ALLENTOWN, Pa. -

Allentown officials are still working on a plan to lease the city's water and sewer systems, and now the state is weighing in.

Mayor Ed Pawlowski introduced the lease proposal earlier this year as a way to help pay the city's rising pension costs.

The mayor's office asked the Pennsylvania Public Utility Commission if the PUC had the authority to regulate rates if the plan went through.

The PUC has since issued an informal opinion, saying rate regulation would not fall under its jurisdiction. It said even if the water and sewer systems are operated by a third party, they're still owned by the city and the PUC can't regulate the rates of a city-owned system.

The opinion is not legally binding and is subject to change.

Mayor Pawlowski called the PUC's opinion a "huge positive." He said it will allow the city to set the rates and have more control over the costs.