Section 5622(a) Conveyance Power Turns on Present Municipal Authority After Section 5610(a.1) Board Recomposition

1. Introduction

This consolidated matter concerns whether the City of Chester (“City”) may unilaterally compel the transfer of the Chester Water Authority’s (“Authority”) assets/projects under 53 Pa.C.S. § 5622(a) of the Municipal Authorities Act (“MAA”). The dispute arose after Aqua Pennsylvania, Inc. (“Aqua”) made an unsolicited purchase offer, the City considered monetizing the Authority’s assets, and the Authority attempted to shelter those assets by transferring them into a trust via a 2019 declaration of trust and a petition seeking court approval. The City and Aqua objected, asserting that only the City could direct a transfer under Section 5622(a). Parallel litigation sought a declaratory judgment affirming the City’s asserted unilateral power and injunctive relief to prevent asset dissipation.

A key statutory complication is the 2012 enactment of 53 Pa.C.S. § 5610(a.1), which, by operation of law, replaced the Authority’s five-member, City-appointed board (“Old Board”) with a nine-member board (“New Board”) comprised of appointees from the City, Delaware County, and Chester County—despite those counties not having created, incorporated, or joined the Authority under the MAA’s incorporation/joining provisions (53 Pa.C.S. §§ 5603-5604).

The trial court concluded that any Section 5622(a) conveyance required authorization by the Authority’s current governing body (the New Board). The Commonwealth Court reversed, holding the City retained the “sole power” under Section 5622(a) to “demand and compel” conveyance, while emphasizing it did not decide whether the City could satisfy all conditions within Section 5622(a) to obtain all assets. The Supreme Court granted review to address the Commonwealth Court’s statutory interpretation of Section 5622(a).

2. Summary of the Opinion (Justice Mundy, Concurring and Dissenting)

Justice Mundy’s central disagreement is statutory: she reads Sections 5619(a) and 5622(a) as interlocking provisions governing transfer of authority projects to the municipality that created the authority. In her view, the City—having created and incorporated the Authority and appointed the Old Board that established the original projects—retains the present “power to establish, maintain, or operate” those projects, regardless of the New Board’s composition, because Section 5619(a) contemplates conveyance to “the municipality creating the authority.” Therefore, she would affirm the Commonwealth Court and permit the City to invoke Section 5622(a) (subject to the Section 5619(a) impediments).

3. Summary of the Court’s Decision (as described in the provided text)

The Majority reverses the Commonwealth Court on the premise that Section 5622(a) requires a municipality to have the present power to establish, maintain, or operate the project it seeks to acquire. Because the Authority’s governance is now shared via Section 5610(a.1), the Majority concludes the projects are “now of a character” that the participating municipalities collectively have the relevant power to establish/maintain/operate. Accordingly, in the Majority’s view, the City no longer possesses unilateral Section 5622(a) authority to acquire the projects.

4. Analysis

4.1. Precedents Cited

• Burke v. North Huntingdon Township Municipal Authority, 136 A.2d 310 (Pa. 1957)
  The opinion treats Burke as important primarily for what it does not decide. Justice Mundy agrees with the Majority that Burke’s statements implying an authority can initiate a Section 5622(a) transfer were dicta—nonbinding commentary rather than a holding. This matters because it clears the ground for a municipality-centered reading of Section 5622(a), where the municipality “signif[ies] its desire” by ordinance/resolution and the authority must convey.
• In re: Chester Water Auth. Tr., 263 A.3d 689 (Pa. Cmwlth. 2021)
  This is the Commonwealth Court decision under review. It held “despite section 5610(a.1) of the MAA,” the City retained sole power under Section 5622(a) to compel conveyance by ordinance/resolution. It also explicitly limited its ruling to the City’s general Section 5622(a) power and did not decide whether all statutory conditions were satisfied to obtain all assets.
• Cnty. of Allegheny v. Moon Twp. Mun. Auth., 671 A.2d 662 (Pa. 1996)
  Justice Mundy uses this case to support a structural reading of the MAA: Sections 5619 and 5622(a) “address the transfer of an authority’s project to the municipality or municipalities that created the authority.” She further invokes its explanation that these provisions were “presumably enacted” to prevent municipalities from acquiring title until debts are paid, and to ensure municipalities affirmatively accept obligations by ordinance/resolution.
• Mifflin Cnty. v. Mifflin Cnty. Airport Auth., 437 A.2d 781
  Cited for the proposition that the predecessors to Sections 5619 and 5622(a) operate together when a municipality seeks to acquire a project, reinforcing a “paired provisions” understanding.
• Twp. of Forks v. Forks Twp. Mun. Sewer Auth., 759 A.2d 47 (Pa. Cmwlth. 2000)
  Used to illustrate that Section 5619’s “impediments” (agreements/claims/debt) must be cleared before a takeover can be completed under Section 5622(a).
• Forward Twp. Sanitary Sewage Auth. v. Twp. of Forward, 654 A.2d 170 (Pa. Cmwlth. 1995)
  Cited for the idea that, absent impediments under Section 5619 (then Section 14), and absent “foisting” debts without consent, a municipality has power to take over an authority project under Section 5622(a) (then Section 18(A)).

