Mayor Ray Nagin, in his first State of the City address since Hurricane Katrina, said New Orleans is a city on the mend β€” a city of "strength and determination" β€” but he called on state and federal leaders to do more to help speed the city's recovery.

Nagin said President Bush had failed to keep his promise to move federal aid to "affected areas and the people who need it the most." And he called on Gov. Kathleen Blanco, with whom he's had an at-times tense relationship, to tap into a state budget surplus to help the city and other parts of the state still struggling to recover from Katrina and Hurricane Rita, which struck a month later.

"Use the $3 billion budget surplus to ensure a strong future for our state and for all our citizens," he told the city workers, police and community members who gathered in the hangar-like war museum. "Because as New Orleans recovers, and as south Louisiana recovers, so does Louisiana."

Although Nagin referred to the city's challenges, including a storm-depleted police force dealing with a rise in violent crime and a health care system in "crisis" β€” he sounded an overall positive tone, as he compared his city to a patient written off as dying but who eventually recovered.

"We have stabilized, we are implementing plans for our future, and we are strong enough for the next phase of recovery β€”the transformation to the new New Orleans," Nagin said.

"This transformation," he said, "won't be easy."

The speech comes just two days before the start of a new hurricane season, and against the backdrop of a city still fighting to recover from a storm 21 months ago.

While more than half the city's pre-Katrina population of 455,000 is back, according to one recent estimate, swaths of some neighborhoods remain in shambles, with houses empty and many small businesses ailing or shuttered.

As of mid-month, the city said it had received just $163 million in federal rebuilding aid, a fraction of the $1 billion or more it says it will need just to restore what Katrina damaged and with little earmarked for permanent infrastructure work.

The city in March unveiled a $1.1 billion rebuilding plan, but not all the funding for that plan is in place; at least one-third of the money in doubt as the state considers using it to help bail out a homeowner aid program. Nagin called on Blanco to ensure it, instead, reaches local governments to help them implement their recovery plans.