Wednesday, July 17, 2013

Pfenning: $300,000 Casino Revenue Shortfall Predicted

Bob Pfenning
Yesterday, and in the past, I've written about political Controllers like Northampton County's Steve Barron and Lehigh County's Glenn Eckhart. Neither is an accountant. Both use their office to advance their political agenda. Then there's Bethlehem's Bob Pfenning, who has in the past contributed heavily to Mayor John Callahan's political foes. There's no love lost between those two. I'd expect him to unload on Callahan. But he didn't. After listening to his quarterly report last night, which lasted about three months, Pfenning impressed me as a fair-minded fiscal watchdog. He has been good for Bethlehem.

He's an appointed Controller, picked by the Northampton County Court after Council members were amazingly unable to reach a consensus.

I told Bob I had no idea why he even bothered applying because there was no way he would get the appointment. Though he's a CPA, he actively backed three Republicans trying to unseat Democratic opponents.

After assuring him he was wasting his time, he got the job.

Instead of using this position to play politics or make policy, Pfenning instead seems to have his eyes on finances. All he does is watch the money. Council President Eric Evans can't gong the Controller for going on too long. And Pfenning did that in his quarterly report. But he also made some interesting observations.

Casino Host fee. - Pfenning predicts that this year's casino host fee will be between $313,000 and $363,000 lower than projected.

Amusement tax: - Though budgeted at $600,000, only $23,442 came in during the first quarter. Pfenning conceded that much more revenue is anticipated after Musikfest gets under way.

Unpaid City fees. - Pfenning reports that $74,215 in money owed to the City is over 120 days past due.

Confirming purchase orders. - These are purchase orders issued after goods or services have already been ordered. Pfenning believes this should be kept at a minimum, and complimented the Callahan administration for "making good progress" in eliminating the practice.

Bond Proceeds For Minor Repairs. - Pfenning cautioned against using bond proceeds for repairs, unless they are designed to extend the useful life of asset. He noted that, contrary to the best practices recommended by the Government Financial Officers Association, the City was using bind proceeds to repair garage doors and air conditioners. He likened the practice to using a credit card to pay for current expenses. In next year's budget, the Administration will make an effort to pay for minor repairs from current revenue.

21 comments:

Anonymous said...

How can the state tell us the Sands is the highest grossing casino in the state and still be over $300,000 short in the host fee?

Bernie O'Hare said...

Two possible Answers. One, Pfenning could be wrong. Two, casinos statewide could be suffering a decline in revenue.

Peter J.Cochran said...

Or Three, Mr Phenning did not himself make up the Casino Revenue Prediction 'forecast'. Could it be that people really don't have discretionary income to gamble or the trend maybe another sector like lotto? Sands could be highest gross and still be less than some other factor.

Anonymous said...

Get ready Northampton County.

Anonymous said...

could it be that the admins projection was, shall we say bloated?

Anonymous said...

Bernie
What portion of this casino's proceeds were to be earmarked for senior hot lunch programs and is anyone at the city monitoring this issue?

Anonymous said...

Let's just say Musikfest and the other Bethlehem festivals bring in as they traditionally do $400,000 (that's a high estimate and assumes good Fest weather). This still leaves a revenue shortfalls of almost $600,000. To go from as deep a deficit as Bethlehem has had and then to suddenly have an election time surplus should have been better scrutinized.

I give Callahan credit for refinancing and fixing the cities long term debt structure, but something stinks here. What other surprises does this budget hold. I imagine it's a house of cards.

Anonymous said...

Pfenning predicted that the host fee would be short last year, too. He was wrong.

The amusement tax really only covered a small number of concerts in the 1st quarter. It was only enforced against shows that went on sale after the ordinance was implemented.

Anonymous said...

What a mess. I guess we're not getting the tax relief Callahn promised and lied about.

Charlie Dent was right. Callahan's fiscal record in Bethlehem is a house of cards disaster.

Here comes pay-to-play and a disastrous turn for the worse, fiscally. I miss you already John Stoffa. You're an honest broker, gentleman John. You're being replaced by a slippery liar.

Anonymous said...

8:06, You are wrong! The Controller's office projected a higher amount than budgeted last year due to increased table games income and suggested that the additional dollars be set aside for pension costs.
In The Know

Bernie O'Hare said...

"Pfenning predicted that the host fee would be short last year, too. He was wrong. "

He gave a prediction and said he could be wrong and we won't know until the end of the year.

Bernie O'Hare said...

"What a mess. I guess we're not getting the tax relief Callahn promised and lied about."

I think you might be just looking for excuses to attack Callahan. Pfenning himself stated he could be wring about his host fee prediction, and noted that the amusement tax will pick up with Musikfest. For the most part, Pfenning complimented the Callahan admin for working with him.

Bernie O'Hare said...

7:19, Casino host fees go into the general fund. They are not earmarked.

Anonymous said...

You know at first, I thought how is it possible to have the host fee below expectation while you hear reports of the Sands making plenty of money at table games.

Then I considered that either the newspapers only told you 1/2 the story. Sure table games might be up but slots may be way down or the initial projections weren't tethered to any reality whatsoever.

Anonymous said...

We need more Asians from NY. come on Sands!

Bernie O'Hare said...

I love the diversity that comes wit the "Asians from NY." I see them along the greenway and at Sand island. The Chinese (these are Chinese) love to walk up and down the trails, and always have a nice smile as I go by. (Maybe they're laughing). One Chinese student at LU expalined it to me. A group will come down from NYC, and will pool their money with one person who is good at gambling. He or she goes into the casino, and the rest walk around in downtown Bethlehem.

Anonymous said...

As an audience member last evening, I can tell you that Pfenning needs to be put on the timer.

Bernie O'Hare said...

Yep. Bob does like to talk. Maybe they could ask him to keep it to ten minutes.

Anonymous said...

Sounds like everyone leaves in a good mood. Just like a Happy
ending.

Anonymous said...

Don't worry. Thanks to a flawed gaming law, Bethlehem is eligible and can apply for gaming proceeds from Monroe County despite the fact they are greater than 50 miles away from their Casino.

Anonymous said...

Don promised casino tax relief and he keeps his promises. A big refund is coming before he leaves office. The guy's word is his bond. He said you'd get it and you will before Don completes his term. Don is a promise keeper. You'll see. I believe in him.