CHESTER — The Chester Water Authority Board of Directors will consider a 10 percent rate increase at its Jan. 24 meeting as part of the board’s vote on whether to enter a settlement with the city of Chester to avoid sale to a for-profit water company.
CWA informed ratepayers of the meeting and an unspecified rate increase by postcard this week, directing them to the authority website atwww.chesterwater.com. A statement on the increase was then posted on the authority’s website and Facebook page on Thursday afternoon.
For customers currently paying $110 per quarter (the average bill of residential ratepayers between the authority’s two zones), the increase will mean a new quarterly bill of $121 (an increase of $3.65 per month).
The Jan. 24 meeting is set for 2 p.m. on the Neumann University campus, 1 University Place, Aston, in the Mullen Room of the Bruder Life Center.
The pending settlement will be the result of negotiations between the city and the authority that began in March 2018. According to Chester Mayor Thaddeus Kirkland, the city’s state-appointed Act 47 coordinators Econsult Solutions were brought into discussions shortly after the negotiations began. The key disagreement at the start of negotiations was whether the city, as the authority’s original incorporator, had the ability to dissolve and sell the authority to help alleviate its financially distressed status. Today, 78 percent of CWA customers are located outside of the city in Delaware and Chester counties.
“The choice is either we litigate or we consider a settlement,” said CWA Solicitor Francis Catania. According to Catania, the purpose of the rate increase is to fund a settlement payment with the city. Neither he nor Kirkland were able to provide further details on Thursday as the final settlement terms are still being discussed. “We’re still in discussions and the board hasn’t made a decision yet. It’s important to the board that the customers understand why it’s before their consideration,” he said.
Catania said the authority will post available information on the settlement on its website in “at least in a couple of days” and will follow with a mailer to customers ahead of the meeting.
“I believe this what our citizens want – they want partnerships, and that’s what the city and Chester Water Authority have been working towards,” said Kirkland. “I think our goals are the same … when all is said and done the final outcome of the discussions … will be very beneficial to both the authority and the city.” Kirkland was unable to comment on the details of the settlement payment as discussions are still ongoing.
The statement posted on the CWA website Thursday tells customers “the real choice” is between “10 pwecent water rate increase vs. prospect of doubling of the water rates if CWA is sold to a for-profit company.” It estimates that if a sale were to happen and customers’ rates were doubled based on CWA’s gross 2017 revenues of $47 million, customers would pay an additional $1 billion for water service over the next 23 years.
“For-profit water companies have to pay dividends to shareholders and federal income tax and state income tax on profits – we do not,” said Catania.
If the CWA Board of Directors approves the settlement on Jan. 24, it will then be voted on Chester City Council. If the city enters into the settlement, it will then proceed to the Delaware County Court of Common pleas for final approval.