Mayor John Callahan will be leaving office soon, but last week he announced his proposed budget for the coming year and has high hopes for the city's continued financial health.

"I am proud to present a budget for 2014 that is balanced, fiscally responsible and meets both the short and long term goals of the city," Callahan said. The $71 million budget includes no tax increases and funds for the hiring of five new police officers.

Callahan said there is $1.7 billion in ongoing economic development in the city today and the tax base has increased 19 percent from a decade ago.

"I am proud to say that I am the last Mayor who can say Bethlehem is 'an old steel town.' We are no longer home to the largest single-owner brownfield in the country, but rather the largest shovel-ready site for new jobs and economic growth," he said.

But Callahan said there were many hard decisions to make in this budget, and despite a decrease in water and sewer personnel, an increase of those services of 15 percent is necessary. This will amount to about an additional $32 to sewer bills for the average resident.

Callahan said this is primarily due to the debt services on the Penn Forest Dam reconstruction in 1999 and the construction of our water filtration plant in 1994 continuing to be a burden.

He also addressed the constant issue of pension costs for city employees.

"Nationally we hear about the fiscal cliff and entitlements," he said. "At the state and local level, we understand how pension costs severely limit our ability to balance budgets, forcing many municipalities to make some very difficult and unpopular decisions.

"To give you some perspective on the impact of pensions in the city, in 2003 our pension payment was $1.3 million; about three percent of the budget. Today our payment is $11 million, almost 16 percent of the budget. Continuing at that pace is not sustainable. We had to make a change. The changes that we have already made to the pensions system alone will save the city approximately $40 million over the next 20 years."

He said this budget introduces an employee payment plan for medical expenses, the first time they will be expected to contribute a percentage for health care.

Callahan said running a city is like running a business, and the recent influx of tourists, shoppers and developers is as important as simple monetary gain.

"In one corner of the city, we have internationally-known developers converting former steel land into warehousing and logistic space," Callahan explained. "In another, young entrepreneurs are taking new products and services to market while building a tech community that rivals those in New York and Philadelphia. Families fill our city parks as much as the neighborhoods surrounding them. None of this would be possible without a mindful and cautious approach to budgeting.

"We have positioned this city to grow confidently into the next stage of its evolution. And while the future is unwritten, in Bethlehem, it is undeniably bright."