Jul 17, 2012

Allentown Goes Private

Tomorrow morning at 11:00am, Mayor Pawlowski will announce the sale of Allentown's water and sewage departments to a private operator. The sale is being conducted to satisfy the pension obligations incurred by the police and fire contracts. Two well placed sources have provided this blogger with two versions of the announcement. In the first version, the systems have been sold for $150 million. In the second version, the systems will be put out to bid. In this city, it's very possible that both versions are true; It will be formally put out to bid, but he has a predetermined buyer at the 150 price. The buyer would assume control of both the plants and distribution systems, and be responsible for every aspect of operation. A former city worker insures me that the quality of service from the water department will certainly suffer. Blogger Bernie O'Hare contributed to this post.
UPDATE: The Morning Call apparently felt compelled to issue a statement, and posted their announcement of the pending sale two hours after this post.  They quote an unnamed source saying "If this done right, this will solve the pension problems overnight, but we must install proper oversight and control."  Allentown has no experience with doing things right, or with oversight and controls.  We are in trouble.
UPDATING THE UPDATE:  Our local LCA might well be a bidder (or the bidder) for the Allentown systems.  The current project through Cedar Park interconnects the systems, and will expand their capacity to deliver treated water to western Lehigh County. If the Lehigh County Authority is in fact the buyer, the consequence of selling this prime Allentown asset would be tolerable. Allentonians could expect responsible stewardship and reasonable fees.

building the water works in 1928, The Morning Call archives

40 comments:

Anonymous said...

This is because Alentown officials want to pass the buck on there copability in light of the recent gas blasts and sink holes. The mayor has been talking abou the infastructure and now it will be outsorced to a third party. How will this be creating jobs opps there go a few more gone.

Anonymous said...

This is a disaster! Instead of dealing with the pensions, they're selling out the taxpayers.

The water and sewer operations are the only money makers for the city.

I guess we no longer need the extra EIT or the NIZ.

Anonymous said...

So what's in it for the taxpayers?

Like everything else Pawlowski does - absolutely nothing!

michael molovinsky said...

i think allentown can count on higher water rates under private ownership.

Anonymous said...

I don't get these sales of public infrastructure, Pa Turnpike,State Store,Sewer or Water,etc. other than a quick,one time infusion of cash to bail out incumbent politicians.
If they are valuable comedies to for-profit operators,aren't they valuable long term assets to the tax payers and citizens?
Who would buy them if they didn't think these operations could generate a positive return.
The Mayor is selling the publics(tax payers,citizens)assets.
He wants to sell the Queen City Airport as well. This would put the nail in the coffin for the lovely and neglected Little Lehigh Parkway!

Anonymous said...

Commenter who rail on about the dangers of creeping socialism should be pleased by this sale.
After all,why should the very water we drink, and that all life depends upon,belong to the people?
Why not make the greatest possible profit on water. That's what the "free market"is about in the land of the free,right?
Now if only an enterprising corporation could figure out how to meter fresh air......

Anonymous said...

Another brainstorm by the Pawlowski administration. A few years ago Emmaus considered this for their water department and there was an citizen revolt - result, they kept the department.

Mike great job breaking this one, there has to be some indigestion down at City Hall!

The Banker

Anonymous said...

Maybe there is a way to sell police and fire protection too.
Why do the lazy,unproductive types deserve these services?
They must be worth something?
I say SELL!

Anonymous said...

The quality of service may or may not suffer.
The cost to the taxpayer will sure as hell go up.

Anonymous said...

If the Mayor sells the cities bridges maybe they will be open at least?

Anonymous said...

Anon 12:28
Joyce Marin opposed the sale of Emmaus water.

Let's see if she has the integrity to speak out against this public boondoggle.

You'd think the Mayor would have held off on this scram until the citizens had their say in the upcoming vision process. It's all about the people's vision for the future,isn't it?

Has city council no say in this matter ?

Anonymous said...

Speaking of creeping Socialism, does this mean that Chairman Pawlowski can now find $ 160,000 to fix a broken pool for inner-city children or does all of the $ 150,000,000 get put towards the imperative construction of the transformative Palace of Sport?

Anonymous said...

Where will the announcement be?! Is there a press conference?

If you know, please let us know where this nonsense is taking place.

Anonymous said...

Anon 123pm, no one cared about Joyce Marin in Emmaus, I doubt she carries any weight in Allentown either.

Anonymous said...

The Mayor---- this is the same guy who thinks he could be elected governor?

Come to think of it,considering the current governor,maybe he could!

Anonymous said...

12:56 -

Oddly enough, privatizing the police and fire departments would have been the way to deal with the pension problem, since it would have gotten the city out from the ridiculous contract provisions. And it would have put the burden on the departments that created the problem.

But attacking the pension problem that way would have meant taking on the unions. All this is doing is selling out the taxpayers.

I think I'll file the sale of the water & sewer department as "flushing the city's future".

The only question is how quickly city council rubber-stamps the sale ( with the usual concerns, of course).

doug_b said...

Why not outsource the management (the Mayor and City Council)?

Anonymous said...

Great work Michael.

You should be on the MC payroll.

Anonymous said...

Doug B.
City Council,with one exception,is already outsourced.
They are a wholly owned subsidiary of the mayor.

Anonymous said...

Please note in this county blog post from 2008 when Allentown stupidly sold the water to LCA who is clinking glasses with Ed and Donnie.

