Reform Pittsburgh Now (RPN) was started in 2007 by Pittsburgh City Councilman William Peduto in order to create an organization focused strictly on the issues that build a better city. Find out more about the reformation >

Pittsburgh Becomes Third U.S. City to Pass a Responsible Banking Ordinance

April 18th, 2012

posted by Matt Barron

responsible bankingPittsburgh City Council, yesterday, gave final approval to legislation asking banks that hold City deposits to create community reinvestment plans to outline how they will invest City money back into our neighborhoods. Pittsburgh becomes just the third city in the United States, after Cleveland and Philadelphia, to pass such an ordinance.

Councilman Peduto crafted this legislation after a year of working with community representatives, the Pittsburgh Community Reinvestment Group, and 16 of the region’s small, medium, and large financial institutions. The original bill was introduced last year and passed by Council but vetoed by Mayor Ravenstahl. It was then reintroduced by Councilman Lavelle two weeks later. Councilman Lavelle’s bill was very similar to the original legislation but included some provisions that ran afoul of federal reporting guidelines. The proposal was amended to meet all federal requirements and still provide the needed goals of neighborhood investment. After a year and a half of hard work, we finally have a Responsible Banking ordinance in the City of Pittsburgh.

The legislation, while not perfect, will create competition among financial institutions that do business with the City to see which ones can offer the best interests rates while also providing the most home loans, small business loans, and neighborhood grants to areas of the City most in need. It will also provide the public with a detailed record of which financial institutions are excelling in their community investment practices and which still have some work to do.

The process that this important piece of legislation went through is a great example of what is possible when community organizations, the business community, and elected officials sit down together to discuss common goals and strategies for positive change.

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Towards a More Sustainable Pittsburgh

April 10th, 2012

posted by Matt Barron

With Earth Day approaching on Sunday, April 22nd, it’s a good time to think about both the strides Pittsburgh has already taken towards becoming a sustainable 21st century city and the work that remains to be done. We want to bring you a few updates about what has been accomplished over the past year as well as some big initiatives on the horizon.

The Pittsburgh Climate Initiative (PCI), a coalition of government, higher education, nonprofit, and the private sector introduced the Pittsburgh Climate Action Plan in 2008. This comprehensive roadmap to sustainability set forth clear and achievable goals for reducing our greenhouse gas emissions, increasing our energy efficiency, and improving our air and water quality. The conveners and stakeholders of the PCI used 2011 as a time to look back on the original plan, chart out what has been accomplished, and put in place new milestones for a more sustainable city. Councilman Peduto introduced this new plan, dubbed Pittsburgh Climate Action Plan, Version 2, in Council last month and it passed with a unanimous vote.

We’ve already seen some of the tangible results of the recommendations of the Climate Action Plan. Next time you’re in your neighborhood’s business district in the evening, take a look at the new LED lights that have been installed. These bright, energy efficient new fixtures are a direct result of Councilman Peduto’s advocacy for cost-saving sustainable technology and the hard work of the participants of the Pittsburgh Climate Initiative. To learn more about the new lighting code passed by City Council and the research that went into choosing the best available, most cost effective lighting technology, visit The Pittsburgh LED Project.

While the Climate Action Plan provides the policy roadmap for the future, Pittsburgh is also faced with some immediate environmental issues that we must tackle now. Chronic flooding in many of our neighborhoods has led to loss of life, economic hardship, and environmental degradation and we need both short term and long term strategies to alleviate it. After a citywide public meeting in September, Councilman Peduto began working one on one with neighborhoods in his district to identify specific flood-prone streets and intersections, map them out, and look for potential breakdowns in our water and sewer system. The results of this six-month long study were released to the leadership of the Pittsburgh Water and Sewer Authority, the Mayor’s office, and the media on March 1st and action is already being taken to address the most serious problems. These short term fixes are only the first step, however. The long term strategy lies with the fantastic work of the Green Infrastructure Nework (GIN). Coordinated by The Pennsylvania Environmental Council and 3 Rivers Wet Weather, GIN is a voluntary partnership of over 35 organizations from all sectors working collaboratively to solve the region’s stormwater problems. The group is a shining example of what is possible if we pull together broad coalitions of stakeholders to work towards common goals.

