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Record of Proceedings

Bethlehem Finance Committee Reviews 2024 Audit and Police Vehicle Budget Transfer on December 2, 2025

Council Meetings — Tuesday, December 2, 2025
BodyBethlehem, Pennsylvania
SessionCouncil Meetings
DateTuesday, December 2, 2025
StatusFILED
Video Record
0:00 / 41:54

Transcript — Verbatim
0:02

I will come to order this meeting of the Bethlehem City Council Finance Committee.

0:06

I am Grace Cramsey Smith, Chair of Finance Committee.

0:10

The other committee members are Hilary Kuytek and Rachel Leon.

0:14

The clerk will please call the roll.

0:16

Ms.

0:16

Cramcy Smith.

0:17

Present.

0:17

Ms.

0:17

Quietek.

0:18

Present.

0:18

And Ms.

0:19

Leon.

0:19

Present.

0:21

There are two agenda items for tonight's meeting.

0:24

The first agenda item is a presentation on the 2024 city audit.

0:28

The second agenda item is to review a proposed budget transfer.

0:35

YouTube reminder if you started streaming this meeting after 6 p.m., please make sure to scroll ahead so that the YouTube stream is current rather than a recording of an earlier portion of the meeting.

0:56

To the left, to the middle.

0:58

Anyone from the public to the right?

1:01

Okay, we'll go with the first agenda item is a 2024 city audit presentation.

1:06

I'll call on a representative from the administration to discuss this item.

1:14

Eric was going to make an introduction.

1:16

Okay.

1:17

Are you there, Eric?

1:18

I should mention um that our business administrator Eric Evans is not feeling well, so he's available remotely.

1:28

Hello, um, Chairman Crams of Smith, thank you for hosting this this evening for this meeting.

1:33

Sorry, I can't attend in person.

1:36

I do have the fluid and uh don't want to be there to infect anyone.

1:40

So needless to say, um, I do have a couple comments, and we'll just start with their presentation.

1:45

But the audit is a large undertaking for uh for us, especially for the uh ministry and financial services division.

1:53

It's an ongoing event uh that takes the work of a lot of people through all the departments and it goes on throughout the entire year.

2:01

Tonight we're here to review the 2024 audit.

2:04

Uh and having said that, we can also say that the 2025 audit is also in the beginning stages as as we continue to move into next year.

2:13

So I want to take the time to thank everyone that's been involved with responsibility of keeping and providing the data that's required to be submitted to our auditors.

2:22

Uh there's a citywide if can you hear me?

2:25

Yeah, yes, we can hear you.

2:26

Okay, I'm just getting notes on my thing that's currently offline.

2:31

So I make sure I'm still there.

2:33

But uh, it is a citywide effort that's gonna involve dozens of people in the end.

2:39

But the table tonight are really the two point people.

2:41

We have um sitting there who you're familiar with, Wendy Lazarchak, our director of budget and finance, and uh as a CPA, she has been and as a role, previous role of director of financial services, the point person for I guess I can say more than years, I would say into the decades with our audits.

2:57

Uh next to her is Joe Vlosik, our current director of financial services and the current point person, the audit.

3:05

While many people are involved throughout the process throughout the year, Joe really takes the lead um through and becomes uh the point man.

3:13

So we appreciate uh both our efforts, especially.

3:16

They both have prior experience in auditing, which serves the city well uh during this time.

3:22

And it's the two of them that will be available to answer most any of the questions you have with regard to specifics about the city once the presentation is complete.

3:31

Um, with us tonight is Jennifer uh Kruger Kibbe, uh, who I believe you are familiar with, and she's she's company for the last couple of years.

3:38

She's a partner at Mayor Dussel, and she leads the team that conducts our audit.

3:42

So I want to extend her thanks from the city of Bethlehem uh for the professional relationship that we have with them as well as the services provided by their firm.

3:53

So she did previously share slides with uh the council, and I will now turn to Jennifer for her to report on the 2024 audit.

