Mike, thank you, for your warm introduction.

Now and again when I see Mike, I remember my first – and only – fishing trip. Fishing never interested me. But a few years ago Mike offered me a chance to join him on a fishing expedition to the Sacramento Delta. I don’t remember too many highlights about this trip. Except that we left far too early in the morning, and that it was damn cold.

Oh, and one more thing – I caught my limit. Mike, you make a better Congressman than you do a fisherman. And that is high praise. But seriously, Mike, thank you being here, and for your continued public service to the people of San Jose – especially now that you are on the Transportation Committee.

I would also like to thank Congresswoman Zoe Lofgren for her help in presenting our Good Neighbor and Pride of San Jose awards tonight. She is doing a great job in Washington. We’re lucky we have her fighting for us.

I thank all of you for being here with me this evening. I am glad we are able to take the time to recognize these outstanding people each year. They are great role models for our community.

I am especially delighted to be joined by so many San Jose teachers here on the stage with me tonight. This group shapes the future of our community, and their dedication to having a positive impact on our children is outstanding. These teachers are among those who have been helped by the City’s efforts over the last two years to help San Jose public schools succeed.

Some have received student scholarships because they are committed to teaching in San Jose, while others have been able to purchase their first homes with our help. And still others were recognized with our first "Excellence in Education" awards program, sponsored by Intel, for their outstanding work in the classroom.

I’m sure every one of us can remember a teacher who made a difference in our lives. Someone who turned on the switch to learning and discovery. Who helped us make good decisions at a critical point. Who inspired us to stretch, to grow, and to achieve our real potential. Please join me in honoring these teachers with us tonight, along with all other teachers.

This past year was a very good one for San Jose, and we have a lot to be proud of. I would love to share all of it with you, but this speech would be far too long. But please don’t assume that just because I don’t mention your favorite subject, I don’t believe in it. I’ve just found that no one can sit in these chairs for a very long time!

What I have to say tonight reflects many ideas from my fellow Councilmembers. It’s clear that we have goals in common for San Jose: Building stronger neighborhoods. Providing good services for our people. Securing the prosperity of our community.

Tonight, I want to officially welcome and congratulate our councilmembers who were elected last November: Forrest Williams, Chuck Reed, Ken Yeager, and Dave Cortese. They join our veteran Council members: Vice Mayor George Shirakawa, Linda LeZotte, Cindy Chavez, John Diquisto, and Pat Dando. All of you have demonstrated great leadership for the City of San Jose.

Our new members have been in office only a short while, but I am already impressed with their energy and ideas. As we work together with the entire City Council team, these new members will be able to build upon a strong legacy left by our outgoing colleagues: Charlotte Powers, Margie Matthews, Manny Diaz, Frank Fiscalini, and Alice Woody. Let’s give them a big "thank you" for their dedicated public service.

Their legacy includes a solid City Council commitment to improving the quality of life in San Jose neighborhoods, and to making our city one of the best to live and work in. It’s a legacy that has been built on a spirit of partnership with our community, and a dedication to achieving a city we are proud to hand over to our next generation.

It’s a legacy that allows me to say tonight—the state of the city is spectacular. San Jose has momentum! We’re on a roll, baby!

San Jose today is a confident, exciting city. Full of optimism and opportunity. We treasure our past. We embrace our diversity. We nurture our next generation.

I’m proud of San Jose. I’m proud to be your mayor. I know our people are proud to live here. After two years in office, I want you to know I love this job. And I love our great city, more than ever.

I’m often asked, "what makes a big city a great city?" Well, I think it’s important for you to know my answer to that question.

• I believe a great city is one that listens and responds to its people. It’s committed to sustaining and improving the quality of life in every neighborhood, for every resident, now and in the future.

• I believe a great city is one you can count on. It delivers. It picks up your trash. Fixes your sidewalk. Keeps your streets safe and your parks clean.

• I believe a great city is one you’re proud of. When visitors come, you show it off. You help them discover why we love living here.

• I believe a great city has a special character – a spirit that makes it unique.

I believe San Jose, by these definitions, is a great city. Not perfect, but with wonderful promise and great potential for becoming even better. It’s my vision to make our neighborhoods places people are proud of. Good for children and families. A strong, safe, and healthy community, with opportunities for everyone.

