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By sandbagger2
#491298

Intrigue, possible sale looms over meeting of board of Chester Water Authority

By Rick Kauffman, rkauffman@21st-centurymedia.com, @Kauffee_DT on Twitter
POSTED: 11/02/17, 8:22 PM EDT | UPDATED: 2 HRS AGO 1 COMMENT


The solicitor of the Chester Water Authority is questioning why the financial oversight group for the city of Chester was mulling a sale of the CWA more than a year before Aqua America had offered $250 million to purchase the authority and take it private.

Conversely, the city is questioning why the CWA is dragging its feet in turning over documents including authority bylaws and board actions.

It appears the city and the CWA are engaged in a tug of war over the ratepayers, with the company’s customers and ratepayers stuck in the middle. Chester Mayor Thaddeus Kirkland, in a letter to the CWA board said the city, as the municipality that created the authority, reserves the right to reclaim and transfer the authority’s assets.

“I believe the city has been treated, as least thus far, as a passenger in this process when, in reality, we can put ourselves more in the driver’s seat,” Kirkland wrote in the letter, addressed to CWA Board of Directors Chair Cynthia Leitzell and dated October 25th.


Kirkland wrote that the city reserves the right to “reclaim and transfer operation of the authority’s assets,” and to “dissolve the authority.”

Friday afternoon at an emergency meeting at Neumann University, the water authority board will attempt to find out more details about the Pennsylvania Department of Community and Economic Development (DCED) inquiry into CWA’s assets and what the city’s intentions are in seeking to exit state financial support under Act 47.

CWA has countered with a Right-to-Know Request that procured a receipt from the DCED ordering articles of amendment, incorporation and miscellaneous filing for the CWA dated prior to the release of the Act 47 Recovery Plan last year.

“We’re still trying to figure out if the idea to sell the authority came from Aqua or DCED,” said Francis Catania, the solicitor for the CWA. “I have proof that as early as May 2016 they were talking about it.”

Catania is suggesting that the Act 47 recovery coordinators, Econsult, the firm contracted by DCED to draft the city’s Act 47 Recovery Plan in August 2016, were shopping for a potential suitor for the sale of assets even before the recovery plan was drafted.

“The DCED is stonewalling us,” Catania said. “They’ve given us partial info that has been heavily redacted despite our repeated requests. I don’t know what they’re trying to hide.”

The Act 47 Recovery Plan mandates that the city of Chester has until May 2018 to eliminate its budget deficit and address its funding deficit. On the condition that by May 2018 the city provides a sound fiscal plan for exiting Act 47, Chester can extend the deadline to 2021. Otherwise the city will enter receivership.

The plan’s bullet points for financial growth was to reduce expenses, attract businesses for an increase of tax base and for an enhancement of existing revenue sources.

Selling the CWA was not part of the plan of the economic recovery plan, but Catania is saying that the records show differently.

“It always seems like we’re the last to know,” Catania said.

Kirkland supported the board’s unanimous “No” vote on the sale to Aqua, writing “(I) do not believe accepting such an unsolicited and un-vetted offer to be prudent.”

Thursday over the phone, the mayor said DCED and Econsult have not specifically urged the city to sell.

“Quite frankly, they haven’t advocated one or the other, they’ve placed options on the table,” Kirkland said. “They have not said ‘sell.’”

Catania countered, “If this is a completely innocent inquiry, I don’t know why we’re having so much trouble getting the documents we’ve asked for.”

He added that he doesn’t believe the city has a right to sell the authority, as 78 percent of the CWA customers live outside the city of Chester.

“We believe the authority belongs to the ratepayers,” Catania said. “The board has been consistently saying that.”

For the surrounding communities that are serviced and get their water from the CWA, 13 municipalities from Delaware County have filed resolutions against the sale to Aqua or other corporate entities.

Aston Commissioners President Jim Stigale said after looking into the rates and services provided by Aqua, it was clear that the large corporate entity would bring higher costs and diminished quality of service.

“We’re satisfied with the CWA services, we’ve been able to control expenses, and they’re very good, quick to respond on a township level,” Stigale said. “This private corporation is more about profits than service to the residents.”


