The State of the City The State of the City The Honorable Scott - - PowerPoint PPT Presentation

The State of the City The State of the City

The Honorable Scott Myers

Mayor

• Mr. J. Michael Joyal, Jr.

City Manager

• Mr. Brian J. Gottlob

PolEcon Research

Forum Series Forum Series

7:30 a.m. Tuesday, February 12, 2008 Cocheco Country Club

The State of the City The State of the City

The Honorable Scott Myers

Mayor, City of Dover

The State of the City The State of the City

• Mr. J. Michael Joyal, Jr.

City Manager, City of Dover

The State of Our City is GOOD

We must continue to find our way along a path towards GREATNESS

Volunteers Make Dover Great Volunteers Make Dover Great

Arena Commission Arena Commission Zoning Board of Adjustment Zoning Board of Adjustment Recreation Advisory Board Recreation Advisory Board Utilities Commission Utilities Commission Cemetery Board Cemetery Board Solid Waste Advisory Commission Solid Waste Advisory Commission Transportation Advisory Commission Transportation Advisory Commission Cocheco Waterfront Development Cocheco Waterfront Development Advisory Commission Advisory Commission Library Trustees Library Trustees Conservation Commission Conservation Commission Dover Business and Industrial Dover Business and Industrial Development Authority Development Authority Dover Housing Authority Dover Housing Authority McConnell Center Oversight McConnell Center Oversight Committee Committee Open Lands Committee Open Lands Committee

Professional Staff Make Dover Great Professional Staff Make Dover Great

Executive Offices Executive Offices Finance Finance Planning and Community Development Planning and Community Development Police Police Fire & Rescue Fire & Rescue Community Services Community Services Recreation Recreation Public Library Public Library Human Services Human Services Public Schools Public Schools

“If you're doing something you care that much about, and you believe in its purpose deeply enough, then it is impossible to imagine not trying to make it great. It's just a given.”

Jim Collins, Author

From Good to Great: Why Some Companies Make the Leap… and Others Don’t

Population growth Population growth

24,000 26,000 28,000 30,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Population Trend Line

1.0% Annual Growth Source: NH Office of State Planning

Student growth Student growth

3,000 3,500 4,000 4,500 5,000 1998 2000 2002 2004 2006 2008 Students Trend Line

1.5% Annual Growth Source: Dover School Department

Development activity Development activity

200 400 600 800 1998 2000 2002 2004 2006 2008 Total Perm its Dwelling Units Trend Line Trend Line

• 0.4% Annual Growth
• 1.0% Annual Growth

Source: Dover Planning Department

Vehicle Registrations Vehicle Registrations

25,000 27,000 29,000 31,000 33,000 1998 2000 2002 2004 2006 2008 Vehicle Perm its Trend Line

1.3% Annual Growth Source: Dover Finance Department

Assessed value Assessed value

500 1,000 1,500 2,000 2,500 3,000 1998 2000 2002 2004 2006 2008 Valuation (m illions)

Source: Dover Finance Department

Average Home Value Average Home Value

50,000 100,000 150,000 200,000 250,000 300,000 1998 2000 2002 2004 2006 2008 Average Residential Value

17.0% Annualized Return Source: Dover Finance Department

Average Home Tax Bill Average Home Tax Bill

2,000 3,000 4,000 5,000 6,000 1998 2000 2002 2004 2006 2008 Tax Bill

8.5% Annual Growth Source: Dover Finance Department

General fund balance General fund balance

2,000,000 4,000,000 6,000,000 8,000,000 1997 1999 2001 2003 2005 2007 2 4 6 8 10 Fund Balance Percent of Budget

14.9% Annual Growth Source: Dover Finance Department

North End Fire Station Public School Renovations Streets & Sidewalks Repairs Downtown and Waterfront Development Master Plan Update Tax Cap Charter Amendment Implementation

Projects and Activities

North end Fire Station

Public School Renovations

Streets & Sidewalks Repair

Downtown and Waterfront Development

Master Plan Update

Successful Implementation of Tax Cap

Our Most Immediate Challenge

Our Continued Trek to Greatness

“We must maintain unwavering faith that we can and will prevail in the end, regardless of the difficulties, AND at the same time, have the discipline to confront the most brutal facts of our current reality, whatever they might be.”

