Year 2011
Mayor
John Callahan
State of the City Address
Thursday, February 17, 2011
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The history of a City is not measured in days or even years,
but rather in decades and generations. It is not a mystery
that 2010 was a difficult year for the City financially, not
unlike many businesses and families in the region. The Great
Recession interrupted a period of tremendous and steady growth
in the City and had a negative impact on the City’s
budget and our local economy not to the degree the loss of
Bethlehem Steel but the impact was felt on all of our bottom
lines nonetheless.
Day after day I hear from residents who are having difficulty
paying their bills or homeowners still struggling to stay
in their homes because of a lost job or declining wages. These
are tough times for folks and we need to make sure we do our
part to control costs. And just like all of you that tightened
your belts, cut out the frills, used your savings accounts,
refinanced your debt or used your home equity to ride out
the storm, our 2011 budget does many of the same things.
We cut government spending by 12% from $71.6 million to $63
million. The budget slashed 54 part-time and full-time positions
representing a 7.2% reduction in the city’s total workforce
taking us from 670 full-time positions to 629. It is easily
the smallest workforce in a decade. The goal of these cuts
is to right size our government and bring it in line with
out ability to pay for it.
As a result of these cuts, the City will realize a cost savings
of $3.1 million representing $2.5 million dollars in salary
reductions and $600,000 from benefits. The savings from these
cuts will be realized annually.
However, when we discuss budget cuts and cost reductions
on the local level, we must be careful to separate the rhetoric
and rancor at the national level questioning the role of government
in our lives. At the local level, government has as its core
mission the delivery of quality basic city services. And while
it is the obligation of each administration to hold the line
on spending, we all must be careful to recognize that cutting
too deep might impact our quality of life. 911 calls must
always be answered, our streets need to be plowed and fires
need to be extinguished.
I don’t hear about people complaining about a government
take over of snow removal or the government intrusion in police
protection these are basic services that local government
provides and the residents and businesses depend on. Further
we must be mindful of how that at the local level more often
than not less government equals less services. We don’t
want to get to the point where we dump the rock salt at the
end of the street and you can go spread it yourself.
Those of you have been to these presentations (Slide 1) over
the years have heard me talk repeatedly about the City aggressively
paying down debt, even at times to the detriment of our annual
fund balance. From 2004 through 2010 we did just that, paying
down $78 million in principle and interest. Unfortunately
given the declining revenues resulting from the Great Recession,
paying down debt as quickly as we have in the past is no longer
an option. This year’s budget included a debt restructuring
and refinancing plan along with a working capital borrowing.
Through the restructuring and refinancing we have not extended
the lengths of our debt payments - we just smoothed out how
these payments are made, taking full advantage of the current
low interest rates. This restructuring will free-up 2.7 million
in 2011 and 1.9 million in 2012 budgets to provide us some
additional relief as the economy recovers. And even with the
16 million dollar working capital loan, the City remains on
pace to retire approximately $107 million dollars in principal
and interest over the next five years. Our debt position and
how quickly we were set to payoff our debt was noted as a
positive by S&P.
I would suggest that the size of government is not nearly
as important as the quality of the services provided. However,
it is especially important during these tough times for government
at all levels to look for new and creative ways to enhance
its services which is why we are so focused on CI here in
the City. (Slides 2, 3, 4, 5)
Another example in the City where technology (Slide 6) has
served to enhance our services is in the area of public safety
and most particularly police. In last year’s state of
the City, I announced an expansion of the City’s commitment
to the installation of cameras. But putting up cameras is
not enough, for them to be truly effective, they need to be
monitored. Our 911 operators monitor those cameras 24 hours/
7 days a week. And I would like to show you just one example
of how this investment has paid off. There was a troubling
string of robberies on the Southside recently many of them
targeting Lehigh students and while we upped our patrols in
response to the issue, even to go so far as to have the Commissioner
out there patrolling, it was a camera being monitored by one
of our 911 operators that was able to catch someone in the
act.
This individual was involved with the Bloods and after being
apprehended confessed to being involved in multiple other
robberies and implicated several other individuals that were
all apprehended. Good police work combined with technology
allowed the City to close the case. While never replacing
boots on streets, cameras as a force multiplier, which is
exactly what it proved to be in this case.
There is no more important indicator for a city’s livability
and ability to attract more economic growth, than safety.
We can’t attract millions of visitors to Bethlehem if
they don’t feel safe. We can’t expect someone
to raise a family here if they don’t feel safe. We can’t
expect someone to grow or relocate a business here if they
don’t feel safe.
