Prepared text of Cincinnati Mayor Charlie Luken's State of the City Address, delivered Monday:

Good morning, and welcome to our annual State of the City.

I began what is now a tradition in Cincinnati - the State of the City - in 1985. Since that time it has grown to become the mayor's annual assessment of the condition of our great city - a report card, of sorts.

In the past I have reviewed the ups and downs of the prior year maybe a little less this year, but references to 2003 are frequent in our talk today.

Suffice it to say that 2003 started with a good feeling that got better through the summer with all of the wonderful community events.

Our city enjoyed the ballpark opening, the Contemporary Arts Center festivities, a great Tall Stacks, and much more.

It was a year when our job retention efforts, often criticized, started paying off, as Cincinnati's income tax collections grew at a much faster rate than other major Ohio cities, like Columbus and Cleveland. And you can add Pittsburgh.

We saw steady growth, and have been rated nationally as one of the best areas to establish a small business. Our small business initiative, efforts at helping minority and female owned companies - all moved dramatically forward in 2004.

Our housing efforts advanced in '03. The market for new homes in the city grew. The future of this city depends upon our ability to attract new residents. New housing is the cornerstone of our continuing effort to rebuild our city. Downtown housing continued its boom - and a new study showed an increased market for condos and ownership in the center of our city.

We had fun in '03. We enjoyed success. We saw growth.

But we must do better.

The "high priced production" you just saw is designed to give you a sense of what we are about in 2004 - our neighborhoods.

From east to west, north to south, we are making enormous investments of time and money where our city needs it most - our neighborhoods. In addition to the projects highlighted in the video (shown before this speech), multi-million dollar projects are on tap for Columbia Tusculum, Corryville, Over-the-Rhine, East End, Millvale, Mount Washington, and many more.

These are quiet successes. These are the projects that you don't read about on the front pages of the newspapers, but the projects that give new life and new hope to our community.

These projects are the result of over one year of planning by my office, the city manager, and fully supported by city council. In total, this represents over $100 million dollar public commitment that should leverage well over three times that amount in private dollars.

And I never shy away from our initiatives downtown. I never will. I believe that those who pit downtown against our neighborhoods fail to understand the economic powerhouse that our downtown represents.

With a new convention center starting, a new office tower, and new housing, downtown will continue to provide more jobs and more tax base. Downtown will continue to provide the revenue we need to fund safety, infrastructure and health programs in our neighborhoods.

I salute 3CDC, and look for them bringing new energy to our downtown. No city in America has a stronger partnership, with better leadership, than Cincinnati. It guarantees that we will not become lazy or inattentive to the job to keep Cincinnati the heart of the region.

It now falls to our administration, headed ably by Valerie Lemmie, to make these developments happen.

It will not be simple, and it will not all be completed this year. But it will get done.

The good news for Cincinnati is that Valerie is at the helm. Since her arrival almost two years ago she has faced almost every type of urban crisis. She has handled each with competence and skill, and she has moved our city forward. We are a better city because Valerie is the city manager.

Valerie would be the first to insist that we acknowledge the over 6,000 city employees, who today are providing better service with fewer dollars. So much so that I have re-thought my attitude about one important issue - managed competition.

If you look at our service delivery in so many areas, we have shown that we can do the job - from garbage collection to health services, from road repair to snow removal - and do it well. Meanwhile, other cities that have gotten seriously into privatization are now paying for it - with higher costs and less control.

I think we should change our focus, to make our "managed competition" czar an "efficiency" czar, and look for ways, top to bottom, that we can achieve greater efficiency with our existing city departments.

These service review processes will continue to make us a leaner city government.

I have always said that I will not take a city job away only so someone else can be paid less money with fewer benefits for the same work. I am now convinced that the savings from managed competition will come primarily from that wage and benefit reduction - and that will change will not serve the working families of Cincinnati.

Let us, together, continue to look for ways to provide better service for less dollars, but let us remove the threat of job loss from people who are serving us well everyday.

Of the services we provide to our citizens, about 60 percent of our resources go to public safety. It is our most solemn duty to keep our citizens safe.

