Files Preliminary Injunction to Stop Delco Council Dissolution Actions; Urges Postponing Vote
CHESTER, PA (June 1, 2020) – The Delaware County Regional Water Quality Control Authority (DELCORA) today filed a preliminary injunction in Delaware County Court of Common Pleas to stop the implementation of Delaware County Council’s ordinance to dissolve the authority. DELCORA is filing the petition on behalf of its 165,000 ratepayers who will be irreparably harmed by Delco Council and to stop this illegal money grab. As the petition states, “…an ill-advised attempt to fill the County’s coffers at the direct expense of DELCORA’s customers who are also by and large constituents of the County.”
In referencing the impending merger with Aqua Pennsylvania Wastewater, the filing states, “After paying off DELCORA’s debt obligations and transaction-related expenses, the proceeds of that sale will be used entirely for the benefit of preventing significant rate increases for DELCORA’s customers for a considerable period of time. Council’s attempt to terminate DELCORA via the Ordinance is simply part of its efforts to keep that money for itself.”
The petition further states, “..the Ordinance is callously reckless and creates a logistical nightmare that would similarly imperil the wastewater conveyance services upon which the residents of Delaware County (and Chester County), rely and cause environmental harm.”
“With its proposed actions, the Delaware County Council is stealing our ratepayers’ money and raising their wastewater rates by approximately 10% per year for the next several years,” said Robert J. Willert, Executive Director of DELCORA. “DELCORA is taking this action to protect ratepayers and keep Council out of their pockets. DELCORA is an independent municipal authority which has never received a dime from County Council. Any money at DELCORA belongs to ratepayers not County Council. We call on Council to postpone the June 3 vote until full and adequate public hearings are held to review the County’s plan for operating this complicated system and to determine what is in the best interest of DELCORA’s ratepayers.”
The legal action cites numerous Federal and State laws that will be violated by Council’s actions. They include legal obligations related to a Federal consent decree, the need for a PUC Certificate of Public Convenience to serve non-Delaware County residents and violations of the Municipal Authorities Act which require payment of all outstanding bonds and debts among many other violations.
“Delaware County Council proposed transparency. Yet, it took these actions with no real public notice or input, no prior notification to DELCORA and in a Zoom meeting during a pandemic,” said Willert. “Further, the Council has not released any plans for how to manage this large and highly complex authority which protects the public from waterborne diseases and how it will perform the hundreds of existing and essential contracts. The public deserves to know Council’s plan and to provide comment on it.”
“Conversely, our plan to merge with Aqua Pennsylvania Wastewater was vetted in several public meetings, several public meetings with Delaware County Council and numerous meetings with our municipal authority customers last summer,” Willert continued. “Our plan uses the proceeds from the sale to create an approximately $200 million Customer Trust Fund that will keep rate increases at 3% annually for several years, while also allowing us to pay the mandated and necessary $1.2 billion in capital improvements and maintenance costs.”
Background on Merger with Aqua Pennsylvania Wastewater
On September 17, 2019 the DELCORA board of directors voted unanimously to approve the execution of an asset purchase agreement (APA) with Aqua Pennsylvania Wastewater, Inc. and proceed with the proposed merger, pending Pennsylvania Public Utility Commission approval. The purchase price is $276.5 million which will be used to pay off outstanding debt and reinvested in a rate stabilization plan. The agreement comes after an exhaustive, consultative process which involved over 20 meetings with employees, municipal officials and the Delaware County Council as well as two public meetings with customers.
The merger is grounded on a customer trust fund that would be used to offset customer bill increases. The rate stabilization plan, announced at a public meeting on September 11, is expected to save an average retail customer $1,400 and will help to offset almost $1.2 billion in new and ongoing capital costs to meet soon to be enforced U.S. Environmental Protection Agency Long-Term Control Plan (LTCP) regulations as well as DELCORA’s ongoing capital program.
DELCORA faces significant capital costs to comply with the Environmental Protection Agency’s Combined Sewer Long-Term Control Plan in Philadelphia and in Chester. A recent consent decree mandates that municipal wastewater authorities take steps to manage combined sewer systems including building new or replacing existing infrastructure. Because these mandates are unfunded, municipal authorities typically must increase rates to pay for the new capital costs.
The merger is now being reviewed by the Pennsylvania Utilities Commission.
The Delaware County Water Quality Control Authority (DELCORA) is a municipal authority with an almost 50-year history of successfully treating wastewater for approximately 165,000 customers in 42 municipalities in Delaware and Chester counties. DELCORA is involved in the treatment of approximately 100 million gallons of wastewater every day. It is an independent municipal authority overseen by a board of directors.