Bond Blues - They Took the Money and Ran, Like Thieves in the Night

Joe DeRaymond

12/21/2001

It was a moment of low drama. It was about 9:40 AM, Wednesday, December 19, 2001 and Judge Garb had just opened the proceedings of Bernard V. O’Hare III versus Northampton County and the Northampton County General Purpose Authority (GPA). Bernie was seeking injunctive relief to stop the issuance of $111,000,000 in bonds while matters of law were pending relating to the legality of the organization of the General Purpose Authority and relating to the ability of this authority to pay over $500,000 to insure the bond against lawsuits. But the GPA and the Reibman administration were not interested in Judges and Law today - they wanted the money. Attorney Williams from Reading, representing the General Purpose Authority of Northampton County, said, "Your Honor, the County has already closed on the bond. The money has been disbursed." Judge Garb shortly thereafter told Bernie O'Hare, "There is nothing before me, the motion is dismissed." Later, it was revealed that the County settled at 9:27 AM.

So it was that Bernie's last-ditch attempt to stop the issuance of the $111,000,000 bond failed. The Reibman administration simply rode over the lawsuits. They paid $880,000 of taxpayer money to insure the bond against any lawsuits and issued the bonds, took the money and ran with it. This waste of taxpayer money will be one of the legacies of the Reibman administration, which will only be matched by the actual expenditures of funds from the bond issue.

The lawsuits will continue. The 2000 bond issue is before the Pennsylvania Supreme Court, which will decide whether the Department of Community and Economic Development can enforce the elements of the Municipal Authorities Act. The 2001 bond issue is before the Commonwealth Court which will examine the constitutional issue of whether public money can be granted to private enterprise in the absence of enabling statutes, as well as other issues regarding the legality of the process which approved the bond. Bernie is also challenging, in the Northampton County Court, the General Purpose Authority’s organization and ability to spend $880,000 of taxpayer money to insure the bond . If either of the suits involving the 2001 bond issue succeed, there will be big trouble in Northampton County, for there will be a $111,000,000 bond with no taxing power to pay for it.

As we watch this river of money start to flow out of the coffers of the GPA and the administration, let us revisit the projects we are buying. The big ticket items are the new County Courthouse at $43,000,000 and the first installment of the prison expansion at $22,780,000. The courthouse monies were awarded without needs studies or adequate cost estimates. We are now being presented with a new courthouse addition which will wrap around the bunker style facade of the current courthouse, at the corner of Seventh and Washington. It will be a big, fancy building in a devastated neighborhood.

Even the current Council wants to change the prison plan, which calls for spending 70 - 80 million dollars in several phases to improve and expand the prison at its current site. Unfortunately, they did not have the fortitude to actually legislatively modify this brain-dead proposal from the Reibman administration, which maximizes public expenditure for an outmoded facility. At the final Council meeting of 2001, the Council voted to grant construction contracts for these projects, but made it clear that they could be changed with little added cost. (The Reibman administration per James Hickey, of course, differed with that analysis.)

The third County General Improvement Project allocates $3,083,000 for renovations at Gracedale. Of course, this project should be funded, as it involves needed improvements. It certainly did not require an omnibus bond issue for funding.

The County has allocated $12,986,460 for open space acquisition and parks expansion and maintenance. The total for farmland preservation is $3,000,000. There are $3,500,000 in grants to municipalities in this portion of the bond. Again, why not examine these needs separately? At the final Council meeting of 2001, there was concern expressed that this method would not maximize State grant matching funds - the mega-bond tries to please all, but is deficient in planning and efficiency.

The fire school has been granted $314,000, which has already been allocated by the Council out of general revenues. This is a necessary expenditure to build a minimal fire training facility, i.e., with bathrooms, water, and modern training facilities. This does not address the pressing need to examine the state of fire and emergency preparedness on a County basis, as local volunteer departments struggle to maintain adequate levels of service.

These totals come to $82,163,460. This was bumped up by $3,000,000, as the Northern Tier Industrial Center was abandoned and its $3,000,000 was allocated to farmland preservation and the courthouse. The remaining $29,016,540 of the bond are Authority Economic Development Projects, to be administered by the General Purpose Authority.

The largest single grants in this project are to the City of Bethlehem, which is to receive $5,000,000 for parking structure, infrastructure and related improvements and $13,150,000 to the Bethlehem Commerce Center for infrastructure and related improvements. $1,500,000 is for the already-constructed parking lot at Broad and Main Street, which is to serve the Liberty Center development at the same location. (To date, it is an “under-utilized” development and parking lot, to be kind.) The grant to the Commerce Center is for the express purpose of building a portal to the Bethlehem Works project, which is Bethlehem Steel’s effort to develop the 1600 acre brownfield of abandoned plant in South Bethlehem. This entire plan has been placed in jeopardy by the bankruptcy and impending demise of Bethlehem Steel, yet the administration has insisted on pursuing this grant which could very easily provide a portal to nowhere, a portal to wreckage and contamination, a waste.