A new project is also underway that will tie these efforts together and produce a set of specific policy recommendations to help us put in place a strong foundation for sustainable development. In November, Councilman Peduto’s office submitted a grant proposal to Smart Growth America for technical assistance with a sustainable zoning code review. Pittsburgh was chosen as one of only 15 municipalities across the country to receive the assistance, courtesy of the United States Environmental Protection Agency’s Building Blocks for Sustainable Communities program. Smart Growth America will send a team of experts to Pittsburgh for two days in May to pour through the city code and work with a diverse group of city employees, elected officials, and community stakeholders to identify barriers to innovation and help lay the groundwork for smarter, more sustainable development.

So take Earth Day as an opportunity to reflect on how far we’ve come but also know that there are dedicated, passionate people working every day on these issues to move us towards a more sustainable Pittsburgh.

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Introducing the New (and Improved) Reform Pittsburgh Now

April 10th, 2012

pgh-sunriseWhen Councilman Bill Peduto launched Reform Pittsburgh Now in 2007 it was one of the first blogs devoted solely to public policy at the municipal level in Pittsburgh. As local news sources are being subsumed by national and international media conglomerates and the budgets of municipal reporting at our local newspapers are being whittled away, it is more important than ever that residents of the City and the surrounding region have a place to turn to find out about what is happening on City Council, in the Mayor’s office, and in your City departments.

In order to better serve City residents we are “relaunching” Reform Pittsburgh Now with more content and a broader scope. We will continue to bring you the latest news from City Council and the rest of City government but we will also be introducing a group of talented and accomplished guest contributors who will write about what they are doing to reform Pittsburgh, how other cities are tackling some of the very same issues that we face, and how we can learn from the successes and failures of the rest of the world to create a broad-based platform for change and reform for a new Pittsburgh.

We will be introducing our new contributors this month and are very excited to bring you their views on a range of policy issues facing our city. Stay tuned for much more!

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Responsible Banking Act Passes in City Council

December 23rd, 2011

responsible-banksCouncilman Bill Peduto’s Responsible Banking Act passed in City Council by a 5-4 final vote this week. This legislation builds on the federal Community Reinvestment Act (CRA) which addressed discriminatory practices in mortgage and consumer lending that had led to large portions of, primarily, African American neighborhoods being redlined. The Responsible Banking Act goes a step further by encouraging investment in low-moderate income (LMI) communities and providing a quantitative process to evaluate their progress. It requires banks holding City of Pittsburgh deposits to provide documentation and reports to the City Controller outlining the ways in which they have reinvested public monies into our neighborhoods. The City Controller will then compile a “report card” for those banks so that the public and Council can evaluate which banks are putting our money back to work for our neighborhoods. 

The Mayor has ten days from the bill’s passage (December 19th) to either veto (with a potential Council override), sign, or let the bill become law without signing. If the bill becomes law, Pittsburgh will become only the third city in the country to include Responsible Banking legislation as part of our city code. (Cleveland and Philadelphia have already enacted similar ordinances.)

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Debt Management Ordinance

November 15th, 2011

Posted by Bill Peduto

rpn-debt-management-ordinancePittsburgh’s checkered past when it comes to debt is well-known to many of you who remember the Act 47 takeover by the state and the fight over the Ravenstahl Administration’s attempt to privatize our parking assets. We have finally been able to wrangle control of our debt and the outlook is, while still not perfect, better than it has been in many years. Debt is not necessarily a bad thing for a City that wants to invest for its future and lay the groundwork for long-term growth, but it is a tool that must be used carefully and sparingly. Since the Act 47 takeover, the state oversight body has asked the City to implement a debt management policy to ensure that decisions made regarding the issuance of debt are not made lightly and that there are clear policies that must be followed. This month, I introduced a strong, clear debt management policy today that will achieve these goals.
 
My Debt Management Policy pulls together recommendations from the Government Finance Officers Association (GFOA), an international body of experts in municipal finance, as well as best practices from other cities to put in place clear boundaries for how and under what circumstances the City can take on more debt. We must be sure that debt is only being used to fund long-term projects that will benefit the entire City and that these investments will pay off in the future. The legislation will also allow the Council to bring in an independent financial advisor to provide an assessment of any potential debt deal and make the findings public.
 
