Lehigh Valley

Allentown City Council issues Mayor Pawlowski an ultimatum on proposed water system lease

ALLENTOWN, Pa. - Coming to the support of one of its own frustrated members, Allentown City Council unanimously voted Wednesday to issue an ultimatum to the administration of Mayor Ed Pawlowski.

The essence of council's ultimatum: show us how much money has been spent on the proposal to lease the city's water and sewer systems for the next 50 years or we will not approve anything to advance that proposal.

Council member Jeanette Eichenwald said for weeks she has been asking how much money the administration has spent on that lease proposal, which council has not yet embraced and some residents adamantly oppose. But she can't get answers "and the numbers keep increasing and increasing."

Eichenwald expressed frustration about the administration's lack of transparency, especially an administration facing debt and financial difficulties.

"I'm surprised my fellow city council people aren't joining me in this quest to find out this information," she said.

Said council chairman Julio Guridy: "I join you on that, Ms. Eichenwald. I know you have asked that question before. I think you deserve an answer."

"Absolutely," agreed council member Peter Schweyer.

Eichenwald estimates the administration has spent more than $500,000 to develop and promote its proposal to lease the water and sewer systems. She wants to know exactly how much is being spent and from what part of the city budget all that money is coming.

"There has been no accounting of that half a million dollars," she said.

At Wednesday night's council meeting, Eichenwald asked City Controller Mary Ellen Koval and City Managing Director Francis Dougherty: "When will we be receiving this information? How much money has been spent? And from what [budget] line items?"

Dougherty said he submitted Eichenwald's request for that information to City Finance Director Garret Strathearn, but has not received an update.

"I find that absolutely unacceptable," said Eichenwald.

Council vice president Ray O'Connell told Dougherty "you're the boss" and suggested he should tell the finance director: "I need it by this time."

Much if not all of the unknown expenses involve Public Financial Management –PFM—which Eichenwald calls the administration's lead consultant on the proposed sewer/water system lease.

On Sept. 27, PFM moderated a four-hour-long council meeting where it recommended leasing the water and sewer systems as the best of several options to resolve the impending pension crisis.

Koval told council: "Nothing as yet has been paid to PFM. There is no invoice at this time pending for PFM."

Said Eichenwald: "I find it almost unbelievable that PFM would not issue a bill month after month after month."

Dougherty said PFM is notorious for not submitting bills on time or on a regular basis.

O'Connell said it's imperative that somebody get on the phone with PFM and say "What's going on? We're getting questions from city council." He added:
"It's a right for us to know. It's also a right for taxpayers to know."

Eichenwald finds it "unbelievable, sad and frustrating" that the administration does not know what PFM is charging.

A couple of residents suggested PFM will be paid out of revenue from the lease, but Guridy dismissed that as speculation.

The administration wants council to approve a resolution authorizing the city to seek a Request for Proposals—RFP --from qualified prospective bidders who want to lease and operate Allentown's water and sewer systems.

The proposed resolution authorizes the mayor to give a draft of that lease to those bidders, to engage in negotiations with them and to issue an RFP with the final form of the lease.

Council has called a special meeting for 7 p.m. Oct. 31 to vote on that RFP resolution.

But Wednesday's motion, which Eichenwald persuaded council to pass, states
"that council be provided with information related to all expenses for legal, financial and other advice, including financial obligations, in connection with the RFP for water and sewer up until Oct. 26." It also states that "such information be provided by the end of the business day on Friday Oct. 26 and that no further action be taken on a concession agreement unless such information is provided to council."

In other words, Eichenwald said if council does not have the financial information it seeks, the Oct. 31 meeting will be postponed.

Before that motion unanimously was passed, Dougherty promised to get that information to council before Oct. 31.

"By more than an hour or two?" asked Schweyer.Dougherty promised to get the numbers to council by Oct. 26.

Eichenwald said if council does not receive figures "to its satisfaction," then no vote will be taken on the RFP resolution.

Resident Rich Fegely inspired Eichenwald's motion when he said council should demand that the administration explain the costs at the next council meeting.

Eichenwald agreed, saying: "We need to know what this is costing the citizens of Allentown."

Schweyer said the administration wants council to approve the RFP "for a multitude of reasons," but council is not required to give that approval. Said Eichenwald: "The administration feels it is essential to their plan to have a vote taken by city council. That is our leverage to be given these numbers."

After the meeting, Guridy said it will give the potential bidders "more comfort" to know council and the mayor are working on the lease plan together.

Eichwenwald criticized the resolution council will consider on Oct. 31, which was read Wednesday night. She said it is odd because it includes rationales and opinion.

Council was told the resolution was prepared by Atty. Marc Feller of Philadelphia, special counsel to the city. Said Eichenwald: "That must cost a lot of money, that little verbiage." She said in her five years on council, she's "never heard a resolution presented that had so much opinion attached to it."

Guridy said council also will discuss the Pennsylvania Economy League report at the Oct. 31 meeting.

Council is paying up to $15,000 for that independent consultant's report, which will review options and issues regarding the city's impending pension crisis. Guridy has said the economy league will not only review PFM's recommendation to lease. He also has promised those who oppose privatizing the city's water system that council will not take any action on leasing the system until it considers that report.

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