Bucks County nixes proposed $1.1 billion sewer sale to Aqua Pennsylvania amid public outcry

Bucks County on Tuesday called off a proposed $1.1 billion sale of the county’s sewer system to Aqua Pennsylvania after an upwelling of public opposition to the audacious proposal, which would have been the largest privatization ever of a U.S. public wastewater system.

All three Bucks County commissioners on Tuesday came out publicly to oppose the sale ahead of a planned rally by opponents on Wednesday at the Board of Commissioners’ meeting. The chairman of the Bucks County Water and Sewer Authority (BCWSA), an independent entity that has the power to sell the system, said he does not support moving forward with Aqua’s proposed offer.

>> UPDATE: Aqua Pennsylvania exits Bucks sewer talks after commissioners snub sale

The proposed sale would have generated a massive influx of funds to the county, which could have used the money to reduce debt and fund improvements without increasing property taxes. It would also have allowed BCWSA to rid itself of obligations to spend hundreds of millions of dollars to upgrade the aging sewer system. But opponents said it was a back-door tax increase that would saddle wastewater customers with escalating sewer bills in perpetuity, while giving up control of a major public asset.

The sewer system serves about 100,000 households in 31 towns in Bucks, Montgomery, and Chester Counties.

“While I see much potential in adding an estimated billion dollars to the county treasury, I cannot say that I feel comfortable with this transaction,” Bob Harvie, chairman of the Board of Commissioners, said in a statement. Harvie said he asked John Cordisco, the chairman of the water and sewer authority, to “stop any negotiations and not sell any of the BCWSA operations.”

Michael Sullivan, executive director of the Warwick Township Water and Sewer Authority and regional director of the Pennsylvania Municipal Authorities Association, called on the BCWSA board to “do the right thing” and halt the sale. “These critical services should remain in the public trust,” he said.

The Bucks decision is a major setback for private water utilities, which have aggressively sought to expand in Pennsylvania since the state in 2016 passed new rules encouraging private ownership of public water and sewer systems. The law, which was originally envisioned as a mechanism to allow towns to sell their troubled systems to private owners, has turned into a bonanza of cash for some towns. But it often comes at the expense of sewer customers.

Under Aqua’s proposal to Bucks, current sewer rates would be frozen for a year but would eventually be increased to match Aqua’s rates, which are now about $88 compared with BCWSA’s average monthly rate of $48. The precise impact was unclear because the advocates for privatization suggested that some sale proceeds could be used to soften the rate impact, at least temporarily.

Diane Ellis-Marseglia, the vice chair of the county commissioners, said that customers expressed a fear of “ballooning rates” comparable to what has happened in other towns that sold their systems to private owners.

“While the financial aspect of this deal is a reasonable alternative given the expensive infrastructure work ahead, what we heard from the public was clear, nonpartisan, and near-universal: Do not sell off the publicly run BCWSA sewer system to a private entity,” Ellis-Marseglia, said in a statement. She and Harvie, the chairman, are Democrats.

Gene DiGirolamo, the board’s Republican commissioner, agreed it was time to call an end to the sale process.

“Given the remaining uncertainties around the potential sale, and the sheer amount of public opposition to it, I believe that it is in the best interests of the people of Bucks County that the authority end its negotiations with Aqua, Inc.,” DiGirolamo said in a statement.

The proposed sale attracted immediate protests from BCWSA’s unions; several neighboring water authorities; a national group opposed to utility privatizations, Food and Water Watch; and a local group that opposed Norristown’s proposed sewer system sale, Neighbors Opposing Privatization Efforts.

But the sentiment shifted strongly against the sale after the Bucks County Association of Township Officials organized a flood of resolutions approved by local governing boards, some of which had sold their sewer systems to BCWSA under the assumption that they would remain in public ownership.

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Skeptical that the county is actually walking away from the table, privatization opponents said they planned to continue with Wednesday’s protest until BCWSA formally voted to stop the sale. “We don’t have them voting ‘no’ yet, so we are going to continue and stay on them,” said Tom Tosti, a director of the AFSCME local that represents the authority’s supervisors

On Tuesday, the three commissioners praised BCWSA, which they said had a fiduciary duty to explore the sale after Aqua approached the authority in late 2020 with an initial offer of about $600 million for both the water and the sewer systems. After the county appraised the property and asked for quotes on just the sewer system, Aqua came back with an offer of $1.1 billion.

BCWSA said it also considered and rejected a similar offer for the system from Pennsylvania American, Aqua’s principal rival.

Aqua Pennsylvania, a subsidiary of Essential Utilities Inc. in Bryn Mawr, did not immediately provide a statement about the apparent end of its quest for the Bucks system.

The sale process was shrouded in secrecy for months — many local officials suspect it would not have proceeded without the silent approval of the county commissioners — and came to light only in April. Authorities are not required to conduct an asset sale in public.

State Sen. Steve Santarsiero, who replaced BCWSA chairman Cordisco as head of the Bucks County Democratic Committee earlier this year, praised the commissioners for opposing the proposed sale.

“They understand that public assets — such as a sewer system — are best held by a public entity like the Bucks County Water and Sewer Authority,” Santarsiero said in a statement. “If the system were to be sold to a private entity, public control — and, critically, a great degree of accountability to the ratepayer — would be lost forever.”

The BCWSA board, an independent board whose members are appointed by the county commissioners, has the power to sell the authority’s assets without the consent of elected officials. But Harvie, the chairman of the Bucks County commission, warned that the commission has the power to change BCWSA’s charter to potentially impede a sale.

“We were never going to be in conflict with the commissioners’ position,” Cordisco, the BCWSA chairman, said in a statement. “As such, I have informed the BCWSA board members that I do not support moving forward with the proposed offer, and we will determine the next appropriate steps.”

The Bucks agreement to nix the sale seems to avert a potential conflict that has befallen Delaware County, where the regional sewer authority agreed to sell itself to Aqua Pennsylvania in 2019 just before voters ousted the Republicans from county control.

The Delco Democrats, upon entering office in 2020, voted to disband the Delaware County Regional Water Quality Control Authority, known as DELCORA, and to block the sale.

The Commonwealth Court ruled in March that Delaware County’s takeover of DELCORA was permissible. But the 2019 sale agreement with Aqua remained a valid contract, allowing the sale to proceed. The transaction remains stuck in court over other litigation.