Council Minutes

January 18, 2005 Meeting Minutes

BETHLEHEM CITY COUNCIL MEETING
Bethlehem, Pennsylvania
Tuesday, January 18, 2005 – 7:30 PM – Town Hall

1. INVOCATION
2. PLEDGE TO THE FLAG
3. ROLL CALL

President J. Michael Schweder called the meeting to order. Reverend Gilberto Garcia-Rodriguez offered the invocation which was followed by the pledge to the flag. Present were Ismael Arcelay, Jean Belinski, Robert J. Donchez, Joseph F. Leeson, Jr., Magdalena F. Szabo, and J. Michael Schweder, 6. Gordon B. Mowrer was absent.

Citation – Honoring James Bartos

President Schweder read a Citation honoring James Bartos who retired from the Water and Sewer Resources Department after 38 years of service to the City. The Members of Council, along with the assembly, applauded Mr. Bartos and wished him well in his retirement.

Citation – Honoring Irene Pulli

President Schweder advised that the Citation honoring Irene Pulli who retired from the Parks & Public Property Department after 28 years of service will be forwarded to her since she was unable to be present this evening.

Citation – Honoring Rosemarie Sweeney

President Schweder read a Citation honoring Rosemarie Sweeney who retired from the Financial Services Department after 44 years of service to the City. The Members of Council, along with the assembly, applauded Ms. Sweeney and wished her well in her retirement.

4. APPROVAL OF MINUTES

The minutes of January 4, 2005 were approved.

5. COURTESY OF THE FLOOR (for public comment on ordinances and resolutions to be voted on by Council this evening)

FAA Tower Proposal on South Mountain

William Scheirer, 1890 Eaton Avenue, expressed that he would like to speak on a Communication that he understands Council is contemplating taking action on. President Schweder explained that, technically, under the Rules, you can only speak on ordinances or resolutions. Mr. Scheirer asked if Council was planning to pass on the comments of the Planning Commission to the FAA, and more or less endorse them. He said that constitutes an action of Council and questioned if citizens are not permitted to speak beforehand. President Schweder said it was a recommendation that it was felt there was insufficient time and information at this point to make a final determination. He said it was a recommendation that there be a combined letter from the Department and Council stating that to the FAA and to continue it that way, not in the form of a resolution. Mr. Scheirer said he is in accord with that action but thought that it does represent an action because the consent of the full Council is necessary to do that. He said he thought that the intent of Robert’s Rules is that citizens are allowed to comment on it beforehand, just like they would comment on an ordinance or a resolution. President Schweder said that if it is a letter from Council that would not require a vote by Council at this point, and we have precedent of that, that individual Members of Council would sign that or that he would as President. President Schweder acknowledged that Mr. Scheirer would like to say something with respect to it, so he would accede to Mr. Scheirer if he wanted to be recognized.

Mr. Scheirer stated the following:

“We have now received the evaluations of the supposedly investigated sites for an FAA radar tower on South Mountain. They take the form of an addition to Appendix A of the draft environmental assessment. Nothing else in the assessment has changed. The "new" information does not include what was conveyed to us at the open house at the air traffic control tower at LVIA, nor does it include new information gleaned at the public information workshop.

In fact, the only thing really new is the assertion that the glass exterior of Homer Research Labs would be reflective. But Broughal school may move up there with its playing fields as well, implying that there is plenty of room to place a radar tower. Past minutes of FAA meetings state that this site was dropped because Lehigh University denied access for the purpose of making precise measurements of radar coverage. Why would Lehigh prefer to have Broughal there rather than a radar tower? One reason could be that if Broughal moves to South Mountain, Lehigh can obtain the Broughal property on the South Side. The upshot of this would be that over an acre of trees would be cut on the top of the mountain so that Lehigh could obtain the additional land it wants on the South Side at Packer Avenue.

The new appendix also does not include the assertion, found in the past minutes, that the Bethlehem Authority denied access to the Star of Bethlehem site. The Authority has no recollection nor documentation to back this up. In fact, just five days ago, the Authority voted without objection to grant the FAA access to the site for precise measurements of radar coverage. The new appendix does say that the tower would be too close to the Star, but fails to mention that we have since been told that the tower would not have to be lit at night, eliminating any visual conflict. I have also been told by Jim Linney, the project manager for the ASR-ll radar towers at FAA Headquarters, that he doesn't want to consider the Star site because of potential problems of church and state, which he agreed would have to be settled by his general counsel. I have yet to speak to anyone in the Valley who feels this is a potential issue.

The new appendix does say that the Star and Homer sites "would not satisfy air traffic coverage requirements to the same extent" as the two airport sites, South Mountain Park, and the preferred site,about half a mile east of the Star. This somewhat contradicts what Mr. Linney told me, that the Star and Homer sites would be almost as good, based on preliminary measurements made offsite. But more importantly, if the airport sites are in the same group when it comes to the level of air traffic coverage, why then is it important to have the radar on South Mountain at all? Further, how could there then be any appreciable difference between the coverage from the preferred site and the coverage from the Homer and Star sites?
Finally, the site evaluations still give no indication that the preferred site is inconsistent with the existing zoning, as was stated by Lower Saucon Township at the public information workshop.

The new pages amount to a somewhat muddled bureaucratic straddle, tending to deflect any movement away from their present course of action, after over a million dollars has been spent, according to Mr. Linney. Aside from job security at the FAA, it doesn't make sense to throw good money after bad. It would make more sense for the FAA to seek return of some of the money collected by Raytheon and SRI International for sloppy or nonexistent work.

I would hope that this council would make the same recommendation as the planning commission: the case has not been made for the preferred site, especially because the Star and Homer sites have not been adequately investigated. The FAA needs to reopen the site investigations, with a different contractor if necessary, and do a proper job.”

6. OLD BUSINESS

Bethlehem Authority

Mr. Donchez asked Dennis Reichard, Business Administrator, about the $900,000 that is owed and the possible $200,000 on top of that and the fact that this was found by the new financial arm of the Bethlehem Authority, according to the newspaper reports, Public Resources Advisory Group (PRAG). Mr. Donchez said he takes it for granted that this was happening over a couple of years to get behind in these payments. He asked who bears the responsibility for these monies not being paid, will City Council receive a full report on this issue, and if it is Concord Financial, the old financial arm of the Authority, or whoever it is, will legal action be taken against them.