With this legislation in place not only will one of the unmet conditions of our Act 47 plan finally be met, but the citizens of Pittsburgh will know that important financial decisions are being made with a clear policy in place and that they are being made free from the influence of politics.

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Pittsburgh Stimulus Program

November 15th, 2011

Posted by Bill Peduto

rpn-pittsburgh-stimulus-programThough the worst of the Great Recession is over and the United States economy is beginning to grow again, people who were put out of work or saw their hours cut when the economy collapsed have not fully recovered. Unemployment and underemployment are still too high, corporations and banks are holding cash instead of making loans, and development projects have stalled throughout the country. The prospect of help from Congress looks dim as the 2012 Presidential race kicks into gear so Pittsburgh City Council must step up and do what we can to spur economic growth and get our residents back to work.
 
The Pittsburgh Stimulus Plan, introduced last month, will do just that. The plan provides anyone interested in starting or continuing a residential, industrial, or commercial development 10 years of property tax relief on a graduated scale. In the first two years the tax bill is cut 100%, the next two years it is cut 90%, and so forth until in the final two years, taxes are cut 60% before the plan is phased out. The temporary relief and flexibility provided by this plan will get the shovel in the ground for projects that have not been able to secure full financing. Construction and trade workers who have seen their hours cut and their jobs grow fewer and farther between will get back to work and long-awaited projects will finally break ground.
 
This measure is based off an identical plan that currently applies to residential projects in certain neighborhoods. Under the Pittsburgh Stimulus Plan, all neighborhoods and all projects will benefit. The project also mirrors a program that the County has for suburban communities. This legislation will get people back to work in the City of Pittsburgh, while also fighting the suburban sprawl that has impacted this region for so long.
 
We can’t wait for the Congress to get its act together and provide economic relief to struggling families in Pittsburgh, the time to act is now.

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Responsible Banking Act

November 15th, 2011

Posted by Bill Peduto

rpn-responsible-banking-chartIn 1977, the United States Congress passed the Community Reinvestment Act (CRA) as part of a larger push to end discriminatory practices in mortgage and consumer lending that had led to large portions of, primarily, African American neighborhoods to be redlined. Redlining was the practice of banks and other lending institutions literally drawing a red line around certain neighborhoods and dictating that no loans could be made for residents and business owners there.
 
The CRA effectively ended redlining and led to a renaissance in bank-community relations that lasted several decades. While CRA has been incredibly important, it is federal legislation that doesn’t always capture the unique conditions on the ground in cities and states around the country. It is for this reason that I introduced the Responsible Banking and Neighborhood Reinvestment Act last month.
 
This legislation builds upon the success of the CRA, requiring that any banks holding City of Pittsburgh deposits provide documentation and reports to the City Controller outlining the ways in which they have reinvested public monies into our neighborhoods. The City Controller will then compile a “report card” showing the City Council and the public which banks we’re doing business with are excelling, which are maintaining steady progress, and which are falling behind in their commitments. The City invests tens of millions of dollars in banks each year and that money must be put back to work for our City and its neighborhoods.

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The Choice for Cities: “Prosper Or Perish”

August 25th, 2011

mayor_gray_rpnEveryone reading this knows that Pittsburgh is a city with financial problems. Pittsburgh has been in Act 47 distressed status and under the watch of two oversight boards for over six years now. While it’s easy to cast blame, what we often don’t think about is how our city compares to cities in the rest of Pennsylvania. When you take a real look, you not only find that we are far from alone, but that the pattern of financial woes is not only all to familiar, but how much these difficulties are structural in nature.

The Pennsylvania League of Cities and Municipalities (PLCM) was set up with a mission to “serve local governments by providing programs, cost-effective services, and legislation which strengthen the autonomy of Pennsylvania municipalities.” A year ago the League created the “Core Communities in Crisis” task force to develop a strategic proposal for the new Governor and administration in 2011 regarding growing municipal fiscal challenges. The committee consists of 28 elected officials from every region of our state, including Pittsburgh City Councilman Bill Peduto. You can read their findings here.

