Concern, Negative Reactions To Proposed Aqua Purchase Of Sewer System

Local officials raised concern and had a negative reaction to Aqua Pennsylvania’s proposed $1.1 billion purchase of the Bucks County Water and Sewer Authority’s sanitary sewer system that serves 75,000 customers.

The deal is seriously being explored by the Bucks County Water and Sewer Authority Board of Directors and follows months of rumors and reporting on offers.

Based on Aqua Pennsylvania’s track record of raising rates and the fact their rates already start higher than the Bucks County Water and Sewer Authority’s rates, there is widespread concern the utility with dramatically increase rates within years of a sale closing. The proposal has a one-year freeze on rates and would leave no employees without work.

READ MORE: Bucks County Water & Sewer Authority Exploring Plan To Sell Part Of System For $1.1 Billion

The authority board voted 3-1 Wednesday to begin a year of exclusive review of Aqua Pennsylvania’s offer and solicit public feedback.

For-profit utility Pennsylvania American Water submitted a roughly $1 billion offer for the Bucks County Water and Sewer Authority, but it is not being explored at this time, officials said.

Maggie Rash, the president of the Bucks County Association of Township Officials (BCATO) and a supervisor in Buckingham Township, said the organization believes a sale will hurt residents.

“The sale of Bucks County Water and Sewer to Aqua America or another investor owned utility will have long term negative financial impacts on the residents and businesses served by BCWSA,” she said. “Privatization ultimately results in higher rates for services. In 2018, Pennsylvania Municipal Authorities Association’s analysis showed that for an average home, private utility costs were 85 percent higher than public entities in Pennsylvania and a recent Philadelphia Inquirer article revealed rates to be 58 percent higher. It’s already being reported that per this agreement, rates are predicted to nearly double after one year. In the end, the sale will result in higher rates for the former BCWSA sewer customers,” she said.

Warrington Township Board of Supervisors Chairman Fred Gaines said the municipality will explore whether to buy back their sewer system from the Bucks County Water and Sewer Authority.

The township in Central Bucks County sold their system to Bucks County Water and Sewer Authority for just over $16.4 million in 2019, but there was a right of first refusal clause if the authority was ever sold. The township sold their system to the public authority over much higher offers from private companies because they felt public control would be better for ratepayers.

Barry Luber, the Warrington’s township manager, expressed disappointment he didn’t receive any communication from the Bucks County Water and Sewer Authority about the offer ahead of Wednesday’s move to further explore it. He rushed up to the authority’s headquarters with minutes notice to attend the directors’ meeting.

Luber said several Bucks County township managers recently met to discuss rumors of a sale proposal and to oppose it.

Bristol Borough officials agreed to sell their sewer system and plant to the Bucks County Water and Sewer Authority for $50 million earlier this year. The deal is expected to close soon.

Bristol Borough Council President Ralph DiGuiseppe said officials were aware the Bucks County Water and Sewer Authority had received offers, but was told months ago there didn’t seem to be confidence a private firm buying the authority would happen. The council president noted he didn’t feel mislead when he heard of the Aqua Pennsylvania proposal.

“I’m hoping that deal doesn’t happen with Aqua,” DiGuiseppe said. “Absolutely not. [Bucks County Water and Sewer Authority] isn’t in it for profit and Aqua is.”

DiGuiseppe stated he believes people making their voices heard will have an impact on whether the authority is sold or not.

DiGuiseppe hopes if the deal goes through there is a years-long rate freeze on top of the three-year freeze that is part of their sale agreement.

Middletown Township’s manager and the chairperson of the supervisors didn’t respond to a request for comment. The township sold their system, which serves much of the municipality’s residents who don’t have Levittown addresses, to the Bucks County Water and Sewer Authority for $40 million in 2002.

On Wednesday evening, Langhorne Borough Council approved a resolution urging carefulness by the authority as they explore a sale of the sewer system and asked for a full analysis.

The Bucks County Commissioners were aware through news reports previously that offers for the system had been made, but they were not aware the directors for the authority were going to move forward with seriously considering the offer until contacted by a LevittownNow.com reporter Wednesday morning, a spokesperson said.

