If Chester’s water assets must be sold, the city’s retirees want them to go to the highest bidder

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The Chester Official Retiree Committee said the city of Chester’s plan to monetize its water assets leaves too much cash on the table. The retiree committee represents retired fire, police and office employees.

“If they’re going to monetize these assets, we want to make sure they get maximum dollars for this and we think they’ve limited themselves if they’re only looking at public entities,” said Chuck Bolgunas, retired battalion chief with the Chester Fire Department.

State-appointed receiver Michael Doweary, who is tasked with rescuing the bankrupt city’s finances, wants an outside vendor to take over the water interests — with the caveat that they remain publicly owned.

Bolgunas said the receiver’s plan thwarts the city’s ability to engage with the private sector.

“We’re in bankruptcy,” Bolgunas, a co-chair of the retiree committee, said. “So you would imagine they would want to get the most bang for their buck — and we don’t see that happening in this scenario.”

The receiver’s office said that the city is overburdened by unsustainable retiree pension and health care costs. As of January 2023, Chester owed about $40 million from missed payments to its three pension plans.

The receiver views monetizing the Chester Water Authority (CWA), the Stormwater Authority for the City of Chester (SAC) and the city’s reversionary interest in the Delaware County Regional Water Quality Control Authority (DELCORA) as the only way forward.

Doweary filed a plan of adjustment with federal bankruptcy Judge Ashley M. Chan in August. The filing caught officials from CWA, SAC and DELCORA by surprise. CWA, which has long claimed its independence from the city that created it in 1939, mounted a massive public opposition campaign against any monetization action.

CWA serves more than 200,000 people across 37 municipalities in both Delaware and Chester counties. The authority believes the plan would raise water bills and negatively impact operations. Aqua Pennsylvania previously offered the city $410 million to acquire the Chester Water Authority in 2021. That endeavor was unsuccessful.

Now, pensioners who think the city should squeeze the water assets for all they’re worth are pushing back.

“We continue to believe that monetizing Chester’s assets in a way to keep them in public hands is the best way to address Chester’s financial issues while at the same time addressing the interests of all the parties involved,” said Vijay Kapoor, chief of staff to the receiver.

Bolgunas wants the retirees involved in the process of finding a “fair” resolution. He said they’ve been excluded thus far.

“Our main concern is if they see this as the way out of this bankruptcy, they need to include us in the discussions,” Bolgunas said.

There are several hundred affected pensioners. Alan Davis, retired Chester police officer and committee co-chair, said people opposed to the sale of the water assets need to present an alternative.

“You can’t just turn your back on the city residents and the pensioners and go  — ‘oh well, too bad,’” Davis said.

Davis was shot in the line of duty. He can’t get another job. He said others are in similar situations. According to Bolgunas, there’s no cost of living increase built into the pensions. He said members are stressed about the threat to their livelihoods.

“We have firefighters who have heart disease and cancer from the smoke and the chemicals that they’ve been exposed to over the years,” Bolgunas said. “This is when you need your health care the most.”

Kapoor said the receiver has “always been happy to speak with the retiree committee.”

CWA board chair Noël Brandon told WHYY News in a statement that the authority “firmly opposes any RFP currently under consideration that involves CWA or its assets.”

“The receiver’s assertion that he can dissolve and take over the assets of a separate and independent municipal entity is illegal. Indeed, that very issue is pending before the Supreme Court of Pennsylvania,” Brandon said. “We are a publicly operated and ratepayer funded Municipal Authority in the Commonwealth of Pennsylvania whose assets and operations are independent of the City of Chester.”

Chester’s police pension has been front and center of the city’s financial crises. Before the bankruptcy filing, the receiver’s office alleged pension spiking to be the primary cause of the depleted funds.

Doweary’s investigation found documents that support the conclusion that Chester’s pension board and city officials took actions back in 2009 to make the police pension calculation easier to manipulate.

The retiree committee filed a response to the bankruptcy court regarding the plan of adjustment in September. The Fraternal Order of Police, William Penn Lodge No. 19, recently filed a joinder in support.

The next Municipal Financial Recovery Advisory Committee meeting is Tuesday at 1 p.m.