4:02

Thank you.

4:04

Thank you, Eric.

4:05

We hope you feel better.

4:07

And I just okay, all right, good to try my technology, make sure I'm able to pull everything up.

4:14

So the first couple slides are our required communications.

4:18

So this is in a separate letter that we call the to communication to those charged with governance.

4:23

So we're required to, in accordance with auditing standards, have these written, and I always like to highlight them in the beginning of every audit presentation.

4:30

So our responsibility is under auditing, the audience standards generally accepted in um the United States of America.

4:37

In addition to the government auditing standards in uniform guidance.

4:40

So similar to previous years, the city of Bethlehem expense one than 750,000 of federal wards, which requires you to have that separate single audit.

Discussion Breakdown — Share of Meeting
Fiscal Sustainability█████████████████████████████████████████████68%
Public Safety████████████18%
Procedural███████10%
Public Engagement███4%
Summary of Proceedings

Bethlehem Finance Committee Reviews 2024 Audit and Police Vehicle Budget Transfer on December 2, 2025

On December 2, 2025, the Bethlehem City Council Finance Committee, chaired by Grace Cramsey Smith and including members Hilary Kuytek and Rachel Leon, met to receive the 2024 city audit presentation and review a proposed budget transfer for police vehicles. The audit received an unmodified (clean) opinion with no findings, and the committee unanimously recommended approval of a $645,000 transfer from salary savings to upgrade the police fleet.

Discussion Items

2024 City Audit Presentation

  • The audit was conducted by Maher Duessel, represented by partner Jennifer Kruger Kibbe. The city received an unmodified opinion – the best possible – indicating financial statements are materially accurate in accordance with GAAP.
  • Financial highlights (full accrual basis):
    • Governmental activities: change in net position (net income) of $20 million for 2024; total revenues increased by ~$5 million due to new grants, higher real estate taxes, and interest income; expenses increased by ~$4 million, partly from pass-through grants.
    • Business-type activities (sewer, water, golf, stormwater): net income of $15.2 million; revenues up $1.8 million, expenses slightly decreased.
    • General fund (current resources): change in fund balance showed a $1 million decrease – a net loss. Revenue increased slightly; expenses rose due to community development projects (RACP, Bethlehem Food Co-op).
    • General fund balance at year-end 2024: $58.9 million total, with $44.4 million unassigned (available for future spending), $14.2 million assigned for future capital and medical claims, and $253,000 restricted for community development.
  • Single audit (federal awards >$750,000): Three major programs audited – ARPA (Coronavirus State and Local Fiscal Recovery Funds), Highland Conservation (rail trail property purchase), and Economic Development Initiative (Bethlehem Food Co-op). All received unmodified opinions; no material issues or findings.
  • No deficiencies in internal control over financial reporting were reported. Two best-practice recommendations were included in a management letter:
    1. Review sewer fund administrative charges to ensure they are substantiated and allowable under the act (a repeat comment). Administration is gradually reducing charges ($300,000 in 2026 budget, $400,000 next year) to align with cost study results.
    2. Improve documentation of P-card statement approvals – add signatures to show review. A committee is working on a new process expected by January 2026.
  • New accounting standards (GASB 100 and 101) had no material impact on financial statements.
  • The city’s net position (accumulated equity) for governmental activities was $43.6 million, and for business-type activities $77.9 million at year-end.
  • Committee members asked clarifying questions about the recommendations, capital asset capitalization thresholds, and the general fund balance breakdown. Councilwoman Leon noted public concern about the Food Co-op grant and confirmed the audit found no issues with the 2024 transfer.