Our report card in that area is mixed: Overall crime down about 2 percent, violent crime down about 9 percent, but homicides up, about 16 percent. In our city, however, we refuse to accept the notion that crime reduction is outside of our control. And in 2004 our most important focus will be on crime reduction.

First, and it has been proven in every city in America, real crime fighting begins with a healthy attitude towards police. Our police officers deserve the respect of every citizen, just as it is their duty to respect every citizen in return.

We will continue to work in every Cincinnati neighborhood to develop healthy relationships between police and citizens.

Our Citizen's Academy gives citizens a up-close look at the day-to-day challenges of policing. Our Citizens on Patrol bring police and citizens in the closest possible partnership in the fight against crime.

In every neighborhood, we will develop CPOP teams, where police, citizens and all city departments focus on issues of blight, litter and crime.

In 2003, our drug arrests were up, 35 percent. This number is testament to our police engaging in the kind of pro-active policing that we need. But we must do more. Our Community Response Teams, working on crime hot spots, will be increased this year. We will put more police on the street; including, 30 or 40 trained and experienced officers who were laid off in Cleveland's budget crisis.

Last year, we removed record numbers of guns from our streets. This year, we will use, even more often, tougher gun laws with longer sentences under the federal law. Working with ATF and the FBI, we will target repeat offenders for longer sentences, and get them off the streets.

We will target better service delivery for victims of gunshots and first time felons. Time and time again, I hear stories about parolees who have no place to go upon release. They simply ask to be dropped off on some obscure corner and immediately fall in line with their old ways. This cycle must be broken.

That being said, I will be asking our police partnering center to also serve as a clearinghouse for programs to help first time felons successfully re-enter society. The services to accomplish this goal are in place, yet they need to do more and they need to work together.

Nothing red flags a person for future problems like the first felony conviction, or being the victim of a gunshot. We must intervene, using our employment and training center, state employment programs, and drug treatment programs to help persons who have made one mistake, avoid another.

The president, in his State of the Union, identified new money for a coordinated program. We will take advantage of that, enhance existing programs, and do whatever it takes to bring a coordinated effort to work with people interested in making better choices for their lives.

Bottom line: We have developed a new community based system of policing in Cincinnati, but it requires citizen support, and a cooperative spirit between residents and police at levels not seen before in our city. It is working in some of our neighborhoods, and by the end of 2004, it will be working in all of our neighborhoods.

As I said, public safety is our most solemn duty, whether the threat comes from crime from within, or terror from the outside.

In the next two years, and based on budgets now before Congress, I anticipate our region will receive about $25 million for Homeland Security.

How will we use that money? Will we act parochially, and insist on isolated, per-resident expenditures to each locality?

Or, will we act boldly, and regionally, for the collective benefit of all residents of the Greater Cincinnati area?

After nine-eleven, our nation was shocked to find that, with billions spent on intelligence, our FBI was legally prohibited from sharing information with the CIA, and visa-versa.

In our area, when it comes to regional security, there are similar barriers communication and information sharing.

In 2004, we must change that, and establish a regional communication and information procedure that will, one day, be a part of the fabric of our regional security plan.

We must also establish, and use Homeland Security money for, a regional firefighter-training center, where all area firefighters will receive the same first class training in areas of firefighting, emergency medical response, and the dangers of biochemical and other terrorist threats.

The ultimate goal is to one day have the law enforcement agencies of the Tri-State on the same page - the same radio frequency, the same training, the same equipment and infrastructure.

The accomplishment of such a goal will require all of us - including the city - to give up precious turf that has been fiercely guarded for years.

It all leads - and it will take committed leadership - to a regional security umbrella that will make every Tri-state resident more secure.

It is our most solemn duty.

In 2004, Cincinnati must work on our image, via marketing and real change that shows our city is not the less-than-tolerant place it has been portrayed by some in the media. By our actions, we must show Cincinnati to be an inviting and welcoming place, a place all share equally in the bounty of our great city.

There are several ways we can demonstrate our commitment to fairness and openness for all.