Kirkland wrote that some form of monetization of the water system “will almost certainly be part of the final stretch of the recovery effort,” but Thursday said cooperation between the city and CWA is of chief importance.

“We’re not going to allow anything to be taken away, we’re in a position to help our city in a great way,” Kirkland said. “Everybody knows the urgency in working together in a way that is beneficial for the community, the CWA, the board and everybody involved.”

“We have a commitment to working together with the CWA to provide great service.”

Chester Water Authority, which is not in financial distress, serves more than 42,000 customers, impacting about 200,000 individuals in the city of Chester and other parts of Delaware and Chester counties over 656 miles of pipeline. Dating back to 1866, the authority draws its water from the Susquehanna River on the borders of Chester and Lancaster counties and the Octoraro Reservoir and has received multiple awards for its superior taste.

It flows into 17 of Delaware County’s 49 municipalities and 16 of Chester County’s 73 municipalities.

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User avatar
By JuneCarter
#491299
Got a letter from CWA today stating they have no intent to sell and these offers to buy are unsolicited.

I'm confused as to what's going. Sounds like something shady is afoot.

I sure hope Chester has no authority to sell.
User avatar
By sandbagger2
#491300
Chester Water Authority sets emergency meeting; sale talk again looms

Bottled water from the Chester Water Authority sits on the table during a recent board meeting, where residents raised concerns over a potential sale of the utility and a potential hike in costs to customers. Talk of a sale is heating up again, and the board has slated an emergency meeting Friday to discuss the matter.
Bottled water from the Chester Water Authority sits on the table during a recent board meeting, where residents raised concerns over a potential sale of the utility and a potential hike in costs to customers. Talk of a sale is heating up again, and the board has slated an emergency meeting Friday to discuss the matter. RICK KAUFFMAN – DIGITAL FIRST MEDIA
By Fran Maye, fmaye@21st-centurymedia.com, @kennettpaper on Twitter
POSTED: 11/01/17, 5:15 PM EDT | UPDATED: 21 HRS AGO 0 COMMENTS

CHESTER >> The board of the Chester Water Authority will hold an emergency meeting Friday to discuss actions that could lead to the dissolution and potential monetization of the authority.

It’s the latest twist and turn for the company that supplies water from the Octoraro Reservoir to thousands of residents in both Delaware and Chester counties since it became obvious earlier this year that the private utility Aqua America was interested in acquiring it. Back in May the Chester Water Authority received an unsolicited offer of $250 million from Aqua America. That bid was rejected by the board. But Aqua has remained interested. And now it appears the city of Chester’s financial situation could figure prominently in a possible sale.

Specifically, the board will review results of information requests regarding the city of Chester’s Act 47 coordinators’ contacts with for-profit water companies and communications about potential monetization of the Chester Water Authority, and it will discuss a letter sent by Chester Mayor Thaddeus Kirkland regarding potentially monetizing the customers and assets of the Chester Water Authority.

Chester is trying desperately to get out from under Act 47, the state designation for financially distressed cities. The Department of Community and Economic Development has a responsibility to assist Pennsylvania municipalities that are experiencing severe financial difficulties in order to ensure the health, safety and welfare of their citizens.


“Certain board members are being pressured to make sure the sale goes through,” said Leonard Rivera, a Chester County member of the Chester Water Authority board of directors.

However, Chester Water Authority Solicitor Francis Catania said the board wants to get to the bottom of the issue.

“There hasn’t been anything said about that at the public meetings,” Catania said. “Aqua bid came without any solicitation or involvement of the Chester Water Authority. We need to determine why this sudden interest. One of Act 47 coordinators told me that he’s considering recommending the authority be terminated.”

Said Catania: “We need to know if the state is the moving force behind this push to sell. We need to find that out.”

At its September meeting, the board approved a resolution stating that it is not in the ratepayers’ best interest to sell the Chester Water Authority’s customers and assets to a for-profit company by an 8-to-1 vote.

The nine-member board is composed of three members from Delaware County, three members from Chester County and three members from the city of Chester.

After the Aqua offer became public in May, no less than 11 Delaware County municipalities served by the authority passed resolutions urging it remain private and opposed to any sale or public takeover.

