Delaware County Democrats pull a surprise move in the fight over a sewer authority sale

Delaware County on Monday moved to dissolve the county’s public wastewater authority and take over its responsibilities, escalating its efforts to block the $276.5 million sale of the sprawling public sewer system to Aqua Pennsylvania.

The county council introduced an ordinance to terminate the Delaware County Regional Water Authority, which it created in 1971, and to have the county assume responsibilities for its operations. The matter is set for a final vote on June 3.

The action to terminate DELCORA, which serves 165,000 customers in 42 towns in Delaware and Chester Counties, is the second time in a week that the council’s new Democratic majority has moved to stymie the sale to Aqua proposed last year by outgoing Republicans. The sale has not yet closed and is pending approval by Pennsylvania utility regulators.

“This week, we are taking another step to reverse an overtly political and backhanded deal orchestrated by the former Republican majority," Brian Zidek, council chairman, said in a statement. The council had said the sale was designed to prevent an important patronage stronghold from falling into Democratic hands when political control of the county changed.

The county said it has the power under the Pennsylvania Municipal Authorities Act to terminate the agency, whose headquarters are in Chester.

DELCORA decried the action, which it said it first learned about after the council posted a news release following a meeting that was held by teleconference because of the coronavirus pandemic.

“DELCORA has a legally binding agreement with Aqua Pennsylvania Wastewater and it intends to carry out the agreement,” the authority said in a statement. It said the county’s actions would harm ratepayers because the county, rather than the private company, would need to cover the cost of future capital costs, which the authority estimates at $1.2 billion.

Aqua Pennsylvania, a subsidiary of Bryn Mawr based Essential Utilities, said it has a sales agreement with DELCORA that Delaware County cannot break. “We intend to enforce the contract and proceed with the sale,” the company said in a statement.

The proposed ordinance requires DELCORA to “cooperate with the county in an orderly windup of its activities, and take all steps necessary to effectuate the transfer of all of its assets, funds and other property, including, as applicable, any regulatory permits, to the county, and the assumption of all of its liabilities by the county.”

The county last week filed suit challenging the creation of a trust that was set up to hold the proceeds from the sale to Aqua, which would amount to about $210 million after payment of expenses and retirement of DELCORA’s debt. The trust proceeds would be used to reduce expected rate increases the system plans to pay for upgrades that DELCORA says it needs to make to comply with federal clean-water regulations.

Aqua said the sale was not motivated by politics but by DELCORA’s need to either build new treatment capacity or commit itself to continuing to send its wastewater to the city of Philadelphia for treatment. DELCORA had complained that Philadelphia intended to impose onerous increases in fees for treatment services.

Aqua, which in its statement assumes the sale to the private utility will move forward, asked if the county is ready to assume DELCORA’s union contracts, employee pensions and $150 million in debt if it takes ownership prior to the sale to Aqua, and to file for regulatory clearance to provide services outside the county.

"We question if Delaware County has thoroughly considered all that is involved if it were to dissolve DELCORA and temporarily assume the obligations of a public utility,” the company said in its statement.

This article was updated to include a statement from Aqua Pennsylvania.