Recession's Effects Intensify in Cities

/PRNewswire/ -- Cities' finances continue to weaken under the strain of the recession, resulting in cities being less able to meet their fiscal needs in 2011 and beyond. According to the National League of Cities' annual report on cities' fiscal conditions, financial officers report the largest spending cuts and loss of revenue in the 25-year history of the survey.

In the research brief, "City Fiscal Conditions in 2010" (http://nlc.staging.10floor.com/ASSETS/AE26793318A645C795C9CD11DAB3B39B/RB_CityFiscalConditions2010.pdf), 87% of city finance officers report their cities are worse off financially than in 2009. City revenues - as generated in property, sales, and income taxes - will decline -3.2% in inflation-adjusted dollars according to finance officers. To compensate, city officials are cutting back spending, with expenditures declining by -2.3%. These are the largest cutbacks in spending in the history of the survey and the fourth year in a row that revenue declined.

Financial pressures are forcing cities to layoff workers (79%), delay or cancel capital infrastructure projects (69%), and modify health benefits (34%). There were also significant increases in the number of officers reporting across-the-board services cuts (25%) and public safety cuts (25%). Public safety is usually reduced only as a last resort option.

"This historic recession has forced city officials to make difficult decisions that impact the social and economic fabric of their communities," said Ronald O. Loveridge, mayor of Riverside, CA and president of NLC. He continued, "This recession is making city officials fundamentally rethink and repurpose the provision of services in their communities. Some are innovating and finding creative solutions but, regrettably, without the necessary resources, cities will continue to have a difficult time assisting their residents through these trying economic times."

The ongoing weakness in the housing market, along with poor retail sales, has reduced the available revenue by significant margins. The responses from the finance officers clearly illustrate that the effects of the economic crash are intensifying in cities. Because most tax revenue is collected at specific points during the year, and since it takes time for housing assessments to catch up to current values, cities will still be feeling the full effect of the downturn in 2011. The national economy's slow recovery to date also means the recession's effects will potentially linger in cities for several more years.

"These stark numbers continue the trend we've been seeing for the past several years: lower revenue and reduced services at a time when there is an increased demand for services," said co-author Christopher Hoene, director of the Center for Research and Innovation for the National League of Cities. He continued, "Unfortunately, because of the loss in revenue, cities will face even more difficult circumstances in the months, if not years, to come."

Cities have been forced to confront low consumer spending, unemployment, and cuts in state aid that have severely affected the types of services and the manner in which they are offered by cities. In response, many cities are revisiting the range of services provided and looking for new service-delivery models in order to balance budgets and minimize the impacts of cuts on residents.

"While certain segments of the economy may be under recovery, cities as a whole are not yet experiencing growth," said co-author Michael A. Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. He continued, "As a consequence, cities are facing very serious financial hurdles right now in providing basic public services."

NLC conducts the survey each year in partnership with the University of Illinois at Chicago's College of Urban Planning and Public Affairs, a nationally recognized innovator in education, research, and engagement in support of the nation's cities and metropolitan areas. Michael A. Pagano, Dean of the College, has helped conduct the survey and author the report since 1991.

The National League of Cities is the nation's oldest and largest organization devoted to strengthening and promoting cities as centers of opportunity, leadership and governance. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.

Through its Center for Research and Innovation, NLC develops, conducts and reports research on issues affecting cities and towns. The Center assists cities and their leaders to implement innovative practices by providing qualified information and technical assistance.

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Coca-Cola Commits to Climate-Friendly Refrigeration Through Engagement with Greenpeace

(BUSINESS WIRE)--Days before the United Nations summit on climate change begins in Copenhagen, The Coca-Cola Company and its bottling partners today announced that 100 percent of their new vending machines and coolers will be hydrofluorocarbon-free (HFC-free) by 2015. Coca-Cola is committing to use its scale to aggregate demand and encourage supply as a means of accelerating the transition to HFC-free refrigeration equipment. This announcement is a direct result of work with Greenpeace that began in 2000, and a demonstration that phasing out the use of HFCs is a tangible and near-term action corporations can take to protect the climate.

The transition to HFC-free refrigeration will reduce the equipment’s direct greenhouse gas emissions by 99 percent. A recent peer-reviewed report by top scientists shows that HFCs will be responsible for between 28 percent and 45 percent of carbon-equivalent emissions by 2050 if society reduces carbon dioxide while leaving HFCs unchecked. Eliminating HFCs in the commercial refrigeration industry would be equivalent to eliminating the annual greenhouse gas emissions of Germany or Japan.

“Climate change is real and the time to act on solutions is now,” said Muhtar Kent, Chairman and CEO of The Coca-Cola Company. “Greenpeace has played a critical role in raising our awareness about the need for natural refrigeration. Our announcement today demonstrates a commitment to use our influence in the marketplace to drive innovation and help shape a low-carbon future.”

