CHESTER, PA — In a crucial move to address its ongoing financial challenges, the City of Chester‘s Receiver has filed a Plan of Adjustment in the U.S. Bankruptcy Court. This strategic plan outlines a pathway to generate essential revenue by monetizing the city’s water, wastewater, and stormwater assets while ensuring they remain publicly owned.
Faced with unsustainable costs for retiree pensions and healthcare, alongside a limited tax base that struggles to support basic services, Chester finds itself in a precarious financial situation. The proposed plan is a vital component for restructuring the city’s debts and maintaining essential services, thereby paving the way for the city to emerge from bankruptcy.
The plan proposes the issuance of requests for proposals (RFPs) to third parties interested in acquiring, managing, or operating the city’s water-related assets. Importantly, the plan stipulates that these assets must remain under public ownership. Special emphasis is placed on engaging public authorities or entities interested in potential mergers or collaborations. Proposals are encouraged to focus on minimizing future rate impacts, preserving public sector jobs, and offering regional solutions for stormwater management.
Chester Receiver Michael T. Doweary expressed optimism about the plan, stating, “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.” Doweary acknowledged that while the plan marks a significant first step, further efforts are necessary to ensure the best outcomes for Chester residents.
Mayor Stefan Roots echoed this sentiment, noting, “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. The water and wastewater systems are the city’s most valuable assets, so it makes sense to utilize them for our residents.”
The plan’s filing follows nearly three decades of state oversight, four years of receivership, and two years of bankruptcy for Chester. Since taking on the role of Receiver in June 2020, Doweary and his team have actively engaged with stakeholders to incorporate feedback into the monetization strategy. This approach aims to generate sustained annual revenue while safeguarding consumers by keeping the systems under public control.
The RFP process is expected to commence soon as part of the city’s routine operations, conducted in alignment with legal requirements and under the Receiver’s guidance according to Act 47 and the Recovery Plan.
Chester’s Plan of Adjustment is pivotal in preventing severe cuts to city services, which could significantly disrupt residents’ lives. Without monetization, Chester lacks the fiscal capacity to meet its extensive financial obligations. By leveraging its water, stormwater, and wastewater systems, while maintaining public oversight, Chester aims to emulate successful models seen in other regions, thereby providing a protective layer for its water system customers.
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