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Why Are City of Chester Sewer Assets Worth Up to $70 Million Going Unclaimed by the Receiver?

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Why Are City of Chester Sewer Assets Worth Up to $70 Million Going Unclaimed by the Receiver?
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Has the City of Chester been misled by the Pennsylvania Department of Community and Economic Development (DCED) and its hand-picked Receiver currently overseeing the City’s finances?

A 50 year old contract may hold the answer.

In 2017, when Aqua agreed to purchase the nearby DELCORA sewer system, no one paid attention to a clause in a 50 year old contract between the City of Chester and DELCORA that kicked in. That clause provides that if DELCORA goes out of business, the City, not Delaware County, gets back the sewer assets. In the transaction as currently structured, Aqua is paying DELCORA for assets that belong to the City, and which are estimated to be worth as much as $70 million.  

It is incredible that the City’s claim to these assets has not been pursued as a solution to the budget crisis the city faces, even though the City’s contractual right to these assets has been known for some time by the DCED and the Receiver, and has been discussed internally by the DCED for years. Why hasn’t the DCED, Aqua or the Receiver brought this to the City’s attention? Why isn’t money being paid for these assets going to the City? Why isn’t the Receiver asserting Chester’s claim to these assets?

What is even more incredible is that separately Aqua, the DCED, and the receiver continue the attempted hostile takeover of the Chester Water Authority and plan to seize and sell it to Aqua, under the guise of easing Chester’s financial burden.

Allowing the Receiver, DCED and Aqua to pursue a hostile takeover of the CWA when there are valuable sewer assets to which the city is contractually entitled to will only compound the issues for city residents and CWA ratepayers. The ratepayers will ultimately bear the brunt of these decisions, through increased monthly water bills. Recent reporting paints a pattern of massive rate increases in nearby suburban jurisdictions Aqua oversees.

DCED should act with the intention of ending the financial crisis in Chester as soon as possible. With assets worth up to $70 million available to the City from the DELCORA sewer assets, the City does not need to pursue a sale of the CWA, and could enter into a resolution for the CWA to remain independent. 

The attached documents, acquired through the state’s Right to Know Act, and PUC filings, share more details about the legal gymnastics being played to potentially benefit Aqua and shortchange the City of Chester.

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