Monthly Archives: December 2010

Buena Suerte en Panama, Beata!

For regular readers of Crossroads — not to mention friends, followers and allies of RenewLV in general — this week brings some sad news. As she noted here yesterday, Beata Bujalska has wrapped up her time as our Campaign Coordinator. She is relocating to Panama City, Panama, along with her boyfriend Jorge, who will be heading up a sales team there for Lutron. We’re very sorry to see Beata go, but thrilled for her as she begins this exciting new chapter.

Beata has been with RenewLV since June 2009, and there’s no way a single blog post can do justice to what she has meant to RenewLV over the past year and a half. She was central to developing and putting in place campaign strategies across all of RenewLV’s initiatives, and was especially key to the organizing effort of our Regional Health Initiative.

Beyond the work on our individual initiatives, Beata helped RenewLV make major strides in general outreach and community education. The success of RenewLV’s brown-bag series is due in large part to Beata’s efforts, both in coming up with topics for the sessions and facilitating strong turnout. And of course, Beata led RenewLV’s use of online tools and social media, boosting our presence through Facebook, Twitter, our blog and website, and iTunes.

Personally speaking, I’ve learned a great from having a Beata as a colleague. This has been mostly about social media, campaign strategy, and outreach, but about other topics, too. For instance, I’ve learned that a band like Duran Duran, which I found pretty difficult to listen to in my younger days and figured had disappeared by now, still has something of a following among Gen Y. (Actually, I never verified that one, but I’m taking Beata’s word for it). I also learned from her about the magic of Groupon.

If I have one regret about Beata’s tenure with RenewLV, it is this: It really should have been me who happened to be in San Francisco the night my Giants wrapped up the World Series title. I’m just saying.

In any case, Beata, here’s wishing you much happiness and continued success in Panama. You added so much to RenewLV and the Lehigh Valley in the time you were here. We’ll all look forward to keeping up with what you do next.

Happy Holidays (and Farewell Lehigh Valley)

As the new year approaches us quickly, we wanted to thank all of our supporters and community members in the Lehigh Valley. We’ve had a great year, filled with many opportunities, as well as many challenges. If you haven’t had a chance to do so yet, check out our End-of-Year Message.

As many of you know, I am leaving the Lehigh Valley and moving to warmer weather down south. Sadly, this means that today is my last day with Renew Lehigh Valley. It’s been a fantastic ride and I feel so lucky to have been part of the RenewLV team.

I will continue blogging on the Crossroads blog as much as possible. Some of these updates will be ones about smart growth in Panama. Yes, Crossroads is going international.

If you haven’t already done so, please add us to your RSS reader. By doing so, you’ll never miss any of our posts.

Happy holidays and a great New Year!

Valley Transportation Projects Receive Funding

A slew of transportation improvement projects were approved for funding on Monday. PennDOT officials and members of the Lehigh Valley Transportation Study chose 10 projects out of a proposed 24 to receive a share of $3.3 million in available money. These funds come from the Transportation Enhancement Program, which aims to fund projects that will improve transportation connections and provide much-needed improvements to our network. Dan Hartzell of the Morning Call reports:

TEP funds normally are awarded for improvements apart from direct road or bridge construction work, said Joseph Gurinko, chief transportation planner for the Lehigh Valley Planning Commission. These include sidewalks, pedestrian crosswalks and related work, bicycle safety projects, street lighting, rail trails and other park improvements.

Better connectivity means more livable communities, so I’m thrilled to see that this important program is still around and still funding such crucial projects.

The Express Times posted the full list of projects:

^ $500,000 to Lehigh County to restore Manassas Guth covered bridge in South Whitehall Township

^ $499,100 to Allentown for pedestrian lighting along Seventh Street

^ $497,835 to Freemansburg for Main Street enhancements

^ $488,750 to the D& L National Heritage Corridor for trail construction from Hokendauqua to North Catasauqua

^ $449,500 to Whitehall Township to develop Jordan Creek greenway

^ $439,875 to Fountain Hill for pedestrian enhancements to Delaware Avenue

^ $434,654 to Hellertown for streetscape work at the government complex off Route 412

^ $243,600 to the Coalition for Appropriate Transportation for bicycle education for cyclists and law enforcement

^ $172,500 to Allentown for a safety/crosswalk project for Muhlenberg College students

^ $158,485 to Community Bike Works for bicycle safety and maintenance classes

Total: $3,884,299

Great to see that Hellertown received funding to continue it’s street enhancement project. Sure sign that this community will continue thriving (go visit if you haven’t yet — I recommend the restaurant at the Crossroads Hotel, and not just because our blog shares the name with it).

