# Governance, tariff rules, and declared scenario assumptions

Evidence cutoff and user-facing date: **November 7, 2026, America/New_York**. Projection period: 2027–2031. This revision replaces the former restriction to Suburban Water sensitivity analysis. **Suburban Water, Suburban Wastewater, and City Division scenario controls are enabled.** Published rules anchor the calculations; missing billing determinants, future agreement inputs, and approvals are handled through visible assumptions and review flags.

This is an independent public-data planning demonstration. Financial feasibility does not establish tariff adoption, project or borrowing approval, or legal compliance. Missing agreement details require precise assumptions rather than disabling an entire division.

## Resolution of the prior scope gates

| Issue | Established evidence | Enabled treatment and remaining assumption | Classification |
| --- | --- | --- | --- |
| Authority rate setting | [53 Pa.C.S. §5607(d)(9)](https://www.legis.state.pa.us/WU01/LI/LI/CT/HTM/53/00.056.007.000..HTM) provides authority rate-setting powers and reasonable/uniform service standards. [PA PUC](https://www.puc.beta.pa.gov/water-wastewater/), “Not Regulated by the PUC,” explains that it generally does not regulate municipal authorities, with specified lease-back exceptions. | Enable all divisions. No generic PUC annual percentage cap is established. Use financial tests and statutory review flags; the optimizer cannot determine substantive reasonableness. | Statutory framework verified; numerical feasibility is not legal compliance. |
| Service-area benefit | The project-revenue paragraph of §5607(d)(9) contains an entire-service-area benefit condition for a multi-municipal authority. | Keep division cash, debt, capital, and revenue separate; shared allocations must be explicit. No discretionary transfer is a default assumption, not a statutory universal transfer ban. | Statutory condition verified; model allocations assumed unless documented. |
| Allentown amendments | [R85, file15-3680, enactment30026](https://allentownpa.legistar.com/LegislationDetail.aspx?GUID=0252BB7A-E462-4BDB-9350-02C85E2EAD8E&ID=4590278&Options=&Search=), passed August12,2020, approved the integrated agreements. The [CLEAN EXECUTION COPY8.10.20](https://allentownpa.legistar.com/View.ashx?GUID=947959AF-3F70-4D50-992E-34ADED223689&ID=8716538&M=F) has blank signatures/dates; PDFpp17–18 contain effectiveness and bondholder-consent conditions. The [City2024 compliance report](https://www.allentownpa.gov/Portals/0/files/Departments/Compliance/2024%20Annual%20Report%20Final%20Draft%20.pdf), printedp2, describes the August2020 settlement as resolving disputes. | Enable City using published2026/proposed2027 tariffs. Use approved-form capital mechanics as a documented planning convention, with execution/project-approval status visible. | Approval verified; retrieved form does not prove signatures or every effectiveness condition. |
| Exact City escalator | [2013 lease](https://www.lcawaterworks.org/wp-content/uploads/Allentown-Water-and-Sewer-Concession.-Lease-Agreement-May-1-2013.pdf), PDFp11 Annual Percentage Change; p21 Index/Index Change; p26 Margin Change; p28 Permitted Annual Rate Adjustment; pp83–84 §7.1. Index is CPI-U **Northeast Region, not seasonally adjusted**, annual change ending **June30 of the prior calendar year**. Margin is **2.5 percentage points through2032 inclusive**, then **2.0 from2033**. Combined annual percentage has a **zero floor**. | Core ceiling is `max(0,CPI+margin)`. Published2027 uses6.8%=4.3%+2.5points. Future CPI3.3% and resulting5.8% core growth are assumptions. Explore alternatives and flag a core increase exceeding the modeled ceiling as a contract-change scenario. | Original rule verified; future CPI assumed; complete current amendment chain not certified. |
| Escalator scope | Lease§7.1(e) and the permitted-adjustment definition exclude add-ons under§7.1(f)–(m); municipal service agreements have separate terms. | Do not cap the combined bill, CCRC/AO, all City receipts, or either Suburban division with the core escalator. Published volume rates already include Change of Law/DRBC: do not add those twice. Future indexing of the whole published volume component approximates an unseparated core/pass-through mix. | Scope verified; future component decomposition assumed. |
| City capital/AO | [2027 City details](https://www.lcawaterworks.org/wp-content/uploads/2026/10/City-Rate-Details.pdf), PDFp4: waterCCRC$0.70841, sewerCCRC$0.78932, AO$0.20704 per1,000gallons. The2020 lease form, pp2–3, preserves prior CCRCs and provides debt-service recovery plus5.445107% return on existing cash used for new qualifying projects. [CCRC MOU amendment](https://allentownpa.legistar.com/View.ashx?GUID=5D3C9E03-C2CA-4F28-8DBE-9F32DE5CD650&ID=8682769&M=F), pp2–3, addresses approval, timing, and funding. | Start with published charges; model future add-ons separately. A5.8% future CCRC/AO growth proxy is assumed, not a contractual entitlement. Exact recovery requires eligible costs, funding, life, allocations, and project approvals. Protect required capital. | Starting proposed charges verified; future recovery assumed. |
| Coverage/reserves | The2020 lease form, PDFpp12–13, uses1.70 in conditional rate-relief provisions. | Do not treat1.70 as a universal covenant. Use editable planning coverage/reserve floors with stated definitions until specific current debt documents replace them. | Conditional clause verified; general model floors are assumptions. |
| Municipal/wastewater allocations | [2026 wastewater schedule](https://www.lcawaterworks.org/wp-content/uploads/2025/11/LCA-2026-Wastewater-Rate-Schedule.pdf), pp1–2 distinguishes retail service scopes; p6 separately lists WLI/LLRI. [2025ACFR](https://www.lcawaterworks.org/wp-content/uploads/2026/10/LCA-ACFR-2025.pdf), printedp81/PDFp96, describes municipal treatment, transportation, and interceptor cost sharing. | Enable wastewater finance, common-rate bills, flow, strength, capital, and contract-index controls. A residential bill percentage cannot scale all wastewater receipts. Use a separate declared residual cost-sharing index until agreement-specific inputs replace it. | Service distinctions verified; forward agreement allocation assumed. |
| 2027 adoption | [2027 rates page](https://www.lcawaterworks.org/2027-rates/) supplies proposals. [October26 budget presentation](https://www.lcawaterworks.org/wp-content/uploads/2026/10/LCA-2027-Budget-Final-Review-Approval-102626.pdf), p20, schedules rate adoption November9, after the cutoff. | Preserve **PROPOSED** customer-rate labels. Budget approval is separate from tariff adoption. | No adoption before cutoff established. |
| Financing/project approvals | [LCA finances](https://www.lcawaterworks.org/lca-finances/) distinguishes capital-plan adoption from subsequent project and financing approvals. | Apply fund-specific cash identities and preserve restricted cash and required projects. User financing changes are planning scenarios. | Financial feasibility and authorization remain separate. |
| Welshtown | [2026 water schedule](https://www.lcawaterworks.org/wp-content/uploads/2025/11/LCA-2026-Water-Rate-Schedule.pdf), p1, publishes meter-size minimums including8,000gallons/quarter and$5.50/1,000gallons above that. The2027 page states no change. | A Welshtown bill can be calculated. For5/8 or3/4-inch meters the quarterly minimum is$60. Do not substitute the common tariff or infer fund allocations. | Tariff resolved; fund allocation assumed if modeled. |

