Wednesday, December 22, 2010

Bethlehem's Xmas Present to Taxpayers - a 5.3% Tax Hike

Bethlehem's origins may go back to the Moravians, but the $65 million budget adopted by City Council on December 21, could have been written by Puritans. During a two-hour meeting before sixty City workers and activists, in which the opening prayer lasted much longer than most of the votes, an austere spending plan with a 5.3% tax hike was approved by a 5 to 2 vote, with David DiGiacinto and J. William Reynolds voting No.

When it was all over, there was no applause and no wishes for a Happy Holiday from Christmas City Council Prez Bob Donchez. Instead of Christmas cheer, City Council's gift to residents was a 3/4 mill tax increase, its first in the last five years. Ironically, it comes despite the casino revenue generated by the Sands.

In enacting the tax hike, Council restricted the anticipated $1.1 million in revenue to the City's aging EMS facility and a fire pumper. Their approval is required before the money is spent, and it must be maintained in a separate account. These restrictions were imposed after approving a $6 million lie of credit for projects like the EMS facility, only to learn that the money was diverted to medical coverage for City workers.

It's a budget that shares the pain. 54 City jobs were eliminated, including 2 fire fighters and another four who are expected to retire next year with no replacement. Firefighters union president David Saltzer grumbled, "I feel safer already."

Step increases for non-union workers were eliminated, and a scheduled 1 1/2% pay hike was delayed until July.

A last-minute attempt by David DiGiacinto to restore them failed to garner enough support, even though the Public Works Director Michael Alkhal had found the money in some non-priority projects. "I think it's important for morale," he quietly stated.

Karen Dolan sided with DiGiacinto, calling it "the right thing to do," noting that a City department had come forward at the eleventh hour and said, "Here, have some extra money, we can live without it." DiGiacinto said he sat down with City officials on Friday afternoon. "It didn't take long to find the money. ... It just makes you wonder."

Eric Evans, who also proposed the tax hike, argued "it's not consistent with what we've done." J William Reynolds and Bob Donchez joined Evans in voting against DiGiacinto's proposal, effectively killing it. DiGiacinto had four votes, but needed five.

In addition to the tax hike, Council set the wheels in motion for a $16 million loan to pay for unpaid bills, including the City's annual pension contribution. In an August Finance Committee hearing, city officials had assured Council President Donchez that this year's payment would be timely, but the money must now be borrowed. Callahan had sought approval for a $20 million borrowing plan, which included the same projects for which Council had already borrowed $6 million. DiGiacinto voted No.

Although Mayor Callahan opposed a tax hike, he increased City fees wherever he could. Recycling fees will increase from $40 to $60. It will cost you more to golf, too.

Disgusted, Bethlehem resident Chuck Nyul asked Council, "Have you no regard for this City? I love this place, but i'm starting to hate some of the people that are governing it."

Video Highlights"

Firefighter Union President David Saltzer: "I feel safer already."

City Resident Chuck Nyul: "Have you no regard for this City?"


Anonymous said...

This is what happens when you let an ambitious career politician with no experience run a city. This has been a male model mayor with no management experience. He surrounded himself with some real operators.

I wonder where this crew plans to take their road show next. May God have mercy on whatever government they cast their ambitious eyes on.

I believe the next election we need an entirely new group of city council people. We should even vote for a new mayor.

I remember a few elections ago when a group ran for city council. I supported Donchez and Reynolds because they are long time city guys. Now I think I should have voted for some different people.

Anonymous said...

Dolan and Evans are on the way out. they accept a 3.9 raise of their own while cutting legitimate raises for city employees. city employees and citizens are taking it on the chin for an inapt boy mayor, mismanagement and a mostly turn your heard rubber stamp council. Raising fees is nothing but a hidden tax and then they raise taxes anyway. No one will answer the question What happened to the casino money.

public services will suffer. hope you don't get 4 feet of snow or two fires at the same time. Perhaps the non union employees should unionize so they won't continue to get screwed by union teachers and incompetent administrators.

Anonymous said...

Notice that 5 of the weakkneed council people are either union or prior union and of course all of them are democrats. Thus why the union is never pushed to provide concessions or to pay higher costs for their medical benefits.