4.2. Legal Reasoning

A. The Majority’s framing (as recounted by Justice Mundy)

Justice Mundy describes the Majority as treating Section 5622(a) as containing two functional clauses: a “project-defining clause” and a “conveyance clause.” The Majority couples this with the definition of “project” in 53 Pa.C.S. § 5602 (defined in the present tense as something an authority “is authorized” to acquire/construct/operate, etc.) to conclude that the municipality seeking to acquire must have the present power to establish, maintain, or operate the project. On that view, Section 5622(a) is not “static”; a municipality’s ability to compel conveyance can change as control/governance changes, and in this case the projects are now “of a character” that the participating municipalities collectively have the relevant power. Therefore, the City cannot act unilaterally.

B. Justice Mundy’s counter-reading: “established by” plus the creating municipality’s retained power under Section 5619(a)

Justice Mundy accepts that Section 5622(a) is unambiguous but disputes the Majority’s plain-language application. Her analysis proceeds in two steps:

• (1) “Established” fixes the relevant point in time for identifying eligible projects.
  She emphasizes Section 5622(a)’s text permitting acquisition of “a project established under this chapter by a board appointed by a municipality.” She relies on a dictionary definition of “establish” (BLACK’S LAW DICTIONARY (12th ed. 2024))—to bring into existence or fix firmly—to argue that the threshold question is whether the project was originally created by a board appointed by the municipality. The Authority’s original projects were established by the Old Board appointed by the City, so they qualify under this criterion.
• (2) Section 5619(a) confirms the creating municipality retains present “power to establish, maintain, or operate.”
  Justice Mundy reads 53 Pa.C.S. § 5619(a)—authorizing an authority, after discharging bond debt secured by project revenues, to convey the project “to the municipality creating the authority”—as evidence that the creating municipality necessarily has continuing capacity to own/operate such projects. Otherwise, she argues, Section 5619(a)’s explicit conveyance destination would produce an absurd or unreasonable result, contrary to 1 Pa.C.S. § 1922(1)-(2). On this reading, Section 5622(a) (municipality compels conveyance) and Section 5619(a) (conditions/impediments to conveyance) are “two sides of the same coin,” consistent with Cnty. of Allegheny v. Moon Twp. Mun. Auth. and Mifflin Cnty. v. Mifflin Cnty. Airport Auth., as well as the Commonwealth Court cases requiring satisfaction of Section 5619 impediments before a takeover completes.

Finally, Justice Mundy underscores a structural point about Section 5610(a.1): although it altered board composition by granting appointment power to counties, it did not amend the MAA’s mechanisms for becoming a creating/incorporating municipality or for “joining” an authority (and the counties undisputedly did not create, incorporate, or join the Authority). Nor did the legislature amend Sections 5619(a) or 5622(a) when enacting Section 5610(a.1), which she views as supporting continuity of the creating municipality’s conveyance-related powers.

4.3. Impact

As described in the provided text, the Majority’s approach recalibrates municipal authority law by making Section 5622(a) conveyance power contingent on a municipality’s present power to “establish, maintain, or operate” a project—an inquiry potentially affected by later statutory changes to authority governance. In practical terms, for multi-county water/sewer authorities whose boards are recomposed under Section 5610(a.1), a creating municipality’s unilateral acquisition leverage may be curtailed, shifting bargaining dynamics among incorporating municipalities, counties with appointment power, authorities, and private buyers.

Justice Mundy’s dissent, if adopted in future cases or by legislative amendment, would preserve a strong form of “creator’s prerogative”: the creating municipality retains takeover power (subject to Section 5619 impediments) even after governance expands. The tension between these views flags a likely litigation hotspot: whether “appointment power” under Section 5610(a.1) should be treated as “control” sufficient to reallocate Section 5622(a) authority, absent formal “joining” under Section 5604.

5. Complex Concepts Simplified

• Municipal authority vs. municipality: An authority is a separate legal entity created to finance/operate public projects (like water systems). A municipality (city/borough/township/county) may create it, but the authority is not simply a city department.
• Section 5622(a) conveyance: A statutory mechanism by which a municipality can, by ordinance/resolution, require the authority to convey a project—if statutory conditions are satisfied and the municipality assumes the authority’s obligations relating to that project.
• Section 5619(a) “impediments”: Constraints on conveyance—especially the need to have “finally paid and discharged” bonds secured by project revenues, and to honor agreements concerning operation/disposition.
• Dicta: Judicial commentary not necessary to the decision and not binding as precedent. Here, Burke’s suggestion about an authority initiating conveyance is treated as dicta.
• “Creating” vs. “appointing”: The MAA distinguishes (a) the municipality that creates/incorporates (or later “joins”) an authority from (b) entities that may have appointment power to the authority’s board under specialized provisions like Section 5610(a.1).

6. Conclusion

The provided opinion text captures a sharp statutory divide about who may compel a municipal authority to transfer its projects under Section 5622(a) after Section 5610(a.1) changes board composition. The Majority (as described) reads Section 5622(a) as dynamic—requiring present municipal power to operate the project and thereby denying the City unilateral takeover authority once governance becomes shared. Justice Mundy concurs on key interpretive points (including that Burke was dicta and that Section 5622(a) is unambiguous), but dissents on the core outcome, reasoning that Section 5619(a) preserves the creating municipality’s present ability to establish/maintain/operate the projects and that Sections 5619(a) and 5622(a) must be read as symmetrically related.

Going forward, the case spotlights how Pennsylvania courts will reconcile (1) formal creation/joining status under the MAA, (2) appointment-power expansions under Section 5610(a.1), and (3) the takeover-and-debt-assumption framework built into Sections 5619 and 5622(a).