Altoona must consider water lease option
Altoona City Council was right to vote recently in favor of hiring a consultant to negotiate a longterm lease of its water and sewer systems. While we’re not ready to endorse the lease, it would be wrong to ignore learning more about the option.
City Councilman Bruce Kelley began exploring the idea quietly after hearing a presentation in September on Allentown’s 50-year, $211 million lease of its systems to the Lehigh County Authority. If Altoona follows a similar pursuit, it could collect enough money to dig itself out of debt and its Act 47 financial distress status.
Based on a proposal prepared by Griffin Financial Group LLC of Reading, a longterm lease of Altoona’s water system might generate between $180 million and $240 million. That could pay off all debt held by the city and the Altoona Water Authority, fully fund their pension plans, reduce property taxes and maybe leave some money left over to support the city’s general fund budget.
Unlike a failed proposal in 2005 to sell the water and sewer systems, supporters say a longterm lease will allow Altoona to retain ownership and permit City Council to build in some measures controlling future water rates and offering job protection measures for current employees.
Altoona City Controller A.C. Stickel, an accountant with a first-rate education on the city’s budget and other financial matters, has already rendered his support.
“I don’t see a drawback,” Stickel said on the night of the May 14 meeting when the idea surfaced publicly.
Those less acquainted with this plan are right to be skeptical for lack of more information.
“I get incredibly nervous when I hear people take these deals as: ‘This is a way of getting out of debt,'” University of Chicago law professor Julie Roin told the Mirror recently. She studied these kinds of privatization efforts and found them leaving local governments with limited flexibility and less transparency, to the disadvantage of the public and future generations.
Altoona City Council and representatives for the Griffin Financial Group have promised a transparent process for the leasing. If the deal eventually goes through, we’d like some guarantee of future transparency for management of our community’s water and sewer systems. For example, the Lehigh County Authority, which outbid private companies and became the lessee for Allentown’s water and sewer system, meets publicly, sets aside time at those meetings for public comment on any topic and posts its meeting minutes online.
While the Griffin Financial Group looks for parties interested in Altoona’s water system, local community leaders and their residents have time to consider the pros and cons involved with this 50-year venture. All should feel free to do some research and offer opinions that can factor into a decision that will rest with Altoona City Council.
While some areas of the United States worry about a lack of water, Altoona residents can take pride in ownership of a large watershed that fills 11 reservoirs. Collectively, that’s more than enough water to answer the demands of 70,000 people through 23,000 customer accounts in 11 municipalities and to support a sewer system serving 50,000 people through 19,000 accounts in Altoona and Logan and Allegheny townships.
Let’s be careful while contemplating the future of this valuable resource and the future of Altoona. They’re likely one and the same.