They and the over their head administration constantly rant and rave that over 80% of the budget is personal related.Then do something about it besides taking it out on non-union personnel. Force the union to do their part.

If not,Anon 5:16 has a good suggestion in that the non-union personnel should look into protecting themselves from administrative incompetence by unionizing if they can.

Anonymous said...

Why has this been allowed to grow into such a problem? Why haven't oversight measures been applied or enforced? This mess just did not happen overnight.Obviously school teachers and drug sellers do not make great or even good administrators or leaders

Anonymous said...

Bernie-Forget tax increases. It's Christmas. Do you remember the Seinfeld episode where Jerry refused to go along with Kramer's new lobby touchy feely program, only to live to regret it.


STATEN ISLAND, N.Y. -- They can congregate and kibitz — but only for 90 minutes a day, twice a week.

That’s the essence of a state Supreme Court ruling, ending a two-year war of words and affirming the right of five seniors at a New Springville condominium to chitchat in their building lobby, while putting restrictions on them.

The fivesome — Leroy Tepper, Ronald Silver, Thomas Milazzo, Charles Montemaranno and Thomas Raia — sued the Elmwood Park Condominium II condo, its managing agent and president of the board of managers last year in state Supreme Court, St. George, after their nightly meetings were banned for violating condominium bylaws against loitering.

Some residents also complained the men let strangers into the building and sometimes made unwanted comments — charges the seniors denied.

Courtesy: Drudge Report

Anonymous said...

Some Call reporter wrote the following. Can it be true your favorite Hot Tamale owns an airplane? We thought you loved her for her good looks.

"Voting to take the grant were Haines, Anthony Boyle, Tony Iannelli, Larry Sheridan, Randy Uhler and airplane owners Frank Kovacs and Cindy Feinberg."

Anonymous said...

I think it's telling that the members of city council will cut the non union staff so much that essential services will be hurt, while at the same time refusing to cut the pay of the heads of department and the mayor. Or for that matter to stop personal use of city cars after a number of people asked council to do that. It always comes down to making us pay while they keep $80,000 per year salaries and expense accounts.

What ever happen to leading by example?

John Callahan sits there and smirks at everything that is suggested from the citizens. Reynolds is too busy giving certain citizens dirty looks, and Donchez wants to be mayor while voting for every increase that comes in front of him. All the while protecting the mayor when he "improperly used host fee money", and now trying to tamp down the illegally used $5.8 million.

The casino is here; did you get a tax break?

Anonymous said...

I applaude Chuck Nyul for saying, "Have you no regard for this City? I love this place, but i'm starting to hate some of the people that are governing it." I also thought it was great that he asked if city council even looks into any of the items that are brought in front of them prior to the meetings, because it almost seems as if they don't. I agree with Chuck wholeheartedly, and hope that everyone who lives in this city feels the same so we can eliminate the incompetent and complacent individuals who hold positions of authority who clearly should not... I am uncertain if city council truly knows what is happening inside City Hall, but I would place a very large wager that they don't (with the exception of Dave DiGiacinto).

Anonymous said...

hehe I guess Callahan spent too much on his campaign.... I knew the guy was a snake the first time I saw him, Just watch his depate. Henry Schaadt

Bernie O'Hare said...

It surprises me that the nonunion employees were denied what is being spent on the union, even after a department head found the money and spoke of morale being a factor. It is incredibly short-sighted to make these folks suffer when their work is essentially what runs the City. I was dismayed that no money could be found for 6 firefighter positions, which is just going to invite OT beyond what is budgeted. I was appalled at the decision to get rid of a CPA in a City where sound accounting seems like an afterthought. And why would a part-time City Council NOT avail itself of a budget analyst after all those deficits? Instead, they eliminated or severely cut the budget for that.

All in all, a poor job by both the Mayor and City Council. Council received some praise last night for looking closely. If this is what is considered a close look at a budget, I'd like to see what things were like before.

Patrick McHenry said...

Bernie -

I don't live in Bethlehem so I haven't been following this closely. However, I think the biggest problem with this approach is the debt portion.