Last year, San Jose did listen and respond to you – as a great city should. You told us you wanted an exciting downtown; healthy neighborhoods; more open space; traffic relief; better parks and libraries. That’s why I challenged our city to launch several new initiatives. Together, we have been successful.

• We started construction on over 1000 new homes in our downtown area.

• We are creatively using $10 million a year from our "Healthy Neighborhoods Venture Fund" to meet the needs of children and seniors. This includes our support for a tobacco-free community and a partnership that will help all San José children have health insurance.

• Through our Strong Neighborhood Initiative, we are increasing Redevelopment investment in our neighborhoods by 400 percent!

And we did the unthinkable – we placed four big measures on the ballot so you could choose to make San Jose a stronger city.

• Over 80 percent of you approved stronger protection of our open space. We are now the biggest city in America with an urban growth boundary.

• We responded to your call for solutions to traffic congestion. As a result, you approved Measure A – better than 70 percent!

• And with the leadership from the City Council and your support, we succeeded with two bond measures – well over 70 percent approval for better neighborhood libraries and parks.

We listened. We responded. And we delivered.

Last year I said we would establish a customer service call center at City Hall. A place you can call any time – day or night. That’s right – 24/7 – to get answers and results. I am delighted that we can officially launch the Call Center tonight. I’m going to place a call now, just to try it out.

Our call center staff will be able to answer many of your questions about City services right away. We will call you back to follow through. We will get your problem solved. I guarantee it.

I believe a great city is one you can count on. It delivers.

Here’s what people in San Jose have on their minds: [video montage]. I hear these kinds of comments when I visit neighborhoods on Saturdays. Whether it’s at a community center, or at a neighborhood clean up. Work gloves may be covering my hands, but my ears are wide open.

After all, neighborhoods are where people live – where they put down roots – and raise their families. Where we get our earliest memories of what the meaning of community is all about. And neighborhoods are where families feel their quality of life affected most directly by the public services we deliver.

I grew up in a working class neighborhood. In my mind, I can still see my old street. Kids of all ages playing in their front yards. Pick-up baseball games. Double-Dutch jump rope. Chasing the ice cream man. Walking to our schoolyard – feeling safe.

Today’s neighborhoods may not be exactly what we grew up in, but they still should be places where our residents feel at home. Where they are secure, and they can raise their families. This is why strong neighborhoods are so important to us in San Jose – it’s for our families. This is why we are investing in our neighborhoods more than ever. And I can tell you, we are making a difference.

Last year while I was visiting the Washington neighborhood, a resident came up to me. She explained that she had lived in the neighborhood for a long time, and she wanted to thank me for the improvements the city has made.

She said, "Mr. Mayor, because of what you and the city have done, I now feel safe in my neighborhood. I can now walk at night. I can feel my children are safe playing in our front yard." I was moved by her sincere gratitude. We clearly made a difference to her and her family. She confirmed why I chose public service – to help people improve their lives.

Let me talk about the ways we are making a difference in neighborhoods.

People want to be safe – and feel safe. I am proud that San Jose remains the safest big city in America, and crime rates continue to decline.

That is no accident – it’s the result of an excellent police department; a great economy; and strong neighborhoods. But we must always be vigilant. Our emphasis on crime prevention and law enforcement must continue. Just two days ago we were reminded that the lessons of Columbine and Oklahoma City still echo across the nation. I am grateful for the alert response of Kelly Bennett – a remarkable young woman – and the fast action of San Jose police to prevent a dangerous threat from becoming a tragedy.

Kelly can’t be with us tonight – she is in New York with her parents – but our San Jose police officers are here. Let us thank Officer Paul Hamblin; Officer Cassondra Lansberry; and Sergeant Bob Mendiola for their excellent work that helped save so many lives this week.

I’m proud of our low crime rates, but that’s not enough. San José must be a city where every child, every woman, and every senior can feel safe, not only in their neighborhoods, but in their homes. Tonight, I want to make it clear—there’s no excuse for abuse. Violence against children – against women – and against seniors – will not be tolerated in our city.

