Delco state rep. introduces bill to block sale of authorities by financially distressed municipalities without approval
KAYLEE LINDENMUTH / SHENANDOAH SENTINEL FILE - The Pennsylvania State Capitol in Harrisburg, Dauphin County.
HARRISBURG – A bill recently introduced in the state House of Representatives would block the sale of authorities by a financially distressed municipality unless 75% of all municipalities served by that authority approve.
State Rep. Carol Kazeem (D-159, Delaware County) introduced the bill this week, which would amend Act 47: the Municipalities Financial Recovery Act.
“Privatization is often discussed as an option for public water systems owned by distressed municipalities,” Kazeem said in the co-sponsorship memo for the bill. “However, the impact of privatization can go far beyond the distressed municipality.”
She used the ongoing sale of the Chester Water Authority as an example. Not only does the authority serve the City of Chester, but 37 municipalities and 200,000 customers in total. Chester has been in the Act 47 program since 1995, one of the longest tenures in the program since its approval in 1987.
Under Kazeem’s approval, the sale of an authority by a municipality in the Act 47 program would need to be approved by 75% of municipalities served by that authority.
“The typical household pays 59% more for water services from a privately held, for-profit utility rather than a publicly held utility,” Kazeem wrote. “While there are certainly reasons to support and oppose privatization in most cases, residents should have a voice through their own elected leaders before their utilities are privatized and potentially become less affordable.”
The proposed sale of the Municipal Authority of the Borough of Shenandoah would not be impacted by Kazeem’s proposal, if passed by the state legislature, unless Shenandoah enters Act 47 for a second time.
Shenandoah was the first municipality to enter and exit the Act 47 program, entering in 1988 and exiting in 1993.
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