Pa. Supreme Court rules Chester does not have unilateral power to seize Chester Water Authority

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After a long-standing back and forth, the Supreme Court of Pennsylvania ruled that the city of Chester does not have the “unilateral authority” to seize the assets of the Chester Water Authority, or CWA.

Chester’s state-appointed receiver sought to take back the assets against the authority’s will and monetize them to rescue the bankrupt city’s finances.

Wednesday’s decision is a major setback for the receiver’s efforts — and a win for the Chester Water Authority.

“The decision draws a clear line between public ownership and privatization,” CWA Board Chair Brandon Noel said in a statement. “The Court sided with everyday residents who drink CWA water and affirmed that the authority belongs to its customers—not to a receiver, politicians, or private interests.”

The Chester Water Authority is one of the region’s largest public water systems, serving about 200,000 people in more than 30 municipalities across Chester and Delaware counties. The city of Chester incorporated the water authority in 1939. Receiver Vijay Kapoor said in a statement that he was “disappointed” in the decision.

“The City remains on a path to greater financial stability and improved operations,” Kapoor said. “However, we recognize that this ruling makes it more difficult for the City to exit bankruptcy. That said, we will continue to relentlessly work on behalf of all involved to reach a successful outcome.”

Chester City Council once appointed all of the authority’s board members. In 2012, the state Legislature passed a bill with a last-minute provision that granted counties the power to appoint board members.

From then on, Delaware and Chester counties were each empowered to appoint three board members, ending the city’s sole control over the authority. The receiver’s office has alleged that the bill was “unconstitutional special language” — a targeted effort to undermine the city’s influence. This matter was not before the court.

However, the state Supreme Court anchored its ruling in the notion that the city of Chester, Chester County and Delaware County all share governance over the Chester Water Authority.

Kapoor said his office continues to believe that the legislation is “unconstitutional.”

In recent years, the Chester Water Authority has drawn the attention of Aqua Pennsylvania. In 2017, the private water company made an unsolicited $320 million offer to purchase the Chester Water Authority. The board unanimously rejected it.

In 2019, Aqua Pennsylvania boosted the proposal, lobbing a $410 million offer to Chester City Council for the water authority’s assets — what some saw as a golden ticket out of a fiscal emergency. Since then, the matter of who controls the Chester Water Authority has been tied up in the courts.

When the receiver’s office announced a plan in August 2024 to monetize the city’s water assets, then-receiver Michael Doweary stated that he wanted them to remain publicly owned.

However, this prompted a separate legal skirmish with city retirees.