Mr. Reichard responded that he received a call this evening from Chris Gibbons of Concord Public Finance and as usual, there is a dispute in the numbers. He said there is a $2.1 million negative arbitrage that was not taken into account and said that he spoke with Attorney Peter Carlucci today who was not sure of those numbers, they were still providing information to the new financial advisor and there is a dispute. Mr. Reichard said if, in fact, Mr. Gibbons is correct, the number won’t even be $100,000, and Mr. Gibbons has the documents to prove it. Mr. Reichard said that Mr. Gibbons will be in contact with Ronald Donchez, Chairman of the Bethlehem Authority, tomorrow and also with PRAG. Mr. Reichard said that in discussions he had with Attorney Carlucci on Friday, Attorney Carlucci was not done supplying information to the new financial advisor on this. In answer to Mr. Donchez’s question, he responded that the auditors are the ones who should find this, and it would not be Parente Randolph, the City’s Auditors. Mr. Reichard said he believes they just receive the information from the Authority auditors and incorporate that into the City Audit. He said that may change down the road, but as of now that is the way that audit is done. There is a difference of opinion here, there are two different numbers, and Mr. Gibbons is sending him his memo from 1997-98 with those calculations. He was in discussions with the Authority about it. Mr. Reichard said he does not know what the number is tonight, but Mr. Gibbons is confident in his numbers.

Mr. Donchez said he doesn’t understand why this wasn’t found by the Auditors. He said we have a new financial arm of the Water Authority making the statement that there is $900,000 plus maybe $200,000 in interest or penalties, we are facing the IRS, and now we have low numbers of $100,000. Mr. Reichard responded that he cannot answer that, he is not in charge of the Authority or hiring those auditors. He said again he does not know what the number is. He has a number from Mr. Gibbons who has documentation and is backing that up. There is a number from Mr. Huestis, the new financial advisor, and we still have Attorney Carlucci providing some information. He said the arbitrage is not as simple as what it may seem, there are different types of tests, whether it is an under $5 million bond issue or over $5 million bond issue. He said that from what he was told today was that the $2 million that they had available from the dam project it was a negative $2.1 million arbitrage to go against that. That was missed from what Mr. Gibbons was telling him today, and that really changes the focus of these numbers. Mr. Reichard said he does not have any information from PRAG and has not talked to Ronald Donchez on this.

Mr. Donchez asked if it is $2.1 million or even if it is at the low end of $100,000, whose responsibility is it, and who made the error. Mr. Reichard replied that he would think that it is the auditors who should have found this. He said again you also have financial advisors, auditors, bond counsel, a number of people involved, and said he does not want to determine who was at fault. Mr. Donchez asked if that will have to be determined. Mr. Reichard said yes it is. He said he does not have control over this, it is the Authority, not the City. Mr. Donchez asked what the time frame is. Mr. Reichard said that Mr. Gibbons was sending him his information, but Mr. Reichard felt the information should be sent to Mr. Donchez, the Chairman of the Bethlehem Authority, followed by discussion with the new financial advisors and Mr. Gibbons to determine who is right.

Mr. Donchez requested that at the Public Works Committee Meeting scheduled for 6:00 PM on Tuesday, February 1, 2005, that an update be presented to Council as a Whole or that a written report be provided. Mr. Reichard said that he thinks that should be requested of Mr. Donchez of the Bethlehem Authority and not the Administration. Mr. Donchez said we need to define these lines and get a clear role of what the Authority does and what the City does, there is too much gray. He said you had Concord Financial, the financial arm of the Water Authority and the financial arm of the City, there is Mr. Gibbons versus Mr. Settley, and they work for the same firm. He said when this final Strategic Report is completed these roles really need to be clearly defined. Mr. Reichard said he did not know a number until a reporter asked him after the board meeting last week. He said he had no clue on the number, but vaguely knew there was an interest rate rebate analysis going on. He said he was not informed by anyone until the reporter asked him.

Mr. Donchez said that he will make a written request from the Bethlehem Authority that an update be provided to the Public Works Committee Meeting in two weeks.

Joseph F. Leeson, Jr., said that he would like to echo Mr. Donchez’s comments. He said for quite some time he has been complaining about the transactions between the City and the Authority, and said in his estimation there is a situation of fuzzy math here. Either somebody’s in charge or nobody’s in charge, and he said really it has gotten to the point of being a big joke, as to what the Authority owes, what the City owes the Authority, what the Authority owes the IRS, and we can’t seem to get straight answers. Mr. Leeson said even to this point in time, after having asked for months, we still don’t have anything in writing as to what the City owes the Authority, whether interest is owed on top of that, and now the latest with this IRS issue. Mr. Leeson told Mr. Reichard he is not blaming him personally, but we already have had problems with the IRS years ago, and you would have thought that the professionals that we deal with would have gotten the message to keep a close eye on the finances and if there is a problem with the IRS, deal with it promptly, immediately, and if there is any fuzzy math involved, hire the auditors who have the talent to get to the bottom of it.

Mr. Reichard responded that he doesn’t disagree with his comments, but concerning what is owed the Authority, he just got to a number but has not sat down with Ronald Donchez, and the Board has not looked at the number to get back to the Administration to say this is the number they think is owed. He said Linnea Lazarchak, Director of Financial Services, was working with the financial advisors on that two weeks ago and it was said they thought they had the number, but he has not gotten anything from the Authority on that. Mr. Reichard repeated again that he had no clue whatsoever about this number and that he found out from a reporter, and Mr. Gibbons today said he disagreed with that the number, they missed some document. Mr. Reichard agreed that for the past couple years there has been a problem with the lines of authority here and with who is in charge of what. Mr. Reichard said the Authority has always just basically owned the system and the bond issues were done through them. The City runs the operation and pays the bills, and that is the way it was set up. He said in reference to Mr. Donchez’s question, he will not step on any toes or accuse anything of any Authority Board members, the request will have to be made to the Authority, it is their bond issues. They are the ones responsible for it, they are the ones who had a financial advisor, they have an auditor, and accountant, they have a Board, they have the fiduciary responsibilities. They have to make the determination of who is right, Mr. Gibbons or Mr. Huestis of PRAG.

