“The proposed increase is unconscionable and a clear violation of the lease,” said Mayor Ray O’Connell. “The City understands LCA has considerable financial obligations to its creditors and bondholders, but it cannot endeavor to satisfy those obligations by milking families of modest means in Allentown. The lease was designed to provide a fair return to LCA from users of the water and sewer systems, but also to protect citizens of the City by strictly limiting permitted rate increases.”
The city is seeking an injunction to stop LCA from implementing monthly billing which it intends to do in August.
Among other things, the lease calls for the Authority to set an annual rate that must be in effect for the calendar year. The lease also requires rates to be reasonable. The city contends that a 107 percent increase on top of the maximum rate increase that was already imposed is a clear violation.