Jim Collins, Author

From Good to Great: Why Some Companies Make the Leap… and Others Don’t

The State of the City The State of the City

• Mr. Brian J. Gottlob

PolEcon Research

Trends and Directions in The Dover Economy

Presentation to the Greater Dover Chamber of Commerce “State of the City Forum” February 12, 2008

Brian J. Gottlob PolEcon Dover, NH (603) 749-4072 bgottlob@poleconresearch.com

U.S. Economic Overview

• Slowing Economy Through Summer (Recession is

Semantics – Weakness Will be Clear)

• Housing and credit markets are biggest risk
• Impacts spreading to consumer & business

confidence as well as spending

• Labor market continues to weaken
• Large monetary (interest rates) and fiscal stimulus

will limit severity of downturn

Nationally, Business Confidence Has been Eroding Since the Summer “Subprime Shocks”

Weekly Business Confidence Index 5 10 15 20 25 30 35 2 7 M a r c h J u n e S e p t . 2 8

N.H. Economic Overview

• Performance will be better than the rest of New

England

• But we are not immune to weakening national

economy

• Housing just beginning to affect the labor market
• Business access to credit is key – remember the 1990-

91 recession?

• Long-term success depends on our ability to continue

buck unfavorable regional demographic trends

Delinquencies and Foreclosures in NH Showed No Signs of Slowing Through Q3 of 2007

2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5%

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0%

% NH Loans Past Due % NH Loans in Foreclosure

NH Housing Price Appreciation (OFHEO Index) & Loans in Foreclosure

• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% '00 '01 '02 '03 '04 '05 '06 '07 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% NH Home Price Aprreciation % NH Loans in Foreclosure

Unfortunately, Home Price Trends Will Determine How Many Loans Eventually Fall Into Foreclosure.

Price Appreciation in NH Has Been Negative Since Mid-2006. NH is

• ne of 21 States as of October, With Negative Appreciation

NH Home Price Appreciation

• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% 8% 10% 12% 2005 2006 2007

Source: Loan Performance Inc., First American Core Logic

The Housing Market Won’t Stabilize Until The Supply of Unsold Homes Declines, but Inventory Continues to Rise (Albeit a Bit More Slowly)

2,599 1,260 2,246 1,085

500 1,000 1,500 2,000 2,500 3,000

2006 2007 Houses Added to Strafford Co. Market and Home Sales Added to the Market Houses Sold

Source: Northern NE Real Estate Network (does not include all inventory and sales in the state)

The “Wealth Effect” of Reduced Home Values. Home Equity Lines of Credit (and Cash-Outs Refi’s) Fueled Consumer Expenditures. Now HELOC’s are Trending Downward in NH While Delinquencies Increase

$0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000

2 2 2 3 2 4 2 5 2 6 2 7

HELOC's ($000's)

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000

Delinquencies ($000's)

HELOC's at NH Banks Delinquencies

One Fallout From Subprime Crisis - Tighter Credit The Federal Reserve Senior Loan Officer Survey Shows All Types of Credit are Tightening

% of Loan Officers Saying Credit is Tightening

• 40
• 20

20 40 60 80 100

2003 2004 2005 2006 2007 2008

Tightening for Large & Medium C&I Borrowers Tightening for Small C&I Borrowers Mortgages Prime Subprime Comm.Real Estate

To Date, Commercial and Industrial Lending By NH Banks Does Not Seem To Be Affected by Credit Market Woes

(Well Functioning Credit Markets are Essential for Economic Growth)

C&I Lending by NH Banks 500 700 900 1,100 1,300 1,500 1,700 1,900 2,100 2,300

2003 2004 2005 2006 2007 Millionss C&I Lending by NH Banks

NH Employment Peaked This Past Summer

(and the Peak Will Likely be revised Downward)

625 630 635 640 645 650 655 2006 2007 2008

New Claims for Unemployment Offer One Sign That We May Avoid Recession

Average Weekly New Unemp. Ins. Claims in NH

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

The NH Leading Index Dipped Further Into Negative Territory

• 40
• 30
• 20
• 10

10 20 30 40

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

NH Index Value

• 6%
• 4%
• 2%

0% 2% 4% 6% % Change in Emp. Over 12 Mos. Prio

NH Leading Index Value Rate of NH Emp. Growth

Index Value: -20.3

The NH Leading Index Has Turned Down Sharply (Recession Risk Jumps to 60%)

