DV Journal

The Delaware County Council appointed two former Upper Darby officials to plum positions at its last meeting.

Vince Rongione, who was the township’s chief administrator, was appointed as county register of wills, and its former mayor, Barbarann Keffer, was appointed to the board of Delcora. Also appointed to Delcora’s board were former county solicitor William Martin and Kenneth Schuster, the City of Chester solicitor.

Former Upper Darby Council President Brian Burke said Rongione and Keffer’s appointments are “political patronage.”

“It’s a political patronage job,” said Burke, about Rongione’s appointment to the $47,000 a year opening for register of wills. The previous register, Rachel Ezzell Berry, was elected to the Common Pleas Court bench in November.

Keffer did not seek re-election as mayor in the wake of a DUI arrest.

“I thought the Democrats wanted to take over the county because of the Republicans’ did it (patronage),” said Jeff Jones, an Upper Darby resident and Republican who ran for county council. “But there was never patronage like this. It seems to me the Democrats are doing exactly what they accused the Republicans of doing.”

Rongione had “shown he was inept at his job,” said Jones. “Hopefully, he’s not inept as register of wills.”

Rongione said he stepped down for family reasons. However, his tenure at the Upper Darby helm was marked by controversy. In February 2022, the township treasurer told the township council, alleging that the balance of some bank accounts were lower than they should have been. At issue was $41 million in funding from the federal American Rescue Plan Act, or ARPA.

A bipartisan group of six council members tried to fire Rongione. Rongione, a lawyer, then sued Upper Darby.

In June 2022, an auditor found no problems with the township’s handling of ARPA funds, but a group on the council continued to press for more information, saying the auditor did not have access to all the township’s accounts. A second audit also found no money was missing. In the end, the money was not gone but comingled with other accounts, the treasurer said.

Burke, who switched parties and ran for mayor as a Republican, also accused Keffer of holding up funds for various projects by refusing to sign off on the council’s legislation.

“I’ve always been passionate about public service,” said Rongione. “And (being a register of wills) is a great way to showcase how the government can help people through important transitional moments in their lives. We also do marriage licenses, in addition to estate and will functions. So it’s really a great opportunity to help folks navigate these important transitional moments.”

As for his critics, Rongione said, “There’s always going to be partisan political nonsense.”

“I went through a thorough vetting process in order to obtain the position, and I’m tremendously grateful for the vote of confidence and I look forward to the opportunity to prove myself in a less contentious environment to anyone who might be skeptical.”

Rongione is a graduate of Villanova University and Villanova law school. He also holds a certificate in mediation.

Council Chair Monica Taylor, Ph., said they interviewed all the candidates separately, and she was very impressed with Rongione.

“I am very supportive of his application,” said Taylor. “He seemed to have the best answers and the managerial experience. I’m looking forward to having him serve as the register of wills, and hopefully, he’ll run for (the office) in 2025.”.

But Terry Tracy, chair of the Upper Darby Republican Committee, disagrees with that assessment.

“Vince Rongione’s appointment to county-wide office is a classic example of failing up,” said Tracy. “The only way it is possible that he was the most qualified candidate for this role is if he was literally the only candidate county council considered, and even that’s being overly generous. Given his unfortunate resume…every dime he is paid in this job should be considered by Delaware County taxpayers, to borrow a phrase coined by Delco Democrats, a ‘corruption tax.’”

Councilwoman Elaine Paul Schaefer said she would not support Schuster’s appointment because she backed another qualified person and was concerned about a conflict since he is the Chester solicitor.

“Whether it’s legal or perceived, it’s not clean,” said Schaefer, who noted that Martin had similar skills as an experienced attorney.

Adrienne Marofsky sent this response to a question regarding political patronage, “As with all hiring and appointments by the County, these appointments were made on the basis of appropriate experience and suitability for the position following careful consideration by Council.”

Lawyer Frank Catania, who used to represent Delcora, said about the new appointments, “Obviously, they’re people that Delaware County Council has a lot of confidence in.”

