Lockbox When I returned to blogging a few weeks ago, I promised myself that I was going to avoid local Allentown politics as much as possible. A lot of Perspectives’ readers are not Allentonians.  And the truth is, I’m frustrated beyond words with Allentown’s slide in to the abyss and the inability of anyone in a position to do so to show an ounce of courage or leadership.

But promises are made to be broken, and even though fellow blogger extraordinaire Bernie O’Hare beat me to it, I feel compelled to comment on Jarrett Renshaw’s well-written story in Sunday’s paper, titled “Allentown Loan Deal Isn’t Paying Off”. Really. What a surprise.

Anyone who’s ever been married knows that one of the ways you keep a relationship “healthy” is by resisting the urge to say “I told you so” when your partner turns out to be wrong and you turn out to be right. But there are no such rules in journalism or politics, so excuse me while I mention that there were people out here in the wilderness, myself included, who were trying to sound this alarm, years ago, and no one, including The Morning Call, would listen.

Now that the light is finally shining on the inside of the open lockbox, and it looks like the reserve may have dipped below it’s legally “locked” level, and even though the convoluted deal hasn’t earned a fraction of the interest projected to help pay down the debt, don’t get your hopes up that anything will change.

City Council will continue to verbalize a few mild protests, the mayor will go on blaming his predecessor and the worst recession since the Great Depression, and there will be no consequences for this deception except for the increase in taxes of the dwindling number of Allentown citizens who still actually pay taxes.

10 thoughts on “What A Surprise: The Box Isn’t So Locked”

  1. Michael Donovan

    Hi Pam,

    I wrote a long response, but forgot to put in the email, and thus it got erased. The lockbox has not been touched, but other funds have. Mr. Renshaw have had extensive conversations about cash status.

    The real problem is poor cash receipts and the risk that another year like the last two will present a problem, no matter how we finance the deficits. Right now we are using funds that the solicitor says are ok. I question that, but it is buying time to see if the economy improves.

    I have demanded a cash forecast by 4/14, the date of the next monthly statement. I have a fairly accurate seasonal cash inflow forecast that will help see where are by May. We need the timing of cash expenses to see what the month by month results might be.

    The real problems are the following (not the lockbox):

    1) Poor cash receipts that must recover, but will only as the economy recovers
    2) Unions unwilling to give concessions
    3) The Mayor waiting too long to react
    4) A city that is unwilling to increase taxes logically because of the unacceptable increase in pensions.
    5) A city that has many urban problems but does not have sufficient wealth to finance appropriate strategies in community development and public safety.

    So, I don’t thinke we should focus on the lockbox as much as we should be pushing concessions, understanding the impact of a small tax increase, and demanding that the mayor not hide what is obvious. He could have been a hero, but chose to not face reality.

    Best regards, (there was more I said in the first draft…feel free to ask any questions you want)


  2. Mr. Donovan –

    I’ll take your list of “real problems” and then add my comments (and a few other issues/problems):

    1) Poor cash receipts that must recover, but will only as the economy recovers

    Some cash receipts may recover with the economy, but many were unrealistically high. For example, could we really expect the real estate transfer tax to continue at record levels indefinitely?

    2) Unions unwilling to give concessions

    Agreed, along with elected officials (Mayor and council) unwilling to do what is needed to force them (or adopt appropriate alternatives). Why isn’t council holding public hearings on what functions of city government could be eliminated, which could be privatized, and what cost savings could be achieved by doing so? Until that happens, what motivation do the unions have to “give concessions”. How would they know city government is serious?

    3) The Mayor waiting too long to react

    Agreed, but Council has been there to enable him along the way. There is no sense of urgency on council, no realization of the crisis the city is in. You’ve demanded a cash forecast by 4/14, that’s hardly enough and you’re one of the few on council doing ANYTHING! I would say emergency meetings of council are in order. Instead(as Pam mentions), we’ll most likely get token concern from council and council will only start to really examime the finacial situation during budget season (when it’s too late).

    4) A city that is unwilling to increase taxes logically because of the unacceptable increase in pensions.

    Again, and a council willing to help the Mayor postpone the needed pension contributions in order to prevent having to deal with the issue during a Mayoral election year. As to increasing taxes, go back to #2 (concessions) first.

