Will Chester use water authority to keep from going under?
The first thing that we – the 43,000 customers of the Chester Water Authority in 34 Chester and Delaware County communities – need to know is that we are not Flint, Mich.
Neither the CWA nor any other government agency is going to sabotage our very highquality water supply from the Octoraro Reservoir and the Susquehanna River or our competent water plant (we fervently hope).
In Flint, a state-appointed emergency manager, to save money, switched the water supply to the Flint River and took other measures that destroyed Flint’s old lead pipes, poisoning thousands of children, and caused a lethal outbreak of Legionnaire’s disease that killed 14.
The costs of Flint’s recovery to local, state and federal governments and homeowners is now surpassing $200 million.
The issue here is also about money but under different circumstances, circumstances that may double our water bills in the near future.
The city of Chester is $28 million in the hole, even with the tax money it gets from Harrah’s and the Union soccer stadium because other than those and a few other businesses, it doesn’t have an adequate tax base.
It does have very high police and fire costs, bolstered by some disastrous collective bargaining agreements/arbitrations with city unions, and an inability to attract business to Chester, largely because of safety issues.
(Hey, I’ve eaten at the new Uno across from Widener University on Route 252 (Providence Road) a few times and it’s very good, so congrats to Chester for luring that chain in. Give it a try.)
So the city is in trouble and Mayor Thaddeus Kirkland is acutely aware that it may be forced to exit the protection of the state Department of Community and Economic Development either within a few months or, if it can win an extension, three years.
Either it can exit clean with its debts paid off by, say, selling its major unencumbered asset, its share of the water company, or it can be forced into bankruptcy, which also would very likely force the sale of its share of the water company.
The CWA is made up of the city of Chester along with Chester and Delaware counties, where the other 33 municipalities are located. A nine-member board – three representatives from each – governs the authority.
Essentially it is a public authority owned by those three elected governments.
According to the authority, our water costs average about $400 a year, or $100 for every three-month bill, considerably lower than we would pay with a for-profit company like Aqua America.
The CWA board unanimously rejected Aqua’s unsolicited and noncompetitive offer to buy it for $250 million last May but in the meantime, the state may be talking to Aqua and urging the city for force a sale or some other “monetizing” scheme to turn Chester’s ownership share into money to get it out of debt.
We don’t know who has been talking to whom because when the CWA asked the state agency for documentation of its discussions about the water company, it got back a set of papers so heavily redacted – blacked out – the CIA would be proud.
“There’s no reason for the DCED to have redacted those communications,” CWA attorney Francis Catania told a roomful of customers and employees at an emergency meeting last Friday.
“They should tell us if someone is discussing our future,” he said. Indeed.
Instead we have the ludicrous situation of a public agency (the DCED) refusing to tell another public agency (the CWA) what it is talking about with a private company (Aqua) on behalf of a third public agency (the city of Chester).
To make matters worse, Aqua President Marc Lucca, waffled repeatedly when Catania pressed him on whether he would make public any communications he has had with the city and DCED.
Lucca did publicly promise not to raise CWA’s rates for 10 years and to hire every CWA employee, so he’s on the record with that for what it’s worth.
Kirkland was emphatic at the same meeting that he has never said “sell the water company,” and, in fact he wrote a three-page letter to the CWA Oct. 25 that never says “sell.”
But it does say a other ominous things:
“The city has been treated, at least thus far, as a passenger in this process when, in reality, we can put ourselves more in the driver’s seat, should we so choose,” he said. Then comes this: “I remind you/the authority that the city of Chester is the sole municipality which created the authority few and may determine that the project of the authority, namely, the provision of the supply, treatment and distribution of water, is best carried out by another entity, public or private, and can move to reclaim and transfer operation of the authority’s assets and, subsequently, dissolve the authority.”
Well, that made the CWA sit up and take notice – “drivers’ seat,” “sole municipality,” “may determine,” “move to reclaim,” “dissolve the authority.” Them’s fighting words. So now the CWA has two tasks: Find out who the DCED has been talking to about what and find out if the city of Chester really has any such power to “reclaim” and “dissolve” the authority – both of which should be of great interest to us consumers.
That’s what the CWA board (unanimously thus far) has ordered Catania and a team of lawyers to do. Other legal steps may follow.
We may be in a dilemma for which no one currently in power is to blame.
Everyone, the city, the state and CWA, is trying to do what’s best for their constituents/customers, and Aqua is simply seizing an opportunity for its shareholders.
Stay tuned and be prepared with pitchforks and torches should things go south.