Delcora board members are compensated. However, a spokeswoman for Delcora did not respond when asked how much board members are paid.

State Sen. John Kane (D-Chester/Delaware) joined a telephone public hearing Thursday to share his views on the proposed $276.5 million deal for Aqua PA to buy DELCORA. He opposed the plan and, if Thursday’s hearing is any indication, he is far from alone.

“I’m here today to relay a message delivered to me loudly and clearly. The people in the 9th District as a whole do not support the private takeover of public utilities,” he said, noting that goes for Republicans, Democrats, and independents. “All agree public utilities belong in public hands.”

Kane said people believe Aqua will increase their sewer and water bills.

“This would be a slap in the face to the people of Delaware County,” said Kane.

During Thursday’s hearing, person after person urged Administrative Law Judge F. Joseph Brady to say no to the proposed sale of DELCORA (Delaware County Regional Water Control Authority). The proposal, which extends back to the previous GOP-controlled Delaware County Council and had been rejected by the current Democratic majority, has been at the center of political controversy from the beginning.

Citizens and ratepayers had their chance to speak, and they were nearly universally in opposition.

Swarthmore resident Christopher DeBruyn said he has studied the issue in depth.

“I’m protesting as a private citizen,” said DeBruyn. “The sale is “strongly against the long-term interests of DELCORA ratepayers.” But “massive rate increases are coming no matter who owns the system,” he said.

Ross Schmucki, also of Swarthmore, a former councilman who chaired the public works committee, said he had read the trust document. Newspaper articles about it were “misleading,” he said.

He noted that a trust Aqua had offered to set up would be based in Delaware and the $200 million that would be put into the trust would flow to Aqua itself, not to customers to defray rate hikes as promised.

“That $200 million is no substitute for full rate stabilization,” he said. “The trust by its terms says it will be non-responsive to anybody (according to the) memorandum of understanding.”

Cynthia Ziegler of Downingtown said she is already an Aqua customer, and her rates are much higher than promised.

“Whenever Aqua purchases a place, our rates go up,” she said. “I, too, am opposed to their purchase of DELCORA…This is so unfair and obscene. We’ve been paying these rate increases for years.”

“The sale does not promote the public good,” said Peter Mrozinski of Landenberg. The towns of New Garden, Willistown, and East Whiteland sold their public sewer systems to Aqua with the PUC’s approval even though an administrative law judge recommended against it, he said. New Garden saw an 80 percent increase in sewer rates. The PUC members ruled for the sale because they believe the state legislature favored consolidation, Mrozinski said. But DECORA is already a regional authority with 500,000 customers serving 46 municipalities.

“A monopoly is never in the public interest,” he said.

Vijay Kapoor, a representative of the City of Chester Receiver, tried to testify to tell Brady that Chester was not in bankruptcy, but Brady said that he was taking testimony from individual customers, not government entities. He suggested that Kapoor file a motion.

Stephani Perez, a Chester resident, said, “I am protesting. I am against Aqua.”

“It would be a great hardship to the residents of Chester. If the rates continue to go up, we won’t be able to afford water…Many residents will be pushed out of the city if they can’t afford the water.”

Kearni Warren, who ran as a Green Party candidate for Chester city council, was also opposed to the sale.

“Put people over profits,” she said. Aqua is also trying to buy the Chester Water Authority, she added. “I feel their actions are based on greed. A public bidding process wasn’t held.” She said that she had received a “deceptive” mailing from Aqua.

Radnor resident George Badey, a lawyer, also opposed the DELCORA sale.

He noted he is a DELCORA customer but through a municipal system. And any promised rate savings would not necessarily go to the residents but might be used by municipalities for other needs.

“I strongly oppose the sale,” said Badey. “It’s not fair to ratepayers.”

Judge Brady said he expects to give a recommendation to the PUC in late April or early May 2023.

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Two judges in separate courts issued rulings this week in cases involving DELCORA (Delaware County Regional Water Quality Control Authority).