Mr. Leeson said he feels it is getting to the point that there needs to be a change of attitude on the part of Council and the Administration. He said, again, it is nothing directed personally to Mr. Reichard, he was talking about the City as an institution, everybody. He said there needs to be a change of philosophy and we need a change of thinking because somebody needs to take charge of the finances and because the City guarantees the Bethlehem Authority issues, everything falls back on the City ultimately and reflects on the City. He continued on by saying that he thinks the Administration needs to look at stepping in and taking a more proactive role going forward. He said in the past he agrees that the system seemed to work for many years, but it is broken and doesn’t know how it got that way, and there is no point in trying to figure out how it got that way other than to know it is now broken. He said it is not working and we need a new formula, a new management structure. Mr. Leeson said maybe when David Brong, Director of Water and Sewer Resources, comes out with his recommendations financial overall responsibility will be a component part, but something needs to be done to take charge of what is going on here, and somebody needs to be in the driver’s seat.

Mr. Reichard added that hopefully the Strategic Plan will help solve that.

Jean Belinski commented that it was two years ago we hired a full-time Executive Director for the Bethlehem Authority and she would think that he shares some of the blame here. She questioned whether he should have been looking over this. Mr. Reichard said he doesn’t want to point fingers at anybody because the arbitration rules are very tedious and they are not easy. He said a few years ago we had to have a spending schedule when we floated the equipment during Mayor Cunningham’s term. We had to spend that interest within a certain amount of time, principal and interests and within a year had this certain amount of expenditure and so forth, not to become eligible for any rebate back to the IRS. He said it is very tedious, you have to know what you are doing. He said he has learned that there are different rules for issues above and below $5 million, you can’t make more than yield depending on those years and the type of bond issue you are floating. Mr. Reichard said one of the things that Mr. Gibbons was telling him was missed was the $20 million Pennvest was a taxable, that was missed in the calculation and it has no arbitrage, and plus the $2.1 million negative arbitrage was missed. He said that is what was told to him by Mr. Gibbons, and asked Mr. Gibbons to get that immediately to Mr. Donchez and Mr. Carlucci with a copy to the Administration.

Magdalena Szabo stated that during 2004 we had a lot of discussions on bonds and what is due and not due and the financial condition. She said that during every discussion she has found less and less confidence in the companies that are taking care of such issues. She thinks it was time the Bethlehem Authority made the big decision to change their financial advisors and time for us to do an evaluation and consider that subject, too. Ms. Szabo said she hopes she is not the only one who feels this way. She would like to seriously talk about this, along with the Administration. Mr. Reichard noted that the Bethlehem Authority did change financial advisors.

Mr. Leeson, in follow up to Ms. Szabo’s observations which he said he endorses, said not to forget that the same people who are now in controversy with the Authority are still the City’s financial advisors. He said he hopes there are not any more surprises from them. Mr. Leeson said he thinks it is time to sit down and have a chat with these people unless they are going to be replaced. He thinks they should be told we have had enough of this and they have to get their act together.

President Schweder, commenting that he did not think Council would be able to get to the bottom of this in two weeks as suggested, thought the question to ask either the Bond Counsel or the financial advisors is where is the money, whether the amount is $100,000 or $900,000. Mr. Reichard said he is not sure and is trying to get all the facts, but what he was told on Friday was that it was in the Bond Redemption and Improvement Fund. Mr. Reichard said, again, these are just conversations he has had, he did not receive any official correspondence from Bethlehem Authority or from Concord. He said after many conversations with many people, he does not yet have all the pieces. He is waiting for memos and backup. President Schweder said he thinks these are very important questions, whether it was used for something else by the Administration, or by the Authority, or if it’s sitting somewhere. He said he would like Mr. Reichard to really question Mr. Carlucci and the people at Concord that in each of these years when these payments came due did they notify him as to what amount had to be paid to the Authority to cover what was owed on these bonds, and if so what were those figures. President Schweder questioned who missed this along the way as part of paying off what we were required to do and none of those payments evidently were made. Mr. Reichard agreed and said it is an analysis that is done based on the size of issue, what the yield is, where it is invested, and all those calculations need to be done. He said he thinks that the money is there, it is in one of the funds, and said he was told it was not used. Mr. Reichard said he has requested the total picture. President Schweder said the concern is no matter what the figure is, someone did not serve the City well. Mr. Reichard agreed, saying the number should be $0, there should be no monies rebated back to the IRS. Mr. Reichard said he is not excusing anyone, this is not what we should be doing.

7. COMMUNICATIONS

A. Police Commissioner – Reimbursement for Police Training

The Acting Clerk read a memorandum dated January 11, 2005 from Francis R. Donchez, Jr., Police Commissioner, requesting consideration of a resolution necessary to receive reimbursement from the State for 60% of the salaries of Officers Brian K. Quinn, Jon R. Buskirk, Chad W. Wasserman, Bradford E. Jones, and Jeffrey J. Lutte for the 20 weeks they will be attending the Allentown Police Academy.

President Schweder stated that authorizing Resolution 11 A is listed on the Agenda.

B. Director of Planning and Zoning – FAA Tower Proposal on South Mountain

The Acting City Clerk read a memorandum dated January 14, 2005 from Darlene L. Heller, Director of Planning and Zoning, concerning the matter of the proposed FAA Tower on South Mountain which was referred to the Planning Commission from City Council at their November 16, 2004 meeting for comments and recommendation. The matter was discussed at both the December 9, 2004 and January 13, 2005 Planning Commission meetings. The Planning Commission made a motion at their January 13 meeting to recommend that further review of these sites is needed before a final determination can be made regarding whether Site 12 should remain the preferred site. Specifically, the FAA should further research the viability of sites 4 and 5, Home Research Center and the Bethlehem Star site. The FAA must clarify whether the proposed tower must be lit. The differences in the amount of coverage between sites 4, 5 and 12 must be clarified. This information is necessary before a determination can be made about whether the proposed site is the best site for the tower location.

