Obermayer’s Municipal Services Team Scores a Record Deal in PA History
Two months after launching new practice—the Municipal Services Group— Tom Wyatt and his team facilitated a record deal in PA history. In September, Wyatt and Nasatir negotiated the agreement of sale for the Delaware County Regional Water Quality Control Authority (DELCORA) where DELCORA agreed to sell its system to Aqua Pennsylvania Wastewater, Inc.. The transaction is subject to review and approval by the PA PUC. Once closed, this will be the largest privatization of a public water or wastewater system in Pennsylvania. The widely publicized $276 million transaction, termed by The Philadelphia Inquirer as a “record deal” is associated with the 2016 Pennsylvania law that encourages investor-owned acquisitions of municipal water and wastewater systems.
The DELCORA system includes retail, commercial and industrial customers and large wholesale agreements with municipal authorities in Delaware and Chester Counties. Its assets combine 168 miles of sewer mains, 14 miles of large-diameter force mains, and a 50-million gallon-per-day wastewater treatment plant that supply the western part of its service territory.
DELCORA, as with many Pennsylvania municipalities that own large-scale infrastructure, was in a financial dilemma due to increasing regulation. This acquisition is expected for at least in the next decade to keep residents’ utility bills at a lower rate than paying the higher costs of staying on Philadelphia’s system or to pay almost $1.2 billion in new and ongoing capital costs to meet new U.S. Environmental Protection Agency regulations.
Tom Wyatt joined Obermayer earlier this year as chair of the Municipal Services Group. This niche practice serves Pennsylvania governmental entities grappling with outdated, inefficient or overly costly financial structures for their infrastructure, and municipal authorities seeking to grow and capture economies of scale. More information about Obermayer’s unique Municipal Services Group can be found here.