Proposed $1.1 billion sale of Bucks sewer system to Aqua Pa. draws a crowd at first ‘open house’

A campaign by Bucks County officials to reshape the dialogue about the proposed $1.1 billion sale of the county sewer system went public on Tuesday with a pair of “open house” events to discuss the move toward privatization.

There’s been no final decision on the proposed sale to Bryn Mawr-based Aqua Pennsylvania, according to Bucks County Water and Sewer Authority (BCWSA) officials. But the authority’s July 13 vote to give exclusive negotiation rights to Aqua has already drawn opposition from some municipal leaders and unionized workers at BCWSA.

» READ MORE: Bucks County moves ahead on $1.1 billion sewer system offer from Aqua Pa.

The process has been transparent, said John Cordisco, the BCWSA board chair.

“There have been no backroom deals or have been no private meetings, no member of the water and sewer authority [board] has ever met privately with members of Aqua or their executive team,” Cordisco said in an interview during the informational event Tuesday morning at Bucks County Community College-Perkasie.

“There’s a lot of misinformation that has been put forward, and our purpose here is to clarify that,” Cordisco later told the audience of about 50 who attended the Perkasie event, along with about two dozen representatives from Aqua Pennsylvania and BCWSA. A second open house was conducted Tuesday evening at the community college’s Newtown campus.

Most of the members of the public who attended the Perkasie event appeared to be opposed to a sale.

“I’m concerned about a corporate takeover of a public utility,” said Kara Raymond of Doylestown, who held a “Stop the Sewer Sale” pamphlet during an hour-long question-and answer-session. “People are here to ask questions and let their feelings be known. People aren’t here for a corporate presentation.”

The proposed deal would be the latest privatization undertaken in Pennsylvania since the state in 2016 passed new rules encouraging private ownership of public water and sewer systems. That law allows buyers to recover from ratepayers the appraised “fair market value” of a utility, which is typically much higher than the book value of the assets.

BCWSA officials largely cast the potential sale in a positive light, saying the county would net nearly a $1 billion from the sale, allowing it to reduce debt, increase services and forego property tax increases for years to come.

But customers who attended Tuesday’s event and criticized the sale said ratepayers would pay higher rates to allow Aqua to recover the purchase cost. BCWSA’s current residential sewer rate of about $48 a month compares to Aqua’s rate of $88.

“I see no benefit to the customers of the authority,” said Randy Scott, a retiree from Warrington. “There isn’t any benefit here. There is nothing they have proposed that they can’t do themselves without selling the system. And we lose local control.”

The Bucks County authority argues that its own projected rates would increase at a faster rate than Aqua’s in the next decade because it faces about $250 million in upgrades and repairs. The responsibility for those repairs, and compliance with a 2021 court settlement involving with environmental regulators, would shift to a buyer

BCWSA suggests the rate impact would be softened for about ten years if some of the sale proceeds were used to create a “rate stabilization” fund. The nature and mechanics of such a fund have not been spelled out, and are not part of Aqua’s proposed sale agreement.

Some town officials were skeptical about such a fund. Future county commissions would not be obligated to it, said Barry F. Luber, the township manager of Warrington.

“You can’t obligate a future elected official, so there’s no guarantee that rate stabilization would happen,” said Luber, whose township sold its municipal system to BCWSA three years ago for $16.4 million after rejecting a higher offer from Aqua. He said the township is exploring ways to retake ownership of its system if BCWSA agrees to sell.

The Bucks County Association of Township Officials, citing a report that found private water companies charge an average of 85% more than public entities, also expressed “grave concerns” about the sale in a July 15 letter to the Bucks County Commission, the county’s governing body.

“We respectfully request the authority continue operating as an independent, non-profit agency, as intended when it was created in 1962 by the Bucks County Commissioners,” the local elected officials said in the letter to the county.

Aqua and BCWSA met privately on Monday with municipal officials to explain the deal to local towns. The meeting was cordial, said township and Aqua officials.

Christopher Franklin, the chief executive and chairman of Essential Utilities Inc., Aqua’s parent company, said his company suggested setting up Tuesday’s event as an open house where the public can mingle with officials rather than engaging in a formal presentation from a stage in an auditorium.

“If you create rows of chairs, and you create an us-and-them situation, that’s how a meeting typically goes,” he said. “We don’t want that. We want to be part of the community. We have been part of this community for over 100 years.” Aqua was founded in 1886 in Delaware County.

Food and Water Watch, a national advocacy group opposed to utility privatizations, and a local group, Neighbors Opposing Privatization Efforts, set up informational tables in a hallway outside the event to encourage residents opposed to the sale to organize their neighbors.

Cordisco said there is no timeline set on when the board will make a final decision on Aqua’s offer.