Good afternoon. Thank you so much for being here today for this annual “State of the City Address.” And thank you to the Harlingen Rotary Club for hosting this annual event. It gives us a chance to give the public an annual report on our City and is a valuable service to our community. Harlingen had another outstanding year in 2012. And it is a great honor to stand here as Mayor of this great City and report to you on our remarkable achievements in 2012. Ladies and Gentlemen, the State of the City is strong and I have the numbers to prove it.
1. Financial Condition
To begin with, we ended our fiscal year September 30, 2012 with an almost 9% increase in sales tax revenue, the largest increase of all of the major Valley cities. In the first quarter of the current year, we also are off to a blazing start, with an 11.36% increase. That’s 14 straight months of positive retail sales tax growth, 8 of which are in double digits. We generated more than $20 million dollars in sales tax last fiscal year. And, for the first time in Harlingen’s history we had taxable retail sales of over $1 billion dollars. And it gets better. We also ended the year with a nearly 2 ½ million dollar (unaudited) fund balance increase due to a reduction in expenditures and an increase in revenue. Our total assessed property values for the City of Harlingen once again rose, this time, by 4.38%. Our bond rating agencies like what we are doing as well, confirming our AA- rating on October 1, 2012. The rating reflected the opinion of Standard and Poor’s that the city has: a diverse and expanding economy which continues to benefit from international trade with Mexico; a consistently strong financial position and; low direct debt levels and moderate overall net debt ratios. “In our view,” said Standard and Poor’s “Harlingen’s financial performance and position remain very strong.”
2. Explosive Retail Growth
Clearly, these solid numbers show our retail development strategy is paying off. The infrastructure investments 6 years ago at Harlingen Corners, 2 years ago at Bass Pro Shops and Cameron Crossing and this year with Reyna Family Development are paying big dividends. Harlingen Corners soon will announce its next retail anchor, a 70,000 square foot (Boswell said he could not yet name the business), which we hope will break ground next month. A Chuck E. Cheese restaurant opened there just a few months ago. And the Longhorn Steak House and the huge crowds it is attracting, together with a new AT&T Store, are just the beginning of more development in the Bass Pro-anchored Cameron Crossing. The project that was the focus of the City Commission’s attention for much of last year was the development of Reyna Family Development’s Harlingen Heights which will be home to the Valley’s newest Sam’s Club wholesale warehouse. Plans have been submitted to our building department and we look forward to the groundbreaking for that 139,000 square foot megastore very soon. We also want to congratulate the Chandra Family for breaking ground on another hotel, a Candlewood Suites, going up behind their current property, the Best Western, near the intersection of Ed Carey and Expressway 83. This 4.5 million dollar project, which will add 71 rooms to our hotel inventory, was supported by our Economic Development Corporation. The EDC also provided infrastructure support for Bert Ogden’s new auto complex with four dealerships on the Expressway. And, as a result, Bert Ogden has expanded its employee base in Harlingen from 30 to more than 200. At this time, I’d like to ask our Economic Development Director Raudel Garza and any EDC Board members to stand and be recognized for their leadership and service.
3. Manufacturing Sector Growth
In 2012, Harlingen also saw extraordinary growth in its manufacturing sector, an area often overlooked by many in our community. 2012 marked the 25th anniversary of the Valley’s only aerospace manufacturer -- United Launch Alliance -- which also is the city’s largest property tax payer and the largest tenant at Valley International Airport. ULA builds components for the Atlas V rocket and is one of Harlingen’s great economic development success stories. This year, because of increased orders and projects which will take several years to complete, their employee base in Harlingen rose over 25% to nearly 200 aerospace workers. Many of these positions are highly skilled engineering jobs. We wish United Launch Alliance continued success and a renewed partnership for another 25 years. Cardone Industries also has expanded their operations reaching employment of more than 225 and now producing more than nine automotive product lines in Harlingen, a huge increase from just three lines five years ago. In 2012, ITD Precision also expanded their footprint in Harlingen by 28,000 square feet and added another 19 jobs at their plant in the Industrial Park. These high-paying jobs are key to the growth of our economy and we congratulate our Economic Development Corporation and these firms for their continued success. All of these developments have contributed to our unemployment rate going down to 8.1% and commercial construction going up from about $34,000,000 in 2011 to more than $57,000,000 in 2012. Overall, the value of our construction improvements in 2012 was approximately $86,000,000, compared to $56,000,000 last year. That is a more than a 50% increase and clear, undeniable proof that Harlingen is growing.
