Wastewater Plant1The City of Allentown closed a concession lease agreement with Lehigh County Authority (LCA) that provides a common sense solution to the unfunded pension liability crisis.

LCA made a payment of just more than $211.3 million to the City of Allentown for the city’s water and sewer utility system.  The money will be used to pay off water and sewer bonds, eliminating nearly 20 percent of the city’s overall debt, and reduce or completely eliminate the massive unfunded pension liability.

“This is another step in bringing fiscal stability to the city,” said Mayor Pawlowski.  “It is a process that began years ago with slashing our budget and stabilizing our bond payments and has now extended to addressing the massive unfunded liability of our police and fire pension plans that was a giant weight on the city’s shoulders. By receiving a large upfront payment and depositing that into our pension plan, we can significantly reduce our pension obligation payment and negate the need for a tax increase of 100 percent and service reductions. We worked long and hard to critically examine our situation and develop what we believe is the best solution. I want to thank our team of consultants for their effort and I want to thank City Council for its support and approval. With the proceeds from this agreement we can eliminate or substantially reduce our unfunded pension liability, substantially reduce debt, stabilize the tax rate for years, keep our important water and sewer assets in good order, and stabilize our water/sewer rate structure for years to come.”

No jobs were lost in the transfer of operations to the LCA, who is now operating the water and sewer plants.  A total of 84 former city employees now work for LCA, with 10 more slated to be hired.  Representatives from both entities worked together for more than 90 days to ensure a smooth transition.

Residents with water or sewer emergencies or for customer service issues should contact LCA at 610-437-7515 or 610-437-7643. Regular office hours are 7:30am to 4:30pm. After hours, water and sewer emergencies can be reported to the Communications Center at 610-437-7751.