The Struggle for Chester’s Water System
Chester, Pennsylvania, a city with a history dating back to 1682, is currently facing a significant financial crisis. The city filed for Chapter 9 bankruptcy in 2022 and has since been working to regain financial stability. At the heart of this struggle is the city’s water system, which serves over 200,000 homes. This utility has become a focal point of contention between residents, retirees, and state officials.
Retired city workers, many of whom are firefighters and police officers, are pushing for the sale of the water utility to the highest bidder. They argue that this would help cover the city’s pension debts, which amount to over $350 million. However, state officials warn that privatization could lead to higher utility bills for Chester’s residents, many of whom already live below the federal poverty line. Vijay Kapoor, Chester’s receiver, expressed concerns about the ability of residents to handle further rate increases, noting that they are among the highest taxed in Pennsylvania.
The retirees, who have been advocating for action, recently sued Kapoor and his predecessor, Michael Doweary, arguing that the city is missing out on potential revenue by not considering bids from private entities. The retiree committee claims that excluding deep-pocket nongovernmental entities from making stand-alone bids is unfair and could cost the city millions.
On the other hand, the state-appointed receiver is looking to sell the Chester Water Authority to another public entity. Retirees are questioning why avoiding potential rate hikes is more important than addressing their financial hardships and the loss of valuable funds for the city’s revival. Joseph Morse, a retired firefighter, emphasized the need for a more open and rational sale process that includes all potential bids from both public and private entities.
Chester, located just outside Philadelphia, is part of Delaware County, which has been predominantly Democratic since the 1990s. However, the area was once strongly Republican. The Chester Water Authority is also involved in an ongoing ownership dispute. The city claims ownership of the utility, but it has been governed by a nine-member board since 2012. In 2021, a $410 million takeover bid from Aqua Pennsylvania was approved by the city council, but it was blocked by the state-appointed receiver before Chester entered bankruptcy.
The ownership dispute is now being reviewed by the Pennsylvania Supreme Court. Chester Mayor Stefan Roots supports keeping the utility under public ownership, stating that it would ensure rates are not used to benefit stockholders or high executive salaries. Since 2016, more than 20 public water systems in Pennsylvania have been sold to private companies following a new law that opened them up to privatization.
Kapoor stated that while the city values the services provided by retired workers, their retirement packages are “simply unaffordable.” He emphasized the goal of ensuring sustainable, vital, and necessary services for residents, highlighting the community’s long-standing struggles.
In 2013, when Detroit faced bankruptcy, the city considered privatizing its water system but ultimately decided against it. Instead, Detroit leased suburban operations to a regional authority to prevent rate increases for residents. This decision reflects the complex balance between financial sustainability and the needs of the community.