4. Valley International Airport
With the outstanding leadership of our airport board and current chairperson, Jo Rae Wagner, we continue to see great things happen at Harlingen’s Valley International Airport, one of our most important assets. Southwest Airlines initiated two daily nonstop flights from Harlingen to Dallas Love Field on November 4th. Sun Country Airlines has now extended its nonstop service to Minneapolis to 8 months of the year. Each weekday morning, DHL operates a Boeing 767 from its hub in Cincinnati to Harlingen and then proceeds to Monterrey, Mexico. And every weekday evening, the 767 returns from Monterrey, clears U.S. Customs at Valley International Airport and continues on to Cincinnati. This allows DHL to clear international cargo faster and less expensively than at their hub. In 2012, all the terminal roadway signs were replaced. And soon, a $3 million dollar runway rehabilitation project will get underway, funded 90% by FAA money. In addition, our air field runway and taxi way guidance signs are being upgraded with LED equipment. Each year the FAA performs annual safety inspections of every commercial airport. In 2012 the Federal Aviation Administration gave Valley International Airport a perfect rating on their inspection -- a truly remarkable achievement. The airport continues to be operated in a financially sound manner and currently has a reserve balance of $5.3 million. I’d like to ask Jo Wagner and Michael Browning, our Airport Director, and any Airport Board members to stand. Thank you for your leadership and service.
5. Public Safety, Cleanup and Beautification
For the last two years in my State of the City Addresses, I have expressed concern about border violence creating a negative perception of our region amongst outsiders, including visitors and investors. Well, I guess Keith Partridge of the McAllen Economic Development Corporation has been reading my State of the City addresses because last week he identified border violence as the number one obstacle to future growth in Valley communities. That’s why now, more than ever, our crime rate statistics really matter -- not just for our families and neighbors but for our continued growth. The good news is we can again report another huge reduction in our overall crime rate in 2012, this time by 20%. Violent crime was down 21% -- that’s homicides, rapes, robberies and aggravated assault. Property crimes were down 20% (including burglaries, larceny and vehicle thefts). This represents an overall 5 year trend of continued reductions in our crime rate. As Chief Whitten says, these are rock star numbers. He should know. Tom is a rock ‘n roller, occasionally playing in a band with my brother, Willie, Waterworks General Manager Darrell Gunn and former City Commissioner Jay Meade. (That’s a plug for the band, Tom). We congratulate the leadership of our police department and the many brave men and women whose service ensures that all of us are safe.
Hand in hand with our efforts to reduce crime are many ongoing projects to tear down structures which are eyesores, graffiti magnets, and gang hideouts. Eliminating blight has been and will continue to be one of my main goals as Mayor, in order to make our Harlingen safer, more attractive, and a more desirable place in which to live, visit, and invest.. In 2012, we eliminated another 49 structures including 31 that were torn down by the Texas National Guard. We thank them for their partnership and support in this important effort. We also appreciate the efforts of the many volunteers who have worked with our Code Enforcement, Public Works, and other departments on monthly Clean Sweeps that have helped improve neighborhoods in all five districts. Other efforts to improve the appearance of the community include a town hall meeting in May where we discussed strategies to eliminate litter, improve our entryways, cleanup parks and public properties and beautify the interchange near our new shopping centers. As a result of that meeting and the committees that were formed, we have made great strides, and I particularly want to commend great volunteers like Nick Consiglio, Ruthie Ewers, and Juan and Connie Salas for their efforts. We have improved landscaping, parking lots, and other amenities at many City parks and properties, including Victor Park, the Tom Wilson Sports Complex, Gutierrez Park, Pendleton Park, and around the Casa del Sol and Community Center. We have turned several unsightly irrigation canal bulkheads into beauty spots, and improved the appearance of major entrances to Harlingen. John Wright, a Valley businessman, was at that public meeting to voice his concerns about a problem we had been trying to address for quite some time: the deterioration of the once beautiful Sun Valley Motor Hotel. In recent years, this mid-century icon had become a haven for vagrants and crime, negatively affecting the surrounding businesses, such as Burger King and Starbucks. Today, I am pleased to report, that if you drive over to the Sun Valley site on 77 Sunshine Strip, you will see many of the dilapidated structures have been demolished, and debris is being hauled away. This is a great example of the City responding to the needs of our business community and working to improve the safety of our neighborhoods. The money the City of Harlingen has invested in this improvement project will eventually be recovered through our demolition lien upon the sale of the property. We are confident the actions taken will make this large parcel more attractive to developers interested in investing in Harlingen. Finally, I want to show you designs that our city staff have created to beautify the Expressway interchange. This innovative and ambitious plan combines pavers with artificial turf to clean up and green up the most important intersection leading into Harlingen, along the lines of what has been done in Las Vegas and other cities nationwide. We have submitted a grant application to TXDOT for this project but, even if we don’t get a grant, we likely can identify local resources to at least begin the first phases of this ambitious plan. And we hope to implement similar improvements at other key intersections as well. I want to thank our city staff for embracing the challenge of improving the appearance of Harlingen. They haven’t let bureaucracy bog them down; they have taken a pro-active approach to accomplish these goals and this vision. We will continue to work to make our city the most attractive city in Valley.