I think it's obscene to ask future generations to pay the bill for items we're unwilling to pay for ourself. In addition, I think borrowing money to pay operating expenses is in direct conflict with state law.

Anonymous said...

Patrick -
A lot of what they do with money is against the law, and nobody bothers to look into it. One day the state and the feds will take notice on how grant funds are spent and then it really will hit the fan.

Also, did anyone look at the 2011 budget? There are cost of living raises in there....

Anonymous said...

Council is assuming that anyone off the street can be a City employee. The combination of the folks leaving via the pension incentive, layoffs and those that will find greener pastures, services are going to take a hit from the learning curve of the replacements.

And those replacements aren't going to be top flight. What professional wants to take a job where you know you're not going to get a raise and be asked to pay more for your benefits?

When you see Tony Hanna jumping ship, you know the ship isn't only taking on water, but it's on fire.

On another note, how Reichard remains employed is the biggest question of 2010.

Clem said...

Yes, the morale of public employees is very important. We can't have them sulking or whining, they won't be able to properly perform during their "Not before 9 or not after 4:30 hours" or between their closed for "Martin Luther King day" and "Presidents Day" holidays or be able to properly blow off concerns or requests of those who pay them, or efficiently allow calls to go to voicemail.

If they don't believe their world is perfect, why, they may just have a meltdown.

Poor babies.

Clem said...

Anonymous said...
Council is assuming that anyone off the street can be a City employee.

Give that council a Gold Star!

If you think that is not the case, why not test it? Call the bluff, let them walk, see what happens. The sky, contrary to public employees bloated opinion of themselves, will not fall. Promise.

Anonymous said...

Oh my god Bernie..Dont your posters get tired of whining about everything..bethlehem wouldnt have all of this debt if they had passed a modest tax increase when they needed it in the past..The entire tax increase will cost taxpayers about $1. a week if that..Give it a break already..Council was obviously more concerned about the future of the city than their own political future..Three cheers for guts..Unlike the mayor...Then Digiacento votes against the taxes increasing and then tries to add more costs to the budget..Are you kidding me? As a bethlehem taxpayer i'm thrilled that Council decided against adding more debt..And stop the idiotic ranting about the casino monies..How do you think they were able to avoid tax increases the last four years..By using the casino money. Who are the freaking morons that thought that it would go to cut taxes? Their money went to avoid increases.

Anonymous said...

The City has been mismanaged for years and blaming the current council/mayor is like blaming the Giant's loss to the Eagles on the punter. The seeds were planted by earlier councils and administrations.

Bethlehem was lazy during the fat years (Bethlehem Steel heyday) never feeling the need for fiscal responsibility when big steel would gladly bail them out when over spent. After BS demise, the last three mayors put guns to the head of BPA, water, BHA to try to plug budgetary holes. Anything but fess up, curb spending and maybe increase taxes incrementally. No....'tis far better to ignore the problem of out of control spending, then rob Peter to pay Paul. Fools.

Look it up, I 've been sounding this alarm for a while now.


Anonymous said...

All that debt; Easton has a ton as well, despite today's planned dog and pony exhibition. It's the debt, stupid.

Al Bernotas said...

No, it's the spending, stupid!

Anonymous said...

no it's the crooked administration and asleep at the wheel council, STUPID!!

Anonymous said...

Morning Call, The (Allentown, PA)--January 16, 2008
Fire union and city agree to contract**Betting on casino, pact has 5.5% and 6% raises in 2009 and 2010
After the longest labor negotiations in Bethlehem's recent history, Bethlehem firefighters and city officials have reached an agreement on a four-year contract that saves the biggest boost in pay until the Sands BethWorks casino is expected to open. The contract is retroactive, with 4 percent increases last year and this year. Next year, firefighters will receive a 5.5 percent bump, and 6 percent in 2010. That's when the city expects to be in a better financial position and to receive an annual $8.7 million host fee from the future Sands BethWorks casino.

Anonymous said...

