Tuesday, December 28, 2010

Who's Watching the Henhouse in Bethlehem?

Last week, Bethlehem City Council adopted a $65 million budget that raises taxes 5.3% and sheds 54 people from the workforce, including firefighters and a CPA. It also gave preliminary approval to a $16 million loan, which incredibly includes $2 million of a $6 million loan previously borrowed for items like a new EMS facility, but which the Callahan administration blew on something else. The City even had to borrow the money for its annual pension payment, something it swore up and down would be unnecessary.

As disturbing as it is to learn that Bethlehem firefighters may very well be down by 6 people next year, I am even more troubled by two other cuts.

An independent audit has tagged the Callahan administration for the following financial missteps: a missed pension payment; spending money without required Council approval; "borrowing" EIT money collected for other municipalities; commingling restricted and unrestricted funds; commingling 911 land line and wireless funds; running the internal service fund at a deficit; "unusual investments" in the pension fund; excess 911 personnel costs; and treasurer's escrow account irregularities. In the face of this devastating audit, Callahan's cronies basically thumbed their noses at everyone and blew $6 million borrowed for capital purchases and improvements.

Yet a part-time City Council decided to eliminate around $15,000 set aside for its own budget analyst, who would work on an "as needed" basis.

I think it's safe to say that now, more than ever, City Council needs an independent review of Bethlehem's finances. Controller Meg Holland did make six specific recommendations, and some were implemented. An independent budget analysis would likely give Holland's recommendations more credibility, and would send a signal to the Callahan administration that Council is finally watching the hen house.

The other cut that really bothers me is the elimination of CPA Celie Walton's position, in spite of her willingness to work part-time and for no benefits.

An accounts payable and receivable position is now held by Terry Reichard. She just happens to be the widow of Dennis Reichard's cousin. Dennis Reichard, the City's Business Administrator, reacted to the negative audit in August by saying, "This isn't stuff that anybody's going to jail on." The contract person listed under temporary help in Financial Services just happens to be his next door neighbor.

Celie Walton, the CPA who's job was eliminated, may have been the most unconnected person in that office. She monitored daily financial reports.

Dennis has certainly surrounded himself with people who are beholden to him, and who would be less likely to raise any questions about financial dealings of the city.

Instead of watching the henhouse, City Council may have given Mayor Callahan the key.
Updated 9:55 AM to reflect more accurately what Celie Walton did as a Bethlehem employee. I have also clarified that City Council only authorized the City to reborrow $2 million of the $6 million it had diverted.

20 comments:

Anonymous said...

Dennis has certainly surrounded himself with people who are beholden to him, and who would be less likely to raise any questions about financial dealings of the city.

Instead of watching the henhouse, City Council may have given Mayor Callahan the key.

Thanks Bernie for bringing this to light!

Anonymous said...

And why would the Callahan Administration eliminate positions within the City Health Bureau that were 100% funded by the State? The State was still going to fund those same positions for the next fiscal year, so why eliminate them?

Anonymous said...

Donchez keeps trying to cover everything because he fancies himself to be the next mayor. Reynolds is a yes man for the administration who can't have an original thought to save his life. They are both up for re-election in 2011.

I suggest we vote the bums out and put some people into office that will not only keep an eye on the mayor but call him out in public meetings for his illegal activities.

Bernie O'Hare said...

"And why would the Callahan Administration eliminate positions within the City Health Bureau that were 100% funded by the State? The State was still going to fund those same positions for the next fiscal year, so why eliminate them?"

I hope to be able to write about that soon.

Anonymous said...

BHB is not 100% supported by the state. They get some funding from the state along with federal monies, grants and fees from citizens (i.e. charges for certain immunizations). Plus, each year for the past 3 years the funding that the state gives to local health department has been cut back.

Anonymous said...

Bethlehem will get their act together. They have a lot going for them and one of their strengths is Callahan. He is a bright young man and knows what needs to be done. He has the will power and smarts to get it done. Let's not forget the economy, the state cuts, and the tremendous water debt he inherited.

Anonymous said...

Nice spin 10:50AM. I didn't say that all of BHB was funded by the State. I said positions within the BHB that were eliminated by Callahan were 100% funded by the State. You cannot refute that!

Anonymous said...

How is it Reichard remains employed by the City?

He is a Rasputin in the Halls of Management.

Anonymous said...
This comment has been removed by a blog administrator.
Bernie O'Hare said...

But at least he's not going to jail.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

John Callahan, why he's the bee's knees! Righty-o person who posted just before the sun was straight up in the sky.

Why, if'n the townsfolk of Bethlehem would just buy into what Kid Johnny is a pre-scribing they get hair on their chest, a piece of silver in their pocket and would be regular twice a day.

Okay. Okay. I can't continue. With due respect poster, friend -- are you smoking crack cocaine.

John Callahan is the root of Bethlehem's current problems -- not the solution to them.

Final thought -- why hasn't Dennis Reichard been fired? He's incompetent at budgeting but skilled at misleading the part-time council. That combination is poison for Bethlehem's taxpayers.

Anonymous said...
This comment has been removed by a blog administrator.
Bernie O'Hare said...

Read my comments policy. I delete OT remarks at my discretion. Stick to Bethlehem.

Anonymous said...

Why don't you stick to the truth and try some old fashioned honesty. You should be ashamed of yourself!

Anonymous said...

"And why would the Callahan Administration eliminate positions within the City Health Bureau that were 100% funded by the State? The State was still going to fund those same positions for the next fiscal year, so why eliminate them?"

The State by law only funds 50% of a set base pay and the city has to pay the other half. Get your facts straight.

Anonymous said...

Also, the state funding for those positions is only guaranteed through June. The next state fiscal year starts on July 1. With Corbett in the Gov Mansion and Repo's running the State House, it is unlikely that the 50% will be funded.

Bernie O'Hare said...

Untrue. Anybody who was funded as a contract worker under a specific programmatic grant had their salaries and any other forms of compensation (paid holidays, paid sick days, paid vacation days) paid from the respective grant. The individual grant budgets, including staff costs, operating expenses, training and any relevant equipment costs were part of each grant budget which was developed by the Bethlehem Health Bureau and approved by the PA Department of Health.

Anonymous said...

In addition, I know of at least one position at BHB that was funded to August... Laying off 8 months before the grant is up. Too late to request a budget revision. Not to mention the fact that the money will most likely be available in the coming years. I don't know if the new guy will sweep these things under the rug like they were in the past. What goes around eventually comes around.

karmagirl said...

Well out of the 7 positions that the health bureau eliminated 3 were fully grant funded. 2 positions would most cerntainly continue to recieve full funding for many years to come. Also take a look at the fact that one remaining emloyee was asked to take a pay cut, this employee is FULLY grant funded but was made to take a pay cut for no said reason.

Perhaps someone should take a look into the fact that Ms. Maloney Heatlh Bureau Director has taken many liberties in her position, not just being slapped on the wrist for her DUI & Assault charges, but also letting go thousands of dollars of grant money inlcuding but not limited to the tobacco grant, the highway safety grant, the Northampton County Drug & Alcohol grant and more. She also has a nack for imposing immense fear amongst her staff, pinning each against eachother makng employees follow other employees during their assigned work tasks, driving by employees homes to see if they are "really" sick just to name a few things.

Administration sits back and allows each director the discretion to do whatever they want, however they want, take as much as they want its just plain pathetic. Tsk Tsk COB,,,,,