In April of 2020 Governor Wolf declared a Fiscal Emergency for the City of Chester. Pursuant to that declaration, the Secretary of the Department of Community and Economic Development (“DCED”) Dennis Davin filed a Petition for a Receiver for the City of Chester in the Commonwealth Court captioned, Davin v. City of Chester, No. 336 MD 2020. Secretary Davin is the only Petitioner in the case, in which several filings have been made advocating for the sale of the Chester Water Authority (“CWA”). Despite clear statements advocating for the sale of the CWA, the DCED has been telling the legislature a different story, claiming that it has not taken any position on the sale of the CWA.
The DCED Has Advocated For a Sale of the CWA.
The DCED recently produced documents in response to public records requests, including a draft report dated March 28, 20181 and a final report dated May 4, 20182 by the City of Chester’s Act 47 Coordinator (which the DCED oversees) concluding that “Chester must explore the monetization of municipal assets including a potential transaction involving Chester Water Authority.”
In addition, the Receiver for Chester (overseen by Secretary Davin) has filed several documents in Secretary Davin’s case in Commonwealth Court advocating for the sale of the CWA, specifically stating, for example:
(a) that “the City has little choice other than to explore the potential sale or lease of” its water system and parking system;3
(b) “I fully support the City’s ongoing litigation to establish its sole ability to repossess the assets of the Chester Water Authority”;4
(c) “Section 706(a)(5) of Act 47 specifically empowers the Receiver ‘to require the distressed municipality or authority to cause the sale, lease, conveyance, assignment or other use or disposition of the distressed municipality’s or authority’s assets’”;5
(d) “The Receiver hereby directs the City to continue litigating for its ability to repossess and sell the assets of the Chester Water Authority”;6 and
(e) that “[m]onetizing the Chester Water Authority…is a key component of Chester’s path forward and permanent recovery because it would bring a significant amount of money into the City.”7
These statements by the DCED between 2018 and the present make clear that the DCED has been advocating for the sale of the CWA to its private water friends for several years.
Secretary Davin Falsely Tells the Legislature That the DCED Takes No Position on a Sale of the CWA
On April 22, 2020, State Representative John Lawrence, who represents Pennsylvania’s 13th Legislative District (which includes part of Chester County), co-authored a letter to Secretary Davin, which, among other things, expressed concern that the “DCED may attempt, under the guise of [Governor Wolf’s April 13, 2020 declaration of] Fiscal Emergency, to step in and order a sale of” the CWA.8 The letter also asked Secretary Davin whether such a sale had been contemplated by the DCED or its agents, and what conversations had taken place between the DCED and potential buyers.
On February 22nd of this year, Representative Lawrence questioned Secretary Davin about Davin’s reply letter,9 in which Davin was quoted as stating, “Neither DCED nor the Act 47 Coordinator for the City of Chester has ever promoted a sale of Chester Water Authority.”10 Lawrence pressed Davin to explain the obvious contradiction between the Act 47 Coordinator’s 2018 reports promoting a sale of the Water Authority’s assets and Davin’s denial of any such promotion. All Davin would say, over and over, was that he had no response and would “have to get back to you.”
By letter dated March 8, 2021 to the Pennsylvania Majority and Minority Appropriations Chairmen, Secretary Davin doubled down on his contradictions with a written follow-up to his exchange with Representative Lawrence.11 Davin wrote:
During DCED’s House Appropriations Committee Budget Hearing, Committee members presented questions concerning the Department’s programs. Listed below you will find our response to each question.
* * *
Rep. John Lawrence (R-Chester):
Question: The Representative asked DCED’s position on the sale of the Chester Water Authority and stated that DCED contradicted a letter saying DCED did not advocate for its sale.
Response: DCED has not taken any position on a potential sale of the Water Authority. DCED is aware of several proposals which have been initiated by other parties including one between the Water Authority itself and the City. However, DCED has consistently stated that the Chester Water Authority owns the water system. Therefore, any sale of the system will ultimately be a decision made by the Authority. Moreover, the Commonwealth Court is currently considering a case which will likely determine the City’s legal interest in the Water Authority. DCED has advised the City over time to rely on their own counsel and professionals, which they have done.
Secretary Davin cannot have it both ways and should be held accountable for taking one position regarding a sale of the CWA with the court, and then pretending he never took that position when answering the legislature’s questions. The people of Chester and all of the CWA ratepayers deserve better.
1 See http://chesterwaterfacts.com/wp-content/uploads/2021/02/2020-117-Redacted-000001I-001600I.pdf at 001545I – 001558I (especially 001557I therein).
2 See http://chesterwaterfacts.com/wp-content/uploads/2021/02/2020-117-Redacted-000001I-001600I.pdf at 000841I – 000854I (especially 000852I therein).
3 https://www.chesterreceivership.com/s/Chester-Receiver-Recovery-Plan_FINAL_20200820.pdf (section 1.3 at p.8)
4 https://www.chesterreceivership.com/s/Chester-Receiver-Recovery-Plan_FINAL_20200820.pdf (section 1.3 at p.8).
5 https://www.chesterreceivership.com/s/Chester-Receiver-Recovery-Plan_FINAL_20200820.pdf (section 1.3 at p.8, footnote 4).
6 https://www.chesterreceivership.com/s/Chester-Receiver-Recovery-Plan_FINAL_20200820.pdf (section 6.3 at p.56).
7 https://www.chesterreceivership.com/s/Receiver-Status-Report_20201103.PDF at p.6.
8 Representative Lawrence’s letter is posted on his website at: http://www.replawrence.com/Display/SiteFiles/420/OtherDocuments/IssueCorrespondence/Lawrence%20Cutler%20CWA%20DCED%20Letter.pdf.
9 Secretary Davin’s response to Representative Lawrence’s letter is posted at: http://www.replawrence.com/Display/SiteFiles/420/OtherDocuments/2021/Letter%20from%20DCED%20re.%20Chester%20Water%20Authority%204.27.20.pdf
10 See a video of that exchange at: http://www.replawrence.com/video/latestvideo (first video dated February 22, 2021).