MAA §5622(a) Conveyance Power Turns on Present Municipal Power/Control After §5610(a.1) Board Reconstitution

1. Introduction

This consolidated dispute centers on whether the City of Chester (“City”), the sole municipality that created and incorporated the Chester Water Authority (“Authority”) in 1939 (and renewed its charter in 1965 and 1998), may unilaterally compel transfer of the Authority’s “projects” under the Municipal Authorities Act (“MAA”), specifically 53 Pa.C.S. § 5622(a).

The controversy emerged after Aqua Pennsylvania, Inc. (“Aqua”) made an unsolicited offer to purchase the Authority (rejected unanimously by the Authority’s governing board), while the financially distressed City explored monetizing the Authority’s assets. In response, the Authority executed a declaration of trust (2019) to transfer its assets into a trust and sought court approval, prompting objections and parallel litigation in which the City sought declaratory and injunctive relief premised on a unilateral conveyance right under §5622(a).

A pivotal statutory development frames the legal question: by operation of 53 Pa.C.S. § 5610(a.1) (effective 2012), the Authority’s board changed from a five-member City-appointed board (“Old Board”) to a nine-member board (“New Board”) with appointments split among the City, Delaware County, and Chester County—despite the latter two not having created, incorporated, or “joined” the Authority through the MAA’s formal joinder mechanism.

The trial court held that any conveyance required authorization by the Authority’s then-current governing body (the New Board). The Commonwealth Court reversed, concluding the City retained the sole power to compel conveyance under §5622(a), while expressly not deciding whether the City could satisfy all statutory conditions to acquire all assets. The Supreme Court granted review of the Commonwealth Court’s statutory interpretation.

2. Summary of the Opinion (as described in the provided text)

Justice Mundy agrees with the Majority on three core interpretive points:

• 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), an authority does not play a role in the decision to initiate or approve a conveyance; the statute operates through municipal action and mandatory conveyance by the authority once conditions are met.
• §5622(a) is unambiguous.

She dissents, however, from the Majority’s ultimate holding (as she describes it) that the City no longer has unilateral authority to acquire the Authority’s projects because, after the §5610(a.1) board reconstitution, the projects are no longer “of a character which the [City] has power to establish, maintain or operate.” In her account, the Majority treats §5622(a) as requiring present municipal power/control and concludes the City cannot satisfy that requirement given the Authority’s multi-jurisdictional governance.

3. Analysis

3.1. Precedents Cited

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

Justice Mundy (joining the Majority) characterizes Burke as containing non-binding commentary to the effect that an authority may initiate a conveyance under §5622(a). The significance of this clarification is institutional: it removes any suggestion that an authority has independent “veto” or “gatekeeping” authority over whether a conveyance process begins. In practical terms, this strengthens the view that §5622(a) is a municipality-driven mechanism once its predicates are satisfied.

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

This case is used by Justice Mundy to frame §§5619 and 5622(a) as paired provisions “address[ing] the transfer of an authority’s project to the municipality or municipalities that created the authority.” She emphasizes County of Allegheny’s explanation of legislative purpose: to prevent municipalities from obtaining title until authority debts are paid and to prevent assumption of responsibility absent clear municipal action (resolution/ordinance).

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

Justice Mundy cites Mifflin Cnty. for the proposition that the predecessors to §5619 and §5622(a) operate together when a municipality seeks to acquire a project. The citation supports her central interpretive move: §5619(a)’s allowance of conveyance to the creating municipality presupposes the creating municipality retains the “power to establish, maintain, or operate” the project for §5622(a) purposes.

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

Justice Mundy relies on Twp. of Forks as an example of the Commonwealth Court reading (the predecessor of) §5619 as authorizing the creating municipality to take over a project under (the predecessor of) §5622(a) after statutory “impediments” (agreements, claims, outstanding debt obligations) are discharged.

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

This decision is cited for the principle that, where there are no §5619 impediments and a municipality is not being forced to accept debts without consent, the municipality has power to take over the authority’s project pursuant to §5622(a)’s predecessor.

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

This is the immediate intermediate appellate decision under review. Justice Mundy recites it for factual background (service expansion; board reconstitution) and for its holding that the City retained sole power under §5622(a) to demand and compel conveyance via municipal enactment, while leaving open whether all statutory conditions could be satisfied to acquire all assets.

3.2. Legal Reasoning

(A) The statutory pivot: §5622(a) and what “power” means in a reconstituted-governance authority

The interpretive fight, as Justice Mundy frames it, is not whether §5622(a) is ambiguous (she agrees it is not), but what its unambiguous terms require once a single-incorporator authority becomes governed by a multi-appointing body under §5610(a.1).

