NorCo Council Approves $35 Million Bond Ordinance For New Parking Deck, Radio System

By a 7-2 vote, Northampton County Council voted last night to approve a $35 million bond that would finance a new parking deck at the courthouse campus, a new radio system for first responders, other county projects at the jail and to purchase assets currently under lease. Voting No were Council members John Brown and John Goffredo. The Yes votes came from Council members Ken Kraft, Kelly Keegan, Jeff Warren, Jeff Corpora, Lori Vargo Heffner, Ron Heckman and Tom Giovanni. 

Brown complained that no plans were ever presented to Council for the new parking deck even though detailed plans were presented in July and discussed several times. In fact, after those plans were presented, Goffredo insisted he could bring in an expert t show that there was no need for a new parking deck. That never happened, and even Goffredo last night acknowledges that a new parking deck is needed. 

He was still skeptical because a parking deck would cost about $21 million but the bond is for $35 million. "We're cutting a blank check and we don't know what we're getting," he said. Public Works Director Mike Emili said that the county could spend about a half million to get more refined estimates, but any savings would be lost by waiting for the bond. 

Financial Advisor Scott Shearer told Council that $6 million of the $35 million would pay for the purchase of energy conservation assets currently under lease. He added that bonds would not be sold until March or April. The bonds would be repaid over 16 years. 

Council member Jeff Warren produced a picture of a car damaged by falling concrete in the deck. "This is a vehicle. I don't want it to be a family walking into this building. It's a public safety hazard, straight up."

McClure Administration Makes Case to Borrow $60 Million For New Garage and Office Building at NorCo Courthouse Campus

At yesterday's Finance Committee meeting of NorCo Council, Executive Lamont McClure made the case for borrowing the money needed for a new garage and office building at the courthouse campus. (Preliminary plans were discussed here). His basic argument is that the county is in a very good financial position to assume more debt.

McClure stated that there have been no tax increases in any of the past six budgets presented, including a tax cut in 2022. During that time, the size of county government has actually decreased 31% ($121 million). Moreover, during these six years, outside auditors have annually given the county a clean bill of financial health. 

He also addresses the claim that he is only able to do these things by cutting into the county's fund balance and reducing it until a massive tax hike is necessary. That's just untrue, he observed. He told Council that the average fund balance over the past six years has been $48 million.  He predicts it will be $50 million this year. 

Fiscal Affairs Director Steve Barron followed McClure. He explained that municipal debt is financed through Non-Taxable Bonds sold on the secondary market. "Acquiring debt to construct buildings and infrastructure for government services effectively reduces the burden on today's taxpayers, distributing payments over the useful life of the facility so that those benefiting from it contribute to debt service payments."

According to Barron. most municipalities consider $1,600 to $2,000 per person as a reasonable debt load. If the county assumes new debt to finance the garage and office building, the burden per taxpayer would be $440.73, which is significantly below the average. 

Barron also told County Council that the total assessed value of taxable county property is over $10 billion. The debt burden of financing a garage and office building would be 1.4% of the county’s assessed value. 

He also discussed the $100 million in annual revenue generated by the county. While many municipalities allocate between 40% and 50% of their revenue to debt service, Northampton County's allocation is notably lower at 16.6%. "In summary, with over a billion dollars of borrowing capacity, we currently utilize only 8.2% of that capacity. The new proposal would bring us to 12%. These factors contribute to Northampton County's Aa1 rating from Moody's and its status as an excellent credit risk, attributed to our timely payments, robust revenue, prudent debt management, and conservative approach." 

Barron then introduced Scott Shearer from PFM, who discussed the options for borrowing $60 million in new debt. He said current rates on bond debt are about 2.6%, below historical averages. Moreover, the county can invest this borrowed money with a 4% return rate until the money is needed. He added that demand is high for tax exempt bonds from highly rated entities like the county. 

There are two ways to re-pay a $60 million bond. The first is through level payments over 20 years, similar to a typical mortgage. The second is through wrap around payments in which the amounts increase over time. 

Shearer told Council that borrowing $60 million should have no adverse impact on the county's bond rating. 

Over $400,000 Still Left From 2001's $111 Million Megabond

$439,419.45, to be exact. Late last year, Northampton County Council considered applying these proceeds to capital projects at Gracedale. But at the last Council meeting, financial advisers warned that bond counsel might want that money used to refinance bonds for the swaption.

