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Thursday, October 15, 2015

Donaher Wants Control Over Hotel Tax Grants

Diane Donaher at CIPP presentation
Sparks flew yesterday during the first of at least four budget hearings for Northampton County Executive John Brown's proposed 2016 Budget. DCED (Dep't of Community and Economic Development) Director Diane Donaher incredibly tried to give herself control over nearly $500,000 in hotel taxes, rather than let the people's representatives decide how that money should be spent. It was a surprising display of hubris from someone who was unable to explain whether she's produced a single job and who, just two years ago, was a voice over artist. In the process of trying to take control of this funding, she has hurt many organizations, including downtown Bethlehem merchants, Celtic Fest and the Walnutport Canal Association. This is because they were unable to submit applications for funding this year.

Pursuant to state law, Northampton County collects a 4% hotel room rental tax from every hotel. It is required to use that revenue for tourism and community development. Over the years, between thirty or forty different groups seek funding by filing applications with the County DCED. They are rated and then forwarded to Council for approval or denial as a part of the budget process.

DCED bureaucrats have always attempted to judge the merits of an application on the basis of objective criteria, which they think is free from politics or favoritism. But Northampton County Council has always had final say and has done some strange things. One year, former Council members Ron Angle and Charles Dertinger both clamored to increase the funding for the Blue Valley Farm Show to about twice what had been sought, if there was even an application. Ann McHale always found a way to make sure the State Theater received more money than it requested.

As flawed as the grants process is, it is transparent and the elected officials who award these grants are accountable in news accounts and at the polls.

This year, Donaher decided, with no authority from the governing body, to suspend the practice of seeking hotel tax grants from local organizations. Thus, Historic Bethlehem is unable to seek a grant of hotel tax revenue year for colonially-costumed docents to lead tours and assist visitors. No money is set aside for the maintenance and care of the historic Kreidersville Covered Bridge, the only covered bridge left in Northampton County. Whether it is the Steelworkers' Archive or the Bath Farmers' Market, Donaher turned off the hotel tax spigot.

Instead of these usual grants, the proposed Budget shows that $496,500 in hotel tax revenue is set aside for "future block grants."

Donaher explained that she was considering giving all or a large portion of it to the Northampton County Historical Society, and let it decide how the money should be spent. "We're looking at changing the process," she said.

Council exploded.

Democrat Lamont McClure said he is "very well aware" of who sits on the Historical Society's Board. He was referring to prominent car dealer L. Anderson Daub, a major contributor to Republican candidates. "This is an outrage," he remarked. Peg Ferraro attempted to steer conversation away from the topic, but McClure and Ken Kraft both insisted that Donaher explain herself.

Donaher denied that she was motivated by a desire to funnel money to Daub's favorite charity. I agree. I believe she is motivated by a colossal ego that is utterly dismissive and almost contemptuous of Council Clearly, she and her bureaucrats think they are better equipped to decide how to spend the people's money than the people's own elected representatives.

She also dismissed questions asking her how many jobs her department has created since she became Director two years ago. She indicated that she relies on LVEDC  (Lehigh Valley Economic Development Corporation) to bring in jobs with 50 or more people. She and her staff work on creating jobs for smaller businesses in places like Nazareth and Hellertown. She was unable to state exactly or even approximately how many new businesses or jobs she's been able to snag.

How Donaher is going to be able to present these grant requests without having first sought applications is a mystery. She left the meeting without speaking to anyone.

Council was far less confrontational over subsidies to the Lehigh Valley Planning Commission (LVPC) and mass transit provider LANTA.

LVPC is slotted to receive an increase from $425,000 in 2015 to $525,000 next year. Executive Director Becky Bradley had sought $575,000, and John Brown said he would have supported a grant in that amount because she "stretches everything we give her." He predicted any money spent on LVPC "will pay dividends back to the county overall." But when Brown called Lehigh County Executive Tom Muller, he learned Lehigh is only giving $525,000. Because the county grants must match, Brown reduced his grant to match Lehigh County.

LANTA also is slated for an increase in funding from $434,400 to $493,700. As explained by Executive Director Owen O'Neill, without that increase, state funding could be jeopardized.

Council learned that no money is being set aside for farmland preservation and other open space programs next year. This is because money set aside in previous years is sufficient to cover all expenses this year. Open Space Chair Scott Parsons actually agreed with Brown that enough money is there. It should be noted that the Chrin TIF has generated $204,000 for farmland preservation.When he was on Council, Ron Angle negotiated a deal with developer Charles Chrin to set aside a small part of the gross sales price of each lot as sold to fund farmland preservation. It is beginning to pay off.

Hayden Phillips also established that $9.3 million will be used from cash reserves to balance next year's budget.

Department heads were missing from yesterday's meeting, despite informal requests that they be made available. Brown promised to make them available for the next three budget hearings.


