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Water and Sewer Concession Lease Approved

04/26/2013
Water and Sewer Concession Lease Approved
Allentown City Council has approved a 50-year concession lease of the city’s Water and Sewer Utility System to the Lehigh County Authority. 

City Council voted 6-to-1 to approve the concession lease during a four-and-a-half hour meeting last night.

The deal includes a $220 million upfront payment and is expected to close in the next 90 days. The money will be used to reduce or eliminate the city’s massive unfunded pension liability.

“By receiving a large upfront payment as part of the concession lease process and depositing that into our pension plan, we can significantly reduce our pension obligation payment and negate the need for massive tax increases and service reductions,” said Mayor Ed Pawlowski. “We worked long and hard to evaluate our situation and develop what we believe is the best solution. I want to thank our team of consultants for their effort and I want to thank City Council for its vote. Together, we can continue to move this city forward. We put on the table a well-researched option to eliminate our unfunded pension liability, substantially reduce debt, stabilize the tax rate for years, keep our important water and sewer assets in good order, and stabilize our water/sewer rate structure for decades to come.”

According to LCA, now that its bid has been approved, a 90-day transition period will begin for LCA to begin operating the water and sewer systems. Detailed transition plans are still under development, and a strong team of LCA and Allentown professionals, and outside experts, have been assembled to assist with the transition. Specific strategies will be developed to ensure a smooth transition for employees and customers.
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