We see them everyday. They often walk with their heads lowered so as not to be recognized. They work hard, often in jobs that might go unfilled by an American citizen.

Many send money home to their poor families. In another country, after cashing a paycheck for an enormous fee, because they have no legal identification.

Cincinnati has acted, and passed legislation to give our Hispanic residents a card for local purposes, but more needs to be done, and on a national level.

In conjunction with and supported by most of our area congressional delegation, I ask that Cincinnati go on record as supporting a national temporary worker card that will bring these residents out of the shadows, and allow them to more fully participate in our community.

I do not want anyone in our city getting ripped off when it is time to cash a paycheck, or reluctant to call a police officer when he or she sees a crime committed, or afraid to live anywhere but in a couple of Cincinnati neighborhood.

I have asked Cecil Thomas, head of our Cincinnati Human Relations Commission, to make working with Cincinnati's Hispanic community a priority. CHRC is already doing good work in this area, and I encourage them to continue.

It is at this time that I want to say something about CHRC. This organization does excellent work. They have helped me, helped this community, and helped this city grow together. Let me say this clear: If anyone wants to cut the budget of CHRC, they will have to fight with me to do it.

There is something else hanging over our heads in Cincinnati.

It's called Article XII. It was passed by Cincinnati voters in 1994.

In my view, it singles out one category of citizens for unfair and discriminatory treatment, and it should be repealed in 2004!

Article XII has cost the city millions of dollars, of that there can be no denial. The repeal of Article XII is about more than money, though.

It stands as a symbol that Cincinnati is willing to tolerate discrimination for one class of our citizens.

Article XII was passed after an expensive and slick campaign that, I think, misled voters about what was at issue. What is at issue now, as then, is discrimination, pure and simple.

I do not believe that Cincinnatians want to discriminate against any citizen, and that includes our gay and lesbian citizens.

I ask you, and every Cincinnatian to join me today and sign your self up for the campaign that is coming in November - to repeal Article XII!

Four years ago, I said that race relations were the number one problem facing Cincinnati.

For four years, we have worked to change the structures that contribute to racial disparities in Cincinnati.

I had no illusions about what it meant to tackle race issues. It's hard. It requires so much, from so many, and its benefits are not immediate seen, but can reap the biggest rewards.

We have overhauled police training techniques, revamped our Citizen Complaint Authority, and fundamentally reformed our Police Department. We have worked to eliminate racial profiling, and we have found partners in the community that are actively working to better our police-community relations.

We've made huge strides, to encourage small business development-including a new focused small business division and progressive methods of inclusion in public construction projects.

We are investing heavily in our Empowerment Zone - creating new neighborhood developments, opportunities for first-time homebuyers, and revitalizing areas plagued by poverty and disinvestment.

Our results are paying off.

And we have increased the diversity within City Hall. We are an inclusive organization that values new and diverse perspectives.

The changes of structures toward improved race relations are on a path to completion. But the larger challenge still exists. It rests in the hearts and minds of individual citizens, community and business leaders.

This is the most difficult step we must take, for it requires us - each and every Cincinnatian - to reevaluate our perspective, our relationships, and our actions. It requires each and every Cincinnatian to pause and begin to look at our city not as a City divided by race, but a city blessed by diversity.

We all have to have a part in this. Last week, I stood with the family of Nathaniel Jones on Fountain Square. Instead of placing blame or arguing, we stood on common ground. We agreed that we all must choose our words and actions carefully. I told Ms. Jones that I did not do a good job of that. I made a statement about her grandson that was disparaging, and for that, I am sorry.

His family is here today, and I want to thank them for their careful words and actions - they are an example of how we should approach one another in this community.

We will continue to use institutions to bring about equality and opportunity in our City. But our institutions are only as good as the individuals within.

There is no magic wand, but my challenge to our community is this - embrace a new civility of dialogue.

Recognize that strong positions do not require personal attack.

Embrace the diversity that we are so lucky to have. Diverse communities are vibrant, progressive, inclusive and economically healthy. And so is Cincinnati.

Do not use our diversity to divide.

Use it to make us a better city.