Chester Water Authority weighs options for the future

ASTON » A buyout offer of $250 million from Aqua America was unanimously rejected by the Chester Water Authority at the end of May — but the utility left open the possibility of a sale through an ongoing analysis of its impact on customers.

Consumers and residents were in attendance of the standing-room only CWA board meeting Thursday afternoon at the Rocco A. Abessinio Building on the Neumann University campus to get some clarity on whether Aqua plans to offer another bid for sale.

“Our decision-making process is to make a decision in the best interest of the ratepayers,” said CWA Chair Cynthia Leitzell. “That is the motivating force, that is our fiduciary duty.”

CWA Solicitor Francis J. Catania said the evaluation of whether or not a sale was in the best interest of its customers remains ongoing, but there is “currently no offer from anyone to purchase our assets that we haven’t acted on.”

Aqua, per a press release available on its website from May 16, a day before the unsolicited offer to the CWA was announced, detailed an aggressive acquisition campaign in 2017 to invest $450 million infrastructure upgrades.

Chester Water Authority draws its water in part from the Octoraro Reservoir outside Oxford and then runs it through a pipeline to Delaware County. The firm also has water customers in the Kennett area in Chester County.

Under Act 12, which enabled a process to establish fair market value in selling a public utility, Aqua has already acquired the wastewater assets of New Garden Township, which serves 2,100 customers in Chester County.

However, the cost difference between the CWA and Aqua were enough to raise concern of residents, a number of whom were at the meeting wearing shirts that read, “Why pay more for less quality?”

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

Joe DiMarco of Boothwyn spoke on behalf of a group of residents who were reluctant of the sale to Aqua due to the perceived raising of costs and asked if board members have had continuing conversations with Aqua since the buyout bid was turned down.

Board members Thomas Chiomento III and Leonard Rivera did say they met with representatives of Aqua.

“I did have a conversation with someone from Aqua since the last meeting,” Chiomento said. “It was about all of this, what was going on, I told them why I voted the way I voted.”

The board voted unanimously to turn down the $250 million bid.

“I have several months ago, I met with several people to talk about Aqua’s interest in purchasing the Chester Water Authority,” Rivera said, noting that all conversations were divulged with colleagues on the CWA board.

DiMarco also called out board member Livia Smith, who made a motion to allow Aqua to access Chester water information at the last meeting.

“Did somebody specifically ask you to make that motion, or was that something you did on you own?” asked DiMarco.

“I was asked to,” Smith responded.

When DiMarco asked Smith if she was at liberty to disclose the name of the individual who request the motion, she declined.

“I’m not going to, but it wasn’t Aqua, I’ll say that,” Smith said.

She added that the unidentified individual wrote the motion themselves.

Chester Water Authority 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. Aqua America serves about 3 million people in eight states and has become the second largest publicly traded American water company.

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.

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

“We are still in the process of evaluation ... it is not a monetary evaluation, it is fact-finding in making a decision whether or not we need to go further,” Leitzell said. “The decision to sell or not to sell is in the best interest of the ratepayers.”