Thank you all for being here tonight.

Special thank you to Reverend Claudette Brown for the invocation.

Thanks to tonight's musical performers: the music outside by the Panjammas Steel Drum Band from Cabrillo High School, the music inside spun by Heber Siqueiros, and to Kameron Greene, the terrific vocalist on the national anthem. Thank you all.

Upon its completion in 2013, the Downtown Courthouse named in your honor will give well-deserved recognition to one of Long Beach's finest citizens.

And yes, Councilman Andrews, the Mayor's Office has a calendar -- I know tonight is the BCS national championship game.

But hey, this is The Beach, home to the 49ers and we play basketball! And do you really care how badly LSU beats Alabama?

The State of the City speech has evolved over the years and I believe this format meets the spirit intended by our City's charter. Every year I intend to deliver it without notes, but I find it takes me three weeks to prepare an impromptu speech.

A State of the City address is meant to inform the citizenry on the condition of our City. And its delivery in this open setting is designed to help you judge how well your government is performing. It is part of the larger process of an informed citizenry; which is vital to a well-functioning democratic society.

It is also necessary if we are to hold our elected officials accountable for their actions and essential to preventing the kinds of abuse that occurred in the City of Bell.

Last year, I spoke about the need to attack a problem head on; to avoid "kicking the can down the road"; and my belief that it is nothing short of immoral to place our burdens - be they fiscal, financial or something other -- on future generations. I believe our prime responsibility is to preserve opportunity for the next generation.

I'm proud to say that here in Long Beach we were faithful to that responsibility. And we did it despite an atmosphere in Sacramento and Washington that is caught up in bitter partisan politics and seems destined to impoverish our future for some illusion of present benefit.

Indeed, the State of California seems bound and determined to visit its contagion upon local governments.

In two essential areas- redevelopment and "realignment"-- the state is robbing the future to pay current costs, and setting the stage for our children and grandchildren to be worse off then we are.

Redevelopment, while frustratingly misunderstood within the State Capitol, not only helped cities fix themselves, but brought development to areas that would otherwise remain economically stagnant for decades.

Redevelopment built a larger future tax base from parcels of land better known as drug houses and run-down liquor stores; stealing precious public safety resources.

It was arguably the last remaining tool for economic development in California and it is hard to deny that it has been transformational in Long Beach.

But the reality is that those days are probably now gone. We will work hard to save redevelopment legislatively, but in truth the outlook is grim. So, we are forging ahead on the work of building up this city without redevelopment in our toolbox.

In the short term, rest assured that we are doing everything possible to ensure that business services, graffiti removal and code enforcement continue without interruption. To facilitate this, next week the City Council will act to begin the process of compliance with the technical provisions mandated under the new state law.

Among other things, that will mean a new community advisory board and a reconstitution of some of our existing commissions.

In the mid-term, I will keenly focus my energy on creating new avenues for growth and facilitating private sector investment.

There is a vital need to better align the pieces of city departments that work on development, planning and permitting, issuing business licenses, administering small business loans and branding this City.

Longer term, these changes will mean the art of redeveloping Long Beach continues albeit quite differently; in essence, we're breaking up but we'll still be friends.

So all of you here with us tonight that work within the Redevelopment Agency or volunteer your time as part of the Redevelopment Agency Board, the project area committees, the board of the Housing Development Corporation and our terrific Community Development Advisory board, please stand up and let us thank you for your service to this community.

Last year I warned that the State would pursue a policy called "realignment". I urged vigilance in this area because I feared the State might take the cynical approach of returning powers to counties and cities without the requisite resources to fulfill the increased responsibility. In another example of beggaring our future, the State is doing just that.

The recent announcement of the release of 30,000 state prisoners to County jail comes with inadequate funds and jeopardizes public safety.

On this last point, not surprisingly, the State disagrees. But I can't say it any better than Mark Twain: "Get your facts first, then you can distort them as you please."

Now, if you are convert to Twitter and need to sum the rest of the evening in 140 characters, this part is just for you: The state of our City is sound.

Despite a national recovery that is achingly muted, the fiscal health of our City is improving because of significant and prudent decisions.

