Creating Municipality’s Continuing Power to Compel Project Conveyance Under MAA § 5622(a) Despite § 5610(a.1) Board Expansion (Mundy, J., concurring and dissenting)

1. Introduction

This Pennsylvania Supreme Court matter arises from a high-stakes dispute over control of the assets of the Chester Water Authority (the “Authority”), a municipal authority created and incorporated by the City of Chester (the “City”) in 1939. After the Authority expanded service beyond the City into Delaware and Chester Counties, legislative changes altered the Authority’s board composition. The City—financially distressed—later explored monetizing the Authority’s assets, catalyzed by Aqua Pennsylvania, Inc.’s (“Aqua”) unsolicited $320 million acquisition offer (rejected unanimously by the Authority’s then-governing board).

Litigation followed on parallel tracks: (i) the Authority’s 2019 trust petition seeking approval to transfer assets into a trust (opposed by the City and Aqua), and (ii) the City’s declaratory judgment action seeking confirmation that it could unilaterally compel conveyance of the Authority’s projects under Section 5622(a) of the Municipal Authorities Act (“MAA”), 53 Pa.C.S. §§ 5601-23.

The central issue is statutory: whether the City retains unilateral authority under 53 Pa.C.S. § 5622(a) to compel conveyance of Authority projects after the Authority’s board composition changed by operation of 53 Pa.C.S. § 5610(a.1). Justice Mundy’s opinion concurs in part and dissents in part: she agrees with the Majority’s rejection of certain prior dicta and its conclusion that the Authority does not “initiate” a § 5622(a) conveyance, but she disagrees with the Majority’s ultimate holding that the City lacks present ability to acquire the Authority’s projects.

2. Summary of the Opinion (Justice Mundy)

  • Points of agreement with the Majority:
    • Statements in Burke v. North Huntingdon Township Municipal Authority, 136 A.2d 310 (Pa. 1957) suggesting an authority may initiate a § 5622(a) conveyance are dicta.
    • Under § 5622(a), the authority does not decide whether to initiate or approve the conveyance; the municipality acts through “appropriate resolution or ordinance,” and the “authorities shall convey.”
    • § 5622(a) is not ambiguous.
  • Point of dissent:
    • Justice Mundy would hold the City still has the present power under the MAA—particularly when reading §§ 5619(a) and 5622(a) together—to “establish, maintain or operate” the Authority’s projects (at least those established by the City-appointed “Old Board”), and therefore may compel conveyance under § 5622(a).
    • She would affirm the Commonwealth Court’s conclusion that the City has the sole § 5622(a) demand power, notwithstanding § 5610(a.1).

3. Analysis

3.1 Statutory Framework at the Core of the Dispute

  • 53 Pa.C.S. § 5622(a) (Project conveyance upon municipal desire): permits a municipality to acquire a qualifying “project” by adopting an “appropriate resolution or ordinance,” after which “the authorities shall convey” the project upon the municipality’s assumption of obligations incurred with respect to that project.
  • 53 Pa.C.S. § 5610(a.1) (Water/sewer authority board restructuring): triggered replacement of the Authority’s five-member City-appointed board (the “Old Board”) with a nine-member “New Board” comprising three appointees each from the City, Delaware County, and Chester County, due to multi-county service/population ratios.
  • 53 Pa.C.S. § 5619(a) (Authority’s conveyance of projects to creating municipality after debt conditions): provides that after bonds secured by project revenues are finally paid and discharged, an authority may—subject to agreements—convey the project “to the municipality creating the authority.”
  • 53 Pa.C.S. § 5602 (Definition of “project”): the Majority (as characterized by Justice Mundy) relies on the definition’s present-tense phrasing to require the municipality to have present power to establish/maintain/operate the project.
  • 53 Pa.C.S. §§ 5603-5604 (Creation/incorporation and joining): Justice Mundy underscores that Delaware County and Chester County did not create, incorporate, or join the Authority, even though § 5610(a.1) gave them appointment power.

3.2 Precedents Cited and Their Role

Burke v. North Huntingdon Township Municipal Authority, 136 A.2d 310 (Pa. 1957)

Justice Mundy joins the Majority in treating Burke’s statements—that an authority can initiate a § 5622(a) conveyance—as dicta. This matters because the trial court’s approach effectively vested the New Board with an approval gatekeeping role; repudiating Burke’s dicta helps shift focus back to the statutory command that the municipality signifies its desire and “the authorities shall convey.”

Cnty. of Allegheny v. Moon Twp. Mun. Auth., 671 A.2d 662 (Pa. 1996)

Justice Mundy uses this case to support an integrated reading of §§ 5619 and 5622(a), describing both as addressing transfer of authority projects to the municipality or municipalities that created the authority. She relies on the case’s description of purpose: to prevent a municipality from obtaining title until debts are paid off and to ensure municipal willingness to assume responsibility is manifested by ordinance/resolution.

Mifflin Cnty. v. Mifflin Cnty. Airport Auth., 437 A.2d 781

Cited for the proposition that the predecessor provisions to §§ 5619 and 5622(a) operate together when a municipality seeks to acquire a project. Justice Mundy uses it to reinforce the view that § 5619’s “impediments” are conditions relevant to completing conveyance, not a reallocation of who possesses the ultimate acquisition power.

Twp. of Forks v. Forks Twp. Mun. Sewer Auth., 759 A.2d 47 (Pa. Cmwlth. 2000)

Justice Mundy cites this Commonwealth Court decision for the interpretation that § 5619 (formerly Section 14) authorizes the creating township to take over the project pursuant to § 5622(a) after impediments (agreements, claims, outstanding debt obligations) are discharged—again supporting a “paired” reading of the provisions.