During a Finance Committee meeting yesterday, Doran Hammond recommended freezing the money until the swaption issue is resolved. He noted that $13 million in capitol improvements are underway at Gracedale, thanks to a Guaranteed Energy Savings Agreement proposed last year by County Executive John Stoffa.

Didn't Chrin Say He'd Fund Tatamy Interchange Himself?

It's bad enough that what little is left of the LV's rural charm is being destroyed by someone who already owns half of Northampton County and whose sole motivation is greed. Now comes word that we could end up paying for it, too. That Interchange, incidentally, was originally part of Glenn Reibman's megabond.

John Stoffa Can Build a $16 Million Birdhouse

After dragging its feet the past few months, Northampton County Council last night unanimously adopted a $16 million bond ordinance. Half of the money will go for juvenile justice center expansion ($5.5 million), parking deck repairs ($1.5 million) and bridge reconstruction ($1 million). The remaining half will refinance $8 million in existing debt. Council member Diane Neiper was absent, but the remaining members all support the bond. "It's amazing how successful this bond has become in the last two weeks," was Ron Angle's pithy observation following the vote.

Just two weeks ago, this bond was no sure thing.

Council member Charles Dertinger refused to accept realistic cost estimates that were actually prepared by engineers. He warned actual costs would be much higher. But Dertinger was mistaken. Public bids have since come in for these projects, and it turns out they are slightly lower than the cost estimates. Last night, Dertinger was unusually quiet.

Lamont McClure, usually a Stoffa critic, suddenly became downright complimentary. He was particularly impressed by Stoffa's pledge that eighty per cent of the labor would come from the Lehigh Valley.

But perhaps the best sign of Stoffa's financial stewardship comes from Standard & Poor's decision, made Wednesday, to raise Northampton County's bond rating from "AA-" to "AA." According to these credit analysts, "[t]he county's financial position continues to improve due to conservative budgeting and better-than-expected revenues." ... "We expect the county's management team will continue its strong financial performance and maintain its very strong financial position." The County's Financial advisor told council last night, "There are very few credits this strong in the Commonwealth."

Since coming aboard, Stoffa has insisted on a healthy cash reserve, with more than a little help from the Northampton County Bulldog, Ron Angle. Unlike Allentown's Mayor Pawlowski, Stoffa has also strived to be realistic about revenue projections.

As a result, Northampton's new AA rating is higher than Lehigh County.

This increased bond rating is also a credit to Northampton County's very quiet Fiscal Affairs Director, Vic Mazziotti. When I told you he has found ways to save taxpayers nearly $10 million annually, that was no election spin.

The icing on the cake is the Internet Auction that took place on Thursday. The winning bid was a 3.50 interest rate. The county will save over $500,000 on the bonds it is refinancing, or seven percent of what would otherwise be paid. In addition, the county saves another $394,000 on the amount it had set aside to pay for debt service on the bond this year.

Charles Dertinger had previously complained, "We have an administration that can't build a birdhouse." Looks like John Stoffa builds a pretty good birdhouse after all.

Stoffa's Bond Delayed By Council ... Again

A year ago, Northampton County Council was screaming about Executive John Stoffa's failure to get anything done. Council member Charles Dertinger complained, "We have an administration that can't build a birdhouse." Yet this same group last night put the brakes on a $16 million bond proposed for a juvenile justice center expansion ($5.5 million), parking deck repairs ($1.5 million) and bridge reconstruction ($1 million). The borrowing plan also refinances around $8 million in existing debt.

This time, Dertinger is unwilling to accept cost estimates prepared by engineering firms. "I have something in my office that says, 'The engineer's estimate is the cost of construction in heaven' because it's never right. ... The engineer's estimate is never right." He never did explain exactly what else is needed.

Funny thing. Pennsylvania's Debt Act requires only that projects be supported by realistic cost estimates. The county has those, and Director of Administration reminded council that information was supplied during last year's budget hearings. "This information isn't new." County engineer Steve DeSalva added that a 10% contingency is added to each estimate for cost overruns. But an unusually docile Ron Angle was bending over backwards to be nice to Dertinger. He moved to table the bond so that the county can provide whatever information is deemed so necessary to Dertinger.

An exasperated Conklin told council they've already prepared documents for an imminent Internet sale. "You want to take a risk on it goes for a vote here tonight?" asked Angle.

Conklin was willing to take that risk, but not Stoffa. He agreed to put on the brakes, but warned Council, "Don't criticize us for not getting projects done."