The litigation involves an agreement with Aqua PA to buy DELCORA which had been approved by a previous county council but has been publicly rejected by the current Democrat-controlled county council. The new council went to court in May 2020 to block the sale by terminating DELCORA’s existence.

However, DVJournal learned Delaware County officials are talking with Aqua about settling the litigation.

Asked about whether the county was in settlement discussions with Aqua, County Councilwoman Christine Reuther was noncommittal.

“It’s possible we’ve had some conversations and these may continue,” said Reuther. “I will always take Chris Franklin’s call.” Franklin is the CEO of Essential Utilities, Aqua’s parent company.

Common Pleas Judge Barry C. Dozor held Delaware County does have the right to undo DELCORA but must go forward with a $276.5 million sale to Aqua PA or be in breach of contract. The Commonwealth Court ruled the Public Utilities Commission has authority over the matter, something that Dozor also stated in his decision. It also quashed a Delaware County’s petition asking for review.

William F. Martin, county solicitor, said, “The county has not yet decided whether to appeal the Common Pleas decision. In any event, no transfer of DELCORA’s assets can occur until the PUC has approved the transaction. And that approval is no closer to being received than it was in 2020.

“As to the Commonwealth Court order, it merely stated that now is not the proper procedural time to present the many issues the county has posed for review. The county will still have the opportunity to make its arguments before the PUC and if needed, the Commonwealth Court,” said Martin.

Dozor also ruled if it takes over DELCORA, the county would be bound by the terms of the asset purchase agreement and that settlement on the agreement must happen before the county dissolves DELCORA.

In a separate case that is still pending, the Chester City receiver also filed suit to be sure that the city garners its share from the sale or regains control of its infrastructure.

An Aqua spokeswoman said it has not publicly commented on the court’s decision.

Frank Catania, the lawyer for the Chester Water Authority, which is also an Aqua target, praised the Bucks County Board of Commissioners which recently rejected Aqua’s planned $1.1 billion purchase of the Bucks County Water and Sewer Authority. Catania also praised Chester County officials for their support of CWA and its ratepayers.

“The Bucks County commissioners made their decision in two months and made it publicly,” said Catania. “Delaware County is doing something different, having private conversations. I don’t understand what they’re trying to do here. Their stated strategy is to try and stop the purchase from going through. If there is something else going on they should state it publicly.”

Recently, outside counsel representing Delaware County filed a motion with the Supreme Court to stop Chester Water Authority’s “attempt to protect its natural resources,” said Catania. “They raised an issue that’s not even before the court.” Delaware County took this action without public discussion or notice in the minutes that Council had discussed it in executive session, he said.

As part of its bid, Aqua has offered to place the proceeds from the sale into a trust used to offset rate increases for DELCORA customers. However, residents of other Delaware Valley areas where the sewer or water utilities have been sold have seen rate increases. Residents in Cheltenham Township experienced sticker shock this year after Aqua received PUC approval to raise their sewer rates, with an average residential bill up 69 percent. Township officials sold the sewer system to Aqua in 2019.

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The sale of DELCORA remains snared in litigation. The latest salvo was by Chester City receiver Michael Doweary to make sure the city receives its share of compensation if the pending $276.5 million DELCORA sale to Aqua PA goes through.

The suit argues that a previous contract signed in 1973 says Chester must agree to a sale and the city should also be paid a portion of the proceeds. DELCORA (Delaware County Regional Water Quality Control Authority) is also required under that 48-years-old agreement to return the city’s sewer system to the city. A later agreement said DELCORA must pay the city 10 percent of any sale, the complaint said.

DELCORA serves 46 municipalities in Chester and Delaware Counties.

Doweary asks the court to impose a declaration of judgment and an injunction.

Doweary tried to intervene in the sale before, but the Public Utilities Commission (PUC) refused, telling Chester it was too late. The DELCORA sale to Aqua had been approved by Delaware County’s former Republican-controlled council. The Democrats now in control are fighting the deal and passed an ordinance to permit the county to take over the utility.

