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July 11, 2019

Chester Water Authority says city is selling it to shore up its 'own abysmal finances'

CHESTER – The Chester Water Authority (CWA) recently initiated legal action in hopes of preventing its sale to Aqua Pennsylvania.


In a complaint filed June 26 in the Delaware County Court of Common Pleas, the CWA alleges the city of Chester and Bryn Mawr-based Aqua Pennsylvania “have taken drastic and illegal action to imminently force a sale of the authority” although “the authority is exceptionally well-run and has been providing its customers with clean and inexpensive water for generations.”

According to the complaint, the city is trying to sell the CWA “to bolster its own abysmal finances.” 


A Delaware County Times article reported a city resolution to explore dissolving the CWA came after negotiations with CWA leadership have been unproductive since March 2018.

CWA said its board approved a settlement agreement in January in which the CWA would pay the city $60 million in exchange for a 40-year release on any claim to terminate and sell the authority.


In early June, Chester issued a request for proposal (RFP) seeking bids to buy the CWA, ostensibly open until July 1, but according to the complaint a June 19 court filing in a related case showed the city had already agreed to the deal with Aqua Pennsylvania.


“Chester’s supposedly public RFP is a sham, a front to give a veneer of legitimacy to Chester’s pre-arranged backroom deal with Aqua,” the complaint alleges, "Chester has made a mockery of the law and the good-governance policies it was meant to foster.”


CWA, which said it provides water to more than 200,000 customers in 33 municipalities, alleges the city violated the Pennsylvania Sunshine Act and a law stipulating the city can only sell real estate through legitimate public bidding. The CWA further said Chester comprises only 22 percent of its asset and customer base and the authority is funded only by customer payments. CWA also alleges Aqua tried to buy it for $320 million in May 2017 through an unsolicited proposal.

The CWA lawsuit seeks a court order declaring the RFP illegal and asks the court to enjoin the potential sale and order that any new RFPs must be court monitored for propriety.


CWA is represented in the lawsuit by lawyers from Conrad O’Brien of Philadelphia.


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