“Our original statement from April remains true: The Bucks County Board of Commissioners would not receive a request to approve an agreement of this kind unless first independently approved by the BCWSA,” Bucks County Director of Policy and Communications Eric Nagy said.

If the sale goes through, the county stands to get the $1 billion in profit after the Bucks County Water and Sewer Authority’s roughly $100 million in debt is paid down.

Several unions that represent much of the Bucks County Water and Sewer Authority’s 114 employees were at Wednesday’s meeting and had members speak in opposition to Aqua Pennsylvania purchasing the sewer system.

“It’s a sad day for all of us who will have to live with this mistake,” said Tom Tosti, a former Middletown Township supervisor and regional director of union American Federation of State and Municipal Employees (AFSCME), which represents some authority workers.

Len Hughes, a Bucks County Water and Sewer Authority employee and labor union member, said he was against the sale, raising questions about how transparent the authority has been.

Hughes said he was “confused” as to why a nearly-debt-free and well-run authority like the Bucks County Water and Sewer Authority would sell to a company like Aqua Pennsylvania.

David McMahon, who helped start Neighbors Opposing Privatization Efforts (NOPE) that opposed Aqua’s effort to buy Norristown, Montgomery County’s system, said Aqua Pennsylvania, which is owned by publicly-traded Essential Utilities, was not going to stop at the sewer system and would like to get its hands on the water system.

“We’re turning water into a commodity owned by profit-seeking companies,” he said.

“Yet again we see Aqua Pennsylvania continue its drive to be the regional water monopoly in our area and yet again we have a set of local officials who do not appear to understand the bigger and profound negative impacts from commodifying our water and wastewater systems,” said McMahon. “And so once again it is left to the ratepayers themselves to do the due diligence and show how these privatization efforts are simply not in the public interest.”

McMahon said the Bucks County Water and Sewer Authority board should let the Bucks County Commissioners have feedback or put the issue up for a referendum.

Kofi Osei, a community organizer with NOPE, said in a statement that people should be against any sale of a public authority to a private company.

“Investor-owned utilities consistently have double or triple rates of nearby systems owned and operated by municipal authorities. Section 27 of the Pennsylvania Constitution states that ‘ Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come’. Investors have no right to our constitutionally protected resources and municipal authorities, especially huge multi-county ones like BCWSA, have no right to explore giving away our property,” Osei said.

Ginny Marcille-Kerslake, the eastern Pennsylvania organizer with advocacy group Food and Water Watch, said the plan and way it has been handled is a “recipe for disaster for the customers.”

“The process was ripe for manipulation by private interests at the public expense. The board has failed the public, who should have been informed and consulted before the Board started down the road to privatization. This major transaction would stick generations of Bucks County residents with higher utility bills. The board must reject the deal,” she said.

“This is disappointing but not surprising,” said Margo Woodacre with Keep Water Affordable. “We spoke at one of the suddenly-announced Buck’s County Sewer and Water Authority’s board meetings to warn the board of our experience with Aqua’s tactics of raising fees on the ratepayer. We were surprised to see Aqua’s leadership quietly present at that meeting. Although the board promised that this would be an ‘open process,’ this decision seems to have been made behind closed doors with no public input.”

Dennis Cowley, the lone board member who voted against the plan for the authority to exclusively explore Aqua Pennsylvania’s offer to buy the largest operation run by the authority, said he was against the purchase and thinks the authority should remain owned by the ratepayers.

Cowley was chairperson of the authority’s board when the first Aqua offer came across in 2020. He said he and the majority of the board didn’t have interest in entertaining it at that time.

“I just don’t think it’s right,” Cowley said of the deal.

Recently, the heads of the North Penn and North Wales water authorities in Montgomery County joined together with the current director of the Pennsylvania Municipal Authorities Association (PMAA) to pen a letter to Bucks County municipal leaders urging them not to support any privatization.

Chris Franklin, chairman and CEO of Aqua Pennsylvania owner Essential Utilities, told LevittownNow.com he appreciated the authority is seriously considering the $1.1 billion offer to purchase the sewer system, noting he believes it is a good deal.

“We look forward to discussing the merits of the transaction and the benefits to BCWSA customers and employees and to all Bucks County residents in the coming weeks,” he said.

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