Council's table last night marks the second time this month they've avoided Stoffa's proposal.

Northampton County Reduces Bond From $22MM to $16MM

An uncertain economy prompted Northampton County Council last night to reduce a contemplated $22 million bond to $16 million. Members instead voted, 8 to 1, to support funding for juvenile detention center ($5.5 million) as well as parking deck($1.5 million) and bridge repairs ($1 million). In addition, the County will refinance $8 million in previous bonds at a lower rate. Charles Dertinger was the sole dissenting vote.

When Diane Neiper asked why the County could not use funds on hand, County Executive John Stoffa answered with an ominous warning about the pension fund. "We put $6.5 million in, we just found out we have to put $6.7 million in. Next year, it's going to be more. We can't keep gobbling up money from that fund balance or we're going to have to raise taxes. That retirement fund is looming there with significant numbers behind it."

Northampton County's Capital Needs

Northampton County Executive John Stoffa has given council a progress report on the capital needs of the county, as well as other drains on cash. I thought I'd share it with you.

BOND ISSUE/ CAPITAL PROJECTS/ BUILDING NEEDS OF NORTHAMPTON COUNTY AS PROPOSED ON 5/14/2008:

I. THIRTY MILLION DOLLAR BOND ISSUE

None of this can happen without the bond issue or funding from another source. ... The bond issue needs to be decided soon!

Parking Deck - Reviewing immediate repairs that need to be made - trying to keep costs down. [$16 million for new deck].

Parking Deck Demolition - No report. [$4 million demo cost].

Archives - Decision made to be a stand alone building. Sent out RFQ's. Three firms selected. Met with them to discuss the design of the new archives' building. These three firms were given RFP's with a response date of June 12, 2008. Selection of an architect to be made within a week after June 12, 2008. [$3 million cost].

Juvenile Justice Center Expansion - Decision has been made to recommend USA Architect for the design of the center as the result of the RFP process. [$5 million cost].

Old Courthouse Replacement Windows - Engineering fact finding is under way to
determine the scope of the work. Reviewing alternative energy saving programs that might assist with the funding. [$2 million for 120 old windows].

II. ADDITIONAL PROJECTS - FUNDED

Gracedale Windows - Contract is signed. The first preconstruction meeting was held, The contractor has begun set-up operations.

Prison Roof - No report.

Courthouse Concrete Work - I am attempting to secure a signed letter from Mayor Callahan indicating the exact amount of the unused Commerce Center Boulevard grant. We are at the beginning stages of gathering necessary information for the concrete work.

III. TREATMENT CENTER - WORK RELEASE

Proper documentation to be submitted to Bethlehem Township in June for target healing dates in July with the Bethlehem Township Planning Commission and Zoning Hearing Boards.

IV. ADDITIONAL PROJECTS - UNFUNDED OR FUNDED BY FUND BALANCE *

Pavement of the Union Street Gravel Lot - Working on lighting as rapidly as possible in view of recent break-ins to cars parked there. The goal is to have lighting by end of June 2008.

Gracedale Repaving of Parking Lots - The engineering study is under way.

Weaversville Park - On schedule.

Open Space Line of Credit

*Hay Study - In progress, nearing the end.

*Correction Officers Arbitration - Resolved.

*Deputy Sheriff Arbitration - The decision expected within a month.

Northampton County Inches Closer to $30 Million Bond

The vote was 7 to 1. Northampton County council member Lamont McClure believes the county already has enough debt, but the rest of his colleagues voted last night to support a resolution endorsing a $30 million bond for capital projects. There was little discussion. Council member Charles Dertinger was absent.

This resolution does not authorize the county to borrow any money, but only expresses a consensus that county exec John Stoffa should continue exploring a $30 million bond.

Northampton County Inches Closer to $30 Million Bond

I told you earlier this month that Northampton County is taking baby steps towards a $30 million bond for these capital improvements:

New parking deck - $16.1 million.
Stand alone archives building - $4 million.
Juvenile Justice Center Expansion - $5 million.
Old courthouse replacement windows - $2 million.
Demolition of old parking deck - $4 million.

Fiscal Affairs Director Vic Mazziotti yesterday told the Finance Committee that the thirty year payoff on this bond will be between $50 and $56 million. He also claimed the county is on track to have the money by October. Tonight, county council will be asked to adopt a bond issue resolution. This is preliminary to an actual bond ordinance, based on realistic cost estimates.

