Commonwealth Failing Chester

Attempts to Seize the Water System

The Improper Attempts to Seize the Water System

The Chester Water Authority (“CWA”) was established in 1939 as a public, non-profit corporation for the purpose of providing potable water, and now serves customers in Western Delaware County, Southern Chester County and the City of Chester. The CWA Board is comprised of nine members appointed by the City of Chester Council, Delaware County Council, and the Chester County Commissioners.

The City of Chester has never contributed any money into the operations of the CWA.3 Sometime in 2016 or early 2017 Aqua and the DCED began discussing the sale of the CWA to Aqua. Incredibly, it appears that those plans were discussed by the DCED and Aqua in secret and did not involve anyone from the City of Chester or the CWA 4. In 2017, Aqua America made a written offer to the CWA to purchase its assets, which the CWA rejected, in part, because its analysis showed that ratepayers would have seen significant rate increases over time by Aqua.5 Unhappy with the CWA’s rejection of Aqua’s offer, attempts to simply seize the CWA and force the deal began, with more secret meetings taking place with Aqua and the City of Chester, lawsuits and political pressure. It is worth noting that once these plans to seize and sell the CWA became known, more than 30 townships and boroughs, 10 state senators and state representatives, and at least 10 local interested organizations have written letters opposing any sale of the CWA.6 To date it does not appear that the DCED has provided a response to any of these letters of support.

If the DCED and its hand-picked Receiver for the City of Chester are permitted to seize CWA assets to cover up the shortfalls they created in Chester, it will be to the detriment of the residents of Chester, as well as the 79% of CWA ratepayers who reside throughout Chester County and Delaware County in dozens of other townships and boroughs. All CWA ratepayers, regardless of where they live, will pay significantly higher water rates if the City, DCED and for-profit water companies are successful in seizing and selling CWA’s assets. 7

This attempted seizure is especially troubling because the City’s financial statements have always stated that the CWA is not an asset of the City, and it is not included in the City’s financial reporting. 8 The Secretary of the DCED, Dennis M. Davin, confirmed this a few months ago in a private letter, stating “the water system is owned by the Chester Water Authority.” 9 Despite this, the DCED’s handpicked Receiver in control of Chester has stated that given “the City’s dire financial condition”, the City should nonetheless treat the CWA as a “business-type asset”, seize it, and sell it to for-profit water companies to raise money. 10 In doing so during the City’s cash crisis, the Receiver is using cash the City does not have in order to fund the City’s ongoing litigation efforts to seize the CWA, including paying two high-priced national law firms, Greenberg Traurig and Ballard Spahr, to represent them. 11,12

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