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Allentown City Council approves LCA's lease of water sewer system

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Apr 25 2013 10:43:14 PM CDT
Updated On: Apr 26 2013 04:54:45 AM CDT

Allentown Water Lease saga continues

ALLENTOWN, Pa. -

The great Allentown water fight ended shortly before midnight Thursday, when City Council voted 6-1 to approve a $220 million lease of the city’s water and sewer systems to Lehigh County Authority.

The only no vote was cast by Jeanette Eichenwald, who has stood alone for months as the only member of City Council to vocally oppose the lease.

For the first time in a City Council meeting, the other council members explained their positions on the lease just before voting. Yet the outcome was not surprising.

Council member Cynthia Mota, who is recovering from surgery in a hospital in Venezuela, voted by phone from her hospital bed.

Mayor Ed Pawlowski, who has been leading the charge to lease the water and sewer systems for nearly a year, was asked how he felt when council adjourned the 4.5-hour meeting after midnight. Rather than immediately launching into a victory speech. Pawlowski responded: “I feel tired. Tired and hungry.”

But he added: “At the end of the day, this is the best scenario we have to really address this long-term, crippling debt issue that’s affecting our city’s finances. It’s the right approach to take and I’m glad the City Council also agreed.”

The primary reason for the lease is to wipe out a rapidly increasing police and fire pension debt of at least $158 million. Pawlowski warned the city faced crippling tax increases and cuts in services if the lease deal failed.

Both Council president Julio Guridy and vice president Ray O’Connell promised they will work to develop an independent oversight committee to monitor the lease agreement with LCA. Guridy said he also will advocate with Lehigh County officials that LCA should expand its board to include more Allentown residents.

Responding to comments by numerous residents that council was moving too quickly, Eichenwald made a motion to defer a vote authorizing the lease.

Explaining it has always been her intention to be the voice of citizens, she said deferring would give council and residents more time to thoroughly review alternatives and lease bid documents that have not yet been made public.

When none of her colleagues would second Eichenwald’s motion, people in the audience angrily shouted: “That is a disgrace….Not one of you? ... You’re disgraceful…Unbelievable…”

Eichenwald said she was deeply distressed that no one would second her motion and warned her colleagues there could be dire consequences for the city if they are wrong in voting for the lease.

“What is the rush?” she asked. “Why do it today? Please, please consider what will happen if those who vote for this turn out to be wrong, just as a City Council many years ago voted to acquiesce to the pension agreement that put us into this position.”

More than one speaker warned council members their action on the lease will cost them votes in the upcoming May primary.

Facing a hostile crowd

Council faced a noisy, unruly and hostile crowd. People groaned and shouted.

Guridy eventually gave up telling them not to applaud. At one point he scolded them for acting like children.

People even shouted at the mayor when he tried to speak.

Resident Patricia Infanti thanked City Council and the mayor for being cordial and respectful to people who spoke, but said those in the audience were “shooting off their mouths” and not returning that respect. Several people argued with her.

Considering the mood of the audience, the bravest people in the room may have been those who stood to speak in support of the lease. They included a number of local VIPs: Allentown developer J. B. Reilly, Charles Marcon of Lehigh Valley Partnership, Tony Iannelli of the Greater Lehigh Valley Chamber of Commerce and Don Bernhard of PPL.

A total of 46 people spoke for more than three hours before council voted. Twenty-seven opposed the lease, 17 supported it and two offered no opinion.

As resident Mark Enriquez pointed out, “no matter what is said here, it’s probably not going to sway anyone’s opinions. People are just here standing on their soapbox giving their opinions.”

“What’s going to take place tonight is illegal,” city resident Joe Hilliard told council. “You’ve denied the citizens’ right to review the documents to form an opinion. How can I speak on something if I can’t review it?” Hilliard also accused council of violating the state’s Sunshine law and said he was going to take legal action: “We’ll sort it out later in court.”

Late in the meeting, council was informed the doors to City Hall had been locked and people could not get in. City officials quickly got them reopened. Some in the audience loudly declared that also was a violation of the Sunshine Act.

“You’re dealing with an LCA management that is not transparent,” warned Lisa Scheller, a city resident who is chairwoman of the Lehigh County commissioners.

She said when a majority of commissioners voted against extending LCA’s charter several weeks ago, LCA told commissioners it would not bid on the water/sewer lease, but bid on it anyway. She also said LCA showed her a number that was the most LCA would bid to win the lease, but LCA’s first bid was higher than the number she was shown.

Scheller said she is attempting to develop a county ordinance to dissolve LCA, but was told by the county legal staff that it is very complex legislation and she doubts it will be ready before “the ink is dry on the Allentown/LCA deal.” She said she wishes she had pushed for a motion to dissolve LCA months ago.

Council members speak

“This has been the most gut-wrenching decision I probably will ever have to make,” said O’Connell before voting. “This process has pitted friend against friend, neighbor against neighbor, business person against business person, even colleague against colleague. The anti-privatization people are not our enemy. Far from it. They are people concerned for the city of Allentown.”

But O’Connell said if nothing is done now, Allentown will be bankrupt in a few years. “I truly believe in my heart that the solvency of the city depends on this agreement.”

Guridy said the process of approving the lease was very painful for himself, his family and his colleagues. He stressed that he respects those who led the opposition, including Dan Poresky, Bill Hoffman, Michael Donovan and Rich Fegley.

He praised the fact that Americans can agree to disagree without being shot or told to shut up.

Because of her health problems, Mota has missed recent long council meetings that focused on the lease. She was hospitalized several weeks ago while visiting relatives.

Talking on a speaker phone, she said she cannot even walk.

City Council candidate Kim Velez tried to block Mota from voting, saying she not been part of “this open discussion” and has not made a single comment indicating her position about the lease in the past year.

But Mota said “of course” she was ready to vote.

“We have to do what’s best for the city,” said Mota. “We don’t want the city to go bankrupt. “

She added: “I do not have a hidden agenda like a few people are saying. I just want what’s best for the city.”

Council member Jeff Glazier said if council did not approve the lease, in a year or two it could be debating a 35 percent tax increase to keep up with its growing pension debt.

“This room would be filled four times over with people who are just as passionate and arguing just as vociferously against raising taxes as folks here this evening are arguing against the water rates,” he said. “I’m going to vote for this. In the long run, it’s the right thing to do for Allentown.”

“I’m in favor of the lease compared to other options and I will be voting yes for it,” said council member Joe Davis. He said council did consider different combinations of alternative options.

“There is nothing I can think of that we haven’t discussed.”

Council member Peter Schweyer said initially he was skeptical about a lease, but indicated it will meet his requirements to get the city out of its financial crisis, protect the workforce, ensure water quality and service, and “provide some level of predictability for ratepayers.”

With the city’s multi-million-dollar pension debt crisis averted with the lease, Schweyer expressed hope the city can do more to improve the lives of its residents.

Several residents accused both council and the administration of lacking transparency in developing the lease. But Davis said he tried to answer every question people asked him, adding: “You might not have liked my answer.”

And, in response to council making backroom deals, Glazier said: “I’ve not found that backroom yet. I don’t think it exists.”