Mayor Callahan to Deliver 'State of the City' Today

Bethlehem Mayor John Callahan is scheduled to give the annual State of the City address this morning at the Comfort Suites hotel in South Bethlehem, during a morning meeting of the Greater Lehigh Valley Chamber of Commerce.

Though he will no doubt try to paint a positive picture, he will almost certainly feel compelled to address some indications that the city’s fiscal health has been in decline.

Last week, for example, Standard & Poor’s dropped the city’s bond rating from A- to BBB, as Bethlehem prepares to borrow $16 million to cover a deficit in its operating expenses.

Though the planned bond issue, which City Council is scheduled to give final approval to in March, was given a “stable” outlook, the need to borrow to cover operating expenses was one reason why the bond rating agency lowered the rating, it said. 

Among the other factors mentioned in its report was “an ongoing structural budgetary imbalance in the general fund operations resulting in negative fund balances in fiscal 2008 and 2009.”

Callahan will no doubt make the case that the “structural imbalance” has been corrected by making $6 million in budget cuts and reducing the city workforce by 54 employees.

The mayor will also probably discuss some of the development taking place further east in South Bethlehem where the SteelStacks project is slated for completion in the spring and a new Sands Bethlehem Hotel will be open for business some time after that.