Last June, the City Council approved a comprehensive approach to fight domestic violence. But we can do more – we must do more. Just like Mayor Susan Hammer’s successful effort to reduce gang violence through concentrated and coordinated actions – I say we will focus that same level of attention to reducing domestic violence. We will make these efforts a priority for our public safety. Prevention. Intervention. Strict law enforcement. These will ensure San José homes will be safe.

Feeling safe in our neighborhoods also means feeling safe when you cross the street. For this reason, we formed a special Council committee to focus on making our neighborhood streets safer for pedestrians – especially our children. I think we might approach this task by riding a bike across our busiest intersections. Or holding hands with a three-year old as she walks down the street. We big people forget that the world looks a lot different when you’re only three feet tall.

We need to deliver on safer streets. Last year we set aside a million and a half dollars to help keep cars from racing through our neighborhoods.

Like a broken window or vacant lot, graffiti sends a message about the safety of a neighborhood. Two years ago, we declared war on graffiti. Since then we have won many battles. I will say it again – graffiti vandals are criminals, not artists.

Last year we arrested 170 graffiti vandals. Over the past two years, the amount of graffiti tags throughout San Jose has fallen dramatically. From 70,000 tags when we started – to only 10,000 in our most recent survey. This is the result of aggressive clean up, criminal enforcement, and outstanding volunteer help from the community.

Just a few weeks ago, I joined a couple hundred volunteers on a Saturday morning to cleanup graffiti and pick up trash along the tracks by Highway 87. We had kids, seniors, and people from many neighborhoods working along with our own anti-graffiti crews. The strong community pride on display was impressive – and contagious. At last count, we had more than 1700 anti-graffiti neighborhood volunteers! Let’s thank them their hard work making San Jose better.

I’m also proud that our city crews now consistently meet our high standard for responding to graffiti hotline calls within 72 hours.

Strong neighborhoods are neighborhoods without graffiti. And strong neighborhoods have great parks and libraries. San Jose voters have enthusiastically approved funding to improve our parks and libraries. Our challenge now is to build them, on time and on budget. And that’s a big challenge. Altogether, we will construct more than 100 park and library projects over the next ten years.

We are starting as fast as we can. There will be nine groundbreakings on park projects, just this year alone. We are starting design on four new neighborhood libraries this year, and construction on them will start next year. And the pace will pick up from there.

These projects will move us closer to a day when every family can walk to a neighborhood play lot, library or community center – even in a city as big as San José. I know my Council colleagues share this vision.

Now, I want to say a few words about our special neighborhood. The one that belongs to the entire city – our downtown. Remember – a great city is one you’re proud of. One you want to show off to visitors. Downtown San Jose is one of those wonderful discoveries for both visitors – and some of our own residents.

Last year I said that downtown is hot. This year – it’s sizzling! It’s where the nightlife action is growing – the arts are thriving – and we are taking steps to add even more. Just this week, the City Council approved an agreement that will bring The House of Blues to downtown San José. This venue will be a major magnet for top music acts coming to our city.

We are putting the historic Jose Theatre back in operation. It will become the home of The Comedy Club – bringing laughter back to downtown. Work is under way to restore the historic Fox Theatre as the home of Opera San Jose and classic movies.

We pledged a quarter million dollars to help "Ballet San Jose Silicon Valley" become a strong, locally supported dance company. We have continued our Arts Venture Fund that supports innovative projects—from a world premiere for the American Musical Theatre -- teaching kids to draw and paint.

And speaking of the arts – how about those Sharks! I am proud that we have made they will be playing in San Jose for at least the next 18 years.

I am especially proud of the progress we have rapidly made to bring more residents and more shopping downtown. Just two days ago, the City Council selected a top-notch development team – the Palladium Group – to bring in exciting projects that will include more places to shop, more homes, and more offices in our downtown. We will work with deliberate speed – in cooperation with our downtown residents and businesses – to seek creative proposals that will make the most of even more downtown housing opportunities.

Downtown San Jose is sizzling for good reason. We have a strong economy. And as the Capital of Silicon Valley, San Jose is an essential location for high tech. Our remarkable economic boom is helping us transform our downtown and our neighborhoods. But we cannot afford to be complacent about our future. Our very success has created serious challenges.

