City May Expand Water System in E. Allen Township

The city of Bethlehem is preparing to enter into an agreement with East Allen Township to become the municipality’s exclusive water provider.

David L. Brong, the city’s director of water and sewer resources, briefed members of City Council at a joint session of the city’s Finance and Public Works committees on Monday night.

The key to the deal for the city is access to a new and expanding base of customers for its underutilized water system, Brong said.

“We have the most highly appointed and well-invested water system in the region,” Brong said.. “But we only operate at 50 percent of our capacity. That is our cross to bear.”

The city water system has been underused since Bethlehem Steel suspended its steelmaking operation in 1995. In recent years, the city has tried to step up its efforts to find new customers for its ample supply, including an expansion of territory in an undeveloped section of Bethlehem Township.

East Allen has some housing development on the drawing board as well as the potential for new commercial and industrial development along the Route 512 corridor.

But even with the potential for new customers, East Allen has made the long-term strategic decision to get out of the public utilities business, said James Birdsall, the township’s engineer.

The cost of administering and maintaining the township’s relatively small water system is not a good bargain for township residents, Birdsall said. Water customers in the township will actually see a decrease in their bills when the transaction is completed, he said.

Currently, the township maintains 56,000 linear feet of water mains, four well systems and buys water in bulk from Bethlehem for customers in the southern portion of the township.

Under the terms of the tentative agreement, the city would assume control of the township’s water infrastructure at no cost, while assuming $250,000 in short-term debt that currently belongs to the East Allen Township Municipal Authority.  However, all of that debt will be paid for, by 2018, by the current township customers as a line item in their new city water bill.

The city, meanwhile, will see a modest increase in water revenue beginning in the first year of the agreement, which, Brong projected, would increase to more than $200,000 by 2020.

Brong asked the council committees to approve a nonbinding resolution that gives the green light to continued negotiation to finalize the deal. A similar resolution has already been approved by East Allen supervisors. The committees gave that approval and City Council will consider the resolution at its meeting tonight.

If an agreement is ultimately approved by the city, the township and the Public Utility Commission, the city would assume responsibility for the township’s water mains, which are only 2 percent of what the city currently maintains. More problematic may be the maintenance of four well systems that supply water to 163 customers. For now, Brong said, he plans to keep the private contractor the township currently uses to perform that work.

The city would also quickly work toward extending water mains to parts of the township that will be ripe for development, such as the Route 512 corridor and an existing and still-growing business park just south of Bath.