President Schweder stated that along those lines, a letter will be drafted by the City Clerk in conjunction with the Administration to forward to the FAA which will be available for review by Members of Council.

C. Assistant City Solicitor – Revisions to Article 925 – Stormwater Management Ordinance

The Acting Clerk read a memorandum dated January 15, 2005 from Joseph M. Kelly, Assistant City Solicitor, to which was attached a proposed ordinance to delete the existing Article 925 and replace it with a new Article 925. Pursuant to recent state and federal regulations, the City has a permit relating to its Stormwater Management Plan. As part of the permit process, the City adopted a protocol established by the Pa DEP. The protocol requires the City to have in place a stormwater ordinance which complies with the Clean Water Act. In an effort to help municipalities, the Pa DEP developed a model ordinance, which they strongly recommended that all municipalities adopt. The model ordinance must be adopted by March 10, 2005 for the City to stay in compliance with its DEP permit. The LVPC modified the ordinance as part of its Act 167 Stormwater Management Plan which the City is obligated to follow. The Pa DEP approved the modifications proposed by the LVPC.

President Schweder referred the matter to the Public Works Committee.

8 . REPORTS

A. President of Council

President Schweder requested the following Annual Report be made part of the record.

“In 2004, City Council held over 37 Committee Meetings, adopted 62 Ordinances, and passed 278 Resolutions.

The year 2004 began with a Special City Council Meeting to fill the vacancy on City Council that was created when former Council Member John B. Callahan was elected Mayor for the remaining two years of the term of former Mayor Donald T. Cunningham, Jr. for 2004 and 2005. At the Special City Council Meeting on January 8, 2004, Council appointed Joseph F. Leeson, Jr. to fill the vacant City Council seat until January 2, 2006.

City Council filed a Notice of Intervention in the Notice of Land Use Appeal docketed at Lehigh County related to the rezoning of 1001 Eighth Avenue, the former Durkee property, from LI Light Industrial to IR Industrial Redevelopment and RT Residential, that occurred in 2003. The appeals process continues in the Commonwealth of Pennsylvania courts.

Action taken by City Council in 2004 included the following Ordinances to rezone property: Rezoned Arden and Ravena Streets from I Institutional to RG Residential; Rezoned Schoenersville Road from PI Planned Industrial to CS Shopping Center, and revised the Shopping Center District regulations; Rezoned South Mountain from CS Shopping Center, RM Residential and RG Residential to RR Residential.

Among the Bond Issues approved in 2004 were two of a historical nature.

The first was a Bond Issue of $7.39 Million to fund the settlement of the wrongful death lawsuit in the John Hirko case. City Council voted to override Mayor Callahan’s veto of the Ordinance containing Council’s debt service payment schedule.

The second was a $35 Million Pension Bond to address the City’s unfunded Pension Liability, following the enactment of State legislation allowing municipalities to use this funding vehicle.

Additional Bond Issues approved by City Council in 2004 were: To finance General Fund Equipment of $366,120 and Sewer Capital Projects in the amount of $2 million; and to approve the Refinancing of the Bethlehem Authority’s 1994 Bond Issue in the amount of $66,090,000.

Council took further action in connection with the $7.39 Hirko lawsuit settlement. The Members of Council voted to allocate tax revenues of ½ mill from 2005 through 2015 towards payment of settlement costs, and to reduce General Fund expenses by the amount of $200,000 for the years 2005 through 2015 for the purpose of paying towards the settlement. Related actions were adoption of an Ordinance requiring the City to maintain liability insurance coverage in the amount of $10 million; and, at the urging of Finance Committee Chairman Donchez, Council adopted a Resolution requiring the Administration to annually report to City Council on the types of insurance coverages maintained by the City, in addition to notifying City Council whenever insurance coverage is changed.

Other actions related to the City’s finances taken by City Council in 2004 were: To amend the Firemen’s Pension Fund and the Police Pension Fund, in accordance with Union negotiated settlements, that provided for 70% pension percentages after 25 years of service; to authorize the City’s participation in the Pennsylvania Capital City Automotive and Equipment Contract, administered by the City of Harrisburg, to purchase supplies and services from the contract; to request that the City’s independent auditors to conduct a forensic accounting investigation of the bank accounts and financial records of the former Bethlehem Economic Development Corporation; to require that after January 1, 2006 no municipal bonds shall be issued containing items that have a purchase price or cost of less than $75,000 each, while providing for a temporary suspension of the restriction by the affirmative vote of 5 Members of Council.

Following Finance Committee review, City Council adopted Resolutions to obtain grants for: Acquisition of the Norfolk Southern Railway in South Bethlehem in connection with implementation of a greenway; support of the efforts of the Illick’s Mill Foundation to restore the Illick’s Mill; continuation of the South Side lighting project; and a study of North Side neighborhoods that could be included in a revitalization program called the Elm Street Program initiated by the State.

Several matters reviewed by the Parks and Public Property Committee in 2004 were approved by City Council.

A portion of Johnston Park was leased to the Bethlehem Housing Authority, and in turn the Authority assisted the City with repairs to the stone walls in the Park.

A Resolution was adopted for a Use Permit Agreement for the new Gaelic Sports Spectacular Event in May 2004.

The Committee learned about the conditions and playing field arrangements at Saucon Park, and heard a proposal for the hiring of a South Side Recreation Coordinator that was approved in conjunction with the 2005 Budget.

A Lease agreement between the City and Norfolk Southern Railroad for lease by the City of 1 mile of green space along the abandoned railway lines in South Bethlehem to establish a greenway project was explained to the Committee, and the agreement was revised following the Committee’s questions.

Following the suggestion of Mr. Mowrer and review by the Committee, City Council approved the renaming of the City Center Plaza to Payrow Plaza to honor former Mayor H. Gordon Payrow, Jr.

City Council approved a Certificate of Appropriateness to install a 16 inch square ceramic mosaic memorial in the ground adjacent to the Serenity Garden in commemoration of the 40th anniversary of the Sister City relationship between the City of Bethlehem and Tondabayashi, Japan.