Forward Twp. Sanitary Sewage Auth. v. Twp. of Forward, 654 A.2d 170 (Pa. Cmwlth. 1995)

Used to show that where § 5619 impediments do not apply and the authority is not foisting debt without consent, a municipality has the power to take over pursuant to § 5622(a). Justice Mundy cites it to rebut the Majority’s view (as she describes it) that § 5619(a) and § 5622(a) are not “symmetrically related.”

In re: Chester Water Auth. Tr., 263 A.3d 689 (Pa. Cmwlth. 2021)

This provides the factual and procedural backdrop, including the Authority’s expansion, the board restructuring under § 5610(a.1), the trust declaration, and the Commonwealth Court’s holding that the City holds the sole § 5622(a) power to demand conveyance—while expressly not deciding whether all conditions for obtaining “all of the assets” were satisfied.

3.3 Legal Reasoning (Justice Mundy’s Textual and Structural Argument)

A. The “project established” requirement focuses on origin, not current governance

Justice Mundy emphasizes § 5622(a)’s language authorizing acquisition of “a project established under this chapter by a board appointed by a municipality.” She reads “established” in its ordinary/legal sense (citing BLACK’S LAW DICTIONARY (12th ed. 2024)) as “to make or form; to bring about or into existence.” Thus, for projects originally created by the City-appointed Old Board, the threshold “established by” condition is satisfied.

B. The City’s “present power” persists because it remains the “municipality creating the authority” under § 5619(a)

The core of the dissent is structural: Justice Mundy views § 5619(a) as confirming that the creating municipality necessarily retains the “power to establish, maintain or operate” projects—because § 5619(a) contemplates conveyance of projects “to the municipality creating the authority.” In her view, it would be “nonsensical” (and thus contrary to 1 Pa.C.S. § 1922(1)-(2)) for the statute to authorize conveyance to a municipality that lacks power to operate/maintain what it receives.

C. § 5610(a.1) expanded appointment power, not “creating municipality” status

Justice Mundy stresses that while § 5610(a.1) granted Delaware and Chester Counties board-appointment power, the legislature did not amend the MAA to treat those counties as entities that created, incorporated, or joined the Authority under §§ 5603-5604. Therefore, she rejects the Majority’s conclusion (as described) that conveyance power shifts to the municipalities that “today control the authority.”

D. §§ 5619(a) and 5622(a) are “two sides of the same coin”

In footnote 1, Justice Mundy directly disputes the Majority’s view (as characterized) that the two sections articulate “distinct powers” without symmetry. She reads § 5622(a) as the municipality’s mechanism to force a conveyance, while § 5619(a) supplies limiting conditions (debt/agreements) that constrain when an authority can complete conveyance—an interaction she argues is supported by the cited case law.

3.4 Impact

Doctrinal impact if Justice Mundy’s approach were controlling

  • Stability of “creating municipality” rights: A municipality that created and incorporated an authority would retain § 5622(a) leverage even after statutory board restructuring under § 5610(a.1).
  • Limited effect of regional governance reforms: Appointment-power sharing would not, by itself, dilute the original municipality’s acquisition authority over projects established by its appointed board.
  • Greater monetization capacity for distressed municipalities: A distressed creating municipality could potentially compel conveyance (subject to § 5619 impediments) and then pursue asset monetization strategies, raising policy tensions around regional reliance on authority services.

Practical impact in light of the Majority’s contrary holding (as described in the dissent)

  • Shift toward “current control” conceptions: The Majority’s approach (as summarized by Justice Mundy) makes conveyance power sensitive to present governance structure, potentially insulating multi-county authorities from unilateral takeover by the original incorporating municipality.
  • Increased litigation on “present power” and project characterization: Parties will likely contest whether a municipality currently has the power to “establish, maintain or operate” particular projects, especially where authorities have expanded geographically over decades.

4. Complex Concepts Simplified

Municipal authority
A separate legal entity created by one or more municipalities to provide public services (like water) and finance infrastructure, often through bonds secured by project revenues.
§ 5622(a) “conveyance”
A statutory mechanism allowing a municipality to require an authority to transfer (“convey”) a project to the municipality if statutory conditions are met, with the municipality assuming related obligations.
§ 5619(a) “impediments”
Conditions that can constrain or delay conveyance—principally the requirement that bonds secured by project revenues be paid and discharged, and that conveyance be “subject to agreements concerning the operation or disposition of the project.”
Board appointment power vs. “creating municipality” status
A municipality (or county) may have the power to appoint board members without being the entity that created/incorporated/joined the authority under the MAA’s formal mechanisms. Justice Mundy treats this distinction as central.
Dicta
Statements in an opinion not necessary to decide the case; they are not binding precedent. Justice Mundy and the Majority agree Burke’s initiation language is dicta.
Judgment on the pleadings
A procedural device seeking a legal ruling based solely on the pleadings, asserting that no material facts are in dispute and the law compels judgment.

5. Conclusion

Justice Mundy’s concurring and dissenting opinion frames the dispute as a question of statutory architecture: whether § 5610(a.1)’s regional board restructuring alters the City’s capacity under § 5622(a) to compel conveyance of projects established by a City-appointed board. While agreeing that § 5622(a) is unambiguous and that an authority does not initiate conveyance, she reads §§ 5619(a) and 5622(a) together to preserve the creating municipality’s present operational power—and thus its unilateral conveyance right—despite changes in board composition. Her dissent highlights a durable fault line for future cases: whether conveyance power tracks the authority’s historical origin (creation/incorporation) or its current multi-jurisdictional governance reality.