Chester receiver asks bankruptcy court to put brakes on $276.5 million DELCORA sale

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The city of Chester is trying to stop the sale of the Delaware County Regional Water Quality Control Authority (DELCORA).

Chester’s state-appointed receiver Michael Doweary believes the city, which filed for bankruptcy in November, has an interest in the sewer system and is looking to protect the city’s assets. In a motion filed in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, Doweary said the city sold its wastewater assets to DELCORA in 1973 in exchange for sewer services, but there was a catch.

In the event DELCORA ceases to operate, the receiver’s motion argues, Chester should maintain its previous assets — or at the very least be compensated.

The Republican-controlled county wastewater authority initiated efforts to sell the system to Aqua in 2019 — the same year that Democrats took control of the County Council.

According to the receiver’s motion, Aqua initially appraised DELCORA at $408.8 million. But the wastewater authority agreed to sell the system for $276.5 million.

Delaware County Council immediately moved to try to put the brakes on the sale because they do not believe the authority has the right to sell the system.

The sale, if passed, would be among the largest water privatizations in the state’s history. DELCORA serves roughly 165,000 people in 42 municipalities in Delaware County and parts of Chester County.

The Pennsylvania Public Utilities Commission (PUC) has been holding proceedings as it looks to make a decision on whether the deal has legs.

The PUC is supposed to have new hearings on the deal starting Feb. 14.

Vijay Kapoor, chief of staff to the receiver, said in a written statement to WHYY News they had no other option.

“The Receiver tried to intervene in the PUC matter on behalf of the City, but was denied by the PUC. Consequently, he had no choice but to take this matter to the bankruptcy court,” Kapoor said.

County Democrats have characterized the deal as politically motivated and corrupt.

Delaware County Solicitor William Martin told WHYY News in a written statement that “the Receiver has raised an important issue. It is vital that the long term prospects of the City of Chester, following its reorganization, are not adversely impacted by a premature decision by the PUC.”

Officials from Aqua and DELCORA did not immediately respond to a WHYY News request for comment.

A hearing on the receiver’s motion with the bankruptcy court has been scheduled for Feb. 27.