Local Battle for Open Space Preservation

The Lehigh Valley news circuit has been percolating for some time now regarding the recent Lower Macungie development decision. Patrick Lester of the Morning Call had an excellent write-up about the matter earlier this week.

Here’s a brief recap: David Jaindl, property owner, wants to develop homes and warehouses on a big chunk of his land (about 600 acres). He went to the Lower Mac Commissioners for permission; the Commissioners, hoping to make good on promises of open space preservation, denied his request. Jaindl then threatened to turn the land into a quarry, at which point the Commissioners decided to renegotiate and allow for the land to be developed, with a preservation of about a few hundred acres. Many in the township are outraged at this agreement, mainly because they claim that the Commissioners made the decision without public input.

Some in the township are now fighting back. According to Lester:

The Friends [for the Protection of Lower Macungie Township] group has dug in for what is expected to be a long and costly legal battle over zoning and land development ordinance changes that benefit Jaindl’s plans for about 500 acres in an area bounded by Smith Lane and Mertztown, Spring Creek and Ruth roads. The changes essentially allow heavy industrial, commercial and residential development that previously weren’t permitted.

Several of the group’s members have joined to sue the township in Lehigh County Court in an attempt to overturn the zoning changes and prevent what they describe as a dangerous precedent that could have statewide implications.

Open space is not the only aspect that is of concern (or, at least, open space for the sake of open space is not the only concern). Worries are high that a new development in this area will come with a slew of externalities, such as increased traffic and problems with stormwater management. If we look at a map of the area below, two things stand out: 1) the area proposed for development is very large (600 or so acres means nothing to some until you look at a visualization, and 2) this development is situated in a place that already experiences high traffic volumes and, additionally, developments like these have caused numerous quality of life problems in this part of the region. Here is the map:

Patrick Lester followed up on his coverage with an article published in the Morning Call yesterday. The article reports on a Tuesday meeting, at which Jaindl representatives addressed the worries of the residents:

Scott Pidcock, Jaindl’s engineer, said the company will exceed its obligations for controlling storm water on a proposed 14-lot subdivision plan and is well aware of the traffic concerns. The subdivision is part of Jaindl’s overall plan to add warehouses, businesses and homes on 600-plus acres. The township approved zoning and subdivision ordinance changes to accommodate Jaindl’s plan.

“The goal is that we have proper functioning roads,” Pidcock said. “We, as you, want the roads to work, otherwise the value of the property is diminished.”

The Lower Macungie Planning Commission did not take action this week and discussions are to continue into early next year.

My question: Where is the Lehigh Valley Planning Commission fit into all of this? I am sure that they provided their recommendation for this (they do so for all development decisions in the Lehigh Valley), but given that they are purely advisory (thanks to Pennsylvania’s MPC), their recommendations are just that: recommendations. Lower Mac can ultimately do what it wants to, even though their decision will impact more places than just Lower Mac.

What are your thoughts on this situation?

Municipal Bankruptcy: Once “Once a Blue Moon,” but Now?

Back in September, Steven Schrayer posted “Municipal Bankruptcy Filings a Murky Proposition.”  He referenced a Wall Street Journal article, “Local Debts Defy Easy Solutions” by David Wessel.  In the article, Wessel stated that

[t]here is no obvious mechanism for state and local governments to resolve the coming collision between competing claims of taxpayers, retirees (both current and future) and bondholders.

One existing mechanism, though not one that any municipality would resort to unless it were truly necessary, is municipal bankruptcy under Chapter 9 of the federal bankruptcy code.  (Click HERE for a very helpful, non-technical discussion of municipal bankruptcy by Office of Administration of the U.S. Federal Courts.)

