Areas served by the Chester Water Authority. A deal including a rate hike looks like it may be able to stave off a sale of the iconic private municipal utility.
By Kathleen Carey
A sampling of Chester Water Authority customers see the need for a 10 percent hike as a necessary – albeit uncomfortable – way to keep the iconic Delco firm private, as opposed to being sold, which they believe could have led to even bigger rate hikes.
Parkside Borough Council President Shirley Purcival expressed her concerns.
“As you know, economically this is a hard time for many families,” she said. “I personally and I think we all think that we’d like to keep Chester Water (private) because their rates are reasonable … We’re all concerned that (a private firm), their rates will be three times if not more than what Chester’s is.”
Chester Water Authority Solicitor Francis Catania said of the 65 emails the authority received prior to Thursday’s vote, 60 were in favor of increasing the rates to stave off a public sale. Only five were opposed.
The situation facing CWA dated toMay 2017whenAqua America offered an unsolicited bid to buy the authority for $250 million, an offer which was rejected by the CWA board. Eventually, Aqua withdrew its interest in the firm, but another threat arose. Chester city officials said they had the right to reclaim and transfer the authority’s assets as well as dissolve the authority altogether.
In August 2017, Chester Mayor Thaddeus Kirkland sent a letter to the CWA after the city’s Act 47 consultant, Econsult Solutions, concluded that selling the authority was the only way the city’s finances could be stabilized. Having been declared a city in distress since 1995, the city has been under pressure to provide a sound fiscal plan or potentially be placed under state receivership.
As CWA officials maintained that a public sale would cost ratepayers much more and that litigation with Chester City over the ability to transfer assets would also be pricey, CWA and Chester City Council entered into negotiations last March.
“Not the city government or the mayor ever wanted to sell the authority,” Catania said. “In August 2017, the mayor sent us a letter saying, ‘We have to consider selling you … This is all coming from Harrisburg.’ … That pressure continued. They told the city you have to do something.”
So, Catania said, the city and CWA reached an agreement among themselves.
That resulted in the measure unanimously approved Thursday, in exchange for CWA providing $60.2 million to Chester, Chester City officials would agree to not raise any claim to terminate or acquire any project ofCWA for 40 years and that the assets of CWA would be protected in a trust for that same time. At the end of the four decades, everything would return to the status it was today.
Kirkland was unavailable Friday for comment.
The authority plans to use the funds raised through the hike increase to pay for the $60.2 million settlement.
In its proposal, the CWA claimed that if the authority were to be taken over by a public entity, rates would double and customers would pay an additional $1 billion in water rates every 23 years.
One county resident who was at Thursday’s CWA meeting voiced his perspective.
“To me, it’s the principle of the issue,” Randahl Williams said. “A rate increase is not related to expenses. A rate increase is related to the sale of the Chester Water Authority. The city of Chester is actually asking
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all the ratepayers to pay for the city of Chester’s financial distress. That’s just not right … They may be getting pressure from the state to do this and then the state needs to change their attitude.”
Approximately 22 percent of CWA’s 42,000-customer base is in the city of Chester; about 78 percent is located elsewhere in Delaware and Chester counties.
Williams said he owns properties throughout the county in both CWA territories and in areas served by Aqua.
“I pay more than twice for the same consumption rate with Aqua,” he said, adding that a 4,000-gallon-a-month bill costshim$80quarterly in the Chester Water Authority areawhile in theAqua region, it costs him close to $180.
Then, he said, he received a notice from Aqua in October that it is seeking a 7.5 percent rate increase from the state Public Utility Commission.
Of the CWA rate hike, Williams added, “It’s the lesser of two evils.”
Purcival shared a similar sentiment.
“Health care benefits have gone up, premiums, food is going up and I know that the last thing our residents need … is to see that the water bill is going to go up three times what it was,” she said of a potential scenario of a sale to a public entity.
Besides, Purcival said, CWA employees are part of the neighborhood.
“When you call them and you have a problem, they are very responsive,” she said. “They know the community and that’s important to have a vendorwho … knowswhere Parkside is (and) to know our … community as a whole.”
In another point, Williams said the PUC was formed to protect people from unsavory financial practices.
“The government is in place (and) their goal is to
protect the people and do good,” he said. “Chester Water Authority is doing that. I commended the people at the meeting for doing that. They’re actually doing what they’re supposed to do.”
The measure now goes before Chester City Council, who next meets Wednesday, Feb. 13. If it were to be approved by city council, it would then move to the Delaware County Court of Common Pleas for final review and acceptance.