Apr 2, 2013

Local Water Authority Gets Brass Ring

The apparent high bid by the Lehigh County Authority(LCA) was the best outcome that Allentonians and residents of Lehigh County could have hoped for, short of Allentown retaining the water system. For much of the valley the LCA will now be the source, not just the middle man. Water and sewer lines currently running through Allentown parks already are owned by the LCA. I believe that Pawlowski may have dodged a political bullet by teaming up with the local water entity. The County Commissioners, who attempted to sideline LCA, will now have to juggle the political fallout.

Photograph shows the back of the Allentown Water Works, before the tracks of the former Barber Quarry spur line were removed.

21 comments:

Anonymous said...

Now that the L.C.A. is the highest bidder is there any reason for the Mayor and Council not to accept the offer

Anonymous said...

"Regional water infrastructure at last. Huzzah!" is the interesting reaction from a highly-respected and very well-known 'local' blogger.

The General Secretary should be commended on another smashing and most successful campaign --- complete victory as expected.

I'm very pleased with these developments in the City With No (Spending?) Limits and so should everyone else.

Shaibu!

COLONEL VIKTOR TIKHONOV
Soviet Red Army (retired)

michael molovinsky said...

@5:52, it would be in the best interest of allentown and the suburbs, if allentown formed it's own water authority, issued revenue bonds, and purchased the system from the city for the pension debt. pawlowski won't consider this option, and council, save one, won't consider side stepping pawlowski. under that reality, the LCA, imo, was the logical choice.

colonel @5:54, i would never have expected a year ago to endorse any proposal compatible with renew LV. it is a default approval on my part.

Anonymous said...

Colonel, I do not consider the L.C.A. bid a win for Comrade Pawloski. He will be losing a lot of money. Sincerely, Bill Sherman (retired)

Anonymous said...

So lets see... the bid is higher than the highest exception, it is not going to a private company that is primary concern is profit. It looks like Dan P is running out of things to object to. This is a done deal. Everyone wins! The suburbs and the city.

Anonymous said...

Truth be told, Comrade, I, myself, must admit I really don't see why another administrative agency (sort of like the one that was created for the transformative Neighborhood Improvement Zone), one with the power to float some more junk bonds, could not have been created.

But my own understanding of how this particular system of local government here in America works could be fairly characterized as "progressive" ...

... and every time I drive by the magnificent Palace of Sport construction site or read the writings of a good local Komsomolet on the blogosphere ...

I fully realize I have absolutely no need to fear whether or not the future is in trustworthy hands --- and neither should you.

Your heroic patriotic Comrade forever in correct living and thinking that Lenin, himself, could be proud of,

VIK

michael molovinsky said...

@6:47, it is not a win/win. the allentown water department paid allentown $millions each year for administrative fee's, which is now off the table. allentonians will have to make that money up in higher taxes. current LCA customers now have a provider who is assuming $220million in debt, which will affect their bills, and allentown rates as well. the best i can say is at least this was the devil we know.

Bill said...

This is the best of the bad options. How could this be perceived as a win?

These city officials did this all behind closed doors and with disregard to the citizens. From the Morning Call Article:

"The final terms for the lease, which were released in late February, contained several concessions to bidders in hopes of commanding a higher price. Among those changes were higher-than-anticipated rate increases and additions to make the city – and utility ratepayers – more financial accountable to a future operator."

Read our elected officials decided we would PAY MORE to sweeten the deal. How nice of them.

Anonymous said...

This is an epic bad deal, LCA or no LCA.

Like the pension deal that preceded it, it will take a few years for everyone to realize how badly we've been screwed over.

What will we sell to get out of this deal?

Anonymous said...

The Queen City Airport goes next.

Rich Fegley said...

Tonight at City Council the Citizens of Allentown were not allowed to speak about anything pertaining to the water lease. But I asked why and where did it state that?

Here's how it all went down...

http://www.facebook.com/photo.php?v=10152346674813475&l=1977196234673161428

I hear many wise people talking about a solution where Allentown starts its own Water Authority. This one alternative solution was simply thrown out by the Mayor last year. Now that the final bid parameters have completely changed from the numbers in the Mayor and PFM's original presentation. I can't wait to see how they attempt to explain logically how this 50-year lease plan solves anything.

Many of us understand that it is not a smart solution, it's a quick fix that someone will pay for down the road...the 50-year road. There are alternative solutions. In the end EVERY solution will be "bad"...bad in that SOMEONE WILL HAVE TO PAY! Question is, who is that someone? SOMEONE must always pay when money is "loaned". LOAN or LEASE, the City needs show us a 50-year FINANCIAL ANALYSIS.

Where is the 50-year analysis? There is no 50-year financial analysis. There is not even a 20-year analysis. PFM and the Mayor only presented a 15-year financial analysis. PFM stated that 15-year projection was a big guess in the financial world. 10-year or now even 5-year projections are like predicting weather 5 or 10 days out. IT CHANGES.

Anonymous said...

Rich you are so right!

Those who think the LCA is the best of bad options couldn't be more wrong. In fact, because LCA will likely rely totally on debt to finance the transaction, they are likely the worst option.

Not only will Allentown water users be paying for the pension problem, they will be paying more than double because of the interest charges to pay off the debt that LCA will be assuming.

michael molovinsky said...

