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Chester Water Authority sets emergency meeting; sale talk again looms

Nov 1, 2017 | Press


CHESTER >> The board of the Chester Water Authority will hold an emergency meeting Friday to discuss actions that could lead to the dissolution and potential monetization of the authority.

It’s the latest twist and turn for the company that supplies water from the Octoraro Reservoir to thousands of residents in both Delaware and Chester counties since it became obvious earlier this year that the private utility Aqua America was interested in acquiring it. Back in May the Chester Water Authority received an unsolicited offer of $250 million from Aqua America. That bid was rejected by the board. But Aqua has remained interested. And now it appears the city of Chester’s financial situation could figure prominently in a possible sale.

Specifically, the board will review results of information requests regarding the city of Chester’s Act 47 coordinators’ contacts with for-profit water companies and communications about potential monetization of the Chester Water Authority, and it will discuss a letter sent by Chester Mayor Thaddeus Kirkland regarding potentially monetizing the customers and assets of the Chester Water Authority.

Chester is trying desperately to get out from under Act 47, the state designation for financially distressed cities. The Department of Community and Economic Development has a responsibility to assist Pennsylvania municipalities that are experiencing severe financial difficulties in order to ensure the health, safety and welfare of their citizens.

“Certain board members are being pressured to make sure the sale goes through,” said Leonard Rivera, a Chester County member of the Chester Water Authority board of directors.

However, Chester Water Authority Solicitor Francis Catania said the board wants to get to the bottom of the issue.

“There hasn’t been anything said about that at the public meetings,” Catania said. “Aqua bid came without any solicitation or involvement of the Chester Water Authority. We need to determine why this sudden interest. One of Act 47 coordinators told me that he’s considering recommending the authority be terminated.”

Said Catania: “We need to know if the state is the moving force behind this push to sell. We need to find that out.”

At its September meeting, the board approved a resolution stating that it is not in the ratepayers’ best interest to sell the Chester Water Authority’s customers and assets to a for-profit company by an 8-to-1 vote.

The nine-member board is composed of three members from Delaware County, three members from Chester County and three members from the city of Chester.

After the Aqua offer became public in May, no less than 11 Delaware County municipalities served by the authority passed resolutions urging it remain private and opposed to any sale or public takeover.

In his letter to the Chester Water Authority Board of Directors dated Oct. 25, Kirkland said it was not prudent to accept an unsolicited and unvetted offer to sell the system to a private entity.

“I have found, and my team has confirmed, that the authority’s initial appraisal of the city’s role in this critical process has been somewhat ill-informed,” Kirkland said. “In short, I believe that the city has been treated, as least thus far, as a passenger in this process when, in reality, we can put ourselves more in the driver’s seat.”

The DCED has resisted the authority’s request to reveal all contacts between Chester City Act 47 coordinators and any for-profit water companies. The authority sought all records regarding the valuation and potential privatization of the Chester Water Authority. After a request was filed under Right to Know laws, the Pennsylvania Office of Open Records ruled in Chester Water Authority’s favor. On Friday, the factual information resulting from the request will be debated.

Said Kirkland: “I believe the first mission of the authority and any water system is to guarantee that every person has access to clean drinking water of the highest quality and as mayor of a city of working people for whom every dollar counts, I want to make sure water rates stay as low as possible and in line with our peers.”

The city of Chester plans to exit Act 47 within the next three years and Kirkland said some form of monetization of the water system will almost certainly be part of the final stretch of the recovery effort. The city, he said, is not endorsing any particular form of monetization, but officials are demanding a careful, comprehensive and cooperative examination of every possibility.

Chester Water Authority, which is not in financial distress, serves more than 42,000 customers, impacting about 200,000 individuals in the city of Chester and other parts of Delaware and Chester counties over 656 miles of pipeline. Dating back to 1866, the authority first pumped from the Delaware River and two years later into a 1.5 million gallon reservoir on Concord Road.

Now, the authority draws its water from the Susquehanna River on the borders of Chester and Lancaster counties and the Octoraro Reservoir and has received multiple awards for its superior taste.

It flows into 17 of Delaware County’s 49 municipalities and 16 of Chester County’s 73 municipalities.

Average water rates range from $35.15 to $41.70 for Chester Water Authority customers, depending on which sector they live in, as opposed to 65.20 for Aqua America customers.

The public meeting will be held Nov. 3 at 3:15 p.m. at Neumann University, One Neumann Drive in Aston, on the fourth floor of the Rocco Abessinio Building.

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