Chester receiver asks court for CWA financial records and board reconstitution after 14% rate increase

Vijay Kapoor, the receiver overseeing Chester’s municipal recovery, filed a recovery plan modification in Commonwealth Court on Oct. 28 asking the court to order the Chester Water Authority (CWA) to produce detailed financial records and to reconstitute the authority’s board so the city can appoint five members.

The filing responds to CWA’s announced 14% water‑rate increase effective Jan. 1, 2026, and challenges a 2012 amendment to the Municipality Authorities Act (Act 73) that Kapoor says narrowly targeted CWA and therefore qualifies as prohibited special legislation under Article III, Section 32 of the Pennsylvania Constitution. Kapoor said the Commonwealth Court accepted the filing minutes after it was submitted.

Why it matters: the plan modification combines a request for transparency about the rate increase with a constitutional challenge to who controls the water authority. Kapoor said the information sought will help the city assess whether the 14% rise is justified and will protect the city’s interest in a public asset as Chester proceeds through bankruptcy-related processes.

Kapoor told the committee the first part of the filing seeks standard rate‑case data within 30 days, including any rate study supporting the 14% increase; detailed year‑to‑date and adopted revenues and expenses by line item; significant customer changes from 2022–2025 and their revenue impact; rate resolutions from 2021–2025; delinquency rates; capital improvement and debt schedules; individual service agreements; notices of violations or consent orders; and unrestricted cash balances of all water funds.

"We are not seeking to block the rate increase," Kapoor said. "We are seeking information from it." He added that the goal is to restore accountability and preserve the value of CWA during the city's ongoing bankruptcy process.

The second part of the filing asks the Commonwealth Court to return CWA’s board to the city’s control. Kapoor argued that Act 73’s language was drafted so narrowly that it applies only to the Chester Water Authority—citing a geographic quirk involving the Octoraro Reservoir’s extension into Lancaster County as the dispositive factor that creates a class of one. "We believe that this will correct an injustice that was unconstitutional," he said.

Kapoor also summarized a recent bankruptcy‑court order by Judge Ashley Chan finding that CWA’s counsel obstructed discovery and ordering counsel to pay $135,575 on Oct. 23 to cover the city’s legal costs of compelling document production related to a request‑for‑proposals process. Kapoor said the sanctions and the earlier delays in producing records underscore the need for a court‑ordered production of the records requested in the plan modification.

Mayor Stefan Routes, who highlighted positive public‑safety coverage for Chester earlier in the meeting, read a resident note urging that CWA remain a public, community‑focused utility and said many residents cannot absorb large additional rate increases. The mayor praised Kapoor for seeking clarity on the rate increase.

Kapoor said the MRAC team relied on engineering experts (HRG) to identify which data points are commonly used in evaluations of rate changes and stressed that the court, per Act 47 procedures, may schedule a hearing within 30 days and must issue a ruling within 60 days of the filing. He said the full filing will be posted on the receivership website and that he will update MRAC as the court process proceeds.

Sanctions and historical context: Kapoor noted that CWA had been incorporated by the city in 1939 and that the receiver’s team considers the 2012 statutory change to the board composition a targeted intervention. He also said CWA paid roughly $319,000 through 2024 to a consultant that staffed the "Save CWA" campaign, raising questions about use of ratepayer dollars amid CWA’s lower cash‑on‑hand and a Moody’s downgrade attributed in part to the loss of a significant wholesale customer.

Next steps: the Commonwealth Court filing is pending; the plan modification requests a 30‑day production timeline for the listed financial records and asks the court to consider reconstituting the board. The bankruptcy‑court sanctions order is already entered. MRAC will be updated as the Commonwealth Court sets hearings or issues rulings.