Proposed Budget Transfer for Police Vehicles

  • Deputy Chief Michalt presented a request to transfer $645,000 from police salary savings (due to lower staffing levels) to the vehicle account to upgrade department vehicles.
  • Current fleet: 90 total vehicles, 24 assigned to patrol. Average patrol vehicle mileage reduced from 84,000 miles (2022) to 39,000 miles currently, but over 30 vehicles citywide have more than 100,000 miles.
  • The funds would be used to replace the oldest and least reliable vehicles (patrol cars, trucks, vans, specialty vehicles). Average cost per fully equipped patrol vehicle is about $62,000.
  • Previous 2025 transfers from salary savings include $103,000 for a new ERT robot, $45,000 for records room furniture, $12,000 for cameras, and $70,000 for overtime – leaving only ~$22,000 remaining in salary accounts after this transfer.
  • Committee members expressed support, noting the importance of reliable vehicles for officer safety and working conditions. Questions included how many vehicles $645,000 would buy, the status of e-bikes (8 currently, deemed adequate), and the remaining balances in staffing funds.

Key Outcomes

  • The committee voted unanimously (3-0) to recommend approval of the administration’s request for the $645,000 budget transfer and to place appropriate legislation on the city council agenda for that evening.
  • The audit presentation was for informational purposes only; no formal vote was required on the audit itself.

Meeting Transcript

I will come to order this meeting of the Bethlehem City Council Finance Committee. I am Grace Cramsey Smith, Chair of Finance Committee. The other committee members are Hilary Kuytek and Rachel Leon. The clerk will please call the roll. Ms. Cramcy Smith. Present. Ms. Quietek. Present. And Ms. Leon. Present. There are two agenda items for tonight's meeting. The first agenda item is a presentation on the 2024 city audit. The second agenda item is to review a proposed budget transfer. YouTube reminder if you started streaming this meeting after 6 p.m., please make sure to scroll ahead so that the YouTube stream is current rather than a recording of an earlier portion of the meeting. To the left, to the middle. Anyone from the public to the right? Okay, we'll go with the first agenda item is a 2024 city audit presentation. I'll call on a representative from the administration to discuss this item. Eric was going to make an introduction. Okay. Are you there, Eric? I should mention um that our business administrator Eric Evans is not feeling well, so he's available remotely. Hello, um, Chairman Crams of Smith, thank you for hosting this this evening for this meeting. Sorry, I can't attend in person. I do have the fluid and uh don't want to be there to infect anyone. So needless to say, um, I do have a couple comments, and we'll just start with their presentation. But the audit is a large undertaking for uh for us, especially for the uh ministry and financial services division. It's an ongoing event uh that takes the work of a lot of people through all the departments and it goes on throughout the entire year. Tonight we're here to review the 2024 audit. Uh and having said that, we can also say that the 2025 audit is also in the beginning stages as as we continue to move into next year. So I want to take the time to thank everyone that's been involved with responsibility of keeping and providing the data that's required to be submitted to our auditors. Uh there's a citywide if can you hear me? Yeah, yes, we can hear you. Okay, I'm just getting notes on my thing that's currently offline. So I make sure I'm still there. But uh, it is a citywide effort that's gonna involve dozens of people in the end. But the table tonight are really the two point people. We have um sitting there who you're familiar with, Wendy Lazarchak, our director of budget and finance, and uh as a CPA, she has been and as a role, previous role of director of financial services, the point person for I guess I can say more than years, I would say into the decades with our audits. Uh next to her is Joe Vlosik, our current director of financial services and the current point person, the audit. While many people are involved throughout the process throughout the year, Joe really takes the lead um through and becomes uh the point man. So we appreciate uh both our efforts, especially. They both have prior experience in auditing, which serves the city well uh during this time. And it's the two of them that will be available to answer most any of the questions you have with regard to specifics about the city once the presentation is complete. Um, with us tonight is Jennifer uh Kruger Kibbe, uh, who I believe you are familiar with, and she's she's company for the last couple of years. She's a partner at Mayor Dussel, and she leads the team that conducts our audit. So I want to extend her thanks from the city of Bethlehem uh for the professional relationship that we have with them as well as the services provided by their firm. So she did previously share slides with uh the council, and I will now turn to Jennifer for her to report on the 2024 audit.

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