Allentown Plans To Borrow $21.5M

Randy Kraft , WFMZ.com Reporter: Allentown plans to borrow $21.5M for city improvements

At first my knee jerk reaction was OH NO. Taking a closer look it makes sense to me. The headline is a bit misleading because this not so much about borrowing as it is in establishing a line of credit. According to the report, "The city plans to establish a line of credit of up to $6 million in 2015 to finance short-term capital projects for information technology, police and public works."

One of the things I read that pleased me the most was the city is intending to buy body cameras for the police. At first I thought the price quoted at $950 seemed a bit high, after checking the federal justice department's website (page 32) most spend between $800 to $1,200 for them. The DOJ also mentioned the storage costs associated with each camera runs almost the same amount as the initial costs for each camera over five years. Still it's worth the costs. Allentown losing just one lawsuit alone could pay the entire costs for all the cameras plus five years worth of storage. Seems like a good investment to me.

I also figure since Obama plans on providing federal funding to help buy them the costs could be further reduced. Assuming the idiots in Congress don't screw this up it's a good thing for Allentown to get out in front of this.

I'm not going through this tooth and comb. Suffice it to say if the city can get a good deal on the interests cost it would be cheaper to pay cash (via the finance agreement) then financing them through the manufactures. Also one must consider purchasing large vehicles sooner rather then later is a good idea since their prices will go up faster then what the interest would cost if we didn't buy them now.

The only thing I take issue with is spending a further $3 million on the city pools. I addressed this earlier on this blog. Years ago residents went to the pools to cool off before air conditioning became available in every home. Today few go to them because people want water slides, water rapids and other amusements. I suggested we take the $3 million and find some sort of agreement with Dorney's water park to take in a 'x' number of passes for city residents. This $3 million doesn't include future costs for policing, chemicals, maintenance and labor. Nor take into consideration the city's future risks from liability lawsuits.

One of the biggest misunderstandings people have is how city budgets are different from household budgets. Many of us try to save up for things rather then finance them. Cities on the other hand have seen costs for labor, construction, heavy equipment and infrastructure rise faster on items year-by- year then what homeowners ordinarily purchase. Take for example electronics. While prices have come down for the consumers, big ticket items such as servers, communication equipment for police/fire and 911 systems have risen dramatically. Hence for a city trying to save up to buy them sometime in the future is not the best option.

So yeah, I think it best Allentown locks into a line of credit for these reasons.