Morning Call, The (Allentown, PA)--January 23, 2008
New face in city controller office aims to bring fresh ideas**Scrutiny of casino revenue, spending among goals for 2008
As Bethlehem's first new controller in 45 years, Meg Holland laid out a first-year agenda Tuesday that includes more spending controls, a telephone tip line and a promise to keep track of the $8.7 million expected to come from the Sands BethWorks casino each year. The work could range from tasks as simple as recording the purchase of a shovel the day a city worker buys it to a more in-depth query of city accounts using new software."I don't want to point fingers at people," Holland said from her third-floor office at City Hall. "I want to make the city more streamlined and efficient."

Anonymous said...

Morning Call, The (Allentown, PA)--February 27, 2008
Bethlehem hedges bets on on-time casino**Officials try to plan for risk of Sands opening later than June 2009 It may take awhile before Bethlehem taxpayers see any relief in their city tax bill as a result of getting host fees from the Sands BethWorks casino, the city's business administrator acknowledged during a City Council Finance Committee meeting Tuesday. The Callahan administration is currently working on a five-year financial model that details how the city plans to budget the estimated $8.7million in annual host fees, said Dennis Reichard, the city's chief financial officer. Reichard declined to provide further details until "very soon," when Mayor John Callahan is ready to unveil them. He and Callahan also are working on a plan to fill in 2009 budget holes in case the casino doesn't open by its target date in 16 months.

Anonymous said...

Morning Call, The (Allentown, PA-- October 11, 2007

Audit finds Bethlehem outspent income ** City borrowed escrow funds to make ends meet. Councilman thinks that's illegal.
A draft of Bethlehem's 2006 audit shows that the city spent $1.6 million more than it brought in last year, reigniting a debate over how the city pays its bills and setting the stage for the budget talks -- and possible tax hikes -- next month. Councilman Joseph Leeson Jr. said the audit shows a budget deficit, which he believes violates state and city law.

Anonymous said... blog by Nicole Radzievich at 07:37:44 PM on December 21, 2010

"For everything there is a season," Mowrer said. "I've had all my seasons here."

It's time, he said, to let someone else make his or her mark on council.

Hopefuly it Reynolds will have had all of his seasons there as well!

Anonymous said...

The 0.75-mill increase, which will add an extra $37.50 for every home valued $50,000. $75.00 for every home valued at $100,000. $112.50 for a home valued at $150,000. $150.00 for a home valued at $200,000.

Add to that the increased fees for recycling, sewer, water, inspections, permits, recreation, etc. which could add another $100 or so on average per year.

Add to that the increase in school taxes, along with the anticipated second round increase coming soon and that will be another few hundred.

If I were to walk up to you and take $500 from you it would probably get you pretty angry. But for some reason the government does it under the guise of "we'll plow your streets" and it seems perfectly fine.

Well it's not fine! That's mortgage money, that's a dinner with the family that will help a local business stay open and keep jobs. That's almost a year's worth of filling up a car's gas tank at the gas station so you can get to work. That's money someone on a fixed income needs to survive. That is the difference between someone living from pay check to paycheck to going into the rears and deciding it makes more sense to rob someone to make ends meet again.

How many fees, tax hikes, and inflation can the everyday worker who is earning just above minimum wage afford?

I keep hearing about how difficult it is for people from the members of city council, but five out of seven are or were school teachers. They have/had built in union sanctioned raises, which rarely are frozen. They are the people who's "heart bleeds" for us peasants. Then they nickel and dime us into the poor house.

Anonymous said...

Dolan is a hypocrite. Period. It is unfathomable that she would take a 4 percent raise in her cushy, easy, taxpayer funded public school job and shite on the non unionized workers. Shame on you Karen Dolan, shame on you. Please resign now.

Anonymous said...

The problem is not the over spending or the borrowing to pay bills. the problem is that whenever sombody brings up the corrupt practices, nobody pays attention.

If you expose a problem you are branded a kook or a disgruntled citizen and you are ridiculed.
That's the price you pay for "open" for business government.

Anonymous said...

Eric Evans for City Council

“We all need to think of ourselves as shareholders of our city. As Bethlehem continues to evolve, important decisions are going to be made. My life’s experiences have put me in a position to feel confident that I can make those decisions for our shareholders. I hope you find me to be the best qualified candidate to do that for City Council. Please vote for me on May 19th, 2009.”