Major crime dropped to the lowest level in decades, our infrastructure continues to be upgraded, job growth is moving in the right direction, and our core services remain well-functioning. We again delivered a balanced budget, grew our fiscal reserves and maintained our AA- credit rating.

At a time when the state just began to focus on addressing unsustainable public pensions, we acted - and achieved real and meaningful reform.

Significantly, both our public safety organizations willingly sat at the bargaining table because we share the belief that long-term fiscal health and high-quality public safety go hand in hand. I want to personally thank the leadership and members of the Police Officers Association and the Firefighters Association for their public spirit in passing these reforms.

In total, the newly adopted pension changes will result in more than $110 million in savings over the next ten years.

Now, in truth, there is more to do. One organization has not yet agreed to necessary pension changes.

If they will stop the holdout and join all the other employee groups, we can save an additional $145 million over the next ten years.

There is still time to come to an agreement at the bargaining table, but candidly, time is running out.

The alternatives are not pretty. The escalating costs of maintaining pension benefits will leave very little choice besides significant layoffs to city employees - not a reduction in budgeted positions, not an elimination of vacancies: It means layoffs of real people, in real jobs in every single department of the City, including enterprise funds.

To the leadership of the IAM, please do what is right for your members and the people of Long Beach.

To the Council, what a long, strange trip it's been. I commend you for working hard at issues that most of you never signed up to deal with when you ran for office. It has certainly not been an easy year.

What your constituents will remember most is that you voted responsibly for the long-term health of the City. Do it again tomorrow night and support 4 years of hard work by residents, property owners and stakeholders by passing the Downtown Plan.

This City has a social fabric and sense of community so unique in big city America. It is the reason we all choose to call it home.

There are so many in this city that rightly choose to work for the betterment of others. We care for our neighbors and do much more than give lip service to the concept of community.

As Emerson said, "to leave the world a better place…to know even one life has breathed a little easier because you have lived. This is to have succeeded".

That sense of giving makes for a better society.

It would be a speech in and of itself to mention all of the work that goes on throughout the City daily by unsung heroes whose care and compassion eliminate suffering through acts of charity.

But as just one example: the brand new Ronald McDonald House opened its doors just last month, delivering compassion to families of hundreds of kids in treatment at Miller Children's Hospital.

And guess who's coming to dinner?

The hotel and restaurant members of Long Beach Convention and Visitors Bureau who pledged to provide meals for the House over the course of next year.

While executive director Steve Goodling led the charge to round up a year's worth of dinner - and it is hard to say no to a guy with such a great laugh, the truth is, Steve had a little secret weapon backing him up: your First Lady, Nancy Foster.

Nancy's efforts mean a better day for so many people. Whether helping to save middle school sports or her ever-increasing crusade to shine a light on the issues of mental illness, Nancy's work is being felt all over this city.

Over the course of this past year we have also come together in tragedy; to mourn far more than our fair share. We lost many good people, some to tragic accidents and others to disease, who; each in their own way, helped to make this a very special place.

All of us will miss their contribution and their energy. Join me now in a standing ovation for those that have left us over this past year.

Those examples of charity and mourning demonstrate our understanding that we are all One City; that we live in a larger society, whatever our individual success; we are part of a larger whole.

Part of that larger whole is the economy. Over the past year we have seen an uptick in business activity in the City. Long Beach experienced a 7 percent increase in Business Licenses, adding 256 new businesses in 2011.

Job creation is finally beginning to grow nationally - and the City-run Pacific Gateway Network has had phenomenal success, placing 3,100 area residents in permanent jobs last year. That is nearly 900 more than in 2010.

But statistics give no relief if you still can't find work. So if you are out of work, listen up: Go online and register at hireLB.com. There are hundreds of available jobs in this area and experts at the ready to help you make the connection.

Nationally, there are an estimated 2 million unfilled jobs as a result of a skills gap. If you need to enhance your skills and research a new industry, there is hope in numerous training programs and job placement for individuals - 7,100 adults and 3,500 youth went thru one or another at Pacific Gateway last year.

I visited a class last year full of people that found themselves out of a job after years in the same field or industry. One of the participants said, "I didn't think I needed to learn new skills just to keep my old job."

He was getting those skills right there at our center and he vowed never to be complacent again.

Let me focus for a moment on small business owners. I owned a small business years ago, I know the unique struggles and special pressures of running your own business - especially when it comes to finding time to look ahead.