It is perhaps the most important priority of any City to
ensure the safety of its residents. Since I became Mayor we
have made a considerable investment in public safety. (Slide
7) And, today I am pleased to announce that we remain the
safest city in Pennsylvania with a population over 30,000.
And, we have been fortunate to have had only 2 homicides in
the last three years.
(Slide 8) We here in Bethlehem are proud of our police department.
In 2010 we are happy to report that the department was recertified
by both PLEAC and CALEA one of only 9 departments in the state
to have dual accreditation.
(Slide 9, 10) An important part of having a police department
is building trust with the people they serve which is a benefit
of the Citizen’s Academy. The Citizen’s Academy
was an initiative I started in 2009 and the first of its kind
in Pennsylvania as a ten-week course sought to in increase
transparency in the way the City operates while at the same
time expanding the city’s volunteer capacity and building
a new generation of leaders in Bethlehem. I am pleased to
report that the initiative continues to be an overwhelming
success.
I am happy to announce that we are going to do it again.
The eleven-week program is slated to start this spring.
(Slide 11) The purpose of the Citizen’s Academy was
to give a small group of residents a bird’s eye view
of what we do. Citizen participation input is critical to
understand how we are delivering our city services and in
a world of limited budgets which services we should prioritize.
It is the taxpayers’ dollars at work and they should
have some say in how they are spent. That is why today, I
am please to announce that City will be undertaking a broad
based survey to measure how we are doing. Like you in the
private sector who understand the need to stay in touch with
your customers, government should do the same. The survey
will be complete this year and will be used as a guidepost
for setting budget priorities for next year and year beyond.
(Slide 12) I am equally proud of Bethlehem’s reputation
as a very livable city. Livability is one of those intangible,
“you know it when you see it” elements. But it
is something that cannot be taken for granted and must be
protected. I am pleased to announce today that in the coming
months we will be forwarding to City Council a comprehensive
update to our zoning ordinance. While we have made tremendous
strides in the area of zoning in planning since I took office,
the City has not had a comprehensive zoning update since the
1970’s, so it is long over due. Additionally, we will
be forwarding to Council for the first time in the City’s
history a comprehensive Historic Preservation Plan. While
we grow and change, we must always be sure to protect our
past. As I noted at the beginning the history of a City is
not measured in years, but in decades and generations. More
important, both an updated zoning ordinance and the Historic
Preservation Ordinance will be great tools for us to protect
our neighborhoods and ensure that growth in the City makes
sense.
(Slide 13) The City continues to use FRED and FAÇADE
loans and BEAR loans along with other additional gap financing
aggressively to help Bethlehem small businesses gain access
to the capital they need to start or expand. These programs
are a recognition of the importance small businesses have
in our success. They are important in fostering entrepe and
independent merchants investing in downtown. There were five
such small business that opened this year that are changing
the face of mainstreet using these programs. The 5 new small
businesses were opened by female entrepreneurs all under the
age of 35 a trend we hope continues.
(Slide 14) 2010 saw the opening of the City Skate Park.
(Slide 15) 2011 will be the spring of the Greenway. I am
also pleased to announce that the City anticipates completion
of the Greenway from New Street to the Lynn Avenue Bridge
this year. Once completed the Greenway will truly transform
the quality of life in South Bethlehem, imagine the day you
can get on the Greenway at the intersection of Hayes Street
and Third Street and walk all the way to Saucon Park without
crossing a single street.
(Slide 16, 17) Just across Third street from the Greenway,
the Sands is hard at work completing the first phase of their
development. The 300 room hotel is slated to open the end
of May. It will be the largest full service hotel in the Lehigh
Valley. And, I fully anticipate the work to restart on both
the mall and event center this year. This will bring hundreds
of new jobs to the City, million dollars of investment and
the full build out of phase I of the project.
(Slide 18, 19, 20, 21, 22, 23, 24) This commitment to a vision
that was put in place years before many of the currently elected
officials represented their local governments is something
that sets the County, School district and City apart from
other areas. It would have been easy to demagogue and seek
political points around this issue and tie up the project
for some time, but the County, School District and City recognized
that the plan laid out over a decade ago was one that made
sense for the overall well being of our respective governments.
