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Mayor O'Connell Delivers State of the City Address

01/22/2021
Mayor O'Connell Delivers State of the City Address

Allentown Mayor Ray O’Connell delivered his virtual State of the City Address this morning to an audience of some 225 persons who had registered with the sponsoring Allentown Chamber of Commerce.

In the nearly 30-minute address, O’Connell touted the city’s success in rallying from an original $8 million to $10 million anticipated budget deficit resulting from the COVID-19 pandemic.  O’Connell had ordered a hiring freeze and strict spending reductions, offered temporary voluntary furloughs, restructured debt service and issued 2020 series general obligation bonds to actualize nearly $4 million of additional liquidity in the General Fund.  It is anticipated that the 2020 Consolidated Annual Financial Report (CAFR) will likely show a modest year-end deficit.

The mayor’s top priority of public safety was enhanced in 2020.

O’Connell revealed that the city’s number of Part I crimes continued its steady decline, falling 11% to 4,283.  The department’s emphasis on quality of life issues resulted in the stop or seizure of more than 100 dirt bikes and ATVs causing problems in the streets, an increase of 100% over 2019.

The fire department placed its Truck 1 aerial back in service in 2020 for the first time in eight years and Human Resources negotiated a new contract with the fire union.

Allentown EMS responded to a record 16,000 calls in 2020 and added Medic 3 to the nightshift.

According to O’Connell, “the Health Bureau has been a champion for community health” during the pandemic investigating close to 10,000 cases of COVID-19.  The Bureau was a source of guidance for entertainment venues, restaurants, day cares, the court system and a variety of businesses adjusting to different levels of containment.

The city will be addressing lead paint hazards in some 310 housing units over the next three years thanks to a $5.7 million federal grant and $500,000 in city Community Development Block Grant funds.

The city’s residential and economic trends are positive.  More than 600 housing units are either under construction or proposed.  The Da Vinci Center project is advancing.  Preliminary approval has been granted for a nearly 11-hundred space parking deck between Walnut and Maple streets, netting more than 450 parking spaces downtown. An industrial facility is planned at the incinerator site. A 125,000 square-foot office building is anticipated on the waterfront. The former Neuweiler bottling shop will be converted into a 42,000 square-foot office building.

Upon completion of the demolition of the former Allentown State Hospital, the Pennsylvania Department of General Services will create a competitive bidding process to consider redevelopment options for the site.

Negotiators for the city and the Lehigh County Authority (LCA) reached a settlement ending years of disputes and litigation and solidifying their partnership on the concession lease of Allentown’s water and sewer utility systems through 2063.

The settlement avoided the risks, uncertainty and very expensive legal costs associated with arbitrations and court actions for both the city and LCA.  O’Connell called it, “one of our top accomplishments of 2020.”

In 2021 residents will see $1.3 million in ADA ramp design and construction in UGI project areas and another $1 million in street maintenance construction and curb and sidewalk construction.  The Traffic Bureau will accomplish Phases 2,3 and 4 of the conversion of some 4300 street lights to LEDs at a cost of $1.8 million and solar lights are being installed on American Parkway from Union Street to Airport Road at a cost of $1.2 million.

Users of the Allentown’s recreation facilities can register for programs or rent fields from the comfort of their own homes on their own schedules on the MyRec.com Recreation Software system opening up opportunities for more individuals to enjoy park amenities.”

The city continues to look for ways to reduce expenses and increase revenues.

O'Connell said, "Our health plan changes this year for non-bargaining employees and the Fire Department as we have switched from traditional or HMO plans to a PPO for an estimated five-year savings of $3.7 million."

The city is revising its Business Privilege Tax (BPT) regulations based on guidance from legislative acts and court decisions rendered since April 1996 when the last revisions were made.

“In the South Dakota vs. Wayfair case in 2018 the U.S. Supreme Court overturned the long-standing physical presence nexus standard establishing that physical presence is not necessary to create constitutional nexus,” O’Connell said.

Regardless of whether it maintains or maintained a base of operations, branch or sales department within the city, a business, person or taxpayer has exercised the privilege of doing business in the city if it transacted business or facilitated the transaction of business physically within the city’s territorial borders for all or part of thirty (30) or more calendar days within the calendar year.  The thirty (30) day standard for physical presence is double that which is required by Pennsylvania law.

Effective January 1, 2021 and thereafter, a business, person or taxpayer with no physical presence in the city is considered to have an economic nexus in the City and, as such, is subject to Business Privilege Tax if it has generated at least fifteen (15) or more transactions to points within the City totaling at least $500,000 in gross volume or greater within the calendar year, and has sufficient connection to the City to establish nexus under the United States Constitution.

It is expected to increase BPT revenue when returns are filed by April 15, 2022.

O’Connell told viewers that Teddy Roosevelt said, "Far and away the best prize that life has to offer is the chance to work hard at work worth doing."

O’Connell added, “I know that is how all the city’s elected officials and my team feel.  We are all trying to make Allentown a better place to live, work, play and invest.”

The annual State of the City report by the mayor is a requirement of the city’s Home Rule Charter to "Inform City Council and the public each January of the financial and general condition of the City."

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