Choppy water ahead for Chester Water Authority
For more than a century and a half, it has stood as an icon of Delaware County industry, delivering sparkling clear water from the Octoraro Reservoir on the border of Chester and Lancaster counties to 19 municipalities in Delaware County.
Don’t look now, but storm clouds are forming around the Chester Water Authority, and some people believe that long history could be in danger of going down the drain.
This all started back in May, when the private company received an unsolicited bid to purchase the company from water utility behemoth Aqua America.
We’re not talking chump change. Aqua America was putting up $250 million bucks. That’s a lot of water.
It was a cold slap in the face to local residents and officials who did not care for the idea of seeing their neighborhood water company swallowed up like a minnow being devoured by Moby Dick.
They pushed back. Hard. They urged the Chester Water Authority Board to reject the offer, in part out of fear that their water rates, which had remained stable – and decidedly cheap – with Chester Water would go through the roof should the company fall into private hands.
One municipality after another weighed in against the sale. So did the Chester County Commissioners. The bid was rejected. Chester Water, with assets of $4.4 billion, would continue to serve its loyal 42,000 customers in 34 Delaware and Chester county municipalities and well as the city of Chester.
Customers and local officials urged the board to reject Aqua’s offer, and with good reason. In general, Aqua customers pay a lot more for water, in some instances nearly double.
Still, Chester Water remains a plum that is ripe for picking by private firms. With assets in the billions and a top-notch credit rating, the company is not exactly in distress.
Everyone knew Aqua America, the second largest publicly traded American water company, was not going to go away. They were right. But there is a new intrigue in the latest sale rumors swirling around the company.
These come not from an outside agency, but instead from inside the company. Specifically from the city of Chester.
Mayor Thaddeus Kirkland recently sent a letter to the Chester Water Authority Board noting that the city was feeling a little left out of the discussions concerning a possible sale.
The city has been struggling mightily to reverse its economic fortunes. In fact, it is under a state deadline to show progress so that it can exit state Act 47 conditions, which has for years slapped “distressed city” status on the city.
That $250 million would certainly go a long way toward helping the city navigate that path. It’s clear both the city and the state overseer that keeps tabs on its books are keenly aware of what a sale of an asset such as Chester Water Authority could mean to the city.
If it fails to right its books, the city could be forced into receivership. But they don’t actually have to balance the ledger. All they have to do to gain another extension is show the state Department of Community and Economic Development that they are making “progress.”
Defining what constitutes progress, as you might guess, depends on whom you ask.
The city made its point at a recent meeting of the Chester Water Authority Board, which in recent months have become fairly lively affairs, with workers, municipal officials and others jamming a board room at Neumann University.
The nine-member board is made up of nine members, three from Delaware County, three from Chester County and three from the city of Chester.
All of this falls under that deadly label of “monetization.” Chester needs money. It has very few outlets where it can get its hands on that kind of cash. Enter Chester Water Authority.
The board would love to know exactly what kind of talks city and state officials have been having with Aqua or other suitors – and just how long those talks have been going on. They’ve even filed Right to Know requests to get their hands on those communications.
It should be noted that all sides appear to be trying to do the right thing. It just depends on your particular view – that of satisfied longtime customer; employee; government official or board member.
Will the Chester Water Authority become just the latest Delaware County industry icon relegated to the dust bin of history?
The company traces its roots back to 1866. It brings water through 656 miles of pipelines from the Susquehanna River and the Octoraro Reservoir to Delaware County. The water is consistently recognized for its high quality.
But suddenly there are waves in the water.
The board will meet again at Neumann Nov. 21.
Brace yourself. There is choppy water ahead.
The city has been struggling mightily to reverse its economic fortunes. In fact, it is under a state deadline to show progress so that it can exit state Act 47 conditions, which has for years slapped “distressed city” status on the city.