In June of this year, Lancaster Mayor J. Richard Gray (who is also a member of the task force) released a report by Lancaster’s Municipal Finance Task Force titled “Prosper or Perish: Financing Local Government Services in Pennsylvania.” While the report uses Lancaster as its case study, the problems it identifies are the same in city after city statewide. An editorial in the Erie Times-News  noted as much and the problems listed are ones with which Pittsburgh is well acquainted:

“It’s striking how closely the circumstances outlined mirror those in Erie. What’s wrong is no secret, here or there.

The report acknowledges the case it’s making isn’t new and applies to communities throughout the state. What’s different now is that the cumulative damage threatens to send Erie, Lancaster and other cities into a disastrous, accelerating downward spiral of increasing taxes, declining services, urban blight and suburban flight.

Preventing that requires a wider understanding that in general the decline of Erie and other cities hasn’t resulted from mismanagement, and that their elected officials can’t cut their way out of it. The game is rigged against cities, and only changing the rules will help.

The targets for change identified in “Prosper Or Perish” will be familiar to anyone who’s been paying attention:

- Excessive reliance on the property tax, an issue aggravated in cities by the prevalence of tax-exempt property.

- A system of binding arbitration for police officers and firefighters that doesn’t account for a city’s ability to sustain the costs imposed and that routinely awards pay increases and benefits wildly out of sync with the rest of the economy.

- Fragmented, duplicative local governments that combine with a regressive tax system to leave suburban residents, who are more affluent on balance, shouldering less than their fair share of a metropolitan area’s costs and challenges.”

Sadly as another editorial, titled “SOS,” on LancasterOnline  observes:

“Unfortunately for Lancaster, virtually all of the reforms are beyond the city’s control.

The task force, composed of business leaders, says small cities need a menu of tax options to reduce overreliance on property tax revenue. Only the state Legislature can do that.

And, the report says, the contract arbitration system for police and fire unions has to be rewritten. Again, a job for the Legislature.

The report calls for revenue sharing with federal, state, county and tax-exempt property owners, meaning, among other things, that other government offices would contribute a fair share toward the cost of services provided by the city. Lancaster can’t force any level of government — or any nonprofit agency — to cough up the cash.”

“Prosper or Perish” recognizes this and issues a call to action:

“The time has come for Pennsylvania’s legislature to change the rules by which communities finance their local services. Local governments are forced to operate with a fiscal system that is, at best, irrational and, at worst, dysfunctional; a system that effectively deprives locally elected officials and the people they serve of the ability to be the architects of their own communities and their own futures.”

You can read the full report online here.

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ACTION ALERT: Clean Air Act

July 5th, 2011

rpn-pgh-1-250pxThe Clean Air Act has been created to ensure that we don’t use public dollars to pollute our air. Human exposure to diesel particulate emissions and other diesel pollutants increases health care costs, missed school days, lost worker productivity and premature mortality — cancer risk from diesel pollution alone in Pittsburgh is hundreds of times greater than the EPA’s acceptable cancer level of one in a million. Moreover, the American Lung Association’s “State of the Air 2011″ report rated Pittsburgh’s air quality as “the nation’s third most polluted area for short-term particle pollution for the second year in a row.” As you can imagine, this is not a selling point for our city. In fact, it’s a real factor in keeping companies from moving here and in slowing our economic progress.

IMG_4690_91_89_tonemapped-350The act requires construction vehicles for city-subsidized projects to have the “Best Available Retrofit Technology” in order to reduce these emissions. The benefits will spread even wider when these same contractors end up using the retrofitted vehicles on privately run construction sites. While we were one of the first cities to enact clean air legislation under David L. Lawrence, we’ve sadly fallen behind. The Clean Air Act is the first legislation to clean our air in decades and has been over a year in the making.

rpn-pgh-3-250pxNow, as the prime sponsor of the legislation, I’m asking for your help in getting the Clean Air Act passed. This legislation has been co-sponsored in Pittsburgh City Council by Doug Shields, Bruce Kraus and Natalia Rudiak — and they deserve thanks for that. But, last week — when it came up for a vote — a majority of Council decided to put it on hold. The Clean Air Act is ready to go and the preliminary vote is scheduled for Wednesday, July 6 at 10:00 AM.

rpn-pgh-5-250pxFor the sake of Pittsburgh’s air, please contact City Hall now (click here) and let them know that the time has come to pass this much needed legislation. Let them know you want and need a cleaner, greener Pittsburgh.