In matters reviewed by the Public Safety Committee, City Council: adopted a Resolution to lease 520 Broadway for a Police Substation to service the area; added the 900 block of East Fifth Street to the Residential Permit Parking program; and heard the Administration’s proposal to set the position of Fire Inspector at the level of Lieutenant in an effort to fill the present vacancies in Fire Inspector positions.

The Community Development Committee reviewed, and City Council adopted, the new Pennsylvania Uniform Construction Code, set the fees for enforcement of the new Code, and adopted requirements and qualifications for individuals to obtain licenses to perform electrical and plumbing work in the City.

The Committee heard an update on the programs conducted by the City’s Health Bureau.

The LERTA Program for the Enterprise Development Area and for the North Side Central Business District were Re-enacted for another two year period.

In the area of Public Works, the Public Works Committee heard a presentation on the strategic plan in connection with the water system.

City Council adopted an Ordinance to authorize the purchase of the City’s street lights in the amount of $5,115,000.

A Resolution was adopted to submit to the Department of Environmental Protection for approval a revision to the City’s Official Sewage Facilities Plan for the development of Bethlehem Commerce Center so that it can be served by a sewer extension.

City Council approved several Resolutions in conjunction with the $1.8 million project for replacement of the Paint Mill Bridge to authorize execution of agreements with PPL for relocation of electric facilities, with UGI pertaining to gas lines, and a Federal Aid Reimbursement Agreement to reimburse the City for 95% of the costs.

The Human Resources and Environment Committee recommended and City Council approved a Resolution amending Rule 3 B of the Rules of Council to institute a time limit of twelve minutes for individuals who address City Council under Courtesy of the Floor.

Following the Committee’s review and recommendation, City Council adopted the new Pennsylvania Food Code.

Several Committee of the Whole Meetings were held in 2004 including meetings: to receive a presentation on the Watershed Management Plan; to hear the results of a Study on the Five Points Traffic issue; to review the Five Year Capital Plan for 2005 through 2009.”

B. Mayor

1. Administrative Order – Bryan L. Ritter – Codes Board of Appeals

Acting Mayor Dennis Reichard read Mayor Callahan’s Administrative Order appointing Bryan L. Ritter to the Codes Board of Appeals effective until December 2005. Mr. Donchez and Mr. Arcelay sponsored Resolution 14,548 to confirm the appointment.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Ms. Szabo, and Mr. Schweder, 6. The Resolution passed.

2. Administrative Order – Mary Wright – Fine Arts Commission

Acting Mayor Dennis Reichard read Mayor Callahan’s Administrative Order appointing Mary Wright to the Fine Arts Commission effective until November 2007. Ms. Szabo and Mr. Donchez sponsored Resolution 14,549 to confirm the appointment.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Ms. Szabo, and Mr. Schweder, 6. The Resolution passed.

3. Administrative Order – Constantine Loupos – Zoning Hearing Board

Acting Mayor Dennis Reichard read Mayor Callahan’s Administrative Order reappointing Constantine Loupos to the Zoning Hearing Board effective until January 2008. Ms. Szabo and Mr. Donchez sponsored Resolution 14,550 to confirm the appointment.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Ms. Szabo, and Mr. Schweder, 6. The Resolution passed.

4. Administrative Order – Ruth Sigmon – Fine Arts Commission

Acting Mayor Dennis Reichard read Mayor Callahan’s Administrative Order reappointing Ruth Sigmon to the Fine Arts Commission effective until August 2007. Mr. Donchez and Mr. Arcelay sponsored Resolution 14,551 to confirm the appointment.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Ms. Szabo, and Mr. Schweder, 6. The Resolution passed.

5. Administrative Order – Donald Spieth – Fine Arts Commission

Acting Mayor Dennis Reichard read Mayor Callahan’s Administrative Order reappointing Donald Spieth to the Fine Arts Commission effective until January 2005. Mr. Donchez and Mr. Arcelay sponsored Resolution 14,552 to confirm the appointment.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Ms. Szabo, and Mr. Schweder, 6. The Resolution passed.

6. Administrative Order – John J. Tallarico – Bethlehem Authority

Acting Mayor Dennis Reichard read Mayor Callahan’s Administrative Order reappointing John J. Tallarico to the Bethlehem Authority effective until January 2010. Mr. Donchez and Mr. Arcelay sponsored Resolution 14,553 to confirm the appointment.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Ms. Szabo, and Mr. Schweder, 5. The Resolution passed.

7. Administrative Order – Peter Wolle – Board of Historical and Architectural Review

Acting Mayor Dennis Reichard read Mayor Callahan’s Administrative Order reappointing Peter Wolle to the Board of Historical and Architectural Review effective until January 2010. Mr. Arcelay and Ms. Szabo sponsored Resolution 14,554 to confirm the appointment.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Ms. Szabo, and Mr. Schweder, 5. The Resolution passed.

9. ORDINANCES FOR FINAL PASSAGE

None.

10. NEW ORDINANCES

None.

11. RESOLUTIONS

A. Requesting Reimbursement – Police Trainig

Mr. Arcelay and Mr. Donchez sponsored Resolution 14,555 which authorized the City to obtain reimbursement of monies for expenses incurred for Officers Brian Quinn, John Buskirk, Chad Wasserman, Bradford Jones, and Jeffrey Lutte pursuant to the training provisions of the Municipal Police Officers’ Education and Training Act, and agreeing that while receiving funds from the Commonwealth pursuant to said Act, the City shall adhere to the rules established by the Commission.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Lesson, Ms. Szabo, and Mr. Schweder, 6. The Resolution passed.

B. Authorizing Execution of Amendment No. 1 to Lease Agreement – Golf Course Clubhouse – Mali’s Café, LLC

Mr. Arcelay and Ms. Szabo sponsored Resolution 14,556 which authorized the Mayor and the Controller to execute Amendment No. 1 to Lease Agreement between the City of Bethlehem and Mali’s Café, LLC for use of the Golf Course Clubhouse Restaurant for operation of the restaurant with a liquor license for the renewal term of two years, beginning on March 1, 2005 and ending on February 28, 2007.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Ms. Szabo, and Mr. Schweder, 6. The Resolution passed.