Wessel  noted that municipal bankruptcies are rare events:

[R]eneging on debts remains a rarity among U.S. state and municipal governments. Fewer than 250 of the nation’s 89,000 local governmental units have filed for bankruptcy since 1980.

Wessel goes on to state that

[r]ecent close calls in Harrisburg, Pa., and Central Falls, R.I., spark predictions that the next phase of the financial crisis will be a tsunami of municipal bankruptcies and defaults. Muni-bond experts at rating agencies and bankruptcy lawyers assure us that isn’t likely.

To characterize Harrisburg as a “close call” suggests that the risk to the state capital has passed, which appears far from certain at this point.   Harrisburg is currently awaiting a determination from the DCED on whether it will be permitted to enter Pennsylvania’s Act 47 recovery process for “distressed” municipalities.  Whether it will enter the Act 47 and/or whether it will file for bankruptcy under Chapter 9 remains to be seen.

Despite the suggestions – noted by Wessel – from municipal bond experts and rating agencies that a significant increase in municipal bankruptcy filings is unlikely, there is something less-than-reassuring about such assertions.  (These are the same rating agencies that did the ratings on the CDOs at the center of the housing meltdown.)  It also might have something to do with the conclusion of Wessel’s article:

[b]ankruptcy is a last resort. To avoid it, state and local governments need an alternative that is less unappealing. They don’t have one yet.

While the experts with whom Wessel spoke aren’t (publicly) predicting an increase in municipal bankruptcy filings, sentiment in the finance and legal community does not appear unanimous.  For example, after taking bids from a number of law firms of various sizes and from various locations, Harrisburg’s City Counsel selected the New York law firm of Cravath, Swain & Moore to advise the City on whether or not, and then how, to file for bankruptcy under Chapter 9.

The services that Cravath is providing to the City (free of charge) undoubtedly provide a public benefit to the City – namely access to high quality (and otherwise high cost) legal services.  However,  Cravath’s pro bono representation of Harrisburg also provides an opportunity for Cravath attorneys to gain additional experience (the firm does already have experience in municipal bankruptcy proceedings and in bankruptcy and reorganization work more generally) in a field where – because of the rarity of Chapter 9 filings – experience is harder then usual to come by.

While its pro bono representation of Harrisburg is assuredly driven by a desire to satisfy the ethical obligations of Cravath attorneys to provide pro bono legal services, it is also places the firm in the middle of what would be a highly publicized filing by the state’s capital city.  Such experience and publicity would likely make Cravath more competitive when bidding to represent other municipal entities across the country in possible future municipal bankruptcy filings.  Cravath’s Harrisburg work can be viewed – at least in part – as a bet against Wessel’s predictions, a bet that in the not-to-distant future, municipal bankruptcies may no longer be the blue-moon occurrences they are today.

Public Education: Shouldn’t fairness be our community goal?

“I believe the children are our future.” I believe that ALL children are our future… even the ones that are poor or English language learners. I cannot understand how we have let funding for education to become the MOST backwards thing in the Commonwealth of Pennsylvania.

The biggest challenges in education are in our urban schools. Overcoming poverty, working parents, gang culture, language barriers, and special education are only a few of the issues that urban educators face. Resources are needed. More teachers, more facilities, afterschool programs, and social services are proven ways to improve student performance in urban districts. These cost money. Money that must be raised by a decreasing tax base. When local tax efforts generate less revenue, where is an urban district to find the resources to improve the lives of these kids?

Suburban districts have fewer of these challenges and significantly more resources. At the risk of sounding like a four year old, “It’s not fair!” It is not fair to school board members who make tough decisions about social services when the next district buys 1,250 new Apple computers. It is not fair to the kid who is a victim of his own situation.

Have you ever met an amazing kid, who is in a bad situation? A kid who doesn’t know how to get out of the neighborhood he was born into? I’d be happy to introduce you to one of these kids. You would be surprised to learn that under their shells of self preservation, they are just kids. They deserve options and caring teachers who have time to spend. They deserve to have a pathway to make their life better than their parents’. They deserve a chance. Public education is their only chance.

How do we help these kids? We help them by funding their education with 1/3 of the amount that is spent on a kid who has everything. That is not help. That is inequity. It makes me so sad that I get sick. It makes me so frustrated that I want to scream. It makes me hate this Commonwealth that I love so much.

