The City of Allentown and Lehigh County Authority have closed a concession lease agreement of the city’s water and sewer utility system.

LCA made an upfront payment of just more than $211.3 million.

The money will be used to pay off water and sewer bonds; eliminating nearly 20 percent of the city’s overall debt; and reduce or eliminate the city’s massive unfunded pension liability.

Mayor Ed Pawlowski said the closing “is another step in bringing fiscal stability to the city. It is a process that began years ago with slashing our budget and stabilizing our bond payments and has now extended to addressing the massive unfunded liability of our police and fire pension plans that was a giant weight on the city’s shoulders. By receiving a large upfront payment and depositing that into our pension plan, we can significantly reduce our pension obligation payment and negate the need for a tax increase of 100 percent and service reductions. We worked long and hard to critically examine 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 support and approval. With the proceeds from this agreement we can eliminate or substantially reduce 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 years to come.”

LCA is operating the water and sewer plants as of today, regionalizing a critical public service. City and LCA representatives had been working for more than 90 days on the transition.

No jobs were lost in the transaction.

Persons with water or sewer emergencies or for customer service issues should contact LCA at 610-437-7515 or 610-437-7643. Regular office hours are 7:30am to 4:30pm. After hours, water and sewer emergencies can be reported to the Comm Center at 610-437-7751.
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