Public partnership preferred over privatization for Chester water customers, according to recent analysis.

In the United States, the ethos of free enterprise has long been a cornerstone of its economic identity. President Calvin Coolidge famously articulated this belief, stating that business pursuits are paramount to American life. However, this notion of prosperity extends beyond individual entrepreneurs to the essential public services that underpin society, including education, public safety, and utilities such as water.

Recently, Pennsylvania has seen a troubling trend as private entities increasingly take over local water utilities, raising questions about governance and public reliance on these critical services. Residents have reported significant hikes in their water rates, with some municipalities experiencing increases of two to three times their previous charges following the privatization of their water systems. These rate increases often leave residents grappling with financial burdens, straining their already tight budgets.

The City of Chester, which has been financially distressed for many years and declared bankruptcy in 2022, exemplifies this trend. To stabilize its finances, Chester has turned to the privatization of its water authority, viewing the sale of its water system as a feasible solution to restore financial order. The fate of the Chester Water Authority is currently under review by the Pennsylvania Supreme Court, where a critical question remains: who holds the authority to decide on the sale—the city itself or the board that manages the water utility?

The privatization movement in Pennsylvania gained momentum with the enactment of Act 12 in 2016, which altered how utilities are valued. Proponents argue that selling water systems provides a quick influx of revenue for municipalities, allowing them to avoid tax increases or costly infrastructure improvements. While this may seem appealing, the financial implications often lead to higher long-term costs for consumers. Shareholders expect significant returns, which frequently manifest as sharp increases in water rates for the residents who rely on these services.

Public sentiment is shifting, as evidenced by a recent vote in Pittsburgh where residents overwhelmingly opposed plans to sell their water authority. This backlash reflects a growing public awareness of the potential downsides of privatization, particularly regarding rising costs and accountability.

Rather than pursuing privatization, Chester may find it beneficial to explore collaborative solutions with neighboring municipalities through regional public partnerships. Such arrangements could provide the necessary financial support to the city without surrendering control over essential resources. With effective management and a focus on public interest, these partnerships can ensure water services remain accessible and affordable for all residents.

As Pennsylvania navigates these complex issues, it is imperative to consider reforms, including modifications to Act 12, that would impose restrictions on annual rate increases by private utilities. This would help balance the needs of municipal revenue generation with the financial realities faced by residents. The state must avoid a future where the essential resource of water is placed on the same level as luxury commodities, monopolized by private interests at the expense of public welfare. Media News Source.