Did the Pa. legislature undermine Chester’s influence over its water authority?

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Chester’s state-appointed receiver Michael Doweary accused state lawmakers of quietly stripping the city of its exclusive power to appoint Chester Water Authority board members.

That loss of oversight also translated to the bankrupt city not receiving any compensation for its loss of influence. Vijay Kapoor, chief of staff to the receiver, described the action as yet “another example of Chester residents being taken advantage of.”

Chester formed the CWA in 1939. The water authority provides drinking water to more than 200,000 people across 37 municipalities in Chester and Delaware counties. Chester city officials appointed all of the authority’s board members — until 2012.

Then-state Sen. Dominic Pileggi introduced Senate Bill 375 to amend the state’s Municipal Authorities Act. According to the receiver’s office, the proposed bill prohibited authorities from spending money on things not related to their mission.

But 18 days prior to the state budget deadline, a provision was added that gave the counties board appointment power. Both chambers of the legislature passed the bill within a week. For Chester, it meant Delco and Chester County each were empowered to appoint three board members, ending the city’s sole control over the authority.

Pileggi, who is now a Delaware County Court of Common Pleas judge, did not respond to a request for comment.

The receiver’s office asserted that the statute that was added to the bill contained “hyper-specific” language designed to just target the CWA.

Kapoor said that explicitly naming CWA would be considered “special legislation” — and subsequently be unconstitutional.

“I’m a lawyer by trade. I am used to reading legislation, reading case law and otherwise, but — never seen something quite like this before,” Kapoor said.

The city is not waiving its right to challenge the legislation.

Speculating the reason as to why the legislation was amended in the 11th hour, Kapoor said the city of Chester shifting from Republican to Democrat in the early 2010s presented a threat to the GOP establishment that ruled for decades. He called it a “political power move.”

“I don’t want to pull any punches. I don’t want to bury the lede, but to any of my friends in the legislature who are watching this — I think you know what happened here,” Kapoor said at Tuesday afternoon’s Municipal Financial Recovery Advisory Committee meeting. “The change in the MAA in 2012 resulted in the CWA board appointments remaining under the control of a political party that Chester residents had just ousted after decades of control.”

CWA responds to receiver’s allegations over legislation

A key part of the receiver’s plan in pulling the city out of bankruptcy is by monetizing the water authority while keeping it in public hands. CWA board chair Noël Brandon has vowed to fight the proposal. Ahead of an expected legal battle, the receiver’s office is questioning the very conception of the water authority’s leadership structure.

“Knowing what you know now about how this legislation was passed, do you think it’s fair to the residents of Chester that unlike every other Pennsylvania municipality that incorporated an authority, their ability to appoint a majority of board members to an authority that their city incorporated was taken away from them without any compensation?” Kapoor said.

Brandon told WHYY News in a statement that the receiver is trying to pay off the city’s debt by leaning on the CWA ratepayers and the city’s residents.

“The Receiver’s statements at [Tuesday’s] MFRAC meeting misrepresent the legal status of the Chester Water Authority,” Brandon said. “Their presentation consisted of bluster, theatrics and disinformation aimed at fooling the audience. The only one who is trying to ‘steal’ anything is the DCED appointed Receiver.”

He said CWA’s independence has been on record for decades.

“The Receiver’s new characterization of CWA’s status ignores this long-standing legal and operational autonomy,” Brandon said in the statement. “It’s important to recognize that despite Chester’s financial challenges, CWA remains a separate municipal authority serving residents and businesses in multiple communities and is not a city-owned asset available for liquidation or sale in part or in whole.”

The city’s official stance is that this legislation does not prevent them from dissolving the authority or its assets. The next virtual MFRAC meeting is Oct. 8 at 1 p.m.