Vijay Kapoor, Doweary’s chief of staff, said the new complaint is to make sure that Chester is protected if a sale goes through or DELCORA stops operations.

“There are assets that used to belong to the city,” he said. “These would revert back to the city or the city would receive adequate compensation.” The suit will “preserve Chester’s rights.”

A spokeswoman for Aqua PA said, “Although the action was filed/dated Aug. 17, Aqua only recently received a copy and has not had the chance to thoroughly review it in order to make substantive comment. Aqua is not a named party in the action. We are aware of similar relief the receiver sought before the PUC but the PUC determined he was not permitted to participate in that process. We previously asked the receiver several times for a list of the supposed assets potentially subject to the old agreement, and the supposed valuation of those assets. To date, we have not received a response.”

Kapoor said the PUC ruled they were too late to file but did not rule on the merits of their claims.

“It’s like watching a medieval castle siege,” said Frank Catania, a lawyer for the Chester Water Authority. “If they just starve them out they will eventually yield and sell to Aqua. Harrisburg has a $4 billion surplus. Delaware County has $100 million. It’s disappointing that nobody can use some of that money to help the City of Chester.”

CWA is also a litigant because Doweary may sell that entity to Aqua for $410 million, which would help with the city’s pension obligations. However, that case is pending before the state Supreme Court.

CWA serves 49,000 customers in 33 towns in Delaware and Chester counties.

Samantha Newell, with Rudolph Clarke, the law firm representing DELCORA, did not reply to a request for comment Thursday. The politically-connected law firm has Democratic state Reps. Mike Zabel and Benjamin Sanchez and Democratic state Sen. Maria Collett and Steven Santarsiero as “of counsel” lawyers.

The Common Pleas court has scheduled a hearing on September 7th to hear arguments regarding the Order the Court will issue, in response to the Commonwealth Court’s decision on this matter.

Delaware County Solicitor William Martin could not be reached for comment.

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Delaware Valley residents are being confronted with Aqua Pennsylvania and Pennsylvania American Water driving a frenzy of acquisitions to take over municipal sewer and drinking water operations.  This is 100 percent money-driven – Big Money, Big Profits, all paid for by the utilities’ customers.

The Pennsylvania legislature and Public Utilities Commission (PUC) have combined to create this acquisition frenzy. In 2012 the legislature allowed Big Water companies to dump much of the cost of their acquisitions on existing customers who have no connection to the acquired systems. Then in 2016, the legislature gifted Big Water the ability to pay highly inflated prices for municipal systems.

Regulated utilities generate profits from a return on their investments.  As illogical as it sounds, Big Water is eager to pay the inflated acquisition prices because the more they pay, the greater their profits.

The PUC has to certify that these acquisitions provide a “public benefit.” They seem to have a simple definition of “public benefit”: Economy of Scale ‑ Good; Big Water ‑ Good;  Municipal system ‑ Bad.  “Economy of Scale” is so important that it can justify a doubling of the customer’s cost. Think about that – “economies” that double your cost is a “public benefit.” Does that make sense to you?  It does to the PUC. The PUC has yet to deny any of these acquisitions.

Buying municipal systems is a major strategic focus for Aqua and American. They have very deep pockets and are pouring hundreds of millions of dollars into the acquisition feed trough. Unfortunately, many municipal politicians are the hogs flocking to the trough to get what they see as “free” money.

Big Water uses a well-practiced sleight of hand to entice these politicians. They make the deal sound so sweet. They start with a huge candy jar full of money emphasizing no tax increase – a hot button for any politician. Then there is scaremongering about the costs of repairing a decrepit system and misleading claims that Big Water can fix it cheaper. Finally, there may be promises about mitigation of future rate increases. Promises that so far have always been broken. The reality is that the customer is on the hook for the entire sale price.

The elephant in the room that Big Water tries to cover up is their profits.  They want you to visualize that their sliver of profit is no big deal.

