DRIP, DRIP ...
TALKS ABOUT CHESTER WATER AUTHORITY SALE HAVE BEEN GOING ON FOR MONTHS, EMAILS SHOW
ASTON » New unredacted documents from the Pennsylvania Department of Community and Economic Development appear to show an Aqua America representative was in discussions with Chester’s Act 47 consultant about a potential acquisition of the Chester Water Authority as early as April.
Three emails show that Dan Schuller, Aqua’s executive vice president of strategy and corporate development, had been in discussions with Dan Connelly, the Act 47 consultant, between April 24 and April 26.
“We are interested in the discussions that are taking place regarding the Chester Water Authority and would like to be helpful where appropriate,” Connelly writes in one email, which goes on to describe the city’s outstanding debt balance and liabilities.
Connelly did not return a call for comment Tuesday. Aqua President Marc Lucca was copied on the three emails, but said he had never had discussions himself about the sale of CWA assets.
“Honestly, I don’t who’s been talking with them and what they’ve been saying,” said Lucca following a Chester Water Authority board meeting at Neumann University Tuesday. “Understand, these people talk with the state, these people talk with other agencies, these people talk with other communities. So the reality is people are talking to try to better understand the problem in order to solve it. That’s what’s going on, it’s plain and simple.”
Lucca said he would like to assuage some concerns regarding a potential sale of the non-profit authority to the for-profit corporation, but his offers to talk to CWA directors have been rebuffed.
The issue has been repeatedly discussed at board meetings since the authority received what it deems to be an “unsolicited bid” of $250 million from Aqua in May. The nine-member board unanimously rejected that offer, but questions still lingered.
Board member and former Delco sheriff Joe McGinn likened the continuing mystery behind the proposal to an iceberg. Though he knows what he can see above the water, McGinn said much lies beneath the surface that is still unsure. Adding to that uncertainty is the departure of two directors, Bill Riley and Leonard Rivera, who sat at their last meeting Tuesday.
Solicitor Francis Catania said the CWA received heavily redacted (or “blacked out”) documents from the state pursuant to a Right to Know request in August seeking communications between Econsult Solutions and DCED. Catania had been questioning why Econsult, the financial oversight group for Chester, was considering a sale of the CWA more than a year before Aqua made its bid.
Econsult was hired by the DCED to draft Chester’s Act 47 Recovery Plan in August 2016. The plan requires the city to eliminate its budget deficiencies and address its funding deficit by May 2018.
If the city can provide a sound fiscal plan for exiting Act 47 by that time, then the deadline may be extended to 2021. Otherwise, the city will enter receivership.
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.
The board was under the city’s sole control until Act 73 of 2012 came into effect. It is now made up of three representatives each from Chester City, Chester County and Delaware County.
Catania gained approval from the board earlier this month to take legal action to compel DCED to provide an unredacted copy of the requested materials. He said he received additional documents that were somewhat less redacted Nov. 16, 90 days after the initial request.
Among those documents was a May 23 letter to Chester Solicitor Kenneth Schuster from attorney Adam Santucci at the firm of McNees, Wallace & Nurick indicating the city should stake its claim that it is entitled to a “significant portion” of the proceeds of any sale.
The letter indicates the Act 47 Recovery Team would be available to assist with a four-step plan to gain a seat at the table during discussions and that Stephen Mullin, principal and president of Econsuit, had already agreed to be point person.
Another letter from Mullin to Mayor Thaddeus Kirkland and City Council in July strongly urges the mayor to explore the potential sale of water authority assets and to obtain an expert to value those assets on the city’s behalf.
Kirkland penned a letter to CWA board Chair Cynthia Leitzell in October stating the city had the right to “reclaim and transfer operation of the authority’s assets” and to “dissolve the authority,” reigniting some controversy, but Kirkland said Tuesday that he is neither for nor against a sale.
“I have not been one way or the other – my focus is on Chester, Pennsylvania, and how do we work collectively together to make Chester, Pennsylvania, whole,” he said.
Kirkland had with him a flier featuring the Chester City seal apparently printed by political rivals that indicated the mayor and city council “want to sell Chester Water Authority to a forprofit water company” and that this could effectively “triple what you pay now.”
He said the flier was distributed by a CWA employee and a Delaware County Regional Water Authority employee, arguing both should be fired. Unauthorized use of the seal could have some legal implications, Kirkland said.
CWA rates range from $35.15 to $41.70, compared to Aqua’s average rates at
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