Vision, Courage, Humility, Integrity


“Especially in this economic climate, we need to hold the line on taxes and fees.”

•Evaluate all city services for need, effectiveness, and efficiency

Vision, Courage, Humility, Integrity

Lets not forget Evans in all of this!

Bernie O'Hare said...

"Especially in this economic climate, we need to hold the line on taxes and fees.”

This is damaging.

Bernie O'Hare said...

"The problem is not the over spending or the borrowing to pay bills. the problem is that whenever sombody brings up the corrupt practices, nobody pays attention."

I'm inclined to agree with this. I don't think anyone is personally profiting, but the word "corrupt" is apt. The City admin. has taken money set aside for specific purposes and has blown it on other things. When I first found out about this last year, there were numerous skeptics. But last week, Callahan himself admitted that's precisely what they do, in an open meeting.

In August, I sat in a conference room during a Finance Committee hearing and listened to city officials swear up and down that this year's pension payment would be made on time. It was not, and the City admin tried to pretend it was talking about next year's pension payment. In fact, that is how it was reported in at least one news account. You see, the public is misled, and this occurs after what I'd have to call a blatant lie to the president of City Council.

Everybody who knows Business Administrator Dennis Reichard tells me he's a nice guy. If that's so, he should have no trouble finding a new job. He should be fired. He has been an active participant in a course of deception to City Council. If Bethlehem can fire a cop for being dishonest, then why not a deceptive Business Administrator?

Bernie O'Hare said...

"Meg Holland laid out a first-year agenda Tuesday that includes more spending controls, a telephone tip line and a promise to keep track of the $8.7 million expected to come from the Sands BethWorks casino each year."

She was in the audience on Tuesday night, but I'd have to say she's been a big disappointment who has done nothing to stop the practice of commingling. Instead, she assumed the role of Callahan cheerleader. This is not what I expected. I thought that, as a CPA and an R, she would be a fiscal watchdog.

Anonymous said...

As a result of the reduction of money budgeted for department areas, we are forced to cut down on our number of personnel. Under this plan, older employees will be asked to take early retirement, thus permitting the retention of younger people who represent our future. Therefore, a program to phase out older personnel by the end of the current fiscal year, via retirement, will be placed into effect immediately.

This program will be known as SLAP (Sever Late-Aged Personnel). Employees who are SLAPPED will be given the opportunity to look for jobs outside the company. SLAPPED employees can request a review of their employment records before actual retirement takes place. This review phase of the program is called SCREW. SCREW (Survey of Capabilities of Retired Early Workers). All employees who have been SLAPPED and SCREWED may file an appeal with upper management.

This appeal is called SHAFT (Study by Higher Authority Following Termination). Under the terms of the new policy, an employee may be SLAPPED once, SCREWED twice, but may be SHAFTED as many times as the company deems appropriate.

If an employee follows the above procedure, he/she will be entitled to get: HERPES (Half Earnings for Retired Personnel's Early Severance) or CLAP (Combined Lump sum Assistance Payment). As HERPES and CLAP are considered benefit plans, any employee who has received HERPES or CLAP will no longer be SLAPPED or SCREWED by the company.

Management wishes to assure the younger employees who remain on board, that the company will continue its policy of training employees through our Special High Intensity Training (SHIT). We take pride in the amount of SHIT our employees receive. We have given our employees more SHIT than any company in this area. If any employee feels they do not receive enough SHIT on the job, see your immediate supervisor. Your supervisor is specially trained to make sure you receive all the SHIT you can stand. Please contact personnel directly to recommend any senior employees you feel need to be SLAPPED, SCREWED or SHAFTED. And, once again, thanks for all your years of service with us.

The Passed Dec 21 2010
6 yeas 1 nay

Bernie O'Hare said...

"And stop the idiotic ranting about the casino monies..How do you think they were able to avoid tax increases the last four years..By using the casino money."

Um, the casino opened in May 2009, so I don't understand how that explains 4 years w/o a tax increase. I have another explanation. Callahan cooked the books for his first 4 years so he could win re-election and then simultaneously run for Congress.

" Who are the freaking morons that thought that it would go to cut taxes? Their money went to avoid increases."

Um, that would be Callahan. He specifically said that in a State of the City address.