As a result of this renewed commitment, we stand on the threshold
of what may be one of the most exciting developments in the
City’s history. Artsquest is on schedule to open Steelstacks
in conjunction with the 23 million dollar investment that
the Bethlehem Redevelopment Authority in putting into the
area to provide additional public amenities that will bring
that development alive. A new visitor’s center, the
Leavitt Pavillion, parking improvements and the 21st Century
Town Square, which in combination with the Steelstacks investment
totaling approximately 75 million dollar investment that will
bring to life an almost unimaginable project, especially considering
the economic conditions in which this project was funded and
constructed.
I want to take a moment and thank our partners in the school
district, Northampton county, and the Bethlehem RDA for making
these longstanding plans a reality. Your commitment to the
City’s vision is appreciate and we assure that you will
be proud of that development. Also, let’s take a moment
to recognize the hard work and dedication of Artsquest and
PBS to this project.
(Slide 25, 26) LVIP was an early investor in the former Steel
brownfield. This public/private partnership which started
LVIP VII on the steel sight that today is home to 2500 jobs
in a broad range of sectors. They continue their work on that
sight today having recently submitted subdivision plans for
the Slag site. Their commitment to the City and the region
has been well-document and we applaud them for their efforts.
(Slide 27) The Majestic Corporation continues to make progress
at its 441-acre development project. It is anticipated that
this project will bring 3 to 4,000 jobs and 500 million dollars
in economic development when it is completely built out. We
are excited about the recent planning submissions.
(Slide 28) Economic Development Projects
(Slide 29) Also this past year Lehigh celebrated the completion
of the STEPS Building at Lehigh University.
(Slide 30) Welcome TD Bank and PNC Bank to the Southside
(Slide 31) Eighth and Eaton
(Slide 32) Martin Tower
You can see that there are plans in place to develop every
significant piece of property in the City. Specifically, the
Steel properties all have plans and the projects are in some
form of progress, except one. Martin Tower sits idle in West
Bethlehem. In 1990 the property tax revenues from this building
were 1.5 million dollars. Today this building generates $117,000
in tax revenues. Every year the taxpayers of the school district,
county and city lose over one million dollars in tax revenue.
The property consists of 53 acres and 1 million square feet
of vacant buildings. It will never be a reoccupied as a corporate
headquarters. Redeveloping the Tower will put all steel lands
bank on the tax rolls and back to productive use. The proposed
TIF will assist in its redevelopment to a residential, office,
and commercial use, and help restore the largest building
in the Lehigh Valley, in fact the tallest building in Pennsylvania
outside of Philadelphia and Pittsburgh. The project garners
unwavering bipartisan support at all levels of federal, state
and local government.
The TIF plan, as proposed, will spur over 200 million dollars
of private investment in the community and generate hundred
constructions and full-time jobs. Equally importantly, this
project promotes some of the broader public policy goals of
smart growth: adaptive re-use, curbing urban sprawl, investing
in our urban cores.
In order to succeed it needs the type of public-private partnership
that laid the groundwork for the growth and redevelopment
on the other steel lands.
The taxing body that looks to gain the most or lose the most
is the Bethlehem area school district, which could receive
between 17 million and 22 million dollars in tax revenues
they would otherwise not get. I am not standing alone in support
of this project, the Lehigh County Executive Don Cunningham,
Lehigh County Commissioner Glenn Eckhart, the local state
representatives and senators on both sides of the isle, former
Governor Ed Rendell, Council President Bob Donchez, and the
newly appointed school superintendent all support this project.
I hope that the School Board does reconsider its vote, and
joins with us so we can make this project a reality.
(Slide 33) Real Estate Climb
(Slide 34) Projects on Horizon
Clearly, the State of the City is strong and getting stronger.
2011 will be a dynamic year with much to celebrate. I am happy
to report that the City is poised for prosperity.
Sometimes it is easy to forget how remarkable the story
of the transformation of Bethlehem is. You can get lost in
the day to day battles and frustrations of running a City
and sometimes fail to appreciate the bold decisions both past
and present that have helped place us where we are today.
The challenge for us today is to resist resting on our past
success. We need to re-commit to each other that we will continue
to take bolds steps and not be short-sighted. By stepping
back and taking the long view which can be difficult, we can
be sure that we are setting a solid foundation for tomorrow.
The successful transformation of Bethlehem in the post-steel
era doesn’t belong to any one Mayor or one business.
It belongs to all of us.
On a personal note, there were parts of last year that were
difficult for me. I learned a lot about myself. Throughout
the process, I was always proud to share the story of Bethlehem.
It’s a story of determination and success, a story any
mayor – a story any citizen – would be proud of.
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