Lindsay Weber
The Morning Call
(TNS)
Allentown City Council could soon vote to approve purchasing up to $134 million in government bonds to pay for much-needed infrastructure investments.
At a Wednesday night City Council meeting, Allentown financial adviser Tom Beckett presented a proposal to take out three installments of $41 million in bonds between November 2025 and September 2028 to finance projects including a new police headquarters and a “life safety and wellness” building that would replace the city’s fire and health bureau buildings.
“The reason for the large dollar amount here is, primarily, the city has not been able to, in the past 20 or 25 years, to reinvest in its facilities and its necessary infrastructure to the level a city of this size should,” Beckett said.
Beckett credited City Council and Mayor Matt Tuerk for improvements in the city’s credit rating — which measures the city’s ability to pay back its debt — and its financial position. As recently as 2018, the city faced structural budget deficits and had its bond rating demoted by bond rating agencies. However, last year the city’s rating improved from A3 to A2, which indicates a “low credit risk” and is the sixth best possible rating, according to credit rating firm Moody’s.
Prudent financial planning, an influx of $57 million in federal COVID-19 relief funds and increased tax revenue from new buildings and wage increases have put the city in a better financial position and allowed it to pass balanced budgets under Tuerk’s administration. However, past neglect of city infrastructure has become costly for the city, which is why it must take out bonds to pay for improvements, Tuerk has said previously.
Using money from the bonds, the city plans to allocate $65 million for a new fire department and health bureau building, $30 million for renovations and an addition to the city’s police headquarters, $18.7 million for various parks improvements and $17.5 million for public works improvements.
City Council will have the final say on which capital projects are approved when it votes on the 2026 budget at the end of this year.
The city’s financial experts project that it would take $123 million to finance the infrastructure projects, but the city is asking for approval for $134 million in case the city decides to take on new projects, or if projected costs increase due to inflation, tariffs or other economic factors.
City Council voted to forward a bill approving the bonds to a future meeting, where it will hold a vote to approve them. City Council’s next regular meeting is 6:30 p.m. Aug 20 at City Hall.
The city has $8.3 million in debt service this year. If council approves the bonds, it would pay them off through 2055, with a projected maximum of $18 million debt service in 2036 if the city opts to use the entire $134 million for capital projects.
Reporter Lindsay Weber can be reached at Liweber@mcall.com.
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