This step by Coca-Cola will help accelerate a market shift in commercial refrigeration away from HFCs. The Coca-Cola Company has invested more than $50 million in research and development to advance the use of climate-friendly cooling technologies. In 2010, The Coca-Cola Company and its bottling partners will purchase a minimum of 150,000 units of HFC-free equipment, effectively doubling the current rate of purchase to enable alignment with an interim goal to purchase 50 percent of all new coolers and vending machines without HFCs by 2012.

The Company and its bottling partners have approximately 10 million coolers and vending machines in place today around the world, comprising the largest element of the Coca-Cola system’s total climate impact. As a result of the commitment to eliminate the use of HFCs in this equipment, carbon emission reductions will exceed 52.5 million metric tons over the life of the equipment – the equivalent of taking more than 11 million cars off the road for one year.

“We welcome Coca-Cola’s commitment to help tackle climate change; large enterprises have both an opportunity and responsibility to change the game and Coca-Cola’s action leaves no excuse for other companies not to follow,” said Kumi Naidoo, Executive Director, Greenpeace International.

Coca-Cola currently utilizes two HFC-free solutions. Hydrocarbon refrigeration is used in smaller refrigeration equipment and carbon dioxide (CO2) is used in larger equipment. CO2 is a safe, reliable and energy efficient alternative with positive characteristics as a refrigerant. It does not deplete the ozone layer and it is 1,430 times less damaging to the climate than a typical HFC.

Already, as a direct result of Coca-Cola’s supply chain engagement, a major supplier has communicated its intention to build a dedicated CO2 compressor production facility, helping to meet the growing demand for HFC-free refrigeration options throughout the industry.

“Addressing climate change requires leadership and collaboration,” said Dr. Rajendra Pachauri, Chairman of the Intergovernmental Panel on Climate Change. “Just days away from the negotiations in Copenhagen, this announcement by Coca-Cola and Greenpeace demonstrates that investments in low-carbon technologies can make business sense.”

This announcement is a direct result of discussions with Greenpeace that began in the run-up to the 2000 Sydney Olympics. Greenpeace challenged Coca-Cola to go HFC-free in all of the equipment it supplied to the Games. By the Torino Games in 2006 and the Beijing Games in 2008, the Company was using all HFC-free technology at Olympic venues. For the past five years, the relationship between Greenpeace and Coca-Cola has become increasingly cooperative as both sought a cost-effective alternative to HFCs.

“At Coca-Cola, we are deploying our scale and working with suppliers to deliver cost effective alternatives to HFC, for us and for others,” said Rick Frazier, Vice President, Supply Chain, The Coca-Cola Company.

“Greenpeace increasingly works with businesses to make fundamental manufacturing and sourcing changes by connecting regulation, economies of scale and supply chain security,” said Amy Larkin, Director of Greenpeace Solutions. “Coca-Cola’s commitment today runs ahead of regulation and takes some fear out of rapid change.”

Coolers and vending machines impact the climate in three ways: through direct energy use (operating the machine), through chemicals used in the machine's insulation foam, and by leakage or improper end-of-life disposal of the refrigerant gas used in the cooling system. In addition to its refrigerant gas commitment, Coca-Cola developed a proprietary energy management system (EMS) that delivers energy savings of up to 35 percent and has placed over 1.7 million of these units around the world. In 2006, the Company completed the transition to HFC-free insulation foam for all new purchases of refrigeration equipment. Together, HFC-free insulation and HFC-free refrigerant will generate 99 percent fewer direct greenhouse emissions than traditional equipment.

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Aflac Chairman & CEO Will Forgo 2008 Bonus of $2.8 Million

/PRNewswire/ -- Aflac, Inc. announced today that Daniel P. Amos, Chairman and Chief Executive Officer, has elected to forgo his 2008 bonus of $2.8 million that he earned based on achievement of operating performance measures. The board's compensation committee accepted his proposal recognizing that, although Aflac delivered a strong operating performance in 2008, it is not reflected in the company's stock price given the current turbulence in the stock markets.

In addition, Kriss Cloninger III, Aflac Incorporated President and Chief Financial Officer, voluntarily reduced his bonus by 35% or approximately $477,000.

"Even though Mr. Amos and Mr. Cloninger were entitled to their full operating bonuses -- and in 2008 Aflac outperformed the S&P 500, the S&P Life Index and the Dow -- the board agreed to accept their proposals," said Aflac Incorporated board member Robert B. "Ben" Johnson, chairman of the Compensation Committee. "We support their decision to voluntarily reduce their personal compensation as a demonstration of their commitment to our shareholders."

In 2008, Amos received a salary of $1.3 million and Cloninger received a salary of $857,700.

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