A visitor to the new Chester Water Authority website, chesterwaterfacts.com, is met with the assertion that Harrisburg is at the root of Chester’s financial challenges.
“The commonwealth is failing Chester,” the home page says in prominent display. “The Pennsylvania Department of Community and Economic Development is responsible for the City of Chester’s financial ruin. Behind the scenes of Gov. Wolf’s Declaration of Fiscal Emergency, the DCED has been working with the City of Chester and for-profit water companies to improperly seize assets of the Chester Water Authority.”
Welcome to the latest round of the Chester Water Authority versus Pennsylvania and Aqua with the City of Chester somewhere in between.
For years, the parties have been embroiled in a battle over the assets of the CWA, a move that officially began when Aqua presented an unsolicited bid to buy them in May 2017 for $250 million. After the CWA rejected it, 16 lawsuits were filed – and this is the third new website designated to this issue. The CWA previously had savecwa.org and Aqua has AquaforChester.com.
This most recent rendition – chesterwaterfacts.com – ups the ante by looking straight to DCED for blame.
It starts by saying that Gov. Tom Wolf’s April 13 linking the declaration of fiscal emergency for Chester to COVID-19 as “not true and is a story concocted by the DCED to cover up the DCED’s long standing lack of transparency and fiscal mismanagement of Chester going back at least 8 years.”
The CWA website notes that the Chester Receiver’s Office itself acknowledged the financial issues surrounding Chester have been long-standing, having fallen behind on employee health benefits and struggling to pay yearly obligations and the receiver said the pandemic has made the situation more difficult.
“Chester’s financial difficulties existed prior to COVID and were made worse as a result of COVID,” Vijay Kapoor, chief of staff for the receiver, said.
In addition, the CWA website noted that none of the $3.9 billion of CARES Act money that came to Pennsylvania has been directed to Chester.
The Receiver’s Office said they were aware that the city Fire Department had received some funds through PEMA/FEMA for specific items.
However, Kapoor added, “The Receiver requested approximately $9.1 million in CARES Act funding from Delaware County for public safety and unemployment compensation costs stemming from the furlough of approximately one-third of its workforce and the fire department submitted a request for emergency measures taken. We have not received anything from those two funding requests.”
Last week, Delaware County Council had an open-ended conversation about how to spend the remaining $42 million that had not yet been spent of the $98.9 million they received from the CARES Act distribution.
Requests for responses from DCED and Delaware County Council were not available by deadline.
The CWA website continued with its allegations, saying, “DCED has been working with the City of Chester and for-profit water companies to attempt to circumvent pending litigation, and to attempt to improperly seize and sell to the DCED’s private water company friends assets that neither the DCED nor the City own, as a way to cover-up the DCED’s lack of oversight that has resulted in the City’s cash crisis and economic collapse.”
Aqua issued a statement refuting that and other charges on the new CWA website, reading, “This information is completely fabricated hyperbole. When Aqua submitted its bid in the RFP process, the city indicated that any sale would be contingent upon the outcome of litigation before the Commonwealth Court … The receiver’s office has publicly investigated multiple options and has stated that if a sale was contemplated, it would be dependent upon the outcome of the same litigation. There has been no attempt to circumvent the pending litigation.”
The Receiver also denied the truth in that CWA statement.
The CWA claims that Aqua and DCED have been having communications about a sale of CWA as far back as possibly 2016, even though the state Secretary of Community and Economic Development Dennis Davin confirmed the water system is owned by the CWA.
The Aqua statement read that, “All interactions with DCED have been disclosed through the Right To Know process. The interactions have been professional.”
Formed in 1939, the CWA provides water to the city of Chester and other parts of Delaware and Chester counties. Its board consists of three members from the city, three from Delco outside the city and three from Chester County.
The CWA website notes that the Chester Receiver has maintained that the CWA should be treated as a “business-type asset.”
“He has no plan,” CWA Solicitor Francis Catania said of the Receiver “He was sent here by the DCED for one reason and one reason only – to solve the CWA.”
Speaking for the Receiver, Kapoor spoke to how the sale of the CWA assets would fit into the city’s fiscal viability.
“The Receiver’s office recognizes that to get Chester back on its feet, it needs to 1] Reduce retiree health and pension costs, 2] Restructure operations and 3] Reinvest in City services,” he said. “We have a police pension fund that is due to run out of money early next year if changes aren’t made and basic, vital services for the City of Chester are not being met. Monetizing the CWA – whether that’s done through a sale to a private company or through a partnership that would keep it in public hands – is vital and indispensable to Chester’s recovery.”
The CWA website says that “the City of Chester has never contributed any money into the operations of the CWA.”
However, the Receiver’s office sees it differently.
“Perhaps the website can explain why analysis from a consultant that was working with the city and the CWA on a possible public-private partnership in 2018 appeared to show that, at least as of 2019, city ratepayers annually paid CWA approximately $10 million in fees, but that CWA operating expenses are $3.5 million for those same ratepayers – a difference of $6.5 million per year,” Kapoor said.
“It’s a bald-faced lie,” Catania said. “Neither he or any one from his office has never seen information about expenses from the Chester Water Authority. It’s completely false. He’s just making it up. He has no facts so he’s making things up. It’s outrageous for him to make this kind of allegation. This shows how contemptuous Harrisburg is. They view us all with contempt to spread this kind of misinformation. The people in the city of Chester deserve better than this. They’ve been abandoned by Harrisburg, abandoned.”
The CWA website noted that the city had not released financial statements since the year ending 2017 and said statements between 2013 and 2017 showed a “complete disregard for accounting rules and proper fiscal management.”
Kapoor said the Receiver’s office is working with the city to get these statements completed.
It noted that expenditures for the general fund increased from $40 million to more than $47 million from 2011 to 2017 and total liabilities for basic services during the same time period went from $4 million to $25 million. In addition, the site said the city’s fund balance surplus began at $10.4 million in 2011 and ended with a -$15.3 million shortfall at the end of 2017.
Kapoor said the Receiver is aware of the issues at hand – and is working to resolve them. “Our focus is on trying to address the very real problems Chester is facing today, including a nearly-insolvent police pension plan and an inability to deliver vital services,” he said.
The website said all of the city’s financial woes were because DCED did not adhere to the recommendations it made in the Recovery and exit plans for the city, concluding, “The DCED and Receiver-controlled City of Chester’s attempts to use the cover of COVID-19 to push through a plan that puts affordable safe drinking water at risk, done at the expense of the residents of the City of Chester and other unrepresented constituents of Chester and Delaware Counties, must be opposed.”
Aqua questioned that in their statement.
“In what way is affordable safe drinking water at risk?” it read. “This appears to be the rant of a conspiracy theorist. Aqua is not interested in the hyperbole of, and misinformation being consistently disseminated by, CWA and its solicitor. We remain focused on the outcome of the Commonwealth Court proceedings and the RFP process in the City of Chester. Aqua is proud of the integrity with which we enter every interaction with government and elected officials and is equally proud be to possibly be part of the City of Chester’s solution to improve its city for residents and businesses alike.”