@7:28, this blogger isn't big on hosting misinformation. i favored allentown retaining it's water dept., or forming it's own authority. however, whoever leased the water system would be charging the same, the maximum allowed under the lease conditions.

Anonymous said...

Council needs to have LCA come to a series of public meetings prior to any vote. LCA should be able to answer direct questions about:

The effect on of the deal on water rates on city water users and a commitment that the rates will not go higher than what they testify to

The effect of the deal on water rates on LCA customers outside the city with the same commitment not to change their tune later

The effect of the deal on current city workers in the water and sewer department,

And a host of other questions.

LCA should be happy to do this, since it's a short drive from the suburbs and their local control and accessibility is supposedly one of their advantages.

Theses should be real meetings with real questions from those interested - not PowerPoint shams with questions written on cards. There should be plenty of time to digest the info given and time scheduled for follow up questions. Only then should Council consider a vote on this.

There should be no rushing on this. That's how we got into the problem in the first place.

michael molovinsky said...

@8:46, i support the Save Allentown Water committee, however, i would not be my usual abrasive self without noting that every member of that committee, without exception, was a pawlowski supporter. Thats how you got into the problem in the first place

Anonymous said...

http://www.app.com/viewart/20130403/NJNEWS10/304030113/Hoboken-mayor-Water-problems-years-making
Page 1 of 1 04/04/2013 05:33 AM
Hoboken mayor: Water problems years in the making
Written by Associated Press
Apr 03 app.com
HOBOKEN — Hoboken’s recent water problems are the product of a two-decade-old sale of the city’s water rights
that fell far short of revenue projections and administrators who used the money to plug budget holes rather than fix
aging infrastructure, Mayor Dawn Zimmer said Wednesday.
“We are paying the price for investments that should have been made long ago,” Zimmer said at City Hall as she laid
out a plan that aims to avoid future problems.
Several water main breaks and leaks last week left part of the city without water and forced the officials to issue a
boil water advisory for all residents for three days.
A 30-inch pipe on Willow Street and 14th Avenue was broken by a construction crew Thursday, hours after a
12-inch pipe ruptured several blocks away and flooded basements and submerged cars. A day later, a leak developed
in a pipe connected to a house.
Zimmer said the water woes have their roots in a contract signed in the 1990s that sold the city’s water rights to
United Water. The deal was supposed to reap up to $100 million in profit over 30 years for the city but yielded about
$13 million through 2001 before drying up, she said.
Zimmer said the city was still reviewing the contract details and could not immediately explain the reason for the
disparity between the projections and what the city actually received.
Zimmer said what money the city did receive was used to close budget holes instead of to upgrade the water system.
Currently, United Water commits about $350,000 annually to repairs and improvements, of which about 80 percent
goes to repairs, Zimmer said. Some of the pipes in the water system are more than 100 years old.
Zimmer didn’t blame United Water for the issues and said the company has lived up to the terms of the contract but
called the deal “unbelievably shortsighted” for the city.
The contract doesn’t expire until 2024, but Zimmer said she was reviewing how much it would cost to buy out the
contract and negotiate a new one. She said United Water realizes about $8 million annually from the contract.
She also said the city needs to develop a long-term master plan for its water distribution system, much as it has
sought to do for flood mitigation in the wake of Superstorm Sandy, which inundated the city of 50,000 last fall.
A United Water spokesman didn’t immediately return a message seeking comment Wednesday.

Anonymous said...

But how, praytell will they finance this?

This is a very dark day for Allentown's water customers and taxpayers.

VOR

Anonymous said...

Excellent observation, Comrade Molovinsky.

All the "Water Warriors" were, in fact, unabashed Pawlowski supporters at one point who, all of a sudden, have shamelessly abandoned the transformative General Secretary at this most critical hour of responsible (and balanced) crisis management.

Indeed, it is not more important than ever for this Community's Citizenry to pull together and progressively solve problems in the common interest of all, Comrade?

Some of these very same unheroic and unpatriotic Water Warriors actually actually accepted significant cash grants from the Pawlowski Administration in the past, it should also be definitely, if not prominently, remembered.

A few months breaking rocks in a Siberian gulag might help to jog some memories, I dare suggest.

Shaibu!

COLONEL VIKTOR TIKHONOV
Soviet Red Army (retired)

Anonymous said...

Have they really or have they been sold a false bag of goods with the neglected aquaducks that feed the tenaments officials helpped become deplorable¿
This is very similar to the latino people being fooled in the 90's by RAMOS's promising futures to the fleeing ny latinos and selling of blighted properties at above local monitary levels¿
REDD

michael molovinsky said...

redd, i will print no more comment by you unless you sign your name. i can appreciate bluntness, but let it be associated with your name, not mine. own your words.

michael molovinsky said...

the following comment was sent anonymously on april 4, 2013 at 9:17

Pawlowski manipulated the bidding process to ensure an LCA win to mitigate his political risk. The LCA overpaid for the water/sewer system and now the taxpayers and ratepayers will foot the bill by using tax exempt bonds to finance the project. Is it a coincidence that Tom Mueller is an LCA board member?

The liberals that hate this project will soon be on the same side of this argment with the conservatives that despise the notion of reducing pension debt with taxpayer funds.

Keep digging, Michael.