The DELCORA headquarters in Chester.

MEDIA — Along party lines, Delaware County Council approved DELCORA’s establishment of a Rate Stabilization Trust stemming from their asset sale to Aqua Pennsylvania Wastewater. Republicans approved the measure and Democrats opposed it.

“Here, what satisfied me was the fact that the profit from the sale does not simply go into the pocket of the County of Delaware,” council Chairman John McBlain, a Republican, said.

Councilman Brian Zidek, a Democrat, was not as optimistic.

“Given that I obviously have no faith in the willingness of the DELCORA board to adhere to their duties as board members, I have no faith at all that this trust will be created or administered in the best interest of DELCORA or the citizens it serves,” he said.

On Sept. 17, the Delaware County Regional Water Quality Control Authority unanimously approved a $276.5 million merger with Aqua Pennsylvania Wastewater Inc. after a nine-week due diligence period. A large portion of the proceeds of the sale are expected to be directed to this trust, managed by Univest and expected to stabilize rates for ratepayers for 10 to 11 years.

The merger was not contingent on council's approval of the Rate Stabilization Trust.

"Our Number One goal throughout this process was to find a partner who would provide substantial public benefits such as stabilized rates for our ratepayers in the face of large, looming capital costs," DELCORA Executive Director Robert Willert said after the vote.

DELCORA officials said the sale proceeds would first be used to pay off outstanding debt and the remainder would be placed in a trust geared toward treasuries to stabilize customer rate increases. They said that through the sale, ratepayers are expected to save an average $1,400 through 2029.

They also noted that all DELCORA jobs would be protected and more professional opportunities would be made available.

Authority officials have said the need for the sale arose as it faced about $1.2 billion in new and continuing capital costs through 2028 to meet regulations set through the U.S. Environmental Protection Agency Long-Term Control Plan. 

McBlain said he had questions as well until he consulted with the lawyers hired by DELCORA.

"This has been an issue since the federal government and (the Pennsylvania Department of Environmental Protection) have changed their regulations and placed more requirements on DELCORA," he said. "My conclusion that I came to was, having worked for municipalities for many years, this has been an issue that has been approaching for many years."

Comparing it to the years-long situation with the Chester Water Authority and Aqua, he said the money wouldn't go "in the pocket of the city of Chester" - a matter which is under litigation.

"Instead," McBlain said of the DELCORA deal, "the money will be placed in a trust and will go toward lowering the rates to ameliorating any proposed increases in the future, at least over the next 10 or 11 years. That will protect the ratepayers in all of Delaware County and at the same time, enable our wastewater treatment facilities to be brought up to the standards that have now been implemented by the federal government or the state."

Zidek had a different opinion.

"I think this entire transaction, the sale and the creation of the trust violates the Municipal Authority Act," he said. "I think the members of the DELCORA board who have voted in favor of this transaction and continue to work for its implementation have breached the fiduciary duty they owe to DELCORA and the citizens of Delaware County by extension ... I think it does a disservice to all of the citizens of Delaware County who are served by DELCORA."

In existence for almost 50 years, DELCORA has approximately 500,000 customers in 42 municipalities in Delaware and Chester counties and is involved in the treatment of 100 million gallons of wastewater daily.

Next, the DELCORA-Aqua Pennsylvania Wastewater merger will go before the Pennsylvania Public Utility Commission for approval.

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