Allentown’s Water Gambit: An Irresponsible and Risky Lease

Allentown is considering a risky and potentially very costly ploy to raise money to cover some of its pension liabilities. Mayor Ed Pawlowski has proposed a 50-year lease of the water and sewer systems that he hopes will produce $150 million to $200 million in upfront cash for the city.1 This money, however, is not cheap. Any upfront payment that the city receives is a costly loan that households and local businesses will repay through their water bills for decades. While Allentown’s fiscal difficulties are certainly serious, the city must address the issue directly and avoid budget gimmicks like water privatization that will increase costs for generations of Allentonians.