The City of Easton will receive a $200,000 grant to improve the streetscape on Third Street to improve the entrance to Lafayette College. We must also note that Councilman Michael Dowd obtained a $2,350,000 separate bond grant for the City of Easton to build a parking deck for the Hotel Easton, apparently in exchange for his support for this 2001 bond issue. In reality, this grant is part of the overall bond proceeding, as it was placed in the 2000 bond issue and used as a political carrot for the City’s support of the 2001 version. (It also demonstrates that there is no reason for a massive bond issue for these projects, as it was easy enough to pursue this project separately, when it was politically convenient to do so.) Easton’s State Theater will receive $700,000 to improve its building, including restroom improvements, which is another clever element of the bond which insures more support of the local rich and famous for the boondoggle.

For some reason, the Lehigh Valley Industrial Park will receive $1,000,000 for infrastructure and improvements which are already in place in LVIP VI. These improvements are certainly within the financial reach of the corporations which are rapidly filling the lots in this development.

The remaining $8,966,540 is labeled “Northampton County municipalities: grants for infrastructure and related improvement”. Within this category we find the rest of the “economic development” portion of the bond. The following projects are included:

The only grant in this collection which does not directly benefit a private developer is the $120,000 Bath bypass. The Reibman administration has constructed a completely new economic development philosophy, carried out by its $500,000 a year Department of Community and Economic Development. This policy, as well as the mega-bond idea, was initially fashioned by Reibman’s political operative Michael Solomon, who is currently under indictment for taking kickbacks on County insurance policies. It is untested and unprecedented in its approach. It is based on the theory that industry will be encouraged to come to the area on the basis of improvements provided to industrial parks. It presumes that Northampton County can prime its own economic pump without regard to the larger economic realities of the region, of the nation, of the world. The situation with Bethlehem Steel is an excellent example of this faulty reasoning. After spending the money for an entrance to the BethWorks, there may well be no BethWorks. Furthermore, this site has already demonstrated its desirability, absent public grants. The Connectiv power plant is utilizing the eastern portion of the tract, and Lehigh Valley Industrial Park is going to attempt to redevelop 300 acres on East Fourth Street - without direct government subsidy. These realities point to the meaningless development value of the megabond grants, often to businesses which will receive large tax breaks for locating in the areas. Again, it is a political game more than a development process.

The size and multi-purpose nature of the bond has prevented effective planning for the necessary and large projects, such as courthouse expansion and prison planning. Farmland preservation has been thrown in as an afterthought, as a necessary political element to satisfy an electorate which is demanding an end to sprawl development. Next year, we will be presented with a Green Future Fund proposal to pass another massive bond issue of $30,000,000 to be dedicated to open space and farmland preservation. The difference between the Reibman megabond and the Green Future Fund is that the Green Future Fund will appear on the ballot and will be voted on by the electorate after a fair and open debate. The $111,000,000 bond issue will make this further indebtedness, albeit for a focused and admirable purpose, a tough question for the voters of Northampton County.

The megabond approach has also prevented discussion of progressive ideas on issues such as housing, crime, and employment. We must remember that while there has been some principled Republican opposition to the bond, led by Ron Angle, the political establishment both Republican and Democrat has supported it. The citizen opposition which held up this process was led by Green Party members. We have repeatedly asked for such provisions as a living wage rider, a new look at how we treat non-violent offenders, and innovations which would use more technology in the County work spaces and hence reduce the need for such a large expansion. Our ideas were ignored.

If the County can grant millions to developers, why can it not establish a low-interest LOAN pool to allow worker-owned factories to finance their own local enterprises, in areas such as the garment industry which have taken such a hit from the global economy? During the debate over the Hotel Easton parking deck grant, the County was urged to encourage the City of Easton to remedy a declining home ownership situation in the City of Easton, and it refused. Why not a LOAN pool to encourage increased owner-occupied housing in the West Ward of Easton, which surrounds the courthouse which will receive its $43,000,000 upgrade? The South Side of Easton, which could also benefit from a home ownership program, gets nothing from the bond, and I fear that South Bethlehem will receive only a view of development from this developer-friendly issue.

The 2001 Northampton County megabond was conceived as a campaign scheme, as a means to reach out to the “Four Corners” of the County and spray some money to every area. The Reibman administration simply don’t know what else to do with government, and have allowed the inertia of the initial plan carry them forward. Jim Hickey, Vince Dominach, and Glenn Reibman are driving a vehicle of government beyond their control, even beyond their understanding. Unfortunately, the passengers are the taxpayers of the County who will be paying $217,000,000 over the next thirty years for the ride.

The views expressed herein are the writers' own and do not necessarily reflect those of billybytes.com

© 2001 billybytes.com. All rights reserved.