6. WaterWorks and Public Works Infrastructure Improvements
During 2012, the Harlingen WaterWorks System continued work on several much needed capital improvements to our wastewater and water treatment facilities, doing much of the design and construction in-house, in order to realize significant cost savings. One of the largest and most innovative projects undertaken last year included installation of 8,740 feet of 10” water pipe in order to reclaim water at Hugh Ramsey Nature Park. If you visit Ramsey Park, also known as the Arroyo Colorado branch of the World Birding Center, you now will see several manmade lagoons and ponds WaterWorks constructed to provide attractive resting and hydrating places for resident and migratory birds. This project is a win-win-win, for Harlingen Waterworks, the community, and our important ecotourism industry. Another important project now underway is the design and engineering of a new elevated water tower to service and support all of the development on the west side of Harlingen. We applaud the leadership of WaterWorks and their entire team for their many accomplishments, including their innovative approaches to resource management, and their continued diligence to cost-effectively overhaul the many water and sewer lines, generators, lift stations, and pumps that are so critical to our daily health and vital to the City’s growth. I’d like to ask Darrell Gunn and any WaterWorks Board members to stand and be recognized.
Likewise, our Public Works Department made significant progress in 2012 on many other infrastructure projects, including drainage, street, and sidewalk improvements. I could talk for hours about the many drainage improvements we have made since I became Mayor in 2007. I won’t do that now but for those who are keenly interested in the topic, we will be having a City Commission workshop on drainage next month to review recently completed projects and those which lie ahead. In 2012 we completed the $2.3 million Jefferson Street Drainage Ditch Improvement Project, 75% of which was funded through a FEMA grant. Phase IV of the Northwest Storm Sewer Drainage Project also was completed, with 100% grant funding from Community Development Block Grants and a Texas Department of Rural Affairs grant. Our Public Works team, under the leadership of Assistant City Manager Dan Serna and City Engineer Javier Zamora, also have designed two additional drainage projects that soon will get underway: the 3rd Street Drainage Ditch Improvement Project and the Buchanan, Hays, and “M” Street Storm Sewer Drainage Improvement Project. Grant applications are pending for additional drainage ditch improvements along 13th Street, Dixieland Road, and Lipscomb Road, to name a few. Street improvement projects completed in 2012 include the East Treasure Hills Drive extension and the Dixieland & Lincoln Avenue reconstruction project. And, as you no doubt are aware, work on Stuart Place Road improvements currently is underway.
We have also advertised for professional services to help us develop a new 20 year Comprehensive Plan for Harlingen. It’s critical that we look at our growth and plan for future development, transportation, parks and open space, housing, and other vital infrastructure. It should be an exciting process and will necessarily involve the input of all sectors of our community. At this time, I would like to ask our City Manager Carlos Yerena and all of our City Staff to stand and be recognized for the work accomplished over this past year. Everything I am reporting on today happens as a result of teamwork and it gives me great pleasure to also introduce the members of the team on the City Commission: the old guys Commissioners Mike Mezmar and Danny Castillo and the brand new guys Commissioners Basilio “Chino” Sanchez and Victor Leal. It is a privilege to serve alongside each of you and I ask everyone here to express their appreciation for your service.
