The City of Allentown and the Lehigh County Authority have settled a years-long dispute over the authority’s contract to manage the city’s water and sewer system. The agreement will allow the LCA to phase in the higher rates that are included in its contract over a period of four years.
The main dispute was over the maintenance of the city’s water and sewer system and who will pay for upgrades needed to the system. The settlement revises the 2009 water purchase agreement on the costs paid by the LCA, which estimates that around $150 million worth of improvements will be needed over the next 10 years.
LCA will now pay for water purchased from the city system based on actual production costs, and will pay a proportionate share of the cost of all capital improvements at the water treatment plant in Allentown.
The agreement will also increase LCA’s revenues for its Allentown city division. The system also serves suburban customers.
Rate increases for city residents will begin in October and should result in an approximate $88 increase per year for most customers. When the full rate is phased in by 2024, the increase will be about $176 per year plus any inflationary increases.
The settlement, which would continue LCA’s concession lease of the city’s water and sewer system through 2063, still needs to be approved by Allentown City Council and the LCA board of directors.