President Schweder, referring to Certificate of Appropriateness 11 D, 415 North New Street, said he does not recall minor changes to the back of a house normally being reviewed. Ms. Heller, stating she is not familiar with the case, said that on the north side anything that is visible from the public right-of-way is reviewed, which includes a street in the rear, for example rear garages.

Considering Resolutions As A Group

Mrs. Belinski and Mr. Arcelay moved to consider Resolutions 11 C through 11 F as a group.

Voting AYE: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Mr. Leeson, Ms. Szabo, and Mr. Schweder, 6. The motion passed.

C. Certificate of Appropriateness – 423 Heckewelder Place

Mr. Arcelay and Ms. Szabo sponsored Resolution 14,557 which granted a Certificate of Appropriateness to install flags at the Bach Choir Office at 423 Heckewelder Place.

D. Certificate of Appropriateness – 415 North New Street

Mr. Arcelay and Ms. Szabo sponsored Resolution 14,558 which granted a Certificate of Appropriateness to install windows at 415 North New Street.

E. Certificate of Appropriateness – 123 East Church Street

Mr. Arcelay and Ms. Szabo sponsored Resolution 14,559 which granted a Certificate of Appropriateness to install a screen door and replace a bulkhead basement door at 123 East Church Street.

F. Certificate of Appropriateness – 79-81 West Broad Street

Mr. Arcelay and Ms. Szabo sponsored Resolution 14,560 which granted a Certificate of Appropriateness to alter the exterior of the Arcade Building at 79-81 West Broad Street.

Mr. Donchez stated that he understands that within the last four to five weeks that work was being done on the property, that permits were not pulled and there was an order to stop all work according to an email he received from Tony Hanna, Director of Community and Economic Development. Mr. Donchez questioned if everything was within the law and if all the permits were now pulled. Ms. Heller said the work was stopped and there was a recommendation from the Historical and Architectural Review Board to get approval for the work that they want to do there. She said they do have to go back with some minor things, she believes signage and something else. Ms. Heller said she thinks this recommendation includes the work within the sidewalk that was originally the issue. Mr. Donchez asked if they still have to go back to HARB. She responded yes, on some minor things on signage. She said everything wasn’t approved, but this allows them to go ahead with the work on the sidewalk. Mr. Donchez then asked if everything up until this point now is within the law and if all permits were pulled. Ms. Heller said she doesn’t know whether or not they pulled what they needed for building permits because they would go to HARB first, and if a building permit is necessary, they will need to go to the permit department and make sure that everything also complies with the building code. Mr. Donchez asked if she would get back to him on that.

President Schweder, as a follow up, commented that there hasn’t been a situation like this for a while where somebody just went ahead and did something. He said some time ago there were a rash of these where people went ahead and asked if anything has been done to change the enforcement. Ms. Heller responded not to her knowledge and generally what they try to do is bring them into compliance. There are no penalties built into the ordinance unless they don’t come into compliance.

Voting AYE on Resolutions 11 C through 11 F: Mr. Arcelay, Mrs. Belinski, Mr. Donchez, Ms. Szabo, and Mr. Schweder, 5. The Resolutions passed.

12. NEW BUSINESS

Letter – FAA Tower

Ms. Szabo asked what purpose the letter to the FAA concerning placement of a tower on South Mountain will serve, does it do any good, will we get any action or response, or is this a dead issue and they are going to go ahead and do what they want to do. President Schweder answered that he cannot guarantee that any action will be taken by the FAA, but certainly believes that if both the Planning Commission and the elected City Council ask them, at least, to do a review of all these locations, it would be his hope that they would adhere to this and it would be his recommendation that we would send copies of the letter to Congressman Dent as well as the two United States Senators, and make them aware of our concerns as a City with respect to that and we will follow up with those offices as well. Ms. Szabo asked what purpose a resolution would serve. President Schweder said really nothing more. Ms. Szabo questioned whether he thought we would get a response. President Schweder said he thinks we will get a response, whether it’s the one we want, he doesn’t know, but thinks that what we are doing is trying to go on record as saying we would like them to further review this. President Schweder said that the letter will be available for review by Members of Council.

Mrs. Belinski commented that the rumor is that the Environmental Advisory Committee, Lower Saucon, is very upset, and if the FAA persists and say they are going to put it up on Lower Saucon’s property, their alternative is to take them to court and sue them.

Ms. Szabo added that there would more destruction on the top of the mountain and the mountainside. She thinks people shouldn’t fool around and cut down all the trees, cutting down acres. Mrs. Belinski said it would be two acres to put it in the Lower Saucon site, and they are very much against it.

13. COURTESY OF THE FLOOR

Tree Removal – Ontario Street

Eddie Rodriguez, 436 Pawnee Street, thanked Michael Alkhal and Charles Brown concerning work done on Ontario Street. He said he would appreciate if in the future anybody doing any jobs for the City, whether contractors or contracted by the City, that they clean up after each other because a mess was left after they took down those trees. He said the same thing happened at Madison Park. When the City crews put the paving on City streets he would hope they follow up. He said the job was not done property.

Daly Avenue – Debris

Mr. Rodriguez asked if the Daly Avenue area is where a greenway is supposed to be erected. President Schweder responded not the entire length of that but he thought it would be out to the Minsi Trail Bridge. Mr. Rodriguez asked if that area could be looked at. He said there is a lot of junk, rocks, boulders, bricks. He thinks it is a dangerous situation, some of those properties are in danger of the land eroding and he thought maybe a retaining wall could be erected.

Financial Matters

Mr. Rodriguez commented, regarding finances, that he thinks someone is messing up, and he thinks this is wrong. He said that is why there are City officials supposedly doing their job and it is costing City taxpayers a lot of money. Mr. Rodriguez said he thinks the City is getting a bad reputation. Mr. Rodriguez said somebody has to report to City Council, the governing body. He said he thinks City Council is bright and knowledgeable, and not to be fooled.