7. The University of Texas System South Texas Plan
In December 2012, the Board of Regents of the University of Texas System unanimously adopted a plan to seek legislative approval for creation of a new, comprehensive research university in the Rio Grande Valley. The new university will combine and expand the existing campuses and higher education programs at the University of Texas at Brownsville (including the Public Health branch campus), the University of Texas Pan American in Edinburg, and the Regional Academic Health Center or the RAHC, our branch campus of the medical school at the University of Texas Health Science Center at San Antonio. In addition, UT will augment the new university with administrative headquarters and programs on a portion of the campus to be located in McAllen. The UT Board of Regents also committed to enhance legislative appropriations with an additional investment of $100 million over the next ten years to transition the RAHC into a four-year medical school. If approved by a two-thirds majority in the 82nd Legislature, the new regional University of Texas will be eligible for funding from the Permanent University Fund and also will qualify for designation as an emerging research university. The efficiencies achieved by merging assets and resources of existing UT institutions and the entire Rio Grande Valley will not only eliminate duplication of services and millions of dollars in administrative costs, it will transform and open up educational opportunities in South Texas for generations to come. Just think about it: this new university will be one of the few academic and healthcare education combinations in the entire United States, allowing us to train and retain physicians and healthcare professionals in an area that has long suffered from serious shortages. Just at the outset, this investment in a new university is projected to create 10,000 or more direct, high-paying jobs in our region.
Dubbed the South Texas Plan, the University of Texas Board of Regents’ vision is to incorporate the RAHC campus here in Harlingen fully into this new University. I wish to thank publicly the University of Texas Board of Regents and particularly Chancellor Francisco Cigarroa and Chairman Gene Powell for their vision, dedication and commitment to Harlingen and the entire Rio Grande Valley. Chairman Powell is from Weslaco and the Chancellor is from Laredo. Never again will the stars be so aligned to accomplish such an important initiative. They have asked of us only one thing: our support. I have pledged Harlingen’s support to these two men and the UT System. Harlingen has worked hard over the last 16 years to reach this point. Many City leaders – both in this room and elsewhere -- have contributed to getting us here. Combined, the City, our Economic Development Corporation, Su Clinica and Valley Baptist Health System have invested more than $45 million in the RAHC. That is in addition to the more than $200 million UT has invested in facilities and the operations of the RAHC in Harlingen since 2002. The VA has spent many millions more in Harlingen to develop their state- of-the-art outpatient clinic and surgery center -- both of which are the envy of cities across the country. What is before us is a potential culmination of all of this hard work and investment. But we are not there yet and there is still much to do. Harlingen must remain firm in its resolve and in our support of UT. I urge all of you to keep abreast of what transpires regarding this issue in the legislature and to voice your absolute support of UT and our State representatives who have shown great leadership in the past on this issue. Call Senator Lucio, and Representatives Lucio and Longoria and encourage them to remember Harlingen’s partnership and investment in this great effort. And, by the way, take some time to call Manny Vela and any of your other friends at Valley Baptist to thank and support them for all of the resources they have devoted to this effort for years. Remind them how important the RAHC and medical school are to Harlingen.
As we reflect on the great accomplishment of 2012 and the exciting opportunities on the horizon, one of the achievements from this last year stands out in my mind: the dedication of the Veterans’ Memorial at Pendleton Park. Nearly 1000 people attended the prayer service and dedication in November. It truly was a beautiful and moving occasion, one of those moments that really made you feel great about your community. Not only is it a wonderful memorial which has allowed so many families to honor their loved ones for the service to their country, it is a shining example of how teamwork and effort can improve a City. This was just a group of people with an idea. They had nothing when they started. But they worked within the community to accomplish a goal. And it paid off, not only with a tangible monument, but with a sense of accomplishment for all. Let’s let the Veterans’ Memorial Committee be an example to us all. Putting aside individual differences and agendas, they taught us once again, that together, we can accomplish great things.
That’s how big things happen – in Harlingen and everywhere. Let’s keep working together to make Harlingen the best it can be.
God Bless all of You. God Bless our Country, God Bless the Great State of Texas, and may God continue to Bless our beloved Harlingen. Thank you.