Leaders Breakfast Presentation [PDF]
2013 Proposed Budget
November 9, 2012
Final Budget [PDF]
Proposed Budget Release Presentation
There is probably no more important responsibility
for a Mayor than developing a budget. Allocating the expenditure
of tax payer dollars is never easy. My department heads work
tirelessly to lay out proposals, which are studied and reduced
all in an effort to ensure that we spend tax dollars wisely.
At the end of the process, a budget is crafted which outlines
the priorities of the City for the upcoming year.
But like other cities in Pennsylvania and across
the country we face some tough financial questions. Questions
there are not necessarily easy answers to. I have, throughout
the year, acknowledged the very real financial pressures the
city is faced with- it would be irresponsible to do otherwise.
I have also proposed fiscally responsible plans to address
these pressures head on.
In spite of the all the cutting of spending
and staff reductions we are still forced to increase taxes.
I have fought with all my heart to make sure that we have
as little a tax increase as possible, but I am here today
to announce that we will ask Bethlehem taxpayers to pay an
additional 8.5% in real estate taxes in 2013. Balancing this
budget was a difficult task. The easy thing to do would have
been to throw our hands up and say the situation is bleak
so we have to raise taxes. Property tax increases should always
be looked at as last resorts after all other options are exhausted
and every other cut has been made. We have tried to hold the
line on spending. We have cut fat and waste from the system.
We have used competition to become more efficient. We have
stretched resources and we have become more creative. We have
faced tremendous financial challenges in the city but the
answers to these challenges are not found by first running
to the taxpayers. To the contrary, we must keep taxes as low
as possible in order to continue to attract the economic investment
that will revitalize our city.
However, throughout this year, I have consistently
demonstrated the willingness to step up and make the right
decisions for the City of Bethlehem – decisions that
were often quite difficult. But part of leadership is having
the courage to make the tough decisions. And unfortunately
after having exhausted every other option the city is in need
of a tax increase.
Today I am proud to present a budget for 2013--a
budget that is balanced, fiscally responsible, and meets both
the short- and long-term goals for the City. The 2013 Budget
is a product of sound fiscal management by every department
in the City, and is the result of sensible management practices,
cost cutting, and growth of the City’s tax base. The
2013 Budget provides the resources necessary to meet the goals
of this administration--delivering excellent city services
in the most cost effective way, and providing the needed investments
in our community to continue to revitalize our neighborhoods
and grow our tax base. We should all be proud to live in “one
of the most livable cities in America” and it is rewarding
to be part of this city’s renaissance. The City continues
to turn the corner with a $56 million increase in the tax
base from last year and a total of $236 million increase since
I took office.
Balancing this budget was a difficult task.
With the five positions cut in this years budget, all total
in the last three years we have reduced the city’s workforce
by 69 positions, representing a 10% reduction in the city’s
total workforce. 80% of the city’s budget is made up
of wages and benefits, and at some point, if you are going
to find meaningful cuts you have to look at your workforce.
Bethlehem, like so many other cities, can no longer afford
the government it had, particularly during these though economic
times, and in the face of rising pension and medical costs
we need to right size our government and bring it in line
with our ability to pay for it. Ultimately, it meant some
very tough choices and separating the nice to have from the
need to have, and understanding the difference between a want
and a need.
I have often said, property tax increases should
always be looked at as a last resort, after all other options
are exhausted and every other cut has been made. Certainly,
with the current state of the nation’s economy-- steady
unemployment with anemic growth is not the time to burden
taxpayers with higher taxes. All of us--whether operating
a household, a business, or a government--need to recognize
the current economic climate and adjust accordingly. We have
done just that.
We have also cut fat and waste from the system,
and will continue to do so through the implementation of Continuous
Improvement, or “CI in the City,” a program that
has already produced millions of dollars of savings to the
I also want to make it clear that we will not
stop there. Throughout 2013 we expect to continue to maximize
efficiencies, and operate government like a business where
possible. We will utilize continuous improvement –with
its functional peer review of our daily activities –
to maximize each dollar spent in City government.