There is an incredible web of resources available to you as part of the partnerships between government, higher education and the private sector.

According to a recent study, 40% of small businesses indicated it was difficult finding the right employees.

If you need help hiring, let Pacific Gateway help. Visit hirelb.com and register - there are screened, qualified and local applicants ready to go to work.

As many of you will remember, Long Beach was chosen as the one of the first cities in the nation to launch the Goldman Sachs 10,000 Small Business program.

If you are a small business owner in the area and want to increase your business acumen and learn how to grow your company, get your application started right now.

Yes, the program is competitive. But if admitted, the program is free and classes are held at Long Beach City College.

I highlighted a successful graduate, Fred Johring, in last year's speech. Fred's company based right here in Long Beach, is hiring again -- he has five jobs available and not one single applicant to date.

Also available to you are the teaching and planning resources of the new Long Beach City College Small Business Development Center on Pine Avenue. Go in. Ask questions. Learn about access to capital. Grow your business, hire people and help put folks back to work.

Two years ago, I introduced programs to give preference for local businesses, increase local outreach in City purchasing and help level the playing field for small businesses to compete on bids.

I'm proud to say that last year, over 31% of Long Beach purchases went to Long Beach businesses totaling over $86 million. That is more than double what we accomplished in 2010. I want you to prosper. I want to see small business grow into midsize companies and expand right here.

This may be the single most important part of the successful economic development of this City. Your business is integral to our growth and whatever you need I hope you will reach out and let us help you find it.

And as any business looks to expand or relocate their operations, there may be no bigger influence on that decision than the safety of the City.

Safety is the first job of government and essential for the community's prosperity. Long Beach is well on its way to becoming one of the safest large cities in California. We continue to set generational lows in crime.

Murders are down again this year, to the lowest number on record. In the past two years, murders have dropped 39%.

Police response time for Priority 1 calls is 4.2 minutes - and that is among the fastest for large cities in California.

In total, LBPD responded to 132,000 calls and the Long Beach Fire Department responded to 61,000 calls for service which is an increase over last year.

Please join me in thanking the men and women of the Long Beach Police and Fire Departments for the outstanding job they do.

After they look at crime stats, many businesses are going to look at things like opportunities for recreation and how well we act as stewards for our environment.

We would be doing a disservice to our children if we did not enhance our environment. For the first time in decades, nearly all of our beaches received an "A" grade from Heal the Bay.

This is due, in part, to a partnership between Long Beach and 15 upstream cities to access federal funds for a $10 million project to retrofit storm drains, preventing 840,000 tons of trash from entering the LA River, on its way to the Long Beach coastline.

And thanks to the help of County Supervisor Don Knabe, the two-mile Termino Avenue storm drain project was completed, relieving a flood threat to a neighborhood and protecting surface waters from harmful pollutants.

And I am very happy to say, the City is still here and thriving, despite the Armageddon rhetoric over our ban on plastic shopping bags.

Last week, I made the mistake of reading the online comments section of the Press-Telegram. In response to a great write up about the new "parklets" at restaurants along 4th Street one of the posters wrote: "Yeah, that's nice but how about some real parks?" All I can say is where the heck have you been!

New parks have been completed all over the city - so here's your list: Rosa Parks Park; Seaside Park; Pacific Electric Right of Way; Admiral Kidd Park; Wrigley Heights Dog Park; Manizar Gamboa Community Theater; the 14th Street Basketball Courts; KaBoom Playgound at 21st; Hill Mini park; and while not technically a park; the Rancho Los Cerritos Visitors Center.

And we broke ground on what I happen to believe is the most important park project in the entire City this year - the community supported and council - approved California Gardens and Chittick Field.

Our Port has completed five years of its Clean Air Action Plan and the air is over 70 percent cleaner. Among the achievements, it is important to highlight the Clean Trucks Plan: not only were the air quality goals met two years early but as of January 1st, the entire fleet of trucks serving the Port is now using engines that are 2007 model year or cleaner. That has been the chief catalyst for a 72% drop in diesel particulate matter and is directly improving the quality of life for the people of Southern California.

And we did it the Long Beach way:

We didn't politicize the issue and again demonstrated that environmental enhancements can improve combustion and economic engines. I want to thank Port Commissioners and staff for a job well done.

