NEWARK -- After weathering tough years of belt-tightening, the city can look forward to better days ahead, thanks to the continued recruitment of tech companies and projections of budget surpluses, Mayor Alan Nagy said Thursday during the annual State of the City luncheon.

But during his speech at the Newark Hilton, the second-year mayor also emphasized something closer to his heart: Newark's small-town spirit, which he said is embodied in its ample volunteerism.

"We wanted to focus on Newark as a community," said Nagy, who was first elected to the City Council in 1980. "It's nice to pat ourselves on the back for being a part of Silicon Valley, but it's so much more important to me to have that strong sense of community."

Nagy praised volunteers for fueling programs that improve the city's public safety and quality of life, such as the growing number of Neighborhood Watch groups and the residents who help with graffiti abatement and park maintenance.

"The spirit of volunteerism and public service in the city of Newark is unsurpassed," he said. "We have volunteers from all parts of the city joining together to achieve great things."

After noting that the city had to slash more than $28 million since 2006, Nagy shared some positive economic news. He said that this year's budget is projected at $36.4 million, with a $500,000 surplus, and that the 2013-14 fiscal year budget likely would have a $200,000 surplus.


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In addition, the city's fiscal uncertainty reserves, which were depleted in 2010 while in the deepest throes of the economic collapse, since have grown and are expected to reach $5 million later this year, Nagy said. He credited the 2010 passage of Measure U, a utility-users tax that expires in 2015, and an uptick in hotel tax revenue for that good news.

He said the city also has scored successes in business recruitment, such as luring KNT Manufacturing -- a high tech manufacturer with 150 employees -- to Newark's Stevenson Point TechPark. Nagy said the Pacific Research Center, an office park with 1.4 million square feet of office space on 105 acres, is an example of how the city can rebound from bad news. Sun Microsystems moved from there in 2006, but now it is home to a wide variety of companies, including Logitech.

"There are probably more than 10 businesses there," Nagy said after delivering the speech. "That diversification has given us more stability rather than less."

Contact Chris De Benedetti at 510-353-7011. Follow him at Twitter.com/cdebenedetti.