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‘A Robbery in Progress:’ Chester Water Cries Foul Over Receiver’s Bankruptcy Move

When Receiver Michael T. Doweary filed for Chapter 9 bankruptcy last Thursday for the City of Chester, he said it was the only way to resolve the city’s ongoing fiscal crisis.

“Chester’s financial and operational problems are far worse than my team of professionals has ever encountered. The status quo has not worked, is not working, and will not work. The residents of Chester deserve better,” Doweary said in a press release. He pointed to a projected $46.5 million deficit in 2023, including $39.8 million in past-due pension payments.

But representatives for the Chester Water Authority (CWA), locked in a struggle against the city’s bid to sell the CWA to Aqua PA, it was just the latest misstep by the city’s state-appointed overseer. And it leaves far too many unanswered questions.

“The Receiver has had two and half years to turn Chester around,” said CWA attorney Frank Catania, pointing to several high-profile fiascos like the city losing $400,000 through an internet phishing scam on the Receiver’s watch.

And, Catania added, Doweary did not tell the Commonwealth Court that Chester stands to gain $70 million through the sale of DELCORA (Delaware County Regional Water Quality Control Authority) to Aqua or, alternatively, get its sewer systems back so it could sell them itself.

“It’s a robbery in progress,” said Catania of Doweary’s revised Receivership document. Doweary is “trying to shift the burden (of paying for water and sewer) from government to citizens,” both in Chester and in parts of Delaware and Chester counties. Some 80 percent of CWA customers are suburban and if Doweary has his way, those customers will subsidize the city.”

“The Receiver uses bank robber’s logic: I need money. You have money. I’m taking it.”

Doweary declined to respond to repeated requests for comment. In a press release, he said he avoided bankruptcy as long as possible, and he pointed fingers at city officials.

“Since my appointment over two-and-a-half years ago, I have worked to avoid this day,” Doweary said. “However, Chester has a severe structural deficit that cannot be addressed by one-time fixes, has unaffordable retiree benefit liabilities, and cannot reliably provide vital and necessary services to its residents.”

According to Doweary, Chester’s elected officials and employees are not cooperating with his stewardship. For example, Councilman William Morgan lost the money to the phishing scam — involving a fake request for payment — in June, but he was not notified until three months later. He also pointed to a $750,000 IRS penalty against Chester for incorrect payroll taxes and to a salary being paid to an incarcerated former employee.

Doweary acknowledges he is seeking more control over city operations and also wants the court to award him control over the CWA. He also asked the court to tell employees and elected officials that they must not interfere with the directives of the chief operating officer or the Receiver.

What the Receiver won’t discuss, however, is the city’s outstanding debt for the high-powered law firm, Greenberg Traurig, for a $1 million contingency fee. How could Chester, struggling to pay its bills, afford to pay $1 million?

DVJournal has requested the underlying documents related to retaining Greenburg Traurig, but the Receiver has declined to provide them or explain what work the firm was supposed to provide to the taxpayers of Chester.

CWA is in litigation with the Receiver. Oral arguments in that case are scheduled before the state Supreme Court on Nov. 30.  However, a bankruptcy filing stays other court cases. Lawyers are meeting with a bankruptcy court on Tuesday.  Also, at 1 p.m. on Tuesday, the Municipal Financial Recover Advisory Committee will meet. That meeting will be streamed. 

“[Doweary] is court shopping,” said Catania. “He wants to avoid the Supreme Court and go to Commonwealth Court.”

“He’s going to try to convince (the Commonwealth Court) judge that he should be in charge of CWA,” added Catania.  “He couldn’t even make sure the city that Chester had proper insurance coverage and he wants to sell the water authority and serve 200,000 customers fresh drinking water? It’s outrageous. He’s got to be stopped. He did not tell the court the whole story that Chester stands to get $70 million from the sale of DELCORA.”

Instead of a Receiver, the state should step up for Chester, like it previously did Philadelphia, Pittsburgh, and Harrisburg, said Catania.

“This is an orchestrated crisis,” said Catania. “And whenever it’s convenient, Doweary brings the city retirees out for public relations purposes.

“He treated Chester retirees as hostages,” he said.

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GIORDANO: Rays of Light in 2021, Hopeful for a Better Year in 2022

It’s been a great first year writing a column for this new and much needed media outlet. Most of my columns have been about alerting readers to any number of negative things happening across the Delaware Valley. I thought for the last column of the year, I’d give you some rays of life that I see developing in our area. I’m not talking about the bright sunshine of an 80-degree day on a Wildwood beach but some hopeful bits of sunshine that might brighten up in 2022.

The best example of this is the recent pushback against Larry Krasner for his attempts recently to minimize the violence and chaos that have overrun Philadelphia. On my radio show I was joined by former District Attorney Seth Williams, former Governor Ed Rendell, and former Mayor Michael Nutter. All three were personally offended by Krasner and Nutter was particularly offended by Krasner posturing as the Great White Hope in Black and Brown communities.

Williams made the case that Krasner’s pride and ideology were blocking Philadelphia from implementing the strategies that the City of Chester is using to significantly lower violent crime, particularly homicides. Essentially, law enforcement is targeting those in Chester who are most likely to be carrying illegal guns and commit a murder. They tell these people that they will help them get a job and an education but if they are caught with a gun, they will get the most severe penalty. Krasner will not sign off on a plan like Chester’s. These results in Chester demand that we use them to turn up the heat on Krasner.

Pennsylvania Attorney General Josh Shapiro is running for governor as a Democrat who wants to use every means to turn around homicide rates in Philadelphia. He is great at posing in this role, but he refuses to call out Krasner. I’m hoping that a strong field of Republican candidates will be able to use this dilemma to defeat Shapiro in what I view is the most important race in America. The reason is that which ever party wins will control the election infrastructure for the big presidential race in 2024.

A big ray of light in 2021 came through the person of Clarice Schillinger who organized thousands of parents into a group Back to School Pa. that fought to stop shutdowns of schools. She then went on to quarterback the winning of 133 school board seats in Pennsylvania in the most recent election cycle. Watch for her as a force in Pennsylvania politics in an even bigger way in 2022.

In New Jersey newly elected state Senator Ed Durr was Gloucester County will be a big force in New Jersey politics. I’ve interviewed him twice and he has a tremendous sense of the hope he represents for people who have suffered under extremely progressive rule in New Jersey. He knows that those progressive elements will do anything to snuff out this hope and he is positioning himself already for his next race in a few years. Of course, he’ll stay grounded by still driving a furniture truck as his day job.

Maybe the most hopeful signal for the next year is that Pennsylvania Governor Tom Wolf has been stopped from continuing his one-man rule of Pennsylvania that unnecessarily shut down schools and businesses. Many school districts across the area have decided to empower parents to make the choice about whether or not to have their kids wear masks while in school.

I am very hopeful that 2022 will be a good year that will see better safety and prosperity for everyone across the Delaware Valley.

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