Litter

Mr. Rodriguez said there is a lot of litter, especially on the South Side from the railroad crossing all the way out to Third Street and at the back of Daly Avenue. He said something needs to be done before it starts entering, which it already does, into the Five Points area. He said when it starts coming into the North Side, nobody will like it. He said somebody needs to be penalized and fined because there are ordinances. Mr. Rodriguez said he makes calls to the Mayor’s office almost every other day in reference to it.

FAA Tower – South Mountain

Tom Maxfield, Lower Saucon Township Council, thanked Council for its consideration of the FAA tower matter which is a very important thing to the Township and also to thank the Planning Commission’s consideration and Council’s referral to them. Mr. Maxfield said the communication is an important piece for Lower Saucon. He said they met today with Lehigh University and it seems they are finding more holes in the information that was presented to them. There were things that were claimed about Lehigh University that Lehigh has no knowledge of. He said the issue for Lower Saucon is becoming more and more questionable. Mr. Maxfield thanked City Council for their participation.

Susan Yerger, Lower Saucon Township Council, also thanked City Council for their consideration. She asked that Council support Darlene Heller’s letter and the Planning Commission’s recommendation. Ms. Yerger said she thinks it is important that the FAA hears from Bethlehem as well as Lower Saucon and would like to see a joint effort in having the FAA be held accountable for this important project for both municipalities.

President Schweder thanked them both for coming to the meeting and stated that Council will do whatever they can to assist Lower Saucon Township.

Financial Situation

Dean Bruch, 625 Hawthorne Road, asked why the Bethlehem Authority got rid of the first financial advisor and asked whether they anticipated trouble. President Schweder responded that neither Dennis Reichard or himself could answer that question. Mr. Bruch said he would like a letter sent to him by someone who has the authority to know why. Mr. Bruch asked if the City of Bethlehem owned the Authority’s land. Mr. Reichard said the Authority owns it, it has always been set up that way. Mr. Bruch asked if the City sets up an authority is there money exchanged. Mr. Leeson said that years ago there were restrictions on the ability of Third Class Cities to borrow money, for example during the 1960’s borrowing for City Hall, they had to form an authority to get around certain borrowing limits. He said over time those borrowing restrictions have been relaxed but the Bethlehem Authority was set up before those legal restrictions were relaxed. It was designed to circumvent the law, and it was a legal way to do it. Mr. Leeson said as part of the plan you had to give the Authority title to the property in order for them to go out and borrow the money and pledge the assets of the water system as security for the loan. He said it is a system we have had for 50 to 60 years, if not longer, and until recently the system worked well. Mr. Leeson said he felt there was universal agreement now that the system is no longer working. He said he thinks some mistakes were made on the part of professional advisors, and we need to get to the bottom of it and have somebody take charge of the whole system.

Mr. Bruch asked if the Authority could go bankrupt. Mr. Leeson said any municipal agency can go bankrupt, but did not think that was going to happen. Mr. Bruch asked who is responsible for the money then, and then stated it becomes the City’s again. Mr. Bruch stated he “can’t believe how many crooks” there are. Mr. Leeson said he did not agree with that. Mr. Bruch added that this is getting unmanageable. Mr. Bruch, referring to a newspaper article, asked how close the City is getting to a similar financial condition. President Schweder said he hopes not close. Mr. Bruch added that residents like himself have no weight except at the voting booth.

Certificate of Appropriateness – 79-81 West Broad Street

Lisa Villani, 79-81 West Broad Street, stated that no building permit was required for the work at the building, no permit was required for the work immediately planned, the only permit required was an excavation permit which was issued by the Engineering Department on August 17, 2004. On December 3 the work was not stopped. A building inspector came by at noon after plumbing and electrical permits were pulled that morning and asked what was going on. At 3:00 PM she said they had a meeting and showed the plans to renovate the building. She said the people from the City were supportive and they were told they did not need a building permit at that point. She said the work was never stopped except for between noon and 3:00 PM. Ms. Villani said the Morning Call article was wrong, all the items they asked for were approved. She added that there was also a meeting with Christine Ussler, Historic Officer, concerning certain building materials.

FAA Tower – South Mountain

William Scheirer, 1890 Eaton Avenue, said that Mr. Maxfield informed him that Lehigh University this afternoon told them that they have no recollection of ever denying access to any part of their land. He said they do have documentation that granted access to the FAA for anywhere on Lehigh University’s property. Mr. Scheirer asked if the letter being sent will convey the sense of the Council that more information is required on this. President Schweder responded that is his intent.

Bethlehem Authority

Stephen Antalics, 737 Ridge Street, referring to the Bethlehem Authority matter, said in 1937 the City turned over to the Bethlehem Authority ownership of the whole water system. He said the Authority does own the water system and the City leases it. As he has alluded to in the past six months, Mr. Antalics said to define the lines, Authority versus Administration, who takes charge. In the past, amounts of monies have been lost by timbering, we looked for timber it wasn’t there, we lost water and paid for consultants and there were cross purposes in responsibilities. He said he has suggested to Council to delineate responsibilities. We have a system working on a very poor foundation. Administration, Authority and Council are all concerned with the same problems but the bottom line is the taxpayer pays for indiscretions of any one of the three. He said the problems have existed for the last number of years and will continue until the issue is addressed. City Council on two previous ordinances expanded the life of the Bethlehem Authority, so they do have the power to shut down the Authority. In 1967 the State of Pennsylvania decided to eliminate the Authority idea because they were a scapegoat and a necessary evil which ceased to have need, but they didn’t because of lobbies. City Council, if they wish to solve this problem, can do that by passing an ordinance to retire the Authority and put the entire water system within the Administration with full responsibility, or put the Authority as a full operating authority like the Parking Authority. He said he has suggested this at earlier meetings, but the problem continues because the root cause is not being looked at. He said the root cause is the system is based on a faulty foundation which by definition cannot work because of general delineation of responsibility. Mr. Antalics said you have $250,000 here, $900,000 here, $37,000 here, and who is paying the bill, we are. He said the seven Members of Council have the responsibility to solve the problem if they have the initiative to look for the solution. He said to dissolve the Authority, by ordinance, or give the Authority full control and take water out of the Administration, or he said, the best solution, would be to privatize. He said in the corporate privatized structure none of this would ever happen because heads would roll. Mr. Antalics said at the Authority meeting when this came out, there was shock, and the proper questions were not asked. In the corporate structure when you don’t show a return to your stockholders, answers have to be made or somebody goes. He said someone has to decide what we are going to do. The taxpayers have a financial burden because of mismanagement, but no one knows who is mismanaging. Mr. Antalics said pass an ordinance to retire the Authority, put the entire water system within the Administration under the jurisdiction of the Mayor, or privatize, but something has to change. It is only going to get worse, from loss of timber to loss of water, to what we are seeing today, because no one is taking responsibility. He suggests Council, as the elected representatives, take responsibility for that.

