Section 5622(a) MAA: A Creating Municipality’s Unilateral Conveyance Power Turns on Present Power to Operate the “Project”

1. Introduction

Parties and setting. These consolidated matters concern whether the City of Chester (the “City”) may unilaterally compel the transfer of assets/projects of the Chester Water Authority (the “Authority”), a municipal authority the City incorporated in 1939 and whose charter it renewed in 1965 and 1998.

Triggering event. After the Authority expanded water service beyond the City into portions of Delaware and Chester Counties, the Legislature enacted 53 Pa.C.S. § 5610(a.1) (effective 2012), which—by operation of law—replaced the Authority’s five-member City-appointed board (“Old Board”) with a nine-member board (“New Board”) appointed three each by the City, Delaware County, and Chester County.

Dispute. In 2017, Aqua Pennsylvania, Inc. (“Aqua”) made an unsolicited $320 million purchase offer that the New Board rejected. The City—financially distressed—pursued options to monetize the Authority’s assets. In response, the Authority executed a 2019 declaration of trust to transfer assets into a trust and sought court approval. Parallel litigation followed: trust litigation (objections and motions for judgment on the pleadings) and a separate City declaratory judgment action seeking confirmation that 53 Pa.C.S. § 5622(a) allows the City to compel conveyance and to enjoin interference.

Key legal issue. The core statutory question is the meaning and reach of Section 5622(a) of the Municipal Authorities Act (“MAA”): whether the City retains a unilateral right to compel conveyance of the Authority’s “projects” after the Authority’s governing body ceased to be exclusively City-appointed due to Section 5610(a.1).

2. Summary of the Opinion

The text provided is Justice Mundy’s concurring and dissenting opinion. Justice Mundy:

  • Concurs with the Majority that statements in Burke v. North Huntingdon Township Municipal Authority, 136 A.2d 310 (Pa. 1957) suggesting an authority can initiate a Section 5622(a) conveyance were dicta.
  • Concurs that an authority does not decide whether to initiate/approve a Section 5622(a) conveyance and that Section 5622(a) is unambiguous.
  • Dissents from the Majority’s bottom-line conclusion that the City lacks a present unilateral ability under the MAA to acquire the Authority’s projects. Justice Mundy would have affirmed the Commonwealth Court, which held that “despite section 5610(a.1) of the MAA, the City possesses the sole power under section 5622(a) of the MAA to demand and compel the conveyance of the Authority and its assets” by appropriate ordinance/resolution.

3. Analysis

3.1 Precedents Cited

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

Justice Mundy agrees with the Majority’s treatment of Burke: language implying an authority may initiate a Section 5622(a) conveyance was dicta and thus not controlling. This matters because the litigation posture featured arguments that the Authority, through its New Board, could block or control conveyance; treating Burke as non-binding supports the proposition that Section 5622(a) conveyance initiation is a municipal—rather than authority—prerogative.

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

Justice Mundy relies on the Commonwealth Court’s factual framing (Authority’s expansion; board transition under Section 5610(a.1)) and notes its holding that the City held “sole power” under Section 5622(a) to demand conveyance, while expressly reserving whether the City could satisfy all conditions in Section 5622(a) to obtain “all of the assets.”

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

Used as a structural anchor: Justice Mundy quotes it for the proposition that Sections 5619 and 5622(a) both address transfer of authority projects to the municipality(ies) that created the authority, and for the idea that statutory “impediments” protect against premature transfer or debt-shifting. This case supports Justice Mundy’s “two sides of the same coin” reading: Section 5622(a) compels conveyance, while Section 5619(a) regulates when conveyance may occur (e.g., after debts tied to the project are discharged).

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

Cited to reinforce the linkage of the predecessors of Sections 5619 and 5622(a) in takeover/conveyance disputes. Justice Mundy uses it (along with Cnty. of Allegheny) to argue that the statutory scheme historically treats these sections as interlocking mechanisms.

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

Quoted for the proposition that Section 14 (now 53 Pa.C.S. § 5619) authorizes a creating municipality to take over a project pursuant to Section 18A (now 53 Pa.C.S. § 5622(a)) after impediments (agreements, claims, outstanding debt obligations) are discharged—again reinforcing the coupling of the provisions.

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

Cited for the proposition that where there are no Section 5619 impediments and no forced assumption of debts without consent, a municipality has power to take over an authority project under Section 5622(a). Justice Mundy invokes it to argue the law already conceptualizes Section 5622(a) power as operational once Section 5619 conditions are satisfied.

3.2 Legal Reasoning

(a) The Majority’s statutory frame (as recounted in the dissent)

Justice Mundy reports that the Majority reads Section 5622(a) as effectively requiring that a municipality seeking conveyance must have the present “power to establish, maintain or operate” the project, drawing on:

  • The definition of “project” in 53 Pa.C.S. § 5602 (in the present tense) as something an authority “is authorized to acquire, construct, finance, improve, maintain or operate,” and
  • A structural parsing of Section 5622(a) into a “project-defining clause” and a “conveyance clause,” producing the Majority’s conclusion (as quoted) that conveyance power is “not set in stone” and that Section 5622(a) “only permits a conveyance of a project to a municipality (or municipalities) that today controls the authority.”