The Majority’s approach (as described) rests on two interlocking ideas:

• The definition of “project” in 53 Pa.C.S. § 5602 uses present-tense authorization (“which an authority is authorized to acquire, construct, finance, improve, maintain or operate”), suggesting the municipality must have present power to establish/maintain/operate to invoke §5622(a).
• §5622(a) is parsed into a “project-defining clause” and “conveyance clause,” leading the Majority (per Justice Mundy’s description) to conclude that conveyance authority is “not set in stone” and instead tracks which municipality (or municipalities) “today controls the authority.”

(B) Justice Mundy’s dissent: “creating municipality” power persists via §5619(a)

Justice Mundy’s dissent rejects the Majority’s conclusion that the City lacks present power. Her statutory argument is built on two pillars:

1. The “established” project criterion is historical and limiting.
   She emphasizes §5622(a)’s text: a municipality may seek to acquire “a project established under this chapter by a board appointed by a municipality.” Because “establish” means to make or bring into existence (she cites BLACK’S LAW DICTIONARY), she treats the key inquiry as whether the relevant project was originally created by a municipally appointed board (here, the City-appointed Old Board). On her reading, later board reconstitution does not erase the statutory link between the creating municipality and the originally established project.
2. §5619(a) functionally confirms continuing “power” in the creating municipality.
   She reads §5619(a)—which authorizes an authority to convey a project (after discharge of certain bond obligations) “to the municipality creating the authority”—as presupposing that the creating municipality necessarily retains the capability to “establish, maintain or operate” the project. Otherwise, she argues, §5619(a) would authorize an irrational conveyance to an entity lacking the legal power to run the project, an outcome she characterizes as absurd under 1 Pa.C.S. § 1922(1)-(2).

A notable feature of Justice Mundy’s analysis is her insistence on statutory symmetry: she treats §5622(a) (municipality may force conveyance) and §5619(a) (authority may convey subject to “impediments”) as “two sides of the same coin,” consistent with prior case law that discusses the provisions together. She criticizes the Majority (as she recounts it) for treating the provisions as unrelated “distinct powers articulated with different language.”

3.3. Impact

Even viewed through the dissent’s lens, the Majority rule she describes would materially reshape municipal-authority dynamics in Pennsylvania where §5610(a.1) applies:

• Reduced unilateral leverage for the incorporating city. Distressed municipalities seeking to monetize a legacy-created water/sewer authority may be unable to compel conveyance once governance has been statutorily broadened to other appointing jurisdictions.
• Governance structure becomes outcome-determinative. The ability to invoke §5622(a) may turn on whether the municipality can show current “power” to establish/maintain/operate—potentially aligning conveyance authority with present control rather than historical creation.
• Greater bargaining power for counties/served municipalities. If unilateral conveyance is foreclosed, asset transfers, sales, or restructurings would likely require multi-party negotiation or legislative solutions, rather than a single-municipality resolution/ordinance.
• Increased litigation over “projects” and timing. Because some projects may have been established under the Old Board and others under the New Board, parties may litigate project-by-project eligibility and the extent to which §5619 “impediments” constrain any compelled conveyance.

4. Complex Concepts Simplified

• “Municipal authority”: A separate governmental entity created under the MAA to finance and operate public infrastructure (e.g., water systems) at arm’s length from municipal government.
• “Project” (53 Pa.C.S. § 5602): The infrastructure/undertaking the authority owns or operates (pipes, plants, facilities, etc.).
• §5622(a) “conveyance”: A statutory mechanism allowing a municipality, by ordinance/resolution, to require the authority to transfer a project to the municipality, conditioned on the municipality assuming the authority’s obligations related to that project.
• §5610(a.1) board reconstitution: A statute that can reallocate board appointment power among multiple counties/municipalities when a water/sewer authority meets multi-county service/population thresholds.
• “Creating” vs. “appointing” municipality: Under the MAA, a municipality can create/incorporate an authority (via articles of incorporation) and other municipalities can “join” later through formal steps; appointment power under §5610(a.1) does not necessarily equal “creating” or “joining” status.
• Dicta: A court statement not necessary to the holding; not binding precedent, though it may be persuasive.

5. Conclusion

Justice Mundy’s opinion highlights two important clarifications embraced by the Majority: Burke v. North Huntingdon Township Municipal Authority did not bind courts to the idea that authorities can initiate §5622(a) conveyances, and §5622(a) leaves the authority no approval role once statutory conditions are met. The deeper divide concerns whether §5622(a) conveys a durable unilateral power to the municipality that created the authority, or instead a power that depends on present municipal “power” and control in light of §5610(a.1)’s governance reallocation. Justice Mundy’s dissent insists the creating municipality’s present power persists—anchored in §5619(a)’s transfer-to-creator authorization—while the Majority (as she describes) reads §5622(a) as dynamically tracking current authority control. The decision thus positions governance structure and statutory “power” as central determinants of who can compel transfer of municipal-authority infrastructure in Pennsylvania.