It's Marcel Groen, the power broker that plans to take palumpski to the mansion in Harrisburg. He's the same buddy that stands to make millions for the incinerator that will be choking our air.

I wonder if Ed will get more contributions, and Marcel will make more millions negotiating this historic sale too! It's a win win!

I finally believe in conspiracy. And this one has a beard.

http://blog.lehighcounty.org/Home/tabid/129/EntryId/13/LCA-and-Allentown-reach-historic-water-agreement.aspx

Anonymous said...

can a mayor be impeached? If so how?

Anonymous said...

That is the best idea I HERD in years!

REDD

Anonymous said...

Can the City do this without a public meeting to discuss this.Will the lease payments be going to build the Hockey Arena

Anonymous said...

I sure hope this sale does not include the water sources themselves. That really is the most valuable asset the City owns. When that is gone there is no future for Allentown. It will be countdown to bankruptcy and unincorporation.

michael molovinsky said...

no funds from a sale(or long term lease) of the water and sewage systems should go to the hockey arena. the arena is supposed to be financed by the NIZ, which is primarily state income taxes. allentown hasn't done so well in the past with lockboxes and other designated funds. it would be sad indeed for the city to sell these assets, and still end up with underfunded pensions down the road.

Anonymous said...

The king has got his court jesters lined up like they are doing the thorzine shuffle off the end of cliff. Than he will pillidge, plunder and rape this city of any value it may have left in his last year before his departure to graterford state penitentary. This has been his plan from his arrival and he helpped the pasts mayors do the same, hide the money and accept all political CONtribution no matter the reason.

Anonymous said...

Bad plan from any perspective.
Funny, classic "conservative republican" scam coming from a lock-step machine democrat. Should please the anti government element readership on this site.

Anonymous said...

OK the city can sell off this valuable asset to meet its skyrocketing pension obligations, what can the ASD sell off to meets its own escalating pension obligations?

Scott Armstrong

michael molovinsky said...

although wednesday's post would have been a reprint from the Classic Boxing Era series, molovinsky on allentown is experiencing technical difficulties. IT staff from Chicago is being flown in, we apologize for any inconvenience.

Anonymous said...

12:23 am -

That's where your wrong. There's nothing about this plan that a conservative would support.

Maybe you should re- examine the biases you hold in time for the next election in Allentown.

Anonymous said...

Another thumb up your arse solution courtesy of his honor. Keep dreaming, baby. Keep dreaming.

Yes the hockey arena is the solution to all our ills.

People from far and wide will mysteriously and magically be drawn to our very own corn field right here in eastern PA. All by a simple slight of hand by the prophet from Chicago.

Anonymous said...

"Privatization" with a little union busting? Comodifying natural resources and selling at the highest bid to corporate water interests? Finding ways to pay a less than living,wage? Flipping a resource for a quick buck.They selling water/resource back to the public at the highest margin the market will allow.in fact raiding a corporation (the city)then cherry picking and selling off its most valuable assets piece meal a la Frank Larenzo?
Isn't this what contemporary conservative republicans preach?
I would agree that it certainly doesn't meet the true test of conservative. But that's gone in the credo of The WSJ,Rush and Bane Captial.
.....and Scott,aren't vouchers the pumper sticker republican quick fix for public schools?

michael molovinsky said...

@8:04 I reluctantly accepted your comment. this is a bi-partisan, hyper local blog, with no interest in chat room discussions on political notions. similar comments and replies may well not appear.

LVCI said...

MM let me apologize in advance. I'm not trying to use your blog to promote mine, but I did want to respond to your post. I didn't want to take up a huge windy response in your comment area.

First off a hat tip to you for breaking this out in front of everyone else. GOOD WORK!

Here's my response

Thanks

Anonymous said...

Very troubling to think that this is how they plan to deal with the pension problem. In easton, it's a commuter tax, in allentown, it's sell off assets. Scranton is teetering on the edge on insolvency. Common thread? None of these "problems" came about last week, or even a couple of years ago. This is bad decisions followed by worse decisions, compounded by decades of political leadership which kicks the can down the road for "someone else" to deal with. Well, it's time for these cities to pay up. Somewhere, 50 years ago, there were city fathers discussing the pros and cons about giving unions cradle to grave pensions and other lagacy benefits. There may have been one or two voices of reason explaining how these benefits were unsustainable in the long term. The majority agreed, but took the path of least resistence, giving in to unions in exchange for support. "Besides, we'll be long gone when the piper needs to be paid."

Knock knock. It's the piper!


VOR

Anonymous said...

Now I get it. It's entirely the unions fault. How simple.

Anonymous said...

I would recommend reading LVCI's blog post on this.
Excellent LVCI.
Well done Molovinsky.

Anonymous said...

Michael, Do you know when the Allentown taxpayers have to pay the Pawlowski drop pension plan for the A.P.D.?

Anonymous said...

Anonymous said...
"Now I get it. It's entirely the unions fault. How simple."

Can you read and comprehend?

If you are referring to VOR's statement, he clearly states that it's the fault of the politicians, aided and abetted by your unionistas. Truth is, selfishness is the order of the day for the "I got mine so screw you" club members. Push has come to shove.

Advice: "Don't shoot the mailman."

Anonymous said...

No union movement, no child labor laws,no 40 hour week,no weekends,no living wage,no middle class,etc.
Why would anyone shoot the mailman? Decent hard working union sisters and brothers..