As we heard earlier tonight, our residents and businesses have concerns about housing – education –traffic – and now – energy. These are basic needs we must take care of, to ensure our long-term prosperity.

Finding a home, at a price you can afford, has reached a crisis level – not only in Silicon Valley, but throughout the Bay Area. The growing cost of housing is basic economics – supply and demand. If we are going to make sure our children can find a home in Silicon Valley instead of leaving the state, we need to make sure we have a supply of affordable homes and good jobs for them in the future.

This is why San Jose has been the Bay Area leader in creating more housing. Last year we approved building permits for more than four thousand five hundred [4500] new homes. We expect to do the same this year. We are building more housing than all the cities in Santa Clara County combined.

Just last month, the City Council approved my recommendations on how we can create even more homes for San José families. We want to make sure this is smart growth that takes advantage of our expanding transit systems and will strengthen our neighborhoods. And I want to work with our neighboring communities, so that together, we can all do more to meet our region’s housing needs.

It’s also important that San José continues to lead the way in making our community affordable for San José families. Two years ago, I pledged that San José would double our affordable housing production. We are well on track to reach this goal by building 6000 new affordable homes by 2004. This means 15,000 people will be able to find their place – their homes – in our city. As a result of our $240 million investment for San José families and their futures.

But I believe we must do more. Working families at the lowest income levels have the hardest time finding homes in our community. These are families who are working hard, but they can’t make ends meet.

We continue to add to our previous housing investments. And we continue to get more help from our community partners – such as Fannie Mae, the Silicon Valley Manufacturing Group, and the Housing Trust Fund. Together, we can make a world of difference to thousands of San Jose families.

Just as we want all our families to have the opportunity to live and work in our community, we also want our children to have access to the amazing opportunities that Silicon Valley offers. To do that, they must have the skills that employers want. Those skills come from excellent education.

This is why we hear a lot about the "Digital Divide." You know – the digital divide is much more than just access to technology. It’s about the fundamentals. Our kids need to know how to read – how to write – how to do math. And they need to know how to learn. You can call it bridging the digital divide. I call it fulfilling our responsibility. Every child must have the tools to succeed in the 21^st Century.

Throughout my career at Hewlett Packard – through The Role Model Program – and now as Mayor – I have found that we have to work student by student – teacher by teacher – and family by family. There is no silver bullet. We need commitment from all parts of our community.

The teachers on this stage represent a large part of our City’s contribution to closing the digital divide:

• We have opened homework centers to serve students at every school in the city that wants one, so that kids can have a safe, quiet place to study and learn.

• With our help, 89 San Jose teachers have achieved their dream of owning a home in our city. Another 85 teachers are actively looking to join them.

• With our future teacher scholarships, we have helped 47 San Jose college students follow their dreams of becoming teachers in our city.

This has been a good start – a smart start. Reaching one student, one teacher, one family at a time. But we can do more to encourage teachers and help them be successful.

When a young person steps forward with a dream to become a teacher, we as a city should stand behind them.

It may be true that you have learned all you needed to know in kindergarten. But our kids will learn faster and better if they are ready when they get there. They should know their numbers. Their colors. How to tie their shoes. How to play with other kids. This may sound like simple stuff to us big people, but it’s a big deal when you’re only three years old.

To help 600 children a year get ready for school, I said, two years ago, that we would build ten Smart Start centers by 2003. We are on track to meet this goal.

Tonight, I say we should double this goal for Smart Start centers. We can make sure that 1,200 San Jose children are ready to learn when they enter kindergarten, each year.

To reach this goal we have outstanding partnerships with schools, with businesses like IBM, and community groups. And I’m now talking with the David & Lucile Packard Foundation about a new partnership to work towards an expanded vision. A vision that every child in San José will start kindergarten ready to learn.

This is a major step to closing the digital divide. I am proud that we are securing support from corporations and foundations. I am proud I have signed the "Digital Divide Compact" of Joint Venture Silicon Valley. We will enlist San Jose’s own unique resources to improve education.

We can’t afford to let another class of children enter school without a strong, clear plan of action for our city’s commitment to close the digital divide.

Smart investments in people starts with education, but they don’t end there. I want to talk about another smart investment in people – the health of our employees.