For City Manager Pat West and his cycling pals - and let me tell you, there are legions of them -- we completed the separated bike lanes on Broadway and 3rd Sts. And I will admit - I was a bit of a skeptic. I'm still not exactly sure how the car takes a left hand turn….but no matter, people are actually using them!

And I say that only half in jest.

As many of you know, I have taken to cycling as a way to shape up, inspired by the great playwright George Bernard Shaw's observation that "No diet will remove all the fat from your body because the brain is entirely fat. Without a brain, you might look good but all you could do is run for public office."

And perhaps the best testament to our success can be seen in what we physically built this past year. We had a great year for advancements at the airport - we completed the brand new parking structure early and under budget. We broke ground on the much - awaited new terminal where 30 percent of the construction jobs will be local hires thanks to our Project Labor Agreement. The Long Beach Convention Center underwent a $20million renovation with more to come. The Bridge to 4,000 jobs got underway, as the Harbor Commission and the City Council approved the re-build of the Gerald Desmond Bridge.

This $1billion project protects the Port's competitiveness and will generate 4,000 jobs over the next 5 years.

From billion dollar projects to the "bread and butter" jobs that you all depend on every day, but rarely think about -- We sweat the small stuff.

We resurfaced nearly 19 miles of streets and over 17 miles of sidewalks, filled 39,000 potholes and trimmed 20,000 trees. We recycled 27,000 tons of material at curbside, planted at least 200 new trees, and delivered 250 tons of mulch-to whom, I don't know.

I hope you all conclude that your government has served you well under trying circumstances. All of us should feel proud of the manner in which we have met the challenge this past year. We did not panic.

We stood firm on our fiscal principles. We reduced the size of government but kept core services operating at high levels. We worked hard not to hand greater problems to our children and grandchildren. Two years ago, I spoke of the character of this city and how our determination, courage, no-nonsense financial management and integrity would see us through difficult times.

That character is even stronger today. To be sure, there are more challenges ahead. We still have a budget gap and we always have the uncertainty of the State of California. But we've met the test. We have resisted the great temptation of putting the future at risk for present advantage. Third world countries are often characterized by a lack of future orientation; a near total focus on the present, often at the expense of the future. I speak of the future often and the need to preserve the opportunities we had for the next generation. I'm informed by my study of classical civilizations, particularly Rome. No society in the ancient world was without its evils, but those that advanced human understanding, science, and improved living conditions were dedicated to enhancing the future.

They were more future oriented than not. Those societies that consumed simply for the present faded into history quickly with little advancement of the human condition.

So, what does future orientation mean for Long Beach? We will continue to contain our budget shortfalls and service needs in our time. It means that we are going to have to solve most of our problems ourselves and not depend on others. On issues such as infrastructure, economic growth, redevelopment, and our environment, we will depend more on us than them. There will be some sacrifice, but we will be more self-sufficient. As a result, we will need to be more focused on resources and the impact of our policies than ever before.

We will tackle our own problems and craft our own solutions, our way-the Long Beach way, directly and quickly.

To me, you should enter public life with the prime directive to make things better for those who follow. Our job is to make the hard choices, take the bitter medicine, suffer our own pain, but at all costs preserve the future. It's the reason I ran for this office. It is the moral imperative office holders should follow. That is my job. Your job is to assess my performance. You can't do you your job if you are not informed and vigilant. It should be made much easier by all the electronic tools available to us.

With the press of a key we can find out the history, actions, press accounts and voting records of all our policy makers. Perhaps the ubiquity of information has made us insensitive to it, but most of us are not doing our job of holding those in office accountable.

If you believe that we are in danger of losing the future; If you believe that we have the moral imperative to preserve the opportunities for those who follow, then the only way to alter course is insist on better conduct from your elected officials. There simply is no substitute for your job. For all of us, I hope you do it well. Our future depends on it. I have been your Mayor for more than five years. It has been my honor to serve you. I have done it the best way I know how. If we all do our jobs, we can make our city an example of how an informed citizenry and dedicated office holders insure that the next generation is one of opportunity and accomplishment.

I know that we have a better future - let us rededicate ourselves beginning here tonight.

Thank you.