Daily Local News (West Chester, PA)
Controversy surrounds Chester Water Authority
Firm weighs legal action against state agency
ASTON » With its future still very much in jeopardy, the Chester Water Authority board Friday voted to approve a measure allowing its solicitor and special counsel to evaluate the necessity of taking legal action against the state.
More than 60 people – many of whom spoke up against any possible sale of the iconic Delaware County utility - packed a meeting room at Neumann University in the latest intrigue surrounding the water authority.
After filing a Right-to-Know request with the state Department
of Community and Economic Development and winning an appeal, the CWA was given documents between Econsult Solutions and DCED that were heavily redacted.
According to CWA Solicitor Frank Catania, they should not have been.
So, the CWA board unanimously approved having Catania and the Conrad O’Brien firm pursue action from the state Office of Open Records to have the full content of those records.
“Special counsel and I will take the appropriate action, a court action if necessary, to enforce the Office of Open Records decision,” Catania said.
Back in May, the Chester Water Authority unanimously rejected a $250 million unsolicited acquisition offer from Aqua America after receiving the proposal May 8. At the time, the CWA’s concern was providing top quality water to their rate payers at the most efficient pricing.
CWA rates range from $35.15 to $41.70 compared to Aqua’s average rates at approximately $65.20.
But in an Oct. 26 letter written to CWA Board Chair Cynthia Leitzell, Chester Mayor Thaddeus Kirkland opened up a new threat to the future of the authority, stating the city had the right to “reclaim and transfer operation of the authority’s assets” and to “dissolve the authority.”
It is widely believed the city, struggling mightily to get out from under its Act 47 state designation as a stressed city, would like to use revenue from a possible sale of the water authority to bolters its shaky finances.
Leitzell penned her own letter, dated Nov. 3, stating that the city of Chester did not have the ability to dissolve the authority.
“The Authority is no longer an asset of the city, but rather of present and future ratepayers throughout southeastern Pennsylvania, particularly following the 2012 amendments to the Municipal Authorities Act,” Leitzell wrote.
In addition, she said the CWA receives no funds from the city of Chester but has in fact, given more than $13.5 million to the city since 1996.
CWA Solicitor Catania had been questioning why the financial oversight group for Chester, Econsult, was considering a sale of the CWA more than a year before Aqua made its bid.
Econsult was hired by the state Department of Community and Economic Development to draft Chester’s Act 47 Recovery Plan in August 2016. The Act 47 Recovery Plan requires the city to eliminate its budget deficient and address its funding deficit by May 2018.
If the city can provide a sound fiscal plan for exiting Act 47 by May, then the deadline may be extended to 2021, otherwise, the city will enter receivership.
The plan for Chester was to reduce expenses, attract businesses and to enhance existing revenue sources – selling the authority was not part of that.
CWA officials, however, have been attempting to obtain Right-to-Know information from DCED but were receiving only partial information that was heavily redacted, which is why the motion was made to use special counsel to get the information blacked out.
At the meeting, Kirkland made a plea to the CWA to continue discussions in how to best benefit the ratepayers, considering the city could be potentially facing a receivership situation.
“If the city goes into receivership,” he said, “then the state takes over and the state will move quickly to dissolve. That’s why we are working together.”
Some at the meeting were vocal about their alliance with the CWA.
Catherine Mohler-Gradski of Aston questioned city officials present.
“Isn’t there other things that you guys could have done in the decades to handle this that you’re now in a takeover of the water authority to lose it?” she asked. “Isn’t there something that council could have done to make sure that this didn’t come to pass?
“It’s going to come to pass because the people that have been in charge have done it inadequately,” she continued. “And now Aston’s going to have to pay for your inadequacies. Brookhaven’s going to have to pay for your inadequacies …”
Catania asked Marc Lucca, president of Aqua Pennsylvania, to disclose the e-mail chain between his company and the state Department of Community Economic Development’s Act 47 coordinator from May 2016 to the present.
Lucca said he was unable to do so because he was unfamiliar with that but added, “Anytime you want to meet, we’ll do that. We have not had that opportunity to do that yet.”
Catania said the CWA meets publicly and welcomed him to talk then, as he has in previous meetings.
In his statements, Lucca said that should an Aqua acquisition take place, the company would freeze the CWA rates for 10 years.
The Chester Water Authority itself is not in financial distress. Dating back to 1866, it serves more than 42,000 customers impacting about 200,000 people in the city of Chester, in 17 of Delaware County’s 49 municipalities and in 16 of Chester County’s 73 municipalities.
Its water comes from the Octoraro Reservoir and from the Susquehanna River on the borders of Chester and Lancaster counties and has received multiple awards for its superior taste.
The next meeting of the Chester Water Authority will be 2 p.m. Tuesday, Nov. 21.