Pennsylvania Supreme Court reviews key issue in Chester’s bankruptcy regarding ownership of water resources.

In a proceeding that may have significant implications for the City of Chester, the Pennsylvania Supreme Court recently heard pivotal arguments regarding the ownership and potential sale of the Chester Water Authority. This case emerges amidst the city’s ongoing bankruptcy, with estimates placing the value of the water authority at around 0 million.

Counsel for Chester, Matthew White, argued that state law unequivocally designates the city as the controlling entity over the water authority’s assets. Conversely, attorney Kevin Kent, representing the water authority, contended that the authority serves customers across multiple jurisdictions, as only a fraction of its clientele resides in Chester. Kent emphasized that the water authority should not be viewed solely as a city asset.

The current debate is rooted in a ruling issued by the Commonwealth Court in 2021, which concluded that Chester held exclusive ownership of the water authority, granting it the authority to consider acquisition offers. This ruling gained particular attention when Aqua Pennsylvania proposed a 0 million acquisition of the authority, an offer that surpasses the annual budget of Chester by nearly six times.

After reviewing the perspectives presented by the attorneys, including those from both Delaware and Chester Counties, as well as Aqua, the state Supreme Court has indicated that it will deliberate on the case before rendering a decision.

The outcome of this lawsuit carries weighty consequences for Chester, a city that has been in financial distress for three decades and has been under bankruptcy protection since November 2022. A potential sale of the water authority could stave off severe cuts to essential services and retiree benefits, which are critical to the community’s well-being.

State-appointed receiver Michael Doweary has voiced his opposition to the sale to Aqua, proposing instead the establishment of a regional water organization by consolidating the Chester Water Authority with two other water treatment entities to ensure public ownership of these assets.

The legal discussions have also touched upon legislative actions from 2012 that expanded the water authority’s board to include members from surrounding municipalities, a move that Chester’s legal representatives argue was achieved without proper debate. Kent argued that the board’s restructuring was a sensible measure that afforded representation to the various stakeholders involved.

The future handling of Chester’s water assets remains a critical focus for city officials, especially as financial recovery efforts continue. The court’s forthcoming decision on this matter is awaited with great anticipation, as it represents a fundamental challenge faced by one of the nation’s few municipalities currently navigating bankruptcy. The implications of the ruling could have lasting impacts on Chester’s fiscal stability and governance structure in the years to come.