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Allentown City Council hears mostly objections at water, sewer lease hearing

By Len Righi, WFMZ.com Reporter
Published On: Aug 30 2012 04:18:24 PM CDT
Updated On: Aug 30 2012 06:23:12 AM CDT

Council hears response to leasing water system

ALLENTOWN, Pa. -

Almost three dozen people had their say before city council Wednesday night about Mayor Ed Pawlowski's proposal to lease Allentown's water and sewer system.

And though city council spent 100 minutes taking in what they had to say, many were dissatisfied with the ground rules laid down at the outset by council president Julio Guridy. They wanted the hearing to be more than just a listening session by council -- they wanted to debate the idea that the mayor says will solve Allentown's looming $130 million pension fund payment problem.

Guridy said he asked the mayor not to come to the hearing.

Twenty of the 32 speakers in the crowd of about 80 came out against the long-term lease idea that the mayor has been touting publicly for the last two months. The rest were roughly evenly split between supporting the mayor's idea and wanting more alternatives to it.

A couple of former city officials were in the opposition camp, including former council member Michael Donovan, who suggested council assemble a panel of professional analysts to study the problem.

Blogger Michael Molovinsky told council the mayor "is contemplating selling the family store," adding, "If we have a [budget] shortfall, it's your duty to raise taxes. It's not your duty to sell the water [system]."

Glenn Hunsicker, a city resident for 50 years, presented a detailed list of objections on behalf of a newly formed group called the Citizens for Common Sense Committee. Hunsicker predicted the city would lose hundreds of millions of dollars over the course of a 50- year lease by giving up revenue from its excess water and sewer capacity. Federal and state grants would also be at risk, as well as
87 municipal workers' jobs, he added.

Groups at different ends of the political spectrum united in their opposition to the lease idea, including a representative from International Workers of the World, who worried about "big water companies' union-busting history," and one from Leadership for Liberty, who said council should replace defined benefit pension programs for city workers, which require no contributions from employees, with defined contribution plans, which do.

Several people raised environmental concerns, saying the lease would jeopardize Allentown's parks system and the Little Lehigh Creek. A representative of Food and Water Watch said water rates would skyrocket, and that Allentown residents would see "an increase in taxes through the tap." A Sierra Club representative called for full public disclosure of any proposed lease, evidence that privatization will save money, and "guaranteed oversight" by the city.

Dr. Richard Niesenbaum, a biology professor at Muhlenberg College, said he would reconsider his plan to open an aquaculture business in Allentown, if he could not be assured a dependable source of water.

Those who backed the lease idea that the mayor says could bring in between $160 million and $180 million included developer J.B. Reilly.
"It could be a permanent solution to undoubtedly [Allentown's] biggest fiscal challenge," he said

Marketing and advertising specialist Damien Brown said the money from the lease could also be used to "reduce competitive disadvantages" by lowering real estate taxes and eliminating the real estate transfer tax.