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Reading mayor, council at odds over lease of water system

By Liz Kilmer, Reporter, LKilmer@wfmz.com
Published On: Apr 09 2014 04:36:10 PM CDT
Updated On: Apr 10 2014 08:42:10 AM CDT

Officials in Reading are at war over a plan to lease the city's water system..

READING, Pa. -

Officials in Reading are at war over a plan to lease the city's water system.

Both Mayor Vaughn Spencer and city council members agree that one is needed to reduce the budget deficit, but each side is at odds in terms of execution.

"They have an approach that they want to consider. I would like to consider another approach," said Spencer during a news conference Wednesday.

Spencer is partial to negotiating a long-term lease agreement with the current managing party, the Reading Area Water Authority, whereas city council President Francis Acosta said he and council members are championing a different method.

Acosta said council is looking to enter into a two-year lease agreement with RAWA, which would allow time for officials to consider a long-term agreement with other companies and take their bids.

"That could help us… to set up this bridge, so we could put all our time and effort into working into a long-term lease agreement, where even RAWA [would be] able to compete," said Acosta.

But according to Spencer, those two years could cost the city millions of dollars in interest rates and transaction costs associated with a bid process. Moreover, he said a long-term lease with RAWA would avoid having to pay down the current RAWA debt.

"There's a number of advantages. I think we're doing the right thing. Since we have an authority, let's talk," said Spencer.

And that's exactly what Spencer intends to do. On Tuesday, in a memo addressed to Acosta, Spencer announced that he was developing a new negotiating committee to work with RAWA toward a long-term lease agreement.

Acosta told 69 News he didn't receive the memo until after the water authority did, and said the mayor's decision was "improper" and "unprofessional," considering the mayor recently pulled his administrators from a pre-existing negotiating committee after creating it earlier this year.

According to Spencer, the choice was made after the team ceased to consider a long-term proposal with RAWA. Still, he has invited council members to be part of the new team, scheduled to begin negotiating next week.

Instead, Acosta said he and council members will seek ways to dismantle and establish a new authority.

"This is about doing the right thing for the city," said Acosta.

The current lease agreement is set to end at 2015. Ernest Herbein Schlegel, member of RAWA's Board of Directors, said the authority will not leave the city in a bind for 2015.

"I hope [city] council and the administration will come together, get this plan together," said Schlegel.

A public hearing on the matter is planned for the week of May 5.