Political Payback Alleged in City Budget Cuts

Allegations that officials in the Callahan administration have been guilty of political payback for perceived slights or betrayals surfaced Tuesday night as City Council’s Finance Committee discussed proposed cuts to Bethlehem’s Community Development Block Grant allocations.

Most of the conversation fixed on a two-thirds cut to the Community Action Committee of the Lehigh Valley’s program for home ownership and foreclosure mitigation.

City Councilwoman Karen Dolan, who raised the issue of “political payback” during the discussion said the cuts to Community Action, which has been a city partner in anti-poverty work, is a “stunner,” especially considering the other budget cuts that the regional agency is currently facing from federal and state sources.

Federal block grant dollars are large chunks of money that flow to local government sub-grantees to spend on affordable housing, anti-poverty programs and infrastructure development in low- and moderate-income neighborhoods. In the new federal budget, Bethlehem is experiencing an 11.4 percent reduction in these funds from a year ago, forcing some difficult decisions.

City Community and Economic Development Director Joseph Kelly said Community Action’s proposed cut from $15,000 to $5,000 was justified because the program only used $5,000 of the previous year’s $15,000 budget. The remaining $10,000 from the 2010 budget is still available for community action’s use, leaving it with an account of $15,000 to draw on, Kelly said.

There were city programs, including community policing and drug surveillance programs, that received bigger cuts, Kelly said.

Jennings, who sat in Town Hall during the discussion, did not offer council an objection to that explanation.

But before Kelly offered that explanation, Dolan raised the issue of political payback, citing a heated e-mail exchange that took place Monday night between Kelly and Community Action Executive Director Alan Jennings, of which she and other members of council had received a copy.

“I’m thankful that you were able to reach a positive outcome. Your office has had a habit of playing political hardball on things that have nothing to do with the subject,” Dolan admonished.

Kelly objected to Dolan’s characterization, saying he has only occupied that position since January. Dolan said it has been a hallmark of the office for longer.

In one of the e-mails, Kelly suggests that Jennings “take the reduction of funds up with our Congressman.”

“We have difficult decisions to make on our end. We … stand by them,” he continued.

“Are you saying this is payback for a press release to thank (U.S. Rep. Charlie) Dent for him making sure our funds got cut by 3 percent, not 50 percent?” Jennings responded. The press release in question was sent out during the 2010 election, which pitted Dent, the incumbent Republican, against Bethlehem Mayor John Callahan, the Democratic challenger, who lost.

“The reality,” Kelly wrote back, “is that you were so quick to commend” on talks that were brokered by Republicans and Democrats, “as a fair resolution.”

After the meeting, Kelly called the e-mail discussion “a heated exchange between friends. We are passionate. I’m a hot-blooded Irishman.”

The two men met earlier in the day and hashed out what Kelly had termed a misunderstanding.

After the meeting, Jennings acknowledged that Community Action has not been able to spend its home ownership counseling money, mostly because of current perceptions about the economy. “We’ve had a hard time convincing people that this is a great time to buy a home,” he said.

As for the dustup with Kelly, Jennings said: “I expect that it’s over and the outstanding partnership with the city will remain outstanding.”