In his letter to the Chester Water Authority Board of Directors dated Oct. 25, Kirkland said it was not prudent to accept an unsolicited and unvetted offer to sell the system to a private entity.

“I have found, and my team has confirmed, that the authority’s initial appraisal of the city’s role in this critical process has been somewhat ill-informed,” Kirkland said. “In short, I believe that the city has been treated, as least thus far, as a passenger in this process when, in reality, we can put ourselves more in the driver’s seat.”

The DCED has resisted the authority’s request to reveal all contacts between Chester City Act 47 coordinators and any for-profit water companies. The authority sought all records regarding the valuation and potential privatization of the Chester Water Authority. After a request was filed under Right to Know laws, the Pennsylvania Office of Open Records ruled in Chester Water Authority’s favor. On Friday, the factual information resulting from the request will be debated.

Said Kirkland: “I believe the first mission of the authority and any water system is to guarantee that every person has access to clean drinking water of the highest quality and as mayor of a city of working people for whom every dollar counts, I want to make sure water rates stay as low as possible and in line with our peers.”

The city of Chester plans to exit Act 47 within the next three years and Kirkland said some form of monetization of the water system will almost certainly be part of the final stretch of the recovery effort. The city, he said, is not endorsing any particular form of monetization, but officials are demanding a careful, comprehensive and cooperative examination of every possibility.

Chester Water Authority, which is not in financial distress, serves more than 42,000 customers, impacting about 200,000 individuals in the city of Chester and other parts of Delaware and Chester counties over 656 miles of pipeline. Dating back to 1866, the authority first pumped from the Delaware River and two years later into a 1.5 million gallon reservoir on Concord Road.

Now, the authority draws its water from the Susquehanna River on the borders of Chester and Lancaster counties and the Octoraro Reservoir and has received multiple awards for its superior taste.

It flows into 17 of Delaware County’s 49 municipalities and 16 of Chester County’s 73 municipalities.

Average water rates range from $35.15 to $41.70 for Chester Water Authority customers, depending on which sector they live in, as opposed to 65.20 for Aqua America customers.

The public meeting will be held Nov. 3 at 3:15 p.m. at Neumann University, One Neumann Drive in Aston, on the fourth floor of the Rocco Abessinio Building.
User avatar
By Wrench97
#491303
Chester City needs money and they are taking the short sighted approach of selling CWA Kirkland is laying claim to the Authority by claiming since the city started it way back when they can sell it and put the cash to bail out the debit trying to stave off state receivership.

From my understanding they no longer hold a controlling interest and can not sell it without the other multiplicities agreeing to and sharing in the payout, this is not a good thing for us the customers Aqua and now I hear a second for profit company are waving cash in front of Kirklands face if a sale does go though water will cost us more a lot more.
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By breitak67
#491304
I'd hate to see Chester's financial plight result in the "selling" of Aston residents to a private water provider. It feels akin to allowing Chester to use eminent domain to seize property in Aston. Surely the adoption of CWA by other municipalities came with some sensible rules protecting the new members from Chester's whim or ill fortune. Aston already has pretty expensive water (and even more expensive sewer - I used to pay about $250/quarter combined).
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By eriknben10
#491322
Our water is cheap here in Aston. My bill is only $110.00 a quarter for 5 people.
User avatar
By breitak67
#491336
Only cheap compared to what you'll pay if you are successfully sold to a private provider. On average, private providers are 55% more expensive in PA. That means the average water customer would go from, say, $500/year to a bit more than $775 with no measurable improvement in quality or service - that's an additional $60 or so per quarter FOR NOTHING. $60/quarter that you'd be paying as a result of Chester's financial bind.

By the way, Pa has 5 of the 10 municipalities with the highest-priced water.
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By eriknben10
#491337
It's only money. I'd think $2 a day would still be cheap for one of life's most precious gifts delivered to my home at the turn of a knob. Divide that by 5 and ya got $.40 a head. I happen to know what it's like without indoor plumbing, guess I'm biased.
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By JuneCarter
#491340
We pay 50 a month for a family of 3. I remember when the sewer bill was 35 every 3 months. There was no Twp. Tax. There was no cell phone or modem bill.

This bullshyt raising of only 10 or 20 here and there adds up.

Isn't there a countywide reassessment coming up soon as well ?