The following chart destroys that sliver image. It is Aqua PA’s proposal from its August-2021 rate filing. It is not seeking a sliver of profit but wants the hog’s share of the pie! They propose that 43 percent of our water and sewer bills should go to their profits. Municipal systems are non-profit operations. Therefore, when Aqua acquires a system, a 75 percent rate hike is required just to fund its profits.  Higher depreciation and interest costs push rates up even more.

Delaware Valley residents are facing all these issues with Aqua Pennsylvania trying to buy DELCORA’s sewer operations for $276 million and the drinking water operations of the Chester Water Authority (CWA) for $410 million. Both deals involve political agendas.

For DELCORA, there is speculation that the political incumbents are maneuvering to increase the purchase price. There is also an issue of facility improvements that DELCORA claims could cost $1.2 billion. Such numbers are usually grossly over‑stated scare tactics. But one thing is certain: the customer is far better off when non‑profit DELCORA makes the investment. If Aqua closes this deal, the cost to its customers will go up. Depending on the investment, it could be a modest 17 percent, or it could double or even triple. It is certain that Aqua will be the high-cost result for DELCORA’s customers.

The sale of CWA is supported by Gov. Tom Wolf as a bailout for the bankrupt City of Chester. Politically, that stinks. It is trying to hide a large backdoor “tax” on CWA customers – a small segment of Pennsylvania’s population. If the state wants to bail out Chester City, let it appropriate state funds and have all of Pennsylvania pay for it. Of course, that would be politically toxic.

CWA is a large well-run system.  Aqua brings nothing to the table that CWA does not already have. If this deal goes through, the cost to its customers will double just to fund Aqua’s profits. The PUC approving this deal would be definite proof of its failure to have an understanding of what “public benefit” means.

If your municipal system is the target of a Big Water takeover, you need to take action. Assume the sales pitch is all hogwash. Start asking tough questions and do not accept mumbo-jumbo answers. Put pressure on your municipal officials to stop the takeover. Many officials only see the candy jar full of money and they are not on your side. Demand a place at the bargaining table. The ratepayer has been the pawn in this Big Water, Big Money acquisition frenzy for too long.

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In the wake of a Commonwealth Court ruling on the controversial DELCORA deal, an attorney for the private utility company Aqua sent a letter to the Public Utility Commission (PUC) urging it to “commence expeditiously” toward approving the sale. It is the most recent shot in a legal and political battle going back to 2019.

And yet after mountains of legal filings, multiple political attacks, and partisan name-calling, a key question remains unanswered: Who wins?

If Aqua convinces the PUC to approve its $276.5 million offer to buy DELCORA and the for-profit company takes over service for the 165,000 wastewater customers, is that good news or bad for ratepayers?

Delaware County has convinced the court that it has the authority to dissolve DELCORA and absorb its assets. If it takes over the operation entirely, is that a step forward for customers, or back?

Does the county even want to run the wastewater system? Or would it rather reform DELCORA and leave a quasi-independent agency in charge? Or does the council have another plan: Get Aqua to bump up the price, pocket the extra cash, and dump DELCORA’S customers onto the company’s ledger?

How did the seemingly simple sale of a water treatment system become so fraught with drama? Partisan politics — and lots of money.

Given the dominance of Democrats in Delaware County politics — there are currently no GOP members on the county council — it is easy to forget Republicans held the majority for decades. In 2019, when Brian Zidek became the first Democrat to chair the Delaware County Council in 150 years, one of his first comments was, “We want to make sure we don’t screw this up.”

One of the first items on the Democrats’ “this” list was the previous GOP-controlled council’s decision to make the DELCORA deal with Aqua on their way out the door. The new Democrat-controlled council went to court in May 2020 to block the sale by terminating DELCORA’s existence.

“From the beginning, I’ve said this deal stunk and the fix was in,” Zidek said at the time. “It was nothing more than a giveaway to a political contributor and the hardworking taxpayers of Delaware County deserve better. With the action we took today, we are advancing our goal of transparency and putting people over politics.”

