The City of Chester can move beyond bankruptcy by generating annual revenue from its water, wastewater and stormwater assets, while keeping those assets in public hands.

That’s the crux of a Plan of Adjustment filed by Chester Receiver Michael T. Doweary filed Aug. 26 in U.S. Bankruptcy Court.

The plan would fulfill a critical requirement that Chester provide a means for restructuring its debt while maintaining services for residents as it emerges from bankruptcy.

“I am excited to propose an innovative approach that, if done properly, could not only help Chester address its financial situation, but also result in a publicly-owned regional entity that would preserve public sector jobs, minimize the impact on ratepayers and provide a regional solution to stormwater management,” said Chester Receiver Michael T. Doweary. “While more work needs to be done, this is the first step in how best to move forward for the residents of Chester.”

Currently, Chester is facing unsustainable retiree pension and healthcare costs with a tax base that cannot support basic city services.

 “In order to avoid extreme cuts in retiree benefit levels and services, Chester must generate substantial revenue by monetizing its most valuable assets,” stated a release from the Receiver’s office.

The Receiver’s plan calls for Chester taking proposals from third parties to acquire, manage, or operate the assets of the Chester Water Authority, the assets of the Chester Stormwater Authority, and the city’s reversionary sewer assets in DELCORA.

The plan requires that the utilities remain publicly-owned.

Special consideration would be given to public authorities or other public entities interested in a merger or other combination.

Applicants will be encouraged to provide proposals that:

• Minimize the impact on future rates and ratepayers, particularly those within Chester;
• Retain public sector jobs;
• Provide a regional approach to stormwater management with the ability to potentially manage the stormwater requirements of other communities who voluntarily agree to participate;
• Include a proposed governance structure that is fair to ratepayers served by the entity

Guaranteed annual payments from the acquisition or use of the assets would give Chester the revenue it needs to provide necessary services to residents.

“Monetizing water, stormwater and wastewater systems, while maintaining public oversight, has been accomplished elsewhere and provides a layer of protection for customers of the water system,” the release stated.

The Receiver’s plan received the support of Chester Mayor Stefan Roots.

“This plan is our best opportunity to let Chester be Chester and to ensure we have the revenue needed to meet our obligations and to improve and sustain the services that our residents need and deserve.,” he said. “The water and wastewater systems are the city’s most valuable assets, so it makes sense to utilize them for our residents.”

Other outstanding issues in the bankruptcy involving unions, retirees and other creditors will continue to be negotiated in mediation. Their resolution will be addressed in supplements to the Plan of Adjustment.

It’s been almost 30 years that the state of Pennsylvania has provided oversight of Chester’s finances.  

It’s been in receivership for four years, and in a state of bankruptcy for two years.

Find out more about this recent filing and about the work of Chester’s receiver Michael T. Doweary.