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Parking Response Letter

June 13th, 2011

parking-response-ltr-1Dear Friends:

I would like to thank you for taking the time to contact me regarding the recent changes in the metered parking rates in the City. I appreciate your frustration and agree with you about the negative impact of higher parking rates and increased enforcement hours. To be certain, a bad situation rarely results in a good outcome. That is what we were faced by a state mandate to come up with $250 million in new revenue in one year in order to fix a broken pension system, that has needed help for over 40 years. Failure to come up with the needed cash would have resulted in a state takeover, which would have cost the city twice as much as the new payments.

We were given a puzzle where all of the pieces do not fit, however City Council did their best to come up with a plan that would have the least negative impact on our City. Like you, I am concerned with the harm this may do. To help you understand the dire situation, here are some answers to the most commonly asked questions I have received these past two weeks.

What initiated this rate increase?

In 2009, the state legislature passed Act 44, which required the City’s pension system to be funded at a 50% level by December 31, 2010 or be taken over by the state. As a result of this law, Mayor Ravenstahl proposed privatizing the City’s meters, lots, and garages under a 50-year lease with private financial interests. City Council, which was opposed to the Mayor’s proposal, developed an alternative. The City Council plan used guaranteed future revenue (parking tax) to get the plan up to the 50% threshold. This averted both privatization and state takeover. In order to fill the gap in the annual budget created by promising parking tax revenue be dedicated to pension, the parking rates at meters were increased. Council hired the consulting firm Financial Scholars Group that was headed by the former Chief Economist of the Security Exchange Commission and present CMU Tepper Business School professor to analyze all plans before making any decisions. We also conducted public meetings in all Council districts and a series of special meetings downtown over a nine-month period.

parking-response-ltr-2Why not let the state takeover?

Prior to 2010, the City’s annual pension payment obligation was approximately $45 million. If the state took over the pension system, they would raise the obligation to $100 million per year – an increase of over $50 million annually. The Council alternative that raised rates required an additional $9.3 million in annual revenue (achieved through the rate increase) and met the required state threshold. This is due to two specific criteria. First, the State would require that the pension fund be 100% funded, under Act 44, the city is only required to fund the plan to 50%. Secondly, the state would use more conservative estimates in determining the rate of investment over the long-term of the plan. Although this would be a better way for the city to operate, it was not something that we could afford without doubling the present increases or raising property or wage taxes.

Why not privatize the system?

The Mayor’s proposal to privatize the system would have resulted in the loss of this public asset for fifty years. It included raising parking rates at meters, garages, and lots 300%-400%. Parking meter rates would have been as much as double the increases that went into effect – for example, in Shadyside, the Mayor’s privatization proposal would have increased rates to $3.50 per hour instead of $1.00 per hour. In other neighborhoods like East Liberty and Garfield, privatizing the system would have resulted in meters costing $2.00 per hour. The affects to our neighborhoods would have been devastating.

It also would have added enforcement until 10:00 PM and added Sunday enforcement. This City would have lost billions of dollars in revenue of the 50-year period. This plan would have raised rates to a level that would have devastated our city’s business districts. Furthermore, it would have driven drivers to park on residential streets, lowering property value and decreasing quality of life for city residents. Additionally, any closing of a street or removal of a meter would have required taxpayers to pay the bank for any lost revenue. This plan would have resulted in a loss of over $2 billion in revenue over the life of the lease.

Why not change the pension systems?

While the state legislature passed Act 44 mandating we bring our pension funding up to 50%, they gave us no authority to change the pension system. All pension requirements and laws are controlled by the state legislature. City Council has no authority to change local pension requirements. State laws obligate municipal governments to provide a defined benefit program. In terms of the age of retirees or any other significant cost to our pension plan, the rules are also governed by the state, not local government.

parking-response-ltr-41Why raise parking rates as a solution?

