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Allentown City Council may vote on controversial sewer/water lease in weeks

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Mar 21 2013 05:35:27 AM CDT
Updated On: Mar 21 2013 12:51:55 PM CDT
ALLENTOWN, Pa. -

Allentown’s City Council will vote on a 50-year lease of the city’s water and sewer systems before the end of April, predicted council vice president Ray O’Connell.

If O’Connell is correct, City Council will have less than a month to review the winning bid, and winning bidder, before voting on the lease – because the city administration’s deadline to receive bids has been moved back to March 28.

Unless special meetings are called, O’Connell’s prediction means council is only two meetings away from deciding the controversial issue, which has been debated for many months.

City Council normally meets on the first and third Wednesday of each month. It had promised to hold two special public meetings on the water/sewer lease before taking any vote, but neither meeting has been scheduled yet.

O’Connell made his prediction at Wednesday night’s council meeting, after
council president Julio Guridy said council has not yet determined how much time it will spend reviewing a proposed lease before voting.

In response to questions from lease opponent Dan Poresky, Guridy declined to predict the earliest council will vote on a lease contract. He did say council can vote on a resolution approving a contract at the same meeting where that resolution is introduced.

Five of City Council’s seven members are running for new terms this year. Poresky has promised to launch a campaign against any incumbents who support the lease. If O’Connell is right, council will vote on the lease less than a month before the May 21 primary election.

At Wednesday’s meeting, two other lease opponents suggested City Council should investigate Mayor Ed Pawlowski’s warnings of skyrocketing property taxes if the lease deal falls through.

For the mayor to suggest property taxes will increase 100 or 150 percent if the water and sewer systems are not leased is “a play on fear,” maintained resident Rich Fegley. “Anybody who pays taxes is freaking out because they hear the mayor saying that.

“I’m asking council why you’re not speaking up and saying the mayor is incorrect when he says the taxes will go up 100 or 150 percent.”

Fegley said a report done on the water/sewer lease by PFM, the administration’s consultant, showed taxes would increase by nearly 43 percent if the lease doesn’t happen.

He asked council to look into why the mayor keeps raising the amount of that threatened property tax increase.

“That’s what the mayor is saying,” said Guridy.

“But is it correct?” asked Fegley. “Shouldn’t council correct him?”

Guridy said the mayor can say whatever he wants to say and he has no idea why Pawlowski is saying that.

“Council should ask,” replied Fegley. “If you don’t understand why the mayor is saying it, then you don’t understand this whole plan. I think that’s part of the problem. No one really understands this plan.”

Council member Jeanette Eichenwald said she has asked that question –and many more -- “but those questions are never answered.”

Resident Claudia Steckel told council that the mayor originally stated if he did not lease the water/sewer system, he would have to raise property taxes by 35 percent to cover the city’s unfunded pension liability, “a burden he wasn’t about the place on the citizens.”

Steckel said after she and some other residents said they would be agreeable to such a tax increase if it will keep the water/sewer systems in city control, Pawlowki’s tax increase figures escalated to 50 percent, then 100 percent, then 150 percent.

“When figures are arbitrarily pulled from nowhere, it raises a red flag revealing the figures are not fact-based, which rightfully increases the citizenry’s skepticism that any serious examination of the costs surrounding this whole issue has been done to date,” Steckel told council.

She called Pawlowski’s plan to move ahead with the lease, and any council members’ vote for that lease, “a despicable, unconscionable act” if they do not first “honestly, thoroughly and intently” research all other options to keep water and sewer operations in city hands.

Steckel asked what happened to the side-by-side analysis between leasing the water/sewer systems and other options, including creation of a water authority, which was recommended by the Pennsylvania Economy League before any decision was made. “What progress has been made by council in doing such a side-by-side analysis?”

Guridy said council is waiting for the bids to come in so that side-by-side comparison can be done, adding a contract was signed Tuesday to have the economy league do that work.

Guridy repeatedly had promised a special public council meeting would be held for the economy league to present its results before City Council votes on a lease.

But on Wednesday, Guridy told Poresky council has not yet determined if that meeting with the economy league will be held in public.

Another special meeting was to be held so Dan Koplish, the city’s former manager of water resources who has been hired by council as a consultant, could explain how the new contract will meet water quality standards. Guridy now says Koplish will make his report at the same meeting where the mayor recommends a winning bid to council and introduces the winning concessionaire.

The administration intended to receive bids from six pre-qualified bidders by today -- March 21. But that has been postponed until March 28, council members told Poresky. They did not give a reason for that postponement. Guridy said the bids will be opened in Harrisburg.

Fegley said council should ask PFM and the administration to redo PFM’s report on leasing the sewer and water systems to solve Allentown’s pension crisis because the numbers changed when the final request for proposals was sent out by the city. He said the original PFM report no longer is valid and should be redone.

City Clerk Michael Hanlon said PFM will be redoing numbers, as Fegley suggested, and the Pennsylvania Economy League will review those numbers. “Those will be discussed by council at a public meeting,” said Hanlon.

After Poresky asked City Council several questions about what will happen next, Eichenwald said: “It has to be infinitely clear by now, after all of these months, that in all honesty we will just be presented with a number. And we raise our hands yes or no.

“As diligent as I have tried to be, City Council unfortunately will not be involved in the negotiations. The seven decision-makers are not involved intimately with the process. It’s flawed, from the very beginning till now. I’m sure my fellow council people will say they’ve had their questions answered. I have not had my questions answered to any degree of satisfaction.”

But O’Connell said “I don’t know if it’s a foregone conclusion that we won’t be involved. I want to be involved as much as possible to make a thorough decision on what’s going to affect the city in the future. I personally will push to be involved as much as I can be.”

Resident Ernie Atiyeh asked City Council to “give us some time. These are some very big decisions. I don’t think we should rush into this thing. A lot of questions have come up we don’t have answers for. Give us 30, 60, 90 days to review this whole thing, get the questions out and have a dialogue back and forth.”

On another subject during the meeting, resident Ken Heffentrager said Allentown owns hundreds of city properties that are not used. He said the city is losing property taxes by retaining ownership of such buildings for more than a decade. He said one city-owned property on 7th Street has been dormant for 17 years.

Heffentrager said in the 300 block of N. 9th Street, the city owns 14 of 22 condemned buildings.

Eichenwald agreed all those properties should go back on the tax rolls.