John Tallarico, 274 Wedgewood Road, thanked City Council for appointing him for another term on the Authority. He said he has served for less than year, and agrees that the house is not in order. He said they are managing $144 million in debt and that in itself is a job, the numbers are staggering. He said they do not control the revenue side nor are they in the position to, that is the Administration’s expertise. He said what it comes down to is an enormous amount of cooperation between the Authority and the Administration, primarily Engineering. He said he sees them moving forward in the right direction as far as the filtration plant. He said it is going to be a tough couple of years. Mr. Tallarico, referring to Mr. Bruch’s question concerning changing the financial advisor, said that in moving forward they felt there were some issues as far as dealing with Concord as both the Authority and the City’s financial advisor, that there were some conflict issues. Mr. Tallarico feels he can honestly say that their work is cut out for them, there are really great people on the Board who are very passionate about straightening things out. He said they are looking forward to moving ahead and are optimistic even though it is an enormous amount of debt. He said they are strictly limited to the finance end of it, some bonds might have to be restructured to spread out the payments, and those are the areas they have to concentrate on. Mr. Tallarico said the timbering and other things should be addressed by the City because they have the facilities and staff to do that. He said he looks forward to serving over the next few years.

Mr. Leeson thanked Mr. Tallarico for his service. He said that remarks made during the discussion that occurred tonight were not a reflection on the board members, but thought some important questions were asked and there needs to be answers. Mr. Tallarico agreed, and said he did not know if those original numbers will hold, but said if it is $100,000, it is $100,000 too much. He said some of these arbitrage go back to 1999. He said this is another reason why there is a new financial advisor, to get another opinion. Mr. Leeson suggested that the Authority’s solicitor be commissioned to conduct an investigation to determine if there is any professional liability on the part of any of the professional advisors. Mr. Leeson said there shouldn’t be an arbitrage problem in the first place. One of the cardinal rules professional advisors go through in training is that arbitrage issues should be avoided. He said after reading the press over the last few years, every single government agency that got involved in arbitrage, got themselves involved in a mess. He said he has never in his thirteen to fourteen years of being associated with the City ever heard of anybody endorsing the concept, much less ever wanting to even get close to it. Mr. Leeson said that the idea that we even have this is a shock to everybody involved. He encouraged Mr. Tallarico to get to the bottom of it and ask the solicitor to investigate it, and to share those findings with the City. Mr. Leeson then asked Mr. Tallarico if the $144 million is just the principal debt, that doesn’t include interest. Mr. Tallarico said yes that is the principal. Mr. Leeson then said he believed that the principal indebtedness combined with the interest puts the number to over $300 million at this point in time, which he said he thinks is an all time high. Mr. Tallarico said it is an all time high and the job of the Authority is to manage debt. He said he is very confident in the new financial advisor, who were put in a tough position with this arbitrage. Mr. Tallarico said it is an enormous responsibility. He said they cannot control the revenue stream, that is what the City has to do. He said the strategic plan and everything has to work together if it is going to get better, and they are optimistic.

Support of Dana Grubb

Mr. Antalics, referring to an article in the Morning Call concerning the former Deputy Director of Community Development, communicated that bothered him, the demonizing of a person who has been very supportive of the City, had been a gentleman to him and supplied him with information whenever he asked, and was very free with that and took the time, and there are people on Council who look at him in the fine light also. What he read today, really disturbs him very deeply and said there are options like letters to the Editor, statements to people like them, saying what you really think of that gentleman to get a balance, so the public who only makes judgments about what they read at this point see a demon. He thinks that is very unfair. Mr. Antalics suggested that supporting the former Deputy Director would be a fine gesture, from gentleman to gentleman.

City Debt

Chuck Nyul, 1966 Pinehurst Road, referred to last year’s $7 million bond issue for the Hirko case, $35 million bond for pension program, $6 million above last year’s budget, all the things Council passed last year, including the budget that was just passed. Mr. Schweder said, for the record, he did not vote for any of those. Mr. Nyul said $94 million of taxation was passed for the City of Bethlehem.

Moravian Village

Mr. Nyul related a story concerning a person who bought an apartment at the Moravian Village who is not happy about gambling on the South Side. Mr. Nyul said he does not think gambling is going to make it in the City of Bethlehem.

FAA Tower

Mr. Nyul said he is in the flight pattern of Lehigh Valley International Airport and he feels that a FAA tower is needed on the mountain for the entire Lehigh Valley, not just for the City of Bethlehem. He said this is a Lehigh Valley situation.

Van Bittner Hall – Parking

Mr. Nyul, focusing on parking for City Hall, suggested City Hall move its whole complex to Martin Towers where there would be ample parking, and thinks this is a good time to do this.

Selling Water

Mr. Nyul suggested someone in the Authority sell bottled water to make money for the City.

LVIP Safety Record

Mr. Scheirer said the Airport has compiled its exemplary safety record for the radar tower on the airport property.

Support for Dana Grubb

Mr. Scheirer said there have been many positive aspects of his returning to Bethlehem within the past two years and one of the most positive has been the opportunity to get to know Dana Grubb.

Comments Concerning the Bethlehem Authority

Mr. Bruch apologized to Mr. Tallarico for his remarks against Bethlehem Authority.

14. ADJOURNMENT
The meeting was adjourned at 9:20 p.m.