Lehigh Tea People Choose Idiotic Moralism Over Good Water Prices

WFMZ:

“There seems to be general agreement that this is a bad transaction. There seems to be general agreement that this transaction exists for the wrong reasons,” said Commissioner Vic Mazziotti. “I think there are tremendous risks in this transaction…I think what this transaction does is take a city problem and make it everybody else’s problem.

This is really nuts. LCA gives Allentown money, and they get control of a very valuable asset in return. Instead of being at the mercy of somebody else’s water source and prices, they’d control the source. It’s a good deal for them.

At no point does Allentown’s pension problem become anybody else’s problem here. Allentown gets the money. They could use it for whatever they want. It’s none of the tea people’s business what Allentown uses the money for after that.

This is like if you offered to sell me your guitar so that you can pay off a credit card, and I turn it down because I’m morally offended you had some debt in the first place, even though I really want the guitar. How is it any of my business what you’re going to use the money for? Especially if you’re using the money to get yourself out of a bad situation? At no point have I become a party in the transaction between you and your credit card company. I am part of one transaction – guitar for money – and it’s the same deal with the LCA.

Comments

  1. Mitchell says:

    It is not a single use transaction as you are making it out to be.

    When the City manages water, it should be the City managing it in the best interests of the citizens and not necessarily a profit motivator.

    With the City selling the water to the LCA or whomever, the new owners of the asset will not be motivated by the best interests of the citizens but by the bottom line.

    This will cause rates to increase above and beyond the maintenance costs that the City would project as part of the increase will now be a profit margin the new owners of the water will expect on their investment. Pawloski said rates would go up, but since the City does not have the profit motivation as another group, the monthly fees will be less.

    So in effect, for the next 50 years, people will be paying fees higher than they normally would if the City was running the water department because of Allentown’s union pension giveaways. What was once a City problem is now a regional problem

    • Jon Geeting says:

      That the water is getting leased out to someone is a foregone conclusion. The actual choices before the Lehigh Commissioners now are 1. let LCA bid and retain some political power 2. let a private company lease it and give up all political power. This makes no sense as a proxy vote against any lease.

  2. John says:

    Agree with both Mitchell and Jon.

    This lease, which is a forgone conclusion, will result in higher water/sewer rates than would otherwise be the case, and it doesn’t matter in this regard whether LCA owns it or a private entity. So the fact is Allentown’s pension fiasco will result in higher prices.

    There is also a clause in the RFP that guarantees certain revenue levels to the lessee, and if those revenues aren’t received the lessee has the right to recover against “the city or the other ratepayers.” Guess who is going to get that bill?

    But then Jon is right – this is a done deal and it’s much better for the region if LCA controls the asset.

    The commissioners that voted against this did so as a matter of control, not good economics or policy. It’s the same situation as the reassessment – they voted for it not because it was smart but because Don Cunningham wanted to wait a year and they wanted to show Cunningham who the boss is.

    These people are offensive.

  3. GDub says:

    It has been interesting to watch the city’s management of the RFP. The drop in the annual royalty likely means that the city has found out that the market for a water system with lots of strings is probably a lot worse than they expected, so they’ll be getting either less money, a smaller royalty, or both–which would have made it far more affordable.

    That makes it a double shame that LCA isn’t going to bid, but in these conditions the sale doesn’t really look like its going to help the city that much.

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