200 jobs.

It’s important that we not dwell on these setbacks, but begin immediately to think what they can become.

The good news is that there is more than $200M worth of projects either recently built, under construction or in the planning phase.

From movie theatres at 2nd and Washington opening in July, to new apartments and new restaurants, to the new facilities at Reading Area Community College, the downtown and the rest of the city is coming alive once again.

Investment in the downtown brings jobs and brings activity and that creates more activity. It has happened in cities around us. It can happen here. We need to believe we can do it and we need to work together to make it happen.

About 260 new jobs at Sun Rich Fresh Foods will be available at the Buttonwood Gateway in February. Local companies like Carpenter Technology and Quaker Maid Meats are expanding and creating additional jobs.

Economic development agencies are working together under the umbrella of the Berks Economic Partnership, which is promoting the area to the outside world, a whole new concept for Berks County.

Our support of the Berks Economic Partnership is an investment that I expect to reap benefits for many years.

On the plus side there is renewed interest in several sites in the downtown for new office, commercial and housing projects. I fully expect to make some very exciting announcements in the near future in this regard.

Housing is an issue that has languished over the past several years. We inherited a rash of problems that we did not even suspect. Residential units did not have housing permits, or were being rented in areas not zoned residential. Codes compliance was abysmal but we are working hard with staff on the street every day tracking down violators and issuing citations.

Our conviction rate for codes violations is up 400% from just two years ago and violators are on notice that we will continue to clean up our streets and make our housing stock livable.

Not all landlords are bad landlords. Many are working with us side by side, and many have approached me thanking all of us in the administration and on council for the new policy on getting compliance with proper information for housing permits.

Absentee landlords who neglect property will be prosecuted to the full extent of the law.

People expecting to make a killing based on real estate seminars that promise riches by flipping properties will not find a fertile field for the quick buck in Reading. If you buy in Reading, we will be expecting you to bring the property up to code or we will see you in court. It’s that simple. We are tired of being part of get rich quick schemes at the expense of the city.  

Lastly I want to talk about the financial condition of the city. We made it through last year and will do so again this year by a series of financial transactions that are fast becoming scarce.

Because the year of 2009 has such challenges from a financial point of view, we are starting now to find ways to keep this city viable. We are not alone among cities of Pennsylvania, and I can tell you that mayors are working together to convince state and federal elected officials of the need for property tax reform and equitable taxing policies for urban areas.

Our labor costs are growing beyond our ability to afford them. Health care and pension costs are rising faster than inflation.

Our taxes are already high. Over the long run we must grow our way out of financial difficulty but the short term will mean belt tightening.

We need to attract more people of means to move into the city, to become property owners, to work in the city, and to pay taxes, which will bring us full circle back to the argument for economic development.

We are making the city an exciting place to attract more visitors come to enjoy our sports venues and restaurants.

We are working hard to attract new businesses to the city. That also means more corporate tax revenue as well as job creation.

Let me touch briefly on tax-exempt properties. We have wonderful facilities for higher education in the city. We also have health clinics and many social service agencies in the city. They all provide a valuable benefit to the city. But together the tax exempt properties in the city constitute about 30% of the property values of Reading, one of the highest percentages among our peer cities.

We will be asking for their additional help with the cost of services like police, fire, ambulance and public works. 

At the state level, we won a hard fought battle for the Local Services Tax which is imposed on every worker in the city at the rate of $1 per week.

That tax is to help defray the cost of police, fire, road and street light maintenance and EMS service that are available to workers in the city at all times. But that one dollar per week generates only about 1% of our annual general fund budget.

Property taxes bring in only about 20% of our budget. Balance that with public safety which alone takes about 56% of city expenditures. The rest comes from earned income taxes, real estate transfer tax and other sources including water and sewer fund transfers.

Short term bond swaps and forward bond issues are not the answer for the City of Reading or for any 3rd class city in Pennsylvania over the long term Until there is real tax reform at the state level, cities like Reading will continue to be in financial distress.  

At the government level, we are making every attempt to control costs while still providing services that residents need and expect.

The city has actually done an admirable job in reducing risk and insurance costs which are down $350,000.  Health insurance increases have been below inflation the last two years.

We must not neglect our treasures and we must provide resources for quality of life and city vibrancy.

Throughout the city, we are working to retain our architectural heritage in our homes, churches and public buildings. They are the finest among cities and we need to preserve them. Visitors always remark to me how amazing the buildings are. We take them for granted. We need to keep them and pass them down

We will host the pro cycle tour again in June of 2008, we will celebrate this community at Riverfest, Jazzfest and also a number of events to celebrate the 100th anniversary of the Pagoda. All of these are important since they define our community and make it more livable for residents and more attractive to visitors.

I will be looking for community help to upgrade City Park and to create an Environmental Center at Angelica to complement the recently completed Environmental Park, for us, our children and our visitors. We will hold a grand opening and dedication of the Angelica Environmental Park in the Spring.

Our litter removal campaign is engaging young people and citizens in picking up Reading. This spring will see a renewal of our coordinated anti-graffiti campaign in which we successful last year. For more information on these, citizens can contact the call center at 1-877-PAREADING.

Lastly I want to thank our city workers and all of you who live and work in the City of Reading, including our residents and our millions of visitors to the Sovereign Center, the Sovereign Performing Arts Center, the Goggle Works, our great downtown restaurants and seasonal activities.

Soon you will have a new 10 screen Cineplex and IMAX theatre to enjoy.

We have built a momentum that the skeptics never thought possible. And my great joy is to continue to prove the naysayers and skeptics wrong about Reading.

This is a very good city and with the help of all of you, we will become a great city.

Thank you.