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DELCORA’s Answers To Public Comments From June 3rd Meeting

DELCORA’s Answers To Public Comments From June 3rd Meeting

 

Your Questions Answered

 

In the Delaware County Council meeting held on June 3, 2020, several council members gave false, misleading and no answers to the public comment questions asked about the DELCORA-Aqua merger. Below are the same questions with DELCORA’s answers to these questions.

 

1. How is the county’s plan different from DELCORA? You will be facing the same issues, correct?

The county does not have a plan other than to take over DELCORA and acquire all of its assets. Most importantly, in its scheme the Delco Council does not specify how it will pay for the $1.2 billion in capital and maintenance costs. With no plan to meet these costs, the Council’s plan will lead to skyrocketing rate increases of approximately 10% annually.

 

2. I live in the Darby Creek Service area. The Aqua deal will save us over 100 million dollars in costs over a ten-year period. What is the county’s plan to make sure that we still get these savings?

The Delaware County Council does not have a plan for how ratepayers will be protected from skyrocketing capital and maintenance costs. The savings that will be realized in the Darby Creek area are similar to the savings that other communities will experience. In fact we estimate a total savings of more than $275 million for just the Eastern Municipal customers through 2037.

 

3. Will the county council commit that all money from the sale will go to the ratepayers and not the general fund?

Delaware County Council cleverly dodged this question by stating that the money will go to taxpayers. However, taxpayers are not ratepayers, as many taxpayers are not serviced by DELCORA. The assets of DELCORA belong to DELCORA ratepayers not taxpayers, since those serviced by DELCORA, i.e. the ratepayers, paid to build and maintain DELCORA’s system. County Council never contributed one dime to DELCORA. Under the DELCORA plan, all proceeds of the sale will go back to ratepayers by keeping rates at a manageable 3% annual increase for several years.

 

4. Why won’t the county hold real public meetings before dissolving DELCORA? We have a right to know what the plan is going forward. Is transparency just a campaign slogan you forgot once elected?

Ironically, County Council claims transparency and open government, yet they made their decision with no public meetings to detail their plan. In addition, they proposed this hostile takeover in the midst of a pandemic using a Zoom call. Before making its decision last year, DELCORA held numerous public meetings, meetings with Council and meetings with ratepayers to get their input.

 

5. What happens to the millions of dollars DELCORA has already paid towards the long-term control plan? Will we be double billed? Will an escrow account be established? Do the rate payers have any guarantees that this money won’t simply go into the general fund for the county to use as it pleases? What experience does the county have in operating a waste water treatment plant and do they have all the necessary permits to do so?

The Delaware County Council avoided answering this question by stating that the money will go to taxpayers and made no distinction between taxpayers and ratepayers. However, the assets of DELCORA belong to DELCORA ratepayers not taxpayers generally, since County Council never contributed one dime to DELCORA. Under the DELCORA plan, all proceeds of the sale will go back to ratepayers by keeping rates at a manageable 3% annual increase for several years and all funds previously contributed to the long term control plan will be used for that purpose. Council has refused to make the same commitment, and instead has only said that the money will go to the taxpayers. Also, the Council has no experience operating a complex municipal wastewater authority.

 

6. Teamsters Union Local #115 represents the front-line employees who have been and remain dedicated to serving the community which fundamentally relies on the life-sustaining services from DELCORA. It is our sincerest expectation that upon passage of the ordinance to dissolve DELCORA and return administration of this valuable community asset to the county, the council will provide recognition to Teamsters Local #115 as the sole and exclusive representation for the hard-working and loyal DELCORA employees. Likewise, it is our sincerest expectation that the council will provide assurance that the employees who have dedicated many years and decades to maintain and improving this asset will not be cast aside and the council will provide assurance for jobs and livelihoods which are secured through a collective bargaining agreement in effect through January 9 2022 will remain in place and in-tact upon the county undertaking direct administration of DELCORA.

One of DELCORA’s guiding principles in seeking a partner was to preserve all DELCORA jobs. Aqua Pennsylvania Wastewater specifically agreed to this stipulation. DELCORA has a long and positive relationship with the Teamsters and looks forward to continuing that relationship long into the future.

 

7. It is my understanding that the county has never put any money into DELCORA’s system. Given this, why do you think the county is now entitled to that money?