We recognize that this remains a period of
unprecedented economic expansion, with $1.4 billion dollars
of economic development ongoing in the City. We have worked
hard to put our resources on the front lines where they will
impact the residents the most. In fact, this administration
can honestly say the taxpayers and water and sewer customers
of Bethlehem receive more and better services than at any
other time in our city’s history.
I also want to highlight a few of the larger investments in
this year’s budget:
|8 Police Vehicles
| 1 Police Motorcycle
|Cameras on 4th Street Corridor
|9-1-1 Center Improvements
|Water Engineering Inspector Vehicle
|Traffic Emergency Response Truck
|North Street (New St. to Center St.) Replace Road and
|Street Milling Machine
|Linden Street - Storm Sewer Upgrade/
|Lynn Avenue Bridge
|High Street Bridge
|Main Street Streetscape
|Aerial Bucket Truck - Electrical Bureau
Parks & Public Property
|4 Pick-Up Trucks (Also Used for Snow Operations)
|1 Dump Truck (Also Used for Snow Operations)
| Public Pool Improvements
|Energy Efficiency Upgrades to City Buildings
|Monocacy Creek Improvements
|Municipal Ice Rink Roof Repairs
|Sand Island Improvements
|Greenway Extension to Saucon Park
|Nevin Place/Sun Inn Courtyard Improvements
Tax dollars must be spent wisely in the areas where we need
it most. As I have said before, the single most important
job of City government is keeping its residents safe. Keeping
our neighborhoods safe encourages people to raise a family
here or build a business here. Small businesses and strong
neighbors are critical to a successful City.
We must always remember that we are in a competitive market,
so we cannot make reckless cuts in services, just to drive
down taxes. Austerity without purpose will not improve our
City or help us to capitalize on new economic opportunities.
We will not convince one family or one business to choose
Bethlehem by cutting crucial city services like our police
and fire departments, which is why this budget continues to
provide for the necessary investment of tax dollars in the
area of public safety and other basic city services.
52% of the total expenses of this year’s budget are
in the area of public safety, which equates to over $38 million.
Since taking office, I have made investing in the area of
public safety a priority and it is hard to argue with the
results. Today, Bethlehem is one of the safest, if not the
safest City in the Commonwealth.
Only a decade ago, the City paid $3.85 million in medical
expense. Today, we are budgeting $9.2 million for medical
All market indicators point to continued economic growth
and continued job creation in Bethlehem. The financial challenges
of City Hall will not slow down the economic rebirth of our
city. And despite difficult financial times I am committed
to finding ways to invest in infrastructure, to maintain our
buildings, facilities, and equipment and to make the delivery
of basic services a priority. We will not sacrifice investment
and spending on critical functions to solve our problems.
I realize that we only lose ground and put our community at
risk if we avoid spending on necessary basic functions that
will grow our economy and grow our city.
In past budget addresses I have repeatedly talked about the
City aggressively paying down debt, even at times to the detriment
of our annual fund balance. From 2004 through 2013 we have
paid $90 million in principle and interest. The City remains
on pace to retire 52% over the next ten years and $19.5 million
this year alone. Our debt position and how quickly we were
set to payoff our debt was noted as a positive by S&P.
“Bethlehem’s estimated overall debt burden is
moderate and rapidly amortizing.” Standard and Poor’s
Credit Ratings – February 9, 2011.
I am proud of our record of achievement in driving economic
development in the City and when businesses invest in a community,
they bring jobs. More jobs and more businesses make it possible
to grow our tax base and keep taxes steady.
I want to take an opportunity to recognize and thank my Business
Administrator, Dennis Reichard and Director of Budget and
Finance, Mark Sivak for the countless hours pouring over reports
and projections to craft this budget. I also want to thank
my department heads, who worked hard to prioritize their needs
for the upcoming budget. The hard work of running an efficient
City is in the details and my City team is dedicated to continuing
the remarkable transformation of our great City.
I also want to thank City Council for the time that they
will take over the next few weeks to review the budget. I
will make my administration available to answer any questions
they have regarding the specific details of the budget. Together
we can continue to build a better Bethlehem for all of our