bethlehem ordinance violations

8/14/2019 Bethlehem Ordinance Violations

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CITY OF BETHLEHEMInter-Office Memorandum

Violations of OrdinancesChristopher T.Spadoni, City Council SolicitorJean Belinski, Member of CouncilDecember 29,2009

e City of Bethlehem's Codified Ordinance Section 121.08, Restrictions OnFundCity Council Approval Required, paragraphs (c) and (d) read asfollows:No transfers of funds from the Treasurer's Escrow Account shall be made to thel Fund Operating Budget or to the Water Fund Operating Budget or to the SewerOperating Budget without prior notice to and approval of City Council. (Ord.

Passed 5/1/07.)Gaming Local Share Account. Any and all monies received under and pursuantPennsylvania Race Horse Development and Gaming Act (Act 2004-71) as amended,1401, et seq., shall be deposited in a separate account entitled the "GamingShare Account". No transfers ofunappropriated funds shall be made from theLocal Share Account without prior notice to and approval of City Council. (Ord.

Passed 9/2/08.)you please review the following occurrences regarding the above Codified Ordinance

referenced at the December 22,2009 City Council Meeting:(c)Treasurer's Escrow Account

23,2009, me City borrowed $1,000,000 from the Treasurer's Escrow Account,August 19,2009, the City borrowed $800,000from the Treasurer's EscrowOctober 26,2009, the City borrowed $2,000,000 from the Treasurer'sAccount that was above the $1,800,000 amount in the 2009 Budget that wasted. However, City Council was not notified of the amount borrowed that waswas budgeted, and City Council was not requested to approve the transfer

the funds.follow-up on his questionsat the December 2,2009 Budget Hearing raised about theEscrowfunds utilized by the City, Joseph Leeson, Chairman of the Finance


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SUBJECT: Violations of Ordinances Page 2

Section 121.08 (d) Gaming Local Share AccountThe City received the amount of $335,643 in Host Fees that was above the $1,295,000amount in the 2009 Budget mat was adopted. However, City Council was not notifiedat the time that the City received $335,643in additional Host Fees, and City Council wasnot requested to approve the transfer of the unappropriated funds.To follow-up on his questions at the December 2,2009 Budget Hearing raised about theHost Fees received by the City, Joseph Leeson, Chairman of the Finance Committee, senta ^ . - -,.-:;: dated December 3, 2009 to Dennis Reichaid, Business Administrator,regarding the Host Fee revenues. In Mr. Reichard's response (copy attached) datedDecember 8,2009, it was stated that on October 19,2009 the additional $335,643 wasreceived beyond what was budgeted, and this distribution put the total Host Feereceived above the amount budgeted.I amasking that you please review these matters and offer your opinion by January 19,2010 concerning what Council's alternatives are as a result of these violations. Thank you

Jean Belinski, Member of CouncilAttachmentscc: MayorCallahan J.Kelly M. Holland

D.Reichard M.Sivak K. FarberJ. Spirk L.Lazarchak Members of Council


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City of Bethlehem Memorandum

TO: Joseph F. Leeson, Jr., Esq., Chairman, Finance CommitteeFROM: Dennis W.Reichard, Business Administrator ity'DATE: December 8, 2009SUBJECT: Host Fee-2009

Below is the information requested in your memo dated December 3, 2009:1. Th e dollar amount of Host Fee revenue as of December 8,2009 that is above the $1,295,0(10amount that was budgeted in 2009.

The City received a total of $1,630,643. Therefore, $335,643 is the amount received beyond what wasbudgeted.

2. The date(s) the additional Host Fee revenue(s) were received.The City received the 3"1 quarter distribution on October 19,2009. This distribution put the total HostFee received above the amount budgeted.

3. The account number(s) and account title(s) into which the additional Host Fee revenues weredeposited.

' All host fees received were put in the General Fund and recorded under revenue account 001A-30927,Host Fee.4. A listing of the expenditures on which the additional Host Fee revenues were spent, and the datesof expenditure.

The additional host fee revenues went towards the City's October medical payment which amounted to$353,500 and was paid on November 6,2009.

It was noted multiple times during the 2009 budget hearings and in 2009 that the Host Fe e revenuebudgeted in 2009 was conservative due to the fact that a July lsl opening date wa s assumed. During thosetimes, no members of Council reminded the Ad ministration that there was an ordinance on the host fe eexcess. Nothing was mentioned by Council until last week. The Administration will ensure that in thefuture any amounts received from the host fee in excess of the amount budgeted will go into an escrowaccount titled "Gaming Local Share Account" andwill not be used until appropriated byCouncil.[f yo u have any questions or need additional information please let me know.cc: Council MembersMayor CallahanD. Reichard

M . Holland


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City of Bethlehem Memorandum

TO: Joseph F. Leeson, Jr., Esq., Chairman, Finance CommitteeFROM: Dennis W. Reichard, Business AdministratorDATE: December 8, 2009SUBJECT: Escrow -2009

Below is the information requested in your memo dated December 7, 2009:As of today there has been a net transfer of funds from Escrow into the General Fund of $1,800,000. Itshould be noted however that the $1,800,000 is the amount Council approved toborrow in theFinal 2009Budget. Also, there have been no transfers from Escrow into either the Water or Sewer Fund operatingbudgets. When the treasurer's escrow ordinance was approved in 2007, there was no escrow budgeted.2009 was the first year that we budgeted treasurer's escrow in the amount of $1,800,000. As noted below,there was only one instance when the temporary borrowing of $2,000,000 was over the $1 , 8 00,000.Otherwise allmonies borrowed were under the $1,800,000. Since Council approved borrowing up to$1,800,000, the Administration feels it did not violate any Ordinance.Below are the various dates and amounts of Escrow funds were used:July 23,2009 - $1,000,000 - Used for medical insurance payments.August 19, 2009 - $800,000 - Used for medical insurance payments.October 26, 2009 - $2,000,000 - Used for pension debt payment.It should be noted that a total of $2,000,000 hasbeen paid back andthat again the net amount is51,800,000.It's important to note that the auditor's allocate a large sum of Treasurer's Escrow to the General Fund atthe end of the year. Also, the Administration feels it's better toborrow from ourselves interest-free ratherthan temporarily borrow funds from a bank and pay interest at the taxpayer's expense. The temporaryborrowing is due to the timing of cash receipts.If you have any questions or need additional information please let me know.

Council MembersMayor CallahanD. ReichardM. Holland

bethlehem ordinance violations

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