The Council is not entitled to DELCORA’s assets, since they never contributed anything to DELCORA. The ratepayers have paid to build and maintain the DELCORA system. Since they have never stated otherwise, the only reason that Council is interested in DELCORA must be to raid its assets and put them into the general fund.

 

8. Why is the Aqua Deal bad for ratepayers?

The DELCORA plan is the best plan for ratepayers because it allows mandated government capital improvements to be made while keeping rates at a reasonable 3% annual increase, with the trust absorbing any additional annual costs until it is exhausted. In addition, ratepayers get an experienced operator who is very familiar with the county. The County option would be to take all the funds from DELCORA for the County’s use, and then charge the ratepayers 10% or more increases annually to comply with the government mandated capital improvements.

 

9. An article of the Daily Times said that if the county dissolves DELCORA, the county is going to be responsible for “all of DELCORA’s contracts, assets, and liabilities.” If Aqua can buy DELCORA and Aqua pays off all that debt, how is the county going to afford to pay the debt of DELCORA?

This is a key question and one where the Council has been silent. They have not specified how they will pay for the incoming tidal wave of $1.2 billion in capital and maintenance costs to complete the Chester Long-term Control Plan and leave the City of Philadelphia contract.

 

10. I am concerned about DELCORA employees and have 2 questions. What happens to the union contracts of the employees who work at DELCORA if the county takes them over? Is the county guaranteeing to honor all of the jobs and union contracts? Second, what happens to the pensions of DELCORA employees if the county takes over DELCORA? Will the county honor all of the pensions of the employees and guarantee them for all of the current employees?

One of DELCORA’s guiding principles in seeking a partner was to preserve all of DELCORA ‘s jobs. Aqua Pennsylvania Wastewater agreed to this requirement. DELCORA has a long and positive relationship with the Teamsters and looks forward to continuing that relationship long into the future.

 

11. What experience does county council have that would qualify it to run a professional waste water operation, especially if you’re getting rid of the leadership of DELCORA? Aqua has professional engineers and operation managers, etc. What makes the county think it can do a better job than Aqua?

Delco Council has no experience in operating a complex wastewater authority. Without this experience there is a risk of contamination to local rivers, streams and the general water supply.

 

12. DELCORA and Aqua were going to use the trust to offset the rate increases. Aqua is going to need to do all of the infrastructure work. If the lawsuit to stop DELCORA from forming the trust is successful, what is the county going to do with the $200 million dollars or more that would have been put into the trust?

The County Council did not answer this question, other than to cleverly say that the money would go to taxpayers, but the money belongs to ratepayers not taxpayers. Ratepayers are the ones who built up DELCORA’s assets. Without the trust, ratepayers will be forced to shoulder the burden of $1.2 billion in the form of skyrocketing rate increase of 10% per year for the foreseeable future. The DELCORA plan uses the trust to keep rates at reasonable 3% annual increases.

 

13. If the trust is made up of money from DELCORA rate payers, why does the county feel it is entitled to that money? What will you use the trust money for? If you use it to benefit the county, you’re effectively stealing from DELCORA rate payers to benefit all of the residents of the county. That money should be used to benefit DELCORA. How will you explain to the rate payers that they’re taking that money to use for other things?

Once again, the Council did not answer this question. Council is seeking to take DELCORA’s assets and move them into the general fund while dramatically increasing rates for ratepayers.

 

14. What is the county’s specific problem with the trust? I know the county says the money goes to Aqua, but it’s specifically going to Aqua to pay what the rates would be if the trust was not available. It’s like your insurance company paying your collision repair shop to fix your bumper. The customer still benefits from the money because it’s going directly to pay the difference between the current plan and what the rate would be if they were without the trust. Why does the county have a problem with that? What plan does the county have to ensure that the rates don’t skyrocket?

The Council has not announced a plan. In the absence of a stated plan, ratepayers are left to believe that all the trust money will go into the general fund.

 

15. How are customers supposed to know what their real rates are when their bills are artificially discounted by the trust?

Aqua’s proposal to the Public Utility Commission is to show the full rate on bills to DELCORA customers with a payment from the DELCORA Trust as a line item on the bill. Customers will therefore be able to see the full rate and the payment from the Trust. This proposal is subject to review and approval by the PUC.