Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Allentown Mayor Banks on Credentials in Race for Top

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Allentown Mayor Banks on Credentials in Race for Top

Article excerpt

Allentown Mayor Ed Pawlowski's bid for the Democratic nomination for governor follows the lead of his party's last two nominees.

He portrays himself as a successful municipal manager who would bring to the state level the lessons of government overhaul and economic revival he has successfully implemented locally.

"I'm the only mayor in the race; I'm the only one running a government," he says of the eight current contenders for the Democratic nomination to challenge Gov. Tom Corbett.

That approach worked spectacularly well for Ed Rendell. But Dan Onorato's 2010 experience showed it brings no guarantees of success.

Mr. Pawlowski, a gregarious figure in public, quick to laugh at his own jokes, touts his Allentown record in a laptop slide show he's presented around the state. A sparse crowd gathered in the back room of Tolerico's restaurant in Monroeville this fall to hear one version.

"As I look at the state, there doesn't seem to be any economic development strategy," he said. "In Allentown, we're doing something different. We're doing something about it."

As he tabbed though his laptop, he touted the recent history of the city he's presided over since 2005. He said he balanced a budget that was $8 million in the red when he took office, added police officers while cutting the city's overall workforce, and attracted more than $1 billion in private investment in offices and sports venues.

In a state littered with underfunded government pension systems at every level, Mr. Pawlowski emphasizes in particular Allentown's unique initiative to wipe out its unfunded pension liabilities.

After a bidding process that also attracted three private-sector proposals, the city leased its water and sewer system to the water authority for the surrounding Lehigh County for 50 years. In exchange the city received an upfront payment of $211 million, and escalating annual payments starting at $500,000. Most of the upfront payment is to be used to wipe out the unfunded pension balance of roughly $160 million.

The deal has some critics. While it shielded the city taxpayers from the pension obligation, they are mostly the same people who are expected to pay higher water bills over the life of the deal. Various estimates have projected that by 2042, inflation-adjusted water rates would be significantly higher than current levels.

But a Moody's analysis of the transaction, quoted in the September issue of Governing, noted that those costs would be spread over a broader base as the city's large nonprofit community, which is exempt from property taxes, would pay a share of the higher rates.

Mr. Pawlowski does not hold the deal out as a precise template for solving the state's profound pensions woes, but he contends that it demonstrates the political will and policy creativity that he would bring to Harrisburg. …

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