## Fixed, volume, and customer-class rules

**Suburban Water:** [2027 proposed details](https://www.lcawaterworks.org/wp-content/uploads/2026/10/Suburban-Rate-Details.pdf), pp1–2, distinguish fixed, fireline, volume, and public fire charges. Typical5/8-inch fixed charge changes from$36.50 to$38.20/quarter. Proposed marginal volume prices are$4.26,$3.85,$3.36,$3.12,$2.90 per1,000gallons. Monthly cumulative boundaries are40,000;1,000,000;9,000,000;58,000,000gallons. The2026 schedule explicitly supplies quarterly boundaries three times those amounts; continuing that convention in2027 is an inference. Apply each price only within its block. Retail residential/commercial/industrial differentiation is through meter size and volume blocks; no general class discount is verified. Contract customers require separate inputs. Fire charges are separate; private fireline charges do not change in2027.

**Suburban Wastewater:** Common Rate1 is collection only: proposed$26.40/quarter per ordinary EDU plus$4.69/1,000gallons. Common Rate2 includes collection and treatment:$34.50 plus$9.82/1,000gallons. Flow prices are derived from the published2027 examples ($70.35/15 and$147.30/15). Their image headers say “2026 Rates … Proposed” but columns explicitly compare2026 and2027 and the surrounding page identifies2027 proposals. Continuing half-standard multifamily fixed charges in2027 ($13.20/$17.25) is an assumption pending a full schedule.