Anonymous said...

The Farmland Preservation Board took $203,000 of state matching funds from two different towns in 2015, that was the majority of the state match for $350,000 these two towns each put forward. This was the only way the county could predict they would be able to buy all the farms approved for preservation. In short, the Farmland Preservation Board tried to cover Brown's ass for absconding with all of the funding in 2015 - funding that should come from $3.7m we taxpayers pay in 0.5 mill.

What must have happened is that out of $3.5 million raised in 2015 through county, town and state funds, there was money left over because some land owners turned down their offers.

*IF* there is money "left over", the county should give those two towns back the state match money it took in an unprecedented, unannounced and arbitrary action from them in its effort to preserve as many farms as it could, which it did to make up for the fact that Brown defunded Farmland Preservation in 2015 - which caused low participation.

Is there really enough money there? If the county puts forward $0 of new money, it forgoes state matching, which in 2015 was $.93 on the $1. The county put forward $826,000, and got back $768,000 for doing that. Two towns should have gotten $325,000 each that the state sent back for matching their $350,000 contribution, but were only given $122,000. All told, the state sent back over $2m in matching and grants for the county participation in 2015. That is $2m we will not have, in addition to the $750,000 that won't be contributed, and the towns will not contribute any money because the county isn't contributing - the program requires that the towns can't contribute more than the county. If the county contributes $0, the towns contribute $0 by definition. So Brown has hobbled the entire program, and this is the beginning of the end of a highly successful program in Northampton County. We were a leader in the state in farmland preservation, and within one year Brown has all by himself trashed the program. Towns and the county are partners in this program, and the towns' partner has abandoned them totally. What this will cause is towns not to participate, if their funds are being used to preserve farms in other towns - towns that maybe contributed $0. What is the incentive to contribute in your town or put in an EIT, if you can sit back and let another town bring in matching money that is then stolen by the Farmland Preservation Board to preserve your farm in a non-participating town? There is none. This will destroy the entire program, and leave it as a shadow of its former self.

It is impossible that there is "enough" money "left over" to preserve farms at anywhere near the level that should have taken place in 2015 - unless an unprecedented number of farms turned down their offers. There is a rumor that $800,000 is "left over" from 2015. OK, how does that compare with the $2.7m that this means was spent in 2015? Not at all.

Anonymous said...

There is no such thing as a dedicated real estate tax for farmland preservation.

Maggie Mae Mason said...

Donaher is actually making the Bethlehem C&ED look good.

Anonymous said...

Where do you find these people. How can this woman possibly think so highly of herself.

Anonymous said...

Can you identify the farms?

Anonymous said...

County council needs to scrutinize the proposed budget. Look closely council. Discover Lehigh Valley is to get how much? These companies, attractions, hotels etc... have their own marketing departments and their prices to enter those attractions help pay for this. Do the officers of the board of directors get paid? What about the rest of the board? Ridiculous what the county is handing over to this! Do the companies pay Discover Lehigh Valley for their services? If a 5K wants to be held in the valley, don't they have costs? Do they also have to pay DLV a price for the advertising. Taxpayors need more info. Hope council looks very closely line by line at the budget and research each entry. This is just one example. Not just hand over money because it brings in tourism when there are so many other sources that do this too.

Bernie O'Hare said...

1:30, I see your points and would appreciate a confidential call. 610-533-7379. I was concerned about this, but my concerns were allayed when Scott Parsons, who is Council's biggest open space advocate, said he was satisfied. This is why department heads like Maria Bentzoni need to be at those meetings.

Bernie O'Hare said...

You don't have to ask this question. You can look at the budget, which is online. Discover LV will receive $1.5 million, of which about $800,000 will go to LVEDC. I'm not really sure that the County has any control over that distribution of the hotel tax, and would want that closely examined by lawyers before reducing it. our questions are valid, but the state law would need to be reviewed.

Anonymous said...

County DCED almost single handedly sabotaged and destabilized the Slate Belt Community Partnership by threatening to defund it and caused a panic among the four host boro's as they scrambled to find a way to keep the program going. The CIPP grants were now awarded and the SBCP will rec. county funding for econ. development of those four downtown revitalization participant towns. A leak of confidential information from the DCED offices was used to attack the SBCP group as it found its way to the president of Bangor boro council and was then twisted into an attack to sink the program by muddying the waters and causing a now overturned vote to defund and leave the group. Bangor has now voted to support a five year commitment to it along with Wind Gap, Pen Argyl and Portland. County DCED is a mess. Way too much power given to one person.

Bernie O'Hare said...