    5) A city that has many urban problems but does not have sufficient wealth to finance appropriate strategies in community development and public safety.

    Or a Mayor and city council unwilling to take the necessary steps to focus the limited resources of the taxpayers of Allentown on the core functions of government. It’s time to reassess everything the city does, what it should be doing, and make the appropriate moves. We can’t be everything to everybody, or a mini-federal/state government.

    How about a few more problems/questions:

    Do we really need a managing director (and staff)?
    Does the taxpayers really need to be paying for multiple assitants (and special assistants) to the Mayor?
    Was the Mayor’s salary increase necessary,did it have the stated effect of attracting higher quality candidates (laughable), and should the salary be reduced (along with department head salaries)?
    Could the CED department (which has seen explosive growth over the past 8 years) be trimmed back?
    Are the programs which have been implemented to combat the “urban problems” (as you called them) actually working or are they making the city’s problems worse?

    Those are just the obvious ones. If nothing else, why aren’t those issues being addressed? NOW!?!

  3. Michael Donovan

    Dear Mr. Henry:

    None of your points are without merit, although I would debate the degree to which you dismiss our response or the options that I outline. Perhaps we each start from an ideological perspective about the world.

    You begin with the assumption that government can and should be limited. Indeed, I am aware that CED has expanded, but the real costs of this city are associated with public safety and the union contracts that exist. We actually have a small police and fire department. The pensions are what kill us. It is easy to say that the Mayor has too many staff, but that is merely symbolic. If I were Mayor (and I DO NOT WANT TO BE), I know I would want some staff. Any organization that has the number of employees and budget this city has would provide some staff assistance to the CEO.

    I was not in office when the Mayor’s salary was increased, and I was against it. I wanted to go from $61,000 to $80,000 or at most $85,000. Afte entering office, and experiencing the recession, I would haved reduced the salary if I could, but council cannot. I have called for a salary rollback — even have started donating 7.5% of my take home pay (5% of the council salary) directly to the recreation equipment budget. The Mayor did not follow my lead (nor did council).

    Finally, I have been very vocal that this city does not have a community development strategy and so it continues to wander around confused as to how to deal with the reality of a changing city. We have urban problems, most of which are grounded in anger on all sides. I have my ideas of how to chip away at that anger and most of them are grounded in approaches to leadership.

    Unfortunately, I do not feel that we have had proper leadership, nor do I feel that I have the skills to be such a leader. I understand what I can and cannot do with my personality. I am looking around for that someone.

    You could run for Mayor. I suspect that you might have just as many people nipping at your feet. It is not an easy job for anyone.

    Best regards,

    Michael Donovan

  4. Michael Donovan

    If I may,one other thing. You and Pam mention special meetings.

    Well, I have held monthly budget meetings since April of 2008. I began calling for concerns with receipts in the early fall of 2008. The budget hearings that year were coverd by the press and included very loud calls for recognizing we were in a recession.

    And yet, the public did nothing. Throughout 2009, the budget was in the news constantly, and council was doing the best it could to keep the pressure on.

    If citizens want a change, then they need to change the charter. I have written suggested changes to the budget process that are going to be put into referendum form for the fall election.

    Best regards,


  5. Mr. Donovan –

    I don’t envy your job or the Mayor’s. But I don’t think council can go along as if everything is normal or that our problems can be solved within the normal course of business. We are beyond that, and it is only a matter of time before a majority of city residents are aware of that fact.

    I don’t think regular budget meetings are what’s needed. My assumption is that they are not attended by the entire council, and are most likely treated like any other committee meeting.

    I think we need special meetings, attended by the full council. The purpose would be two-fold. First, it would increase public awareness of the situation and second, it would signal to the public – and the administration -that council is serious about the fiscal problems the city faces.

    Such meetings were held once it became apparent that Mayor Afflerbach had lost control of the city’s finances and we were heading towared financial ruin. We are at that point once again.

    I find it interesting that charter amendments will be offered when the current administration has so frequently flouted the city charter. From placing the EMS referendum on the ballot in successive elections to adding the managing-director position, this administration has shown a complete disregard to the charter – and council has gone along with it. Perhaps we should try following the charter before making changes to it.

