Bethlehem Press

Sunday, May 31, 2020

Debt baffles water board

Wednesday, September 19, 2012 by NATE JASTRZEMSKI njastrzemski@tnonline.com in Local News

An unusual entreaty for a typically staid group: What do we do?

The City Authority's Board of Directors faced this question uneasily Sept. 13 when, during their regular meeting, members wondered how the authority suddenly owes the city about $841,000. As the discussion lengthened, it became apparent many city funds will soon be anemic due to under-budgeting and long-deferred payments.

During his report, Controller John Filipos was at a loss to explain the sudden change in fortune, noting two years ago the city owed the authority. His abbreviated description of the city budgeting as it wished showed mostly his own bafflement at the circumstance, but board member Richard Master spoke up, trying and failing to clarify comments for on-the-record legal use of the minutes in the future.

Other members were equally confused, and Water and Sewer Resources Director Dave Brong said reimbursements for prior borrowing culminated in debt, but admitted, "Nobody has put it in terms I can understand."

Brong said it appears the problem originates with "huge" water fund contributions to the general fund, which is used to pay city employee medical expenses, but how that's broken down, "I don't know."

Board member Mark Jobes, frustrated, said if Brong didn't know, how was the board supposed to, adding, "I have a lot more questions."

Gene Auman, with the city controller's office, then clarified. He said the city budget has remained static while an agreement with Capital BlueCross, that had long allowed the city to defer payments until the following year, had expired. Thus the city suddenly owes more than a year and a half worth of medical expenses and increasing workers' compensation.

Auman said such payments to the general fund are not only from the water department.

Authority Executive Director Stephen Repasch said the workers comp issue will not resolve itself because the city's budget is too low.

City Council member David T. DiGiacinto was present, and confirmed Auman's claim that deficits throughout the city are beginning to pile up from 2010.

Said Jobes, "Now I know way more than I wanted to."

Repasch said cutting free from such citywide cash flow problems is one major reason he's a proponent of becoming an independent operating authority, even if at first it would still be responsible for debt accrued to the city before leaving.

Digiacinto pointed out the city itself is a major user of water – about 56 billion gallons a year – which is all free. "They don't pay a thing."

"They would if we were an operating authority," said Repasch.

"Good luck with that," Digiacinto scoffed.

Board members agreed the most important way to begin is to parse legal agreements and explore cash allocations to help pay off the debt and forestall the city raising water rates.

Unable to proceed without more research, President John Tallarico was ready to move on, saying contritely to Controller Filipos, "So, by next meeting you'll have this figured out, John?"

Repasch offered his own solution: "A dollar a week for a million weeks."

The next meeting is scheduled for 3:30 p.m. Oct. 11 at City Hall.