The Slate Belt Community Partnership is a mess, too. I'd pull the plug on you if i could. The downtowns looks worse now than they did before there was a Main Street manager. And why on earth are her offices in the 'burbs and NOT on one of the Main Streets. She got her job bc of her connections, not bc she is qualified. I'd completely gut this program and start over. The fact that DCED is a mess does not translate to meaning that the Slate Belt Community Partnership is doing fine bc it is not.

Anonymous said...

Then why did boro officials from Portland and Wind Gap speak publically in support of it? Why did 10 current business owners from Bangor voice their support of it and wrote letters of support for it? In response to that overwhelming public backlash, the council relented and voted unanimously to commit to a five year plan of support of financial assistance. Seems you are out voted as to the importance of the program.

Bernie O'Hare said...

That's fine and that's the way democracy works, but I think it needs a new direction.

Anonymous said...

The good news is that once write-in candidate Rich Fegley is elected to Allentown City Council, the evil Republicans in Lehigh County will be stopped in their tracks and finally be forced to pay their fair share.

Anonymous said...

You're a stupido, say.

Anonymous said...

Donaher is an egotistical fraud who fits in perfectly with the Clown administration. The only jobs DCED has created under her leadership have been within the department by adding bureaucrats to make Donaher feel more important. She sucked up county divisions like farmland and Penn State extension so she could look busy rather than perform core functions of DCED - create jobs. Her bloated staff has accomplished nothing in two years. Unless you count a great to a Lehigh County business to recycle latex paint. Donaher is a megalomaniac by trying to take over the hotel tax grants. You are right to suspect that Daub is behind this. But she is trying to grow her sel-importance with this power grab. More authority to basically do nothing.

Anonymous said...

The county needs to stop giving money to non vital activities like the planning commission. I don't know how they justify over a half million dollars. That can be better spent on things that help people.

I'm tired of hearing how Northampton County never has money for things but the planning commission gets that much money which is crazy.

Anonymous said...

She is surrounded by incompetence at home to, can't fix stupid!

Anonymous said...

"...non vital activities..." One should be informed before one throws verbal stones. Without regional planning, taxpayer money is truly wasted. It seems like the Lehigh Valley Planning Commission has been doing a great job in recent years working with the two counties and 62 municipalities that comprise the region.

Bernie O'Hare said...

It has, but it has no real teeth. Everything is a matter of "local concern." I believe that state law should be changed to expand the power of this body to implement more regional planning.

There are a number of crony capitalists among the voting members, but the staff is largely excellent. I also admire and respect Becky Bradley, who did a great job in Easton and is doing a great job at the helm of LVPC. She's a good successor to Mike Kaiser.

Anonymous said...

What happened to the casino money that was given to Northampton County for grants to older communities.

Bernie O'Hare said...

Your question, as stated, is flawed. NorCo receives different sums from the casino for different things. It receives a host fee, which ist can use asa it wished. It also receives slots and table games revenue. The slots revenue is handed out by the Gaming Board, and the primary empasis there is on contiguous municipalities who can show an impact. There is also table games revenue, which can be used by the County as it sees fit. That sum is about $1.2 million, and that is the pool you are discussing. John Brown has set ip a program for awarding those monies to the older boroughs, and I believe the first round is tonight.

Anonymous said...


Is that all you can do, call people names like "stupido"?

I'm not impressed one bit. Time to start paying your fair share. So hop to it.


Anonymous said...

Bernie, you are on to something. Donaher looked like a deer in the headlights trying to explain why DCED was looking at a "new process" for distributing hotel tax money. She mentioned that the director of the Northampton County Historical Society just resigned. Gee, I wonder why? Maybe because that agency is operating in the red? Their board president Andy Daub probably saw an opportunity for the Society to get some additional revenue from the hotel tax fund by giving them a $500 K block grant that would include a percentage for administrating those funds. They would dole out smaller grants to the usual suspects, i.e. State Theater, Bethlehem Historical Society, Celtic Fest, etc. for a fee that would be a new revenue source for the Society. Donaher backpedaled madly when pressed on the issue, now indicating that in ONE WEEK'S TIME they will be accepting grant applications from various non-profits as per the regular process, and recommending funding to council. More egg on the face of Brown's flunky. And, when asked about how many jobs have been created by DCED's initiatives, Donaher DID NOT HAVE AN ANSWER. Duhhhhh. She is supposed to provide that information to council at a future meeting. Baloney! If her department had helped create real jobs, they should have that information at their fingertips. They should have a white board in their office that would proudly display, in large numerals, the jobs they helped create. Donaher's staff just runs around having press conferences about new store fronts, latex paint recycling (that employs workers in another county), and other "busy work" but has not earned their pay by creating ONE JOB. But getting back to the hotel tax, there was something fishy about the Historical Society move that should be further investigated.

Anonymous said...

I like Becky Bradley, too. She plays to the the sustainability crowd and their dopey (but not possible) "high speed rail to New York" folly, but is realistic enough to know they are all nuts.