Anonymous said...

Here you go Berine in his own words!!!

Morning Call, The (Allentown, PA) - April 21, 2005 length: 547 words

Callahan says $10 million slots levy will allow him to lower taxes ** Rybak says mayor too worried about campaign contributors.

Bethlehem's $10 million annual levy for hosting a slots parlor would allow the city to immediately lower taxes, Bethlehem Mayor John Callahan pledged during a mayoral debate on Wednesday. Standing before a room of senior citizens and his Democratic challenger, Anthony Rybak, Callahan said the $10 million fee would represent nearly one-fifth of Bethlehem's current $52 million budget. "This would be an enormous economic boost to the city,"...

Anonymous said...

Categories: Congress, Election 2010, Pennsylvania, Politics
Posted by The Morning Call at 11:45:00 AM on October 20, 2010

[Comment Lee Schantz: ] Question:
Bethlehem ran into the red in 2008 and 2009. What you going to help rein in the $1.3 trillion federal deficit spending???

John Callahan: We can’t force our grandkids to pay our bills. Charlie dug us a $3 trillion hole, one that will cost every man, woman, and child alive today $10,000. – that doesn’t include the $850 billion Wall Street bailout Dent voted for.

We have to get our debt under control. I’ve done it in Bethlehem, cutting $10 million in government waste, and reducing the debt by $60 million. Despite what Congressman Dent says, we haven't had a tax increase in Bethlehem in 4 years - the longest period in 30 years. I’ll do it in Washington. I’ve got a plan to reduce debt, you can read it at

1. No More Bailouts- We’ve got to stop putting the taxpayer on the hook for Wall Streets errors.

2. Freeze Spending- You know families are having to sit around the kitchen table and make hard decisions about what they can afford. It’s time Washington does the same. It's time for us to look at a non-defense/non-entitlement spending freeze.

3. Support “Pay as you go rules”- This means if Washington wants to spend more money they have to have a way to pay for it. Charlie’s voted against this, but I’ll always support it.

4. Reward Innovation- It’s time we bring the same ingenuity that the private sector has to government. We’ve done it in Bethlehem and it’s saved us $10 millions so far.

When any of them run for office I'm going to be ask them the hard ones!!!PS unless the cops throw me out! Right Bernie???

Bernie O'Hare said...

They have done that.

Bernie O'Hare said...

"Bethlehem's $10 million annual levy for hosting a slots parlor would allow the city to immediately lower taxes,"

And notice the use of the word "immediately."

Anonymous said...

With Gordon Mower stepping down from City council, I wonder how many Callahan clones will be running for his seat. I know some great people to run for City Council next year but they won't even bother. As one told me, I am neither a teacher or a Bethlehem hero, so I see little point in running.

So I guess we will once again see a Bethlehem teacher and/or Callahan rubber stamp among the ten or twenty candidates.

Sad, very sad.

The Taxman

Anonymous said...

With Gordon Mower stepping down from City council, I wonder how many Callahan clones will be running for his seat. I know some great people to run for City Council next year but they won't even bother. As one told me, I am neither a teacher or a Bethlehem hero, so I see little point in running.

The Democrats already have their yes man lined up.!/pages/Michael-Recchiuti-For-Bethlehem-City-Council/58811691806

He started showing up to City Council meetings and palling around with the "better than you club" after the meetings.

He's another one that is a meat puppet for the mayor, so much so that he received a very large contribution from Callahan the last time he ran. And lost. Sure, I'll run out and vote for a lawyer who works for the parking authority. Uh huh, no connection to the mayor at all! Not even a little bit. (sarcasm)

"I am running for City Council to make Bethlehem a better place to live, work and raise a family."

Sure you are! That's about as original and genuine as "I will not raise taxes".

Anonymous said...

Wasn't this Recchiuti guy Willie Reynolds campaign manager in his run. I believe he also ran for Council a few years ago.

HOHOHO, I guess Bethlehem will get a new Willie come next election. Just what the city needs,dueling rubber stamps. HOHOHO!!!

Merry Christmas,Oh little town of Bethlehem. Soon you taxpayers will all be living in stables.

Merry Christmas