Nearly two years later, the Commonwealth Court ruled that the council does have the power to terminate DELCORA. However, as Aqua pointed out in its letter to the PUC, the court also said the deal is still in play. Whether or not the goal was to protect GOP patronage jobs, the county is bound by the asset purchase agreement (APA) with Aqua.

In his letter, Aqua’s attorney, John F. Povilaitis with Buchanan Ingersoll & Rooney, highlighted a key part of Judge Patricia McCullough’s decision:

“[I]t is important to note that the County, in its demand that DELCORA terminate its operations and transfer its assets to the County, effectively places the County in a situation where it would receive a ‘contractual assignment’ from DELCORA as a matter of statutory law. Consequently, the County would, without question or condition, be bound by the terms and conditions of the [purchase agreement], just as if it were DELCORA itself in the sense that it would essentially become a ‘party’ to the contract.”

“Aqua respectfully requests that the Commission rule on the pending Petition as expeditiously as possible,” Povilaitis added.

As is often the case in politics, that depends on your definition of the word “expeditiously.” The PUC has to rule on the sale, and an administrative law judge panel has already recommended its rejection.

So, now what?

“The bottom line is that the county must comply with the existing asset purchase agreement between DELCORA and Aqua or face a lawsuit for specific performance and or breach of contract that we believe could reach hundreds of millions of dollars,” Aqua said in a statement to DVJournal.

Some county government observers say the current Democratic majority would be more than happy to avoid a lawsuit and collect a big check. They speculate the current fight is about leverage to force Aqua to sweeten the pot. With DELCORA dissolved, that cash would come straight to the county.

Delaware County Democrats say that is crazy because no matter how hard the story has been to follow, if local ratepayers suddenly see a spike in their sewer bills, they are going to blame the current council.

“The county had been consistent in its position that the transaction is unfair to ratepayers and taxpayers because there was nobody at the table looking out for their interests,” said Delaware County Solicitor Bill Martin.

As for restructuring the existing DELCORA board, attorney Frank Catania, who has often battled Aqua, has concerns.

“A person experienced in Public Utility Commission matters once told me that when dealing with the PUC, ‘If you don’t have a seat at the table, you will be on the menu.’ I hope that the new DELCORA Board will take strong action to protect the DELCORA ratepayers in the PUC proceeding and the remand to Delaware County Court,” Catania said.

And what about rate hikes? Aqua is touting a rate stabilization trust fund in its DELOCORA proposal similar to the one it says is in its bid to take over the Chester Water Authority. The idea is to set aside part of the purchase price to keep rates stable for the next few years.

And, like the Chester Water proposal, Aqua’s trust fund appears nowhere in the actual sales agreement. In other words, it is a pledge, but not a contract.

“The Trust is not part of the purchase agreement and it is up to DELCORA (and possibly the county, if they choose to dissolve DELCORA) to decide what will happen with the net proceeds from the sale,” according to Aqua’s statement. “DELCORA’s plan, as was explained to us, was to offset future rate increases by taking the $200 million in proceeds from the sale and give it back to customers through the use of a trust over the next 10 years.”

Martin describes the Aqua arrangement this way:

“The concept of the trust is that Aqua is paying the authority, but then the authority is setting aside part of the purchase to offset future rate hikes. It’s like someone saying, ‘I want to buy your car,’ then the buyer requires you to hold half the sale proceeds to pay for future repairs for the next 10 years. The net result is that they get the money, not you.”

Margo Woodacre says she has two words for promises from Aqua about protecting ratepayers: “Hog. Wash.”

Margo Woodacre is a co-founder of KWA – Keep Water Affordable, a group of New Garden residents who have seen their sewer bills soar since Aqua purchased the municipal system. She says Aqua came in with a promise of a two-year rate freeze and a cap on rate increases for ten years. It was a promise Aqua hasn’t kept, she told DVJournal.

“Aqua is a lot of talk,” Woodacre said. “They’ve got the money, they’ve got the connections, but I wouldn’t believe anything they say.”