The State controls the rates of most revenue sources for the City. The City only has the right to increases property tax, wage tax, deed transfer tax, and parking rates. Property taxes, when combined with the school district, are one of the highest in the County. Additionally, we must prepare for the upcoming reassessment that may raise property taxes as soon as next year.

The deed transfer taxes are one of the highest in the State and the highest in the County. It is a deterrent to homebuyers to move into the City and is full of loopholes that allow the purchasers of large properties to remain exempt.

Combined with the School District, the wage tax is the highest in the County and second highest in the State. State law mandates that it can only be applied to City residents – we do not have the right to tax people that work in the City, but live outside of it (like almost all other cities in the country). State law also prohibits us from having the right to tax non-profits or create a new source of revenue. We were under a state mandate to come up with additional revenue, but only had the options to increase wage tax, property tax, deed transfer tax, or parking rates.

Parking rates at City meters had not been increased for most neighborhoods for over twenty years. Since the mid-1980s, they have remained at fifty cents per hour for most neighborhoods, far below the national averages. It is difficult to find anything, including parking rates, which cost the same today as they did in the 1980s. Again, we were required to find $250 million in new revenue and of the four choices that we had only one – parking rates – that were below the average rates and had not been changed in over twenty years.

How were these rates determined?

The rates were chosen through analysis by multiple outside consultants. The initial report was conducted by a national parking consultant in conjunction with the Mayor’s plan to privatize parking assets. Further analysis was provided by Financial Scholars Group and compared with national parking averages through 20 comparable cities by City Council. In general, rates were increased by half of what the Mayor proposed through his plan. Rates remain on average or below with most other cities.

parking-response-ltr-3Is it fair across the City or are some neighborhoods being singled out?

The rate increase as a percentage is even across the City (other than Downtown and the North Shore) to what the Mayor proposed and what had been debated last year. The original proposal was to also have Shadyside and Squirrel Hill increase at a larger percentage, but I amended the legislation to protect neighborhoods where the majority of businesses are local, even if shoppers are city residents or from elsewhere. Parking rates are one of the only fees that are paid equally between city residents and commuters. The goal was not only to lower the rates proposed by the Mayor, but also to make them more equitable by neighborhood.

Instead of increasing rates, why not reduce the cost of government?

First of all, the City was required to have cash to fund the pension system; a reduction of services would not have met the requirements of Act 44. Second, since 2004, the City has been under Act 47 status with the State. This requires that both the Act 47 Coordinators and the Intergovernmental Cooperation Authority (ICA) approve all financial decisions. This includes having an approved five-year financial plan. As result of Act 47 and state oversight, the City has already reduced the workforce by 25% (1,000 employees). There have also been cuts in almost all city services, including fire stations, police, pools, recreation centers, senior centers, and street cleaning. While there is always room for improvement, the City is operating in a much more lean and efficient position than we did in 2004. Even if we were permitted to fund our pension system with reductions in city services, eliminating $250 million of services would decimate operations to a point that would be unacceptable to city residents.

What can we do now?

The rates are dedicated to the pension. Removing them would trigger state takeover of the pension fund and as described above, we would need as much as an additional $50 million annually. This is something we cannot afford. Under the plan approved by City Council the increased rates will be met by 2018 with additional funding from a reduction in our debt payments. It may not be apparent, but the plan that was approved was by far the lowest cost to the taxpayers of Pittsburgh. But, that is not enough.

It is obvious, the entire parking system needs to be overhauled. We are operating a 1970s system, while other cities have transformed into a 21st century transportation plan. While this new approach would need to guarantee the $9.3 million annually for the pension, it would also include reforms and improvements that would benefit residents and businesses. Cities like San Francisco are moving toward a market-driven rate system for meters, Washington DC has utilized smart phone systems for payments and cities throughout the world have realized of the importance of parking as a key ingredient in a successful urban development planning strategy. In the next few years, we must do the same – or better.

Once again, I appreciate you taking the time to contact me about the parking changes. I sincerely appreciate your concern and share that concern with you. I hope the information provided at least helps you to understand the difficult position that state mandated and the decision process we struggled with for over a year. I remain committed to protecting our City and the businesses and residents that choose to locate here. If you have any other questions or concerns, please do not hesitate to contact me.

Bill

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