The program is simple. We will allow our employees to take paid time off to get annual cancer screening. This is a matter of life or death. If we save just one life through early cancer detection – if we prevent a single family’s anguish – then we will be successful. San Jose will be the first city in California to take this step. I hope we will be a great example for other employers.

Now, I would like to welcome a special friend of San Jose who is delighted to use our city as an example for California and the nation. Senator Dianne Feinstein.

Thank you, Dianne, for joining us tonight. Your leadership in Washington continues to be critical to the issues that are important to the people in San Jose and Silicon Valley.

Energy has become one of those issues. In recent months we have become painfully aware of California’s energy mess. The chief responsibility for solving it depends on the work being done in Sacramento and Washington – hammering out answers with the energy industry. But we have opportunities here at the local level, too.

1. I have already called for a Silicon Valley energy summit next month – where we will work with other local governments and our communities to explore regional solutions and opportunities. I have already talked to County Supervisor Jim Beall about this, and he has agreed to be my co-chair for this summit.

2. We will identify appropriate locations in the region for new power plants that will protect our economy – and will protect our neighborhoods and protect our environment. We will ask our neighboring cities to do the same
3. We will explore creative energy partnerships among cities – or with the state –or with the private sector, to ensure reliable supplies – for our residents and for our businesses.
4. We must lead by example. We will reduce our energy needs through vigorous conservation efforts. Tonight I join my friends, Mayors Willie Brown and Jerry Brown, and ask everyone in San Jose to do their best to cut their energy use by 10 percent. We at City will make a 10% cut happen.
5. We will expand our model program for energy-efficient buildings.
6. In San Jose, we will consider small – clean – and green – power plants that can be built faster and relieve demand on the power grid. We can locate them in our industrial areas – not in residential neighborhoods.
7. We will set clear predictable standards for clean local generation, within our authority. And we will streamline our City’s review and approval of appropriate power projects so they can be built quickly.

Silicon Valley has a long history of taking bold creative actions to solve complex problems such as traffic and housing. We must do the same with energy. We must become more self-sufficient. We must control our energy destiny. No longer will we be at the mercy of those who try to make a profit out of this mess.

An excellent example of bold regional solutions in Silicon Valley is what we have done for traffic relief. This is why voters overwhelmingly said they want to invest $6 billion of their own money on transportation improvements, including bringing BART to San Jose and extending light rail to more neighborhoods.

Two years ago, I said that we would be connected to BART before I left office. In true Silicon Valley style, we took a huge step to achieving full BART service with Measure A last November.

With the great help from our local state legislators and Governor Gray Davis, we have nearly a billion-dollar commitment from the State of California. We have the impressive commitment of our voters to transit and smart growth. And now we have a bright green light to move forward with traffic relief to help get commuters off our highways, helping them get to work and back home.

Now I can say -- before I leave office, we will start construction – on full BART service to San José.

I have shared a lot with you tonight. Whether the subject is strengthening our neighborhoods – or securing our prosperity for the future – my goal is the same: We will ensure that San Jose is a great city. A city we are proud of.

I continue to hear on Saturdays in our neighborhoods that our people agree. Here are a few examples. [ video montage] I like what I hear. San Jose is a great city. A great place to live, to work, to play.

• San Jose listens and responds to our people. We are committed to improving the quality of life for today’s residents and for the next generation.

• San Jose delivers. It’s a city you can count on. A city that’s striving to do even better in the future.

• San Jose residents love living here and are proud to share this great city.

And San Jose is a great city. We are this close to becoming the best city. Let me share my vision of what the best city looks like:

• I see a child playing in a new playground. I see him learning to read in a new library.

• I see a young person getting his first job with a great company – and starting to save for a down payment for a first home.

• I see a parent getting home from work – on time for dinner with her family – because traffic is flowing better.

• I see a senior who is not afraid to take a walk in her neighborhood.

A great city is made up of thousands of images like these. And San José can have them all. We are a strong, warm, livable and vibrant city. But San José will truly flourish when we can see these images, every day, in every neighborhood.

I love San Jose, and I love its promise. I am proud of what we are – and what we will be. I love this job. I am proud to serve you. I need you to join me, as we make this vision a reality, and boldly and creatively make this city the best.

Thank you.