The Northeast Continues to Have Population Growth but it is Losing Out to the South and West (Residents Fleeing the Northeast)

Population Change 2000-2006

3,745,322 3,387,539 2,439,502 2,542,127

• 1,830,176
• 1,107,625

2,604,422 333,379 1,236,750 1,954,761 1,023,870 1,644,011

• 4,000,000
• 2,000,000

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000

Northeast Midwest South West

Net Domestic Migration International Migration Natural (Births-Deaths)

Northern New England (Mostly NH and Maine) Attract Residents From Other States While International Migration Keeps Southern NE from Pop. Losses

Sources of Population Change 2000-2006

239,283

• 361,834

45,273 24,629 315,876 80,145

• 600,000
• 400,000
• 200,000

200,000 400,000 600,000 800,000

Net Domestic Migration International Migration Natural (Births-Deaths) Southern NE Northern NE

New Hampshire is Not The Oldest State Nor is it Aging Fastest – But There are Demographic Challenges

• NH has lower fertility rates (third lowest in the

nation)

• Lower mortality rates (because of better health of

seniors)

• Both of which are signs of success
• All civilized societies age as they prosper – it is

inevitable

• NH is attracting fewer 30-44 yr olds because there are

fewer of them everywhere – especially in the Northeast

The Mistaken Logic Of NH “Losing Young Families”: The Difference Between a Smaller Age Cohort Because of Getting Older or “Age Progression” and a Smaller Cohort Because of Moving Out-of-State

88,490 70,444 76,884 70,444

20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 2000 2005 ("Expected" Based

• n # of 25-29 yr olds in

2000) Actual 2005

Age 30-34 Age 25-29

Difference Between Actual and “Expected” Is “Migration” And = 6,440 Into This Age

• Group. The 30-

34 Age Group Is “Smaller” Than in 2000 But Not Because of “Out-Migration”

Examined This Way NH Continues to Attract Young Households (Albeit at a Slower Pace than in the 1980’s and 1990’s)

Estimated Net In-Migration 2000-2005

4,936

• 972
• 1,753
• 3,374
• 13

1,988 7,906 6,440 1,251

• 1,350
• 4,000
• 2,000

2,000 4,000 6,000 8,000 10,000 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65+

Source: PolEcon analysis of “Current Population Survey” data

Dover’s Economic Performance has Been Strong and We are Better Positioned for Long-Term Prosperity

Important Trends in Dover

• Changing demographics

– Higher levels of educational attainment - “up-skilling” – Increasing income - “up-scaling”

• More diversified economy

– Less reliant on cyclical industries – Less reliant on a few, large employers – Better able to whether national and state downturns

• Changing expectations

– By residents – By businesses

• What hasn’t changed (enough) our view of Dover

Population Trends Confirm Dover’s Attractiveness

Population Change 2000-2006

2.2% 3.4% 4.2% 4.9% 5.8% 6.3% 6.8% 7.6% 1.2% 0.9% 0.1%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

Portsmouth Keene Nashua Manchester Concord Laconia Merrimack Londonderry Salem Dover Rochester

Dover Has Added Highly Educated and Skilled Residents Faster than Has NH as a Whole

% Change in the Composition of Pop. Over 25 by Educ. Attainment 1990-2000

0.6% 2.3% 2.1%

1.1% 4.4% 3.7%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Associate Degree Bachelor's Degree Graduate or Prof. Degree

Dover NH

Dover Now Has a Population and Labor Force that is Well Educated, Higher Skilled, and Better Able to Support Growth Industries

% Pop. Over 25 by Educ. Attainment (2000)

12.6% 30.1% 20.0% 8.7% 18.7% 10.0% 9.6% 28.6% 20.7% 9.5% 21.1% 10.6% 14.2% 32.3% 20.2% 8.9% 15.1% 9.2% 11.9% 25.1% 21.4% 9.1% 22.0% 10.4%

0% 5% 10% 15% 20% 25% 30% 35% No HS Diploma HS Grad Some College, no Degree Associate degree Bachelor's degree Graduate or Prof. Degree Dover Strafford Co.(Less Dover)

• Rock. Co.