Under that view, once Section 5610(a.1) created shared appointment control, the City’s unilateral power to compel conveyance would no longer exist because the projects are now “of a character” that the participating municipalities collectively have power to establish/maintain/operate.

(b) Justice Mundy’s dissenting statutory synthesis: Sections 5619(a) and 5622(a) as integrated

Justice Mundy accepts that Section 5622(a) is unambiguous, but disputes the Majority’s conclusion about who qualifies as having the “power to establish, maintain or operate” once board appointment authority changes.

Her core moves are:

  1. “Established” limits the eligible projects. The “project-defining clause” covers a “project established … by a board appointed by a municipality.” Justice Mundy emphasizes the ordinary/legal meaning of “establish” (from BLACK’S LAW DICTIONARY (12th ed. 2024)) as to “bring about or into existence,” and stresses Section 5622(a) uses “established” to define the relevant project—not “maintained” or “operated.” Thus, projects originally created by the City-appointed Old Board satisfy that element.
  2. Creating-municipality status persists despite appointment changes. Even though Section 5610(a.1) granted appointment power to Delaware and Chester Counties, Justice Mundy notes the Legislature did not make those counties municipalities that “created,” “incorporated,” or “joined” the Authority (contrasting Section 5610(a.1) with 53 Pa.C.S. § 5603 and 53 Pa.C.S. § 5604).
  3. Section 5619(a) confirms the creating municipality’s present operational power. Section 5619(a) permits an authority (after discharging certain bond obligations) to convey a project “to the municipality creating the authority.” Justice Mundy argues it would be “nonsensical” for the statute to authorize conveyance to the creating municipality if that municipality lacked the power to maintain/operate the project. She bolsters this point with the statutory presumption against absurd results and in favor of an effective statute (citing 1 Pa.C.S. § 1922(1)-(2)).
  4. Therefore: because the City created the Authority and the Old Board (City-appointed) established the original projects, the City retains a present ability—through Section 5619(a)’s framework—to “establish, maintain, or operate” those projects and can compel conveyance under Section 5622(a), subject to the Section 5619(a) impediments.

(c) The “two sides of the same coin” disagreement

Justice Mundy’s footnote frames the interpretive rift: she insists Section 5622(a) (municipality compels conveyance) and Section 5619(a) (authority’s constraints on conveyance) are “symmetrically related,” as reflected in cases such as Cnty. of Allegheny and Mifflin Cnty. She faults the Majority (as described) for treating the provisions as “distinct powers” without textual mandate and contrary to prior interpretive practice.

3.3 Impact

Practical governance and transactional consequences. As framed by the Majority’s rule (as recounted by Justice Mundy), a creating municipality’s unilateral Section 5622(a) leverage may diminish when legislative changes redistribute board appointment/control, potentially requiring multi-municipality alignment to effect conveyance.

Doctrinal consequences. The decision sharpens litigation around:

  • Whether Section 5622(a) is “static” (a permanent attribute of the creating municipality) or “dynamic” (dependent on current governance/control and present operational power);
  • The extent to which Section 5619(a)’s conveyance authorization to the creating municipality informs (or does not inform) the Section 5622(a) “power to establish, maintain or operate” inquiry; and
  • How courts should treat statutory innovations like Section 5610(a.1) that alter board composition without changing incorporation/joining status under Sections 5603 and 5604.

Future cases. Expect disputes to turn on granular categorizations of projects (those “established” under an old board vs. those established later), and on whether “power to establish, maintain, or operate” is derived from municipal home-rule/other enabling authority, from “creating municipality” status, or from present governance control.

4. Complex Concepts Simplified

  • Municipal authority. A separate legal entity created by municipality(ies) to finance and operate public projects (like water systems).
  • Section 5622(a) conveyance. A statutory mechanism allowing a municipality, by ordinance/resolution, to require an authority to convey a project to the municipality if conditions are met and the municipality assumes obligations tied to that project.
  • “Project established … by a board appointed by a municipality.” A limiting condition: only projects that were brought into existence under the authority’s governance when the board was appointed by that municipality qualify under this clause.
  • Dicta. Judicial statements not necessary to the decision; they are not binding precedent. Here, Burke is treated as containing dicta regarding an authority’s ability to initiate conveyance.
  • Judgment on the pleadings. A request to decide a case based only on the pleadings (complaint/answer), assuming the non-moving party’s well-pleaded facts are true.
  • Section 5619 “impediments.” Statutory preconditions (e.g., discharge of certain bonded debt/claims) that can limit when a project may be conveyed, even if a municipality seeks takeover.

5. Conclusion

Justice Mundy’s opinion crystallizes the case’s central interpretive conflict: whether Section 5622(a)’s unilateral municipal conveyance power is effectively dynamic (tethered to present operational power/control after Section 5610(a.1) board changes) or remains anchored in creating-municipality status, reinforced by Section 5619(a)’s express authorization for conveyance “to the municipality creating the authority.” While concurring that Section 5622(a) is unambiguous and that Burke contains dicta, Justice Mundy would preserve the City’s unilateral ability to compel conveyance—subject to Section 5619 impediments—because, in her view, the MAA’s text and case law treat Sections 5619(a) and 5622(a) as integrated components of a single transfer scheme.