What makes it worse? What makes it worse is that the lack of resources into a school district furthers the dis-investment of the community. If schools are “bad” then homeowners buy homes in other districts, leaving the “bad” school district to slide further and further into poverty.

I commend Lehigh County for moving towards reassessment. I commend AEDC for their work to bring industry back into the city. I challenge Lehigh County to lead an effort, blaze the trail, change the world, by fostering regional education funding. Shouldn’t fairness be our community goal?

State and Municipal Finances in the News

The New York Times recently ran a story entitled “Mounting Debts by States Stoke Fears of Crisis,” which focusses on the unfunded pension liabilities facing state and local government units across the country.  Most of these pension liabilities were not incurred since the housing market went south and the recession hit, but those events have put municipal governments in a serious bind.

As the downturn has ground on, some of the worst-hit cities and states have resorted to fiscal sleight of hand to stay afloat, helping them close yawning budget gaps each year, but often at great future cost.

Unfunded pension liabilities share certain similarities with deferred maintenance on municipal capital infrastructure.  Deferred maintenance creates two major problems.  The first, obviously, is that the infrastructure can’t serve its purpose , serve the needs of residents, as effectively.  The second – and here is the parallel with unfunded pension obligations – is that the repairs will be necessary and the bill will eventually come due, and will be higher than if it had not been put off.

— Much of the debt of states and cities is hidden, since it is off the books, just as the amount of mortgage-related debt turned out to be underestimated. States and municipalities often understate their pension liabilities, in part by using accounting methods that would not be allowed in the private sector. Joshua D. Rauh, an associate professor of finance atNorthwestern University, and Robert Novy-Marx, an assistant professor of finance at theUniversity of Rochester, calculated that the true unfunded liability for state and local pension plans is roughly $3.5 trillion.

— The states and many cities still carry good ratings, and those issuing warnings are dismissed as alarmists, reminding some analysts of the lead up to the subprime crisis.

Rauh & Novy-Marx (both with the National Bureau of Economic Research), quoted in the story, released a report in October on the unfunded pension liabilities in metropolitan areas across the country.   Here’s an excerpt from the release by the Kellogg School of Management (where Rauh teaches):

Six major cities have current pension assets that can only pay for promised benefits through 2020: Philadelphia, Boston, Chicago, Cincinnati, Jacksonville and St. Paul. An additional 18 cities and counties, including New York City, Detroit, Cook County in Illinois and Orange County in California would be solvent through 2020 but not past 2025.

“Philadelphia has the most immediate cause for concern, as the city can pay existing promises with existing assets only through 2015 — less than five years from now,” Rauh said.

Here’s a sobering couple of lines from the study’s conclusion:

What is clear is that state and local governments in the US have massive public pension liabilities  on their hands, and that we are not far from the point where these will impact the ability of state and  local governments to operate. Given the legal protections that many states accord to liabilities, which in a number of cases derive from state constitutions, attempts to limit these liabilities with benefit cuts for existing workers will only go so far (Brown and Wilcox (2009), Novy‐Marx and Rauh (2010b)).

Click HERE for a PDF of the full study.

GAO report on transit 1998-2008

The Government Accountability Office delivered a report (abstract here) to the Committee on Banking, Housing, and Urban Affairs on Nov. 30th examining the growing pains that our current transit system is feeling. Primarily, they looked at the increase in ridership that has occured over this period, and the difficulties many transit authorities have had adjusting to this increased demand.

What’s interesting is that even though revenue and fares increased, many of the systems saw their costs increased as well, and not simply from having to increase service levels. While buses had to run more frequently in some areas, or some train platforms had to be extended, simply keeping the infrastructure in repair proved to be a monumental cost for many of the service providers.

Ultimately, the GAO makes three key recommendations to the Committee, as stated in the abstract:

focusing resources on state of good repair, streamlining the delivery of federal grant programs, and incorporating performance accountability measures to maximize the impact of investments.

