A proposed lease agreement between the City of Erie and Erie Water Works is still in question for the 2020 budget.
Chelsey Withers reports with what is holding some council members back on moving forward with the agreement.
The Schember administration says they worked on this agreement after receiving negative feedback about the proposed tax increases, however, it doesn’t seem that everyone is on board with this.
Erie City Council is evaluating the $90 million plan to lease the water system to balance the budget and there are differences of opinion, sometimes loud ones.
Erie Water Works would pay a lease up to 2060, leading some council members to question if this decision is best for the future of Erie.
“Might sound like a fair deal, $90 million upfront in lease payments, but what we need to know as a council is what the ramifications will be short term, midterm, even long term,” said James Winarski, President, Erie City Council.
Some taxpayers agreed.
“If you really want to set things right, just sell the **** thing, 350, 400 million dollars instantly into your coffers,” said Randy Barnes, Concerned citizen.
Erie Water Works staff says it is a way to help the city and the offer will remain, even if not acted on this year.
“It’s a mathematical formula. It’s worked out on bond interest rates and the present value of the future lease payments. It’s a very simple calculation and we just want customers to know that we won’t allow it to interfere with our rates,” said Paul Vojtek, CEO, Erie Water Works.
The city Finance Manager explained that what is proposed right now is a balanced budget, so if city council chooses not to approve the Erie Water Works proposal, there could be a major deficit.
“We are going to have a shortfall in the neighborhood of $3.8 to $4 million and will have to figure out with council how to bridge that gap,” said Paul Lichtenwalter, Finance Director, City of Erie.
Erie City Council has until the end of December to approve the 2020 budget. Another study session regarding the budget is scheduled for Monday at 5:30 p.m.