Although speculation of a Chester Water Authority (CWA) takeover by water utility conglomerate Aqua America, Inc. has quelled, there is still lingering speculation that Chester City officials are still attempting to move forward with taking up Aqua’s $250 million sale proposal.
Chester hopes the multi-million dollar sale means a bailout out of decades of being classified as a distressed municipality under Act 47. If the city fails to bring itself to financial stability, it will face a state takeover next May.
Although city officials have not publicly said they plan to emerge from Act 47 solely through selling the CWA, sources speculate that city officials are quietly lured by Aqua’s eight-page proposal letter. It reads in part: “the City of Chester and both Chester and Delaware counties would benefit from this transaction” by reducing “long-term financial obligations.”
It further concluded: “Finally, a sale would allow the City of Chester to emerge from Act 47 status.”
And movement from city officials, in response to the proposal letter, fuels the speculation that the city is in favor of an Aqua buyout.
So far, the city has refused to pass a resolution demonstrating solidarity with the CWA board’s decision to decline the sale in May, but more than half of the CWA’s municipal consumer base has passed resolutions backing the board. And city officials attended the September board meeting in force and Chester Mayor Thaddeus Kirkland publicly revealed during September’s Council meeting that city Chief of Staff Ronald Starr was scheduled to meet with Aqua.
To this day, the city still maintains a close watch of board meeting business by sending one city official to last month’s meeting. There has also been no follow-up on the outcome of Starr’s meeting because Kirkland has refused to speak to the press.
But city official oversight appears futile because Chester doesn’t control the nine-member board that has made clear there will be no takeover of that entity.
Further stomping on city officials’ hopes to sell the CWA to exit Act 47, the state Supreme Court, last June, pulled the plug on any sales or disposals of public utilities to raise money for a general fund.
The Supreme Court ruled it unconstitutional in the case of the PA Environmental Defense Fund v. Commonwealth of PA, which involved spending oil and gas revenue extracted from state owned lands leased to drilling companies on General Fund purposes.
The court ruled: “The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.”
Clearly stated, “natural resources are the common property of all the people.” Not any specific municipality.
The Supreme Court case apparently grew out of actions by the last three governors, according to at least one published report.
Language the court used came from Article 1, Sec 27 of the state Constitution that was adopted in 1971, but according to Charlie Bacas, retired software developer and former chief of staff to former House Majority Leader Jim Manderino, the article was rendered lame because a law had to be enacted to enable it and it was also hollowed under Act 13, a law signed by then-Gov. Tom Corbett and a Republican-controlled state legislature in 2012, granting Marcellus shale gas drillers immunity to local zoning laws.
According to Bacas, in a published guest opinion, it was the Marcellus shale gas boom that earned the state “several hundred million dollars in fees alone.”
From 2009 to 2015, state-owned lands earned more than $926 million solely from royalty fees; at least half of these proceeds were distributed by the state legislature to General Fund programs.
Under Gov. Corbett, according to Bacas, the multi-million dollar revenue was used to “plug some massive holes in the state’s chronically underfunded budget…” However, under Govs. Edward Rendell and Tom Wolf, the money was reluctantly used for these endeavors.
The high court’s decision also affects local governments, preventing them from acting as the role of proprietor of Pennsylvania’s “natural resources,” including water in the case of CWA.
Instead, government is the trustee of those resources and is tasked with reinvesting any revenue back into the maintenance and conservation of all public resources for “all people, including future generations to come.”
Aqua spokeswoman Donna Alston told The Spirit in an e-mail, “Aqua remains interested in the Chester Water Authority, should the board choose to proceed with exploring a sale. We do not believe the Pennsylvania Supreme Court decision applies to our proposal for several reasons. For example, our proposal includes purchasing physical assets and not natural resources. Please follow up with the owner for how the proceeds could be distributed.”
Chester City still needs a bailout and has hitched its wagon to the county’s attempt to lure Amazon to the area as the mega e-commerce company plans to spend more than $50 million to build a second headquarters. Its current site is in Seattle.