The2026 wastewater schedule p1 uses first-calendar-quarter water consumption for Common1 single-family residential customers, actual-cycle usage for multifamily and commercial customers, and180gallons/day/EDU if no first-quarter reading or meter exists. Common2 uses actual-cycle usage; its unmetered default is also180gallons/day/EDU. Commercial EDU fixed-charge allocation uses235gallons/day. Arcadia West and Washington Township have distinct tariffs with no2027 change. Washington is$124/quarter plus$5/1,000gallons; Arcadia West is$7.55 per1,000gallons of daily allocation per quarter plus$58/1,000gallons flow. Do not multiply the allocation charge by days a second time.

**City:** proposed5/8-inch quarterly fixed water/sewer charges are$96.42/$33.52; flat volume/flow rates are$5.71869/$4.11875 per1,000gallons. Add the separately specified waterCCRC, sewerCCRC, andAO. Fixed charges vary with meter size and billing period. Larger meters are generally monthly, small meters quarterly. Quarterly bill divided by three is a monthly equivalent, not evidence of monthly billing. An industrial label alone does not establish a different City core per-gallon rate.

**Industrial wastewater:**2026 wastewater schedule p4 lists Suburban excess-strength prices BOD/TSS/TKN$0.40/$0.39/$0.43 per pound; City p8 lists$0.334/$0.312/$0.466. Sampling, monitoring, and permits add separate charges. The [September28,2026 Sewer Rules](https://www.lcawaterworks.org/wp-content/uploads/2026/09/LCA-SewerRulesRegs.pdf), printedp6/PDFp8, define domestic-strength limits250/275/35ppm for systems **not ultimately treated at Kline's Island**. Do not automatically apply those limits to City customers or all industrial discharges. Permit-specific thresholds and measured excess pounds are needed for binding invoices. Any illustrative load calculation must identify assumed concentrations/thresholds. Keep interceptor strength prices separate from retail excess-strength prices.

## Bills and rounding

For15,000gallons/quarter, one ordinary residential unit, and5/8-inch meter where relevant:

| Scope | 2026 annual | Proposed2027 annual | Increase |
| --- | ---: | ---: | ---: |
| Suburban common water, no sprinkler | $394.40 | $408.40 | $14.00 |
| Common1 collection only | $367.80 | $387.00 | $19.20 |
| Common2 collection and treatment | $691.80 | $727.20 | $35.40 |
| City water+sewer+bothCCRCs+AO | $1,116.48 | $1,212.32 | $95.84 |

City2027 quarterly lines are$96.42,$85.78,$10.63,$33.52,$61.78,$11.84,$3.11, totaling$303.08. Round each line to cents before summing, then multiply the quarterly total by four. Rounding only the final unrounded aggregate creates a cent-level mismatch. Household bill changes are not division revenue growth factors.

## Revenue exposure and industrial sensitivity

ACFR2025 printedp96/PDFp111 reports Suburban Water named customer charges$16,320,546/$17,802,780 total service revenue=**91.67%**; the remainder is public/private fire service. Forward use is an assumption. A household bill does not establish fixed/volume revenue shares.

The Suburban Wastewater combining schedule, printedp89/PDFp99, reports Common Rate$823,922/$18,369,298 service charges=**4.485%**. WLI=$9,267,741; West Weisenberg=$392,600; Other Wastewater Funds=$7,885,037. The common percentage is a conservative exposure proxy. The residual is not established to be entirely wholesale: Other Funds can contain other service types. Apply a separate residual contract/cost-sharing index rather than the common residential bill multiplier.

City named industrial/commercial/residential classes total$27,135,743/$58,556,400=46.34%. Additional “User Charges”$23,459,676 and “Other”$7,885,911 do **not** identify a retail/wholesale or water/sewer mapping. Never relabel the generic User Charges row as municipal revenue. **70% combined retail exposure is assumed**, with50%/70%/90% sensitivity presets.

Defaults within exposed receipts are30%fixed/70%variable for Suburban Water and Wastewater, and40%fixed core/50%variable core/10%capital-AO for City. These are editable billing-mix assumptions, not measured billing determinants. Historical industrial class revenue shares are sensitivity proxies rather than exact volume-revenue shares. Keep industrial/customer count, usage, and wastewater strength inputs distinct. Interest, grants, tapping fees, reimbursements, and other non-rate receipts do not automatically follow retail tariffs.

## Replacement evidence

Obtain current signed/effective amendments, full adopted2027 schedules, billing determinants by meter/class/service/load, an approved CCRC project/funding register, municipal allocation calculations, and fund-specific debt/restricted-cash definitions to replace the remaining assumptions. These improve precision and authority while current evidence supports useful, clearly labeled analysis in all three divisions.