Northampton County Inches Towards $30 MM Bond

It would be hard to call Northampton County exec John Stoffa enthusiastic as the county inches its way towards its biggest spending plan since its 2001 $111 million megabond. That one promised 30,000 jobs, but actually resulted in county layoffs and two tax increases.

But Northampton County Council is hell bent on spending money even though it's fairly obvious that the administration has a lot of work to do, and yesterday's finance committee meeting resulted in a unaimous vote to move ahead with a $30 million bond at full speed.

"Wayne never met a bond issue he didn't like," noted Ron Angle, and Wayne Grube actually agreed with him.

Council prez Ann McHale added, "I never met a bond issue I didn't like, either."

Get the picture?

Here's the plan so far.

New parking deck - $16.1 million.
Stand alone archives building - $4 million.
Juvenile Justice Center Expansion - $5 million.
Old courthouse replacement windows - $2 million.
Demolition of old parking deck - $4 million.

The Morning Call has a few more details, but not much.

$37.5 Million Parking Deck Proposed in Northampton County

It was a packed house. Northampton County Council Finance Committee meetings as usually as entertaining as watching paint dry. Yet twenty-four people and seven council members were present yesterday. That has to be some kind of record.

Sitting in the peanut gallery was former Director of Administration Jim Hickey. He was right next to the current Director, John Conklin, giving him nasty lessons.

Hickey took one look at me and asked, "Who's the father?"

I took the high road and tried ignoring the miserable bastard, moving to the other side of the room. But when Hickey's project was presented, I had to move back so I could see a fancy power point presentation.

Budget Administrator Doran Hamann - there because of the proposed rebate - turned around when I plopped down. He saw Hickey, inexplicably smiled, and asked, "Do you miss us?"

"Like VD," was Jim's sensitive response.

Hickey was actually at this finance committee meeting on a matter very important to anyone who works at or near the courthouse.

Parking.

As anyone who travels to the courthouse will readily attest, there is none. I usually park in one of the judge's spots, so it doesn't bother me. But things are about to get a lot worse. The county's parking deck is 32 years old and has been falling apart the last few years. Its estimated remaining life? Two years. Repairs will cost over $6 million, which translates to $34,000 per parking space. After repairs, it will be necessary to do patch work at least every other year.

Hickey's engineering firm, CMX, was hired to study the county's parking problems and propose a solution. According to CMX, there are currently 803 parking spaces in the lots and public streets around the courthouse. CMX proposes building a new, seven story, parking deck along the south side of Washington Street, near the Milides building recently purchased by the county.

This new parking deck would include, on its ground floor, a new archives, IT and maintenance facility. It would expand parking to 1597 available spaces, at a cost of $18-22,000 per space. It would have a lifespan of fifty to sixty years. Once built, the existing parking deck would be demolished, giving the county much-needed room for prison or courthouse expansion.

Council prez Ann McHale likes the idea of expanding the prison into the existing parking deck "instead of taking property off the tax rolls in Bethlehem Township." Council member Neiper questioned the wisdom of moving archives into the ground floor of a parking garage, and county exec Stoffa indicated he was willing to listen to other ideas.

Total cost, with all the bells and whistles, is projected at a whopping $37.5 million, to be financed by a bond.

It's worth it. It solves a long-term parking problem and gives county facilities a home on its ground floor. Even more importantly, it will now be possible to expand both prison and courthouse without interfering with any of Easton's neighborhoods.

Update: Thanks to The Express Times and Morning Call, I know my report concerning project cost is off. Total cost is $33.75 million,and not $37.5 million as I've reported. Shoot me.

DCED Rejects Allentown Bondslayers

In a nineteen page Order and Opinion, The Pennsylvania Department of Community and Economic Development has rejected all but one count of a citizen challenge to a $35 million bond refinancing plan proposed by Allentown.

The claim that still survives, is focused on the useful lives of the projects being refunded. Under the The Local Government Unit Debt Act, a local government financing a new city hall or other project must be able to pay that debt while they are still being used. Their useful lives must outlast the time it takes to repay the bonds. The city's own bond ordinance indicates that the useful life of some projects, funded in 2003, is only between between five and twenty years. But rather than sustain the complaint, the DCED has given Allentown an opportunity to furnish any documentary evidence to show that the useful lives of these projects will outlast the debt repayment.

Mayor Pawlowski tells Morning Call reporter Paul Muschick that the necessary information has already been sent.

The fat lady may not be singing, but I hear her warming up.