In all the years I’ve been writing and blogging, I’ve run very few ‘blind items’. I don’t do it because there’s so much good stuff to write about that I can openly source that I don’t have to resort to “unnamed officials” who spoke on the condition of anonymity.  But this is not one of those times.

According to some closely placed sources who spoke on condition of anonymity, down at Allentown City Hall, the phrase, “Act 47” is reverberating through the hallways. You may remember that just two weeks ago, The Morning Call reported and this blog commented on the fact that the $10 million borrowed bailout isn’t working quite the way we were all led to believe it would. With a lot of bills coming due in the next year or two, the option of entering the state’s municipal fiscal distress program may be looking like it might be the only way out.

And then there’s the story about a regional organization that decided to create a non-profit foundation so they could give money away to projects they wanted to support. Just one little problem: The foundation has been giving away more money than they’ve been taking in. Where did they get the money from? They’ve been borrowing it from the organization with which they’re affiliated. The foundation is now in debt to the “mother ship” for well in to six figures. So much so that at least one donor who became aware of the situation has decided to not honor this year’s pledge. 

Looks like there’s going to be a lot of talk soon about how people handle other people’s money. Where is Donald Trump when you need him? 

8 thoughts on “The Handling of Other People’s Money”

  1. Good information, bad ending line. Donald Trump’s gambling palaces have gone belly up a number of times losing his investor’s pretty much all of their holdings. “The” Donald has come out on top every time. Wait, the ending line is brilliant.

  2. Patrick Henry

    So despite 5 years of fleecing the Allentown taxpayers with increased taxes and fees, the Mayor and his rubber-stamp council are now willing to do what should have been done 5 years ago.

    With leadership like that, I’m sure they’ll all be elected in a landslide.

    Oh that’s right, this is Allentown. The actual performance of our elected officials no longer matters. Just pull the ‘D’ lever.

  3. Pamela Varkony

    Thanks, RS…

    “Brilliant” may be a bit of an overstatement, but I do think at times I’m very “clever” 🙂

    The Donald made a lot of money off of “other people’s money”…then sailed off in to the sunset leaving behind the wreckage for others to clean up. Sound familiar?

  4. Pamela Varkony

    Pat,

    You’re so right…this should have been done 5 years ago, which many of us recommended. But I still think the mayor is going to fight it all the way down. His ego just won’t let him do it.

    The city is already in a situation where it is most likely going to run out of cash: I understand February revenues were way down. So the options are becoming fewer and fewer.

    Maybe he’ll get that appointment in Washington he’s supposedly been after and he’ll leave this all behind for someone else to clean up: Just like Roy Afflerbach did to him.

  5. Michael Donovan

    Pam,

    In response to your entry, I wrote this at my blog, and thought it would be helpful to copy.

    Michael.

    Greetings:

    Over at Pam Varkony’s blog, she has mentioned Act 47 and other concerns about the city finances. http://perspectives.pamelavarkony.com/the-handling-of-other-peoples-money/ I thought it might be useful to present what I know.

    At the Budget and Finance Committee meeting of March 24, we were pushing the administration to provide more detail on the city’s cash position and our ability to ride out any further declines in the economy this year. As I noted in an earlier blog entry, we stressed the importance of receiving a cash projection for the year (optimistic and pessimistic). The discussion included questions about Act 47 — what were the criteria for a community to use in a request for designation and what strategies had been adopted by those communities in the state who were in Act 47.

    The committee asked the City Clerk’s office to get information about Act 47 (which has been shared with council) and is researching strategies.

    I am not aware of any effort by the Administration to carry out the same research (indeed it might already have the information), but the Mayor repeatedly has said he does not want to go that route.

    A different Act came up in conversation over the last month — Act 205, which applies to the municipal pensions. I have sat in on several meetings where details of the Act have been described. The Mayor apparently at his press conference last month on pensions mentions the Act and provisions that may help the city. I have not been briefed on those provisions, but from what I hear, his comments were new pieces of information to me.

    Feel free to ask questions. Act 47 has a long list of criteria that allow a city to request classification. I am not totally clear yet on how Act 205 works.

    Best regards,

    Michael

  6. Patrick Henry

    Pam –

    Why would anyone want our Mayor to do on a national level what he’s done to our city?

    Please tell me his appointment is not to a government position in D.C. Maybe he can work for Sam Bennett.

  7. Pamela Varkony

    Michael,

    Thank you for sharing what you know to date. It seems to verify that there are indeed efforts being made to find ways to mitigate the city’s financial crisis.

    This is a tough time to be a member of city council. But the reality is, a lot of people are counting on the seven of you to help get us through this. As a famous politician once said, “holding elected office is not a popularity contest, it’s about doing the right thing”.

  8. Pamela Varkony

    Pat,

    The rumor about his “angling” for an appointment is so pervasive that where there’s that much smoke, there’ almost always a spark or two.

    In this economy and with so much pressure on state and municipal officials, one can only imagine the scrambling going on to escape to a “safe haven” in some bureaucratic job in DC with a government pension.

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