The state of good repair one probably sounds the most mundane, but there’s an additional insight to be gained from its role in GAO’s report:

Officials from the majority of transit agencies with whom we spoke emphasized the importance of maintaining a state of good repair in order to meet future increases in ridership demand. However, agency officials pointed out it is easier to procure additional federal funding to support new transit capital projects than to obtain funding to help maintain their existing vehicles and infrastructure.

While the other GAO recommendations are important, the federal prioritization of new capital projects over repairing older ones deserves a hard examination. While infrastructure can grow so old that it may be more costly to maintain due to obsolesence, this hierarchy of spending still comes off as wasteful, poorly planned, and unsustainable.

Why the Suburbs Are Also Declining

Much of RenewLV’s work focuses on the revitalization of the cities in the Lehigh Valley. In part, we examine the structural issues that are in place that prohibit the redevelopment of brownfields and vacant lots in the cities and we work toward solutions to the challenges. But lately we’ve been realizing that the problem is not just affecting the cities anymore. The so-called inner-suburbs have also suffered a decline over the past two decades. In fact, this is the very issue that the Southeast Pennsylvania First Suburbs project works on and a significant part of the Building One Pennsylvania movement.

Urbanophile writes about this issue in a recent post, mentioning the huge unfunded liabilities that one generation lays in place for the next one to pay. They write:

It is a huge incentive for politicians and residents to vote for immediate gratification with the bill – infrastructure costs, pensions, redevelopment costs, or what have you – pushed out 25-30 years. Then these people or their children simply move to a greenfield and start the process over again.

And here is where the realization comes in:

If you think about it, we spend virtually all of our time in the planning process thinking about the upfront side of the development. We charge impact fees to mitigate road needs from new development and such. We go through an extensive review process to make sure there are no adverse impacts on the surroundings. But we spent little time thinking about the back end of the project, of its end of life, and the types of negative externalities that occur there as people can simply abandon homes and malls and go elsewhere.

One suggestion for how to plan for this, as mentioned by Urbanophile, is to mandate redevelopment insurance on the developer. Sure, it might serve as a disincentive to develop if only certain municipalities or states did this, but if it was mandated uniformly across the nation, then we would all be in the same boat. Read more about this idea on the original Urbanophile post.

Could this be one way that we could ensure that our communities don’t die? Essentially, what the decline of the inner suburbs has shown us is that, given the way we’ve been planning and developing in this nation, no community is safe from falling into distress. It’s happening all across Pennsylvania. And we have to do something about it.

Philly Trying to Improve Green Infrastructure @ Low Cost

The Inquirer has an article discussing the Green 2015 plan being unveiled this week in Philadelphia.  [Click HERE for the full story.] The City is seeking to improve residents’ quality of life by increasing their access to green spaces throughout its neighborhoods and to improve storm water management at the same time.

According to the Inquirer:

The plan’s strategy is purposely structured to allow the city to tackle a variety of other urban problems simultaneously. By distributing pocket parks around the city, Green2015 could help Philadelphia provide more play space in underserved neighborhoods, combat childhood obesity by creating exercise space, reduce polluting water runoff reaching the city’s rivers, raise property values, and attract new development.

The City is hoping to save money by greening property it already holds, rather than expending funds to acquire additional space.

PennPraxis director Harris Steinberg, who prepared the report, explained that Green2015 intentionally relies on a shop-your-closet philosophy because Philadelphia has so little money to invest in public amenities. Almost no land would be purchased to meet Nutter’s 500-acre goal. The report includes a priority list of city-owned, ready-to-green spaces.

The consultants recommend that the Nutter administration start by breaking up unused concrete and asphalt at the city’s schools and rec centers, since they are already a convenient draw for neighborhood children.

The Fairmount Park system, at 9,995 acres, is a tremendous green asset for the city, but as the article points out, it is (perhaps to state the obvious) all in one place, which is great if you have easy access to it, but not as helpful if you don’t (again, stating the obvious).

“We’ve always talked about how much parkland we have in Philadelphia, but the problem is that it is all in one place,” said Shawn D. McCaney, a program director at the William Penn Foundation, which helped fund Green2015.

Philadelphia has some great, green public spaces (Fairmount Park system, Rittenhouse Square, Washington Square in Old City, Clark Park in University City), but there’s plenty of blacktop between these destinations.  If the City is able to create some green stop-overs in between, more power to them.