    Utlimately, I don’t think the problem lies with the charter. It lies with the unwillingness of council to do its job of representing the people and (collectively) standing up to the Mayor.

  6. Mr. Donovan –

    A few more points on your second post.

    It’s not an ideological perspective that is the issue. It is the need for everyone to recognize the reality that exists and that city resources are finite – because taxpayer resources are finite.

    You say that “the city does not have a community development strategy and so it continues to wander around confused as to how to deal with the reality of a changing city”. I agree! Yet who is paying for the CED budget while the department “wanders”? The taxpayers! And council still funds it every year! And they fund the “wandering” while the core funcitions of municipal government – such as police and fire – are not adequately staffed (“small” in your words). That’s an outrage and a failure of council.

    You can call cuts in the Mayor’s salary merely symbolic, but also symbolic is the failure of council to address those obvious issues. I agree, they won’t balance the budget but even if they generate a few hundred thousand dollars it is a step in the right direction. I’d love to have the combined dollar amount that has been spent on those “symbolic” areas over the past five years!

    We’d all like to hit the home run that totally solves the problem, but a few singles would be nice as well. Council should be looking at anything that saves even a few hundred dollars. Those cuts add up and signal the reality that the city is facing.

    Regarding the pensions and union contracts, yes they are killing us. If the unions don’t want to voluntarily give concessions, the city should be looking in to Act 47 in order to restructure the contracts. That certainly ought to be part of the package if council is even thinking about coming to the taxpayers and asking for a tax increase.

  7. Michael Donovan

    Mr. Henry,

    I can say that some of the things you are calling for are on my list (and on the list of others).

    I need to let the lawyers figure out what Act 47 does and does not allow us to do.


    Michael Donovan

  8. Some of your titles lately (“Box Isn’t So Locked” and “Mighty Oak Has Fallen”) have been marvelously entertaining lately.

  9. Mr. Donovan,

    I wish to say I appreciate your desire to communicate, so I thank you for your explanation of your thought process in an open discussion such as this venue. With that being said, I must tell you how absolutely tired I am of hearing council say that they cannot do anything. Yes, you can. There must first be a desire to make change happen. There must be a desire to stand up and say, without fear of consequence of whether or not the mayor gets angry with you, that what’s happening is wrong and you are all going to work together to make some positive change happen. The residents and taxpayers of Allentown deserve better. The mayor’s, whose salary has expanded greatly within the last year, sole focus should be this city, saving us money and working full time. Council should get rid of the managing director and his secretary position – that’s about 110,000 right there.

    Weed & Seed – Done. Program should be OVER. Not expanded. This program was for people to take back their neighborhoods not to supply government funded jobs indefinitely.

    Code Enforcement – Rental Inspections – should go back to systematic; afterall, that’s what the property owners are paying a fee for. Let HUD inspect their own properties. We don’t need the extra work and quite frankly, their inspection process is more stringent than ours.

    There are a number of other things in our budget that should get reviewed. I HATE that once something is “imposed” as a government duty or “service” – it’s there forever, never to be discussed again and when the very idea of looking at things more in depth only results with a threat that the world will come to a screeching halt if a program or service is cut back or, God forbid, removed.

    Michael, I beg of you, I need and expect so much more from our elected officials. I don’t need for “you” to make me feel good I just want you to stand UP for what’s right and speak OUT against what’s wrong. It’s time. (Please note, my use of “you” is in the collective use for ALL of council)

    Thanks, Kim Beitler

  10. Pam –

    I know I’m off topic, but I wanted to bring together something from two of your earlier posts.

    Our government has just passed a health-care bill that imposes a mandate that individuals buy a product from a private company. Merely because we breathe, our government now wants to shackle us with a bill we might not want.

    Where, might I ask, is the ACLU to protect us from this blatantly unconstitutional action? Are they too busy defending the rights of perverts to view pornography in our libraries?

    One would think that an organization that purports to defend the Constitution would want to weigh in on the subject.

    Unless, of course, that organization is a leftist front group founded by Communists for the purpose of undermining this country through the judicial system.

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