Bethlehem Finance Committee Meeting - July 21, 2026: Debt Restructuring, Green Light Go Grants, and Mid-Year Financial Report
Bethlehem Finance Committee Meeting - July 21, 2026
The Bethlehem City Council Finance Committee met on July 21, 2026, to discuss a proposal to restructure existing general fund debt, consider a budget adjustment for the Green Light Go traffic signal grant program, and receive a mid-year financial report. No public comments were offered. The committee voted unanimously to advance the Green Light Go-related ordinance and resolution to the full city council.
Discussion Items
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Debt Restructuring Proposal: Director of Budget and Finance Mark Evans and PFM Financial Advisor Scott Shear presented a plan to refinance and restructure approximately $11.7 million of the city's general fund debt. The proposal targets four bond series (2017A, 2017B, 2017E, and 2019) to smooth annual debt service payments, replacing a flat ~$10.8 million payment with gradual step-downs from $9.4 million in 2027 to under $1 million by 2036. The restructuring would have a present value cost of $811,000 due to extending the repayment term, but would provide annual cash flow relief and budget flexibility. City debt has been reduced from a high of $171 million in 2015 to $77 million currently. The committee took no vote; the proposal will return for a parameters ordinance first reading on August 4, 2026.
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Green Light Go Traffic Signal Grant Program: Bureau of Streets Engineering Manager John Alcall presented two related items: an ordinance adjusting the non-utilities capital budget to include a $78,000 project to replace LED display modules and controller components at all 128 traffic signals, funded 80% by state Green Light Go grants and 20% by city match; and a resolution transferring $141,000 in savings from the Streets Engineering budget to fund the city's matching share. The committee voted 3-0 to forward both items to the full council for consideration.
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Mid-Year Financial Report: Director Mark Evans provided an update on revenues and expenses through the first half of 2026. Property tax collections are at 96.5% of budget, consistent with prior years. Earned income tax is slightly ahead. Real estate transfer tax is running lower due to timing delays from Northampton County. Investment interest revenue is on track despite lower rates. On the expense side, salaries are within budget, but medical insurance claims are running significantly higher than in recent years, partly due to a $500,000 billing lag from 2025. Weekly claims exceeded $500,000 for several weeks early in the year, though activity has since moderated. The city is monitoring medical costs closely in anticipation of the 2027 budget process.
Key Outcomes
- Vote on Capital Budget Adjustment (Green Light Go): Motion to move the ordinance to full council passed 3–0.
- Vote on General Fund Transfer (Green Light Go): Motion to move the resolution to full council passed 3–0.
- Debt Restructuring Next Steps: The committee received the presentation and will consider a parameters ordinance at the August 4 council meeting, with a second reading on August 18 and bond pricing expected after Labor Day.
- No votes were taken on the mid-year report; it was informational.
Meeting Transcript
We are recording. Good evening, everyone. I will call to order the meeting of the Bethlehem City Council Finance Committee. My name is Michael Cologne, Chair of the Finance Committee. The other committee members are Justin Eamon and Hillary Cleopatra. Mr. Miller, please call the roll. Mr. Cologne. Present. Mr. Raymond. Present. Ms. Queck. Present. Thank you, Mr. Millen. We don't have any other council members with us at the moment. I'll acknowledge anyone else who joins us. There are three agenda items for tonight's meeting. Number one is a proposal for restructuring of existing general fund debt. Second is a proposed ordinance involving a budget adjustment involving the capital budget for non-utilities. And lastly, we'll go over a proposed resolution involving a proposed transfer within the general funds to provide matching grant funds. I'll accept public comment at the top. Now please there be any public comment is concluded. Moving on to agenda item number one, the proposal to restructure its existing general fund debt. I'll open it up with Mr. Evans and anyone else who's going to present, and then I'll open it up to committee members for comments. Thank you, Chairman Cologne. I have a statement I'm going to going to read to explain what we're doing here tonight. Then as you can see, Scott Chair from PFM is with us, and he'll be able to walk through the attached packet that's available on the website and our copies available for members of council tonight. And then in conclusion, if you would turn back to me, I'd like to just make a couple points on why we feel it's important that 20 summer of 2026 is the time to be doing this versus the past years. We've been together with Litzcott in 25 and 24, 23, 22. And to talk about it and really get a feeling of when would it make the most sense for if at all, when would it be best for the City Bethlehem to restructure its existing debt? For decades, the city of Bethlehem has borrowed five to seven million dollars every other year in order to fund capital expenditures. In addition, several supplementary borrowings were incurred for a host of other reasons. As a result of borrowings, the city's total debt climbed to 171 million by the year 2015. Since that high water mark, the city has not needed to borrow for any reason outside the planned biannual capital borrowings in 2015 on 2017 and then 2019. The city has not borrowed for general fund purposes since 2019. Due to the pandemic, the budget hearings in the fall of 2020 carried great uncertainty, and the city deferred 2021 capital investment decisions for a year. In 2022, the city used reimbursement from the last revenue provision of ARPA to invest 9.3 million dollars into capital needs, which covered 22 and 23. That second step was taken in 2024, which covered 2024 and 2025. In 2026, the city allocated 22 million dollars to fund capital needs for four years, which is 2026 through 2029 by using 10.7 million from a capital reserve account that was established in 2021 and built by setting aside extraordinary revenues and 11.3 million dollars from cash reserves, which had grown incrementally through small annual budget surpluses over the last 12 years. So from that high water mark of 171 million dollars in 2025, the city's now reduced total debt to 77 million dollars in 2026, a reduction of 94 million dollars. The reduction of debt has improved the city's financial position, and we're now interested in restructuring the remaining debt. Our capital plan is funded for the next four years, so there's no request for additional funding at this time. Rather, the request is to smooth the remaining annual debt service with step downs in order to improve the city's financial flexibility and make the balance balancing the budget process uh more sustainable in upcoming years. So having said that I'll turn to Mr. Sher for the presentation of the proposed restructure.
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