NH

The most valuable resource in the 21st century is brains. Well educated people tend to be mobile. Watch where they go because where they go robust economic activity will follow …..and change and conflict will inevitably

follow

Since the Turn of The Millennium, Dover’s Rate of Private Sector Employment Growth Has Significantly Exceeded That of NH

Private Sector Employment (Index 1996=100)

95 100 105 110 115 120

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Dover N.H.

Employment Growth Has Been Stronger in Dover – Especially in Recent Years

15.7% 2.9% 15.1%

• 5.6%

8.6% 4.1% 3.9%

• 2.3%
• 10%
• 5%

0% 5% 10% 15% 20%

1996-2006 2002-2006

Private Sector Employment Growth

Dover Strafford Co. N.H. Laconia

Compared to Other Communities, Local Government Emp. Growth Has Been Lower in Dover in Recent Years

24.0% 36.5% 26.8% 20.20% 3.9% 5.5% 6.6% 6.50%

0% 5% 10% 15% 20% 25% 30% 35% 40%

1996-2006 2002-2006

Local Government Employment Growth

Dover Strafford Co. N.H. Laconia

• Avg. Weekly Wages Show Dover Having Solid Gains

in Job Quality

64.0% 45.1% 55.6% 17.8% 8.1% 17.6%

• 5%

5% 15% 25% 35% 45% 55% 65% 75%

1996-2006 2002-2006

Private Sector Growth in Avg. Weekly Wages

Dover Strafford Co. N.H.

Dover is “Transitioning” Nicely to a More Diverse Economy, Adding Employment in Newer or Faster Growing (Nationally) Industries, While Stanching the Manufacturing Losses of the 1990’s

• Emp. Growth 2002-2006

11.4% 4.9%

• 2.3%

10.6%

• 8.7%

4.6% 12.6% 11.4%

• 32.5%

0.9% 1.6% 16.2% 21.6% 25.8% 32.1% 10.7% 2.5%

• 7.7%
• 9.1%
• 40%
• 20%

0% 20% 40% 60% 80%

Manufacturing Retail Trade Health Care

• Prof. & Tech. Service

Wholesale Trade Information Educational Services

Dover Strafford Co. N.H.

The Numbers Behind the Percentages

• Emp. Growth 2002-2006

18 27 92 103 207 269 275 416

50 100 150 200 250 300 350 400 450

M a n u f a c t u r i n g R e t a i l T r a d e W h

• l

e s a l e T r a d e P r

• f

. & T e c h . S e r v i c e I n f

• r

m a t i

• n

A d m i n i t r a t i v e S u p p

• r

t E d u c a t i

• n

a l S e r v i c e s H e a l t h C a r e

Compared to Most Regions in NH – Dover Has Not Lost as Much of Its Manufacturing Base

(Portsmout Benefits From the Presence of Pease Tradeport)

Manufacturing Emp. (Index 1996=100)

70 80 90 100 110 120 130 140

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Dover Ports. Manch. Nashua N.H.

Along With Employment Growth, Dover Has Done Comparatively Well Expanding its Commercial/Industrial Tax Base

• Pct. Change in Commerical/Industrial Valuation 1999-2006

90.3% 113.8% 124.7% 137.7% 176.4% 83.3% 77.6% 60.6%

0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%

Rochester Keene Nashua Laconia Concord Dover Manchester Portsmouth

Continued Strong Growth in Commercial/Industrial Valuation is Needed to Balance Recent Population Growth

Comm./Ind. Valuation per Capita

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 00 01 02 03 04 05 06

Dover Rochester Laconia Concord Keene

Moving Forward There Are Many Challenges, Here are a Few

• Manage conflicts over changing expectations/views of city

– Prosperity depends on the quality and “amenity value” of the city – With changing demographics comes different expectations for services – How we resolve this conflict determines our long-term prosperity

• Fiscal prudence is important and necessary but communities

can’t “cut their way to prosperity” – implementation of the “tax cap” could unwind recent economic gains

• Increasingly Dover’s employment base can ‘blend” into the

fabric of the community but there is a need for more strategic locations to accommodate businesses

• A higher skill economy requires connections to (and

identification with) higher-education institutions – Dover has little of either

• Dysfunctional democracy delayed the positive trends, it could

just as easily reverse them