Pawlowski said even if the county commissioners could dissolve LCA, it would be ludicrous for them to do that because the county would have to take over LCA’s debt, which immediately would raise taxes for everyone in the county. He also said the city would collect $10 million, based on a letter of credit it has with LCA, if LCA would not go through with the lease deal.
LCA general manager Aurel Arndt was sitting in the audience at Wednesday’s meeting, along with members of LCA’s management team.
The mayor said the unsuccessful lease bidders were American Water and United Water.
He said Allentown’s water rates have increased 689 percent over the last 40 years. Shearer said, with the LCA lease, rates will increase 579 percent over the next 50 years.
Wednesday’s committee-of-the-whole meeting began about 5:38 p.m. with Pawlowski reviewing the city’s pension crisis and how the lease will resolve it. Then Shearer and Feller took turns reviewing the lease agreement, page by page.
The committee-of-the-whole meeting resumed shortly before 10 p.m., minutes after council’s regular meeting ended, with Shearer reviewing alternatives to doing the lease.
“Tempers are fraying”
In addition to LCA immediately paying the city $220 million for the 50-year lease, Allentown will receive annual payments of $500,000 – considerably less than the $4.5 million in annual royalties the city originally hoped to get in a lease agreement. The mayor explained that the city had to reduce the annual royalty to get more money up front.
Lease opponent Rich Fegley maintained the mayor previously said a lease would not happen without that $4.5 million annual royalty fee. Fegley accused Pawlowski of lying and being deceptive. He repeatedly asked council to question everything that is being presented about the lease.
Said the mayor: “To say we are being devious here is an exaggeration of the facts.”
Shortly after 11 p.m., council member Jeff Glazier interrupted the heated exchange between Fegley and the mayor by suggesting council wrap it up for the night. Said Glazier: “The hour is getting a little late here. I see our demeanor isn’t what it should be. Tempers are fraying. And quite honestly people are fading.
“This is for the good of the order because we’re at a point now where there’s no traction here and we’re going the wrong way,” said Glazier.
Council president Julio Guridy agreed and the meeting recessed at 11:12 p.m., after two more people spoke.