DV Journal

“We’re the oldest city in the Commonwealth of Pennsylvania,” says Chester Mayor Thaddeus Kirkland. But, as he was painfully aware, it is also the only one in danger of being wiped off the map.

Founded in 1682, Chester was where William Penn first disembarked into the province that still bears his name. The city’s courthouse is the oldest public building still standing in the United States. It saw action during the Revolutionary War. It was known as a “Saloon Town” in the early 20th century. Its Sun Shipbuilding was at one time the largest shipyard in the world.

But after decades of financial chaos and mismanagement, Chester now teeters on the edge of insolvency, with the state-appointed receiver suggesting that dissolution may be the inevitable fate of the 350-year-old city.

Kirkland is determined to avoid that outcome.

“For them to even mention disincorporation is simply wrong,” he said.

Kirkland began his tenure as mayor of Chester in 2016. A former state representative for 23 years starting in 1993, he took the city’s reins after it had been financially struggling for years.

Chester first entered state financial oversight under Pennsylvania’s Act 47 in 1995. Kirkland said when he came aboard as mayor, “We worked with [state officials] hand in hand. Everything was fine. We were moving in the right direction.”

“Then COVID hit,” he said. “When it hit, it changed everything for the worse.”

Other officials have disputed the narrative that COVID changed things. Receiver Michael Doweary has noted the city lost nearly $7 million in 2019, which Doweary said was “the seventh annual loss in eight years.”

Kirkland said the city was promised, “serious financial support to help us with our pension problems.”

“At the onset, there was a lot of work that was done together between myself and the receiver,” he said. “But then things started getting a little dicey. During that period, I took offense to some things; he took offense to some things.”

Tensions persisted between city officials and the state’s appointee. Kirkland said the receiver sought to remove the authority of city council members to head up departments, something the council was unwilling to concede.

Still, “we reduced staff at the receiver’s request. We reorganized in various departments.”

Kirkland said during his time as mayor, he had overseen deliberations for selling the Chester Water Authority to the private company Aqua PA. That controversial proposal has been ensnarled in court proceedings for many months.

Both Chester residents and CWA itself have opposed the plan, with residents fearing that Aqua would greatly increase rates once it acquired the water system. CWA, meanwhile, has argued the city council lacks the authority to sell off CWA’s assets.

“We’ve also talked of bringing developers in to develop housing in downtown Chester,” Kirkland said. He added the city “just did some groundbreaking” on “a $55 million expansion of Philadelphia Union’s facility” in the city. “It would draw people from all across the country to that area.”

Kirkland said the city has also worked to address its massive outlay crisis, specifically its pension obligations, which he said were “the biggest headache” on the city’s budget.

“We’ve modified some things so folks don’t walk out of here with these huge pensions anymore,” he said.

The city’s pension struggles have also resulted in downstream personnel decisions.

“Some police officers are retiring or walking away because of the pension situation,” he said. “They don’t feel like the future looks bright. It’s now difficult to retain police officers.”

Kirkland said the receiver’s office has indicated that the city may be disincorporated as early as “the end of the year.”

“I will credit them with saying that’s not what they want to do,” he said. “But if things don’t turn around, that’s what will happen.”

To try and stave off further financial collapse, Kirkland said he and a delegation from Chester planned to travel to Harrisburg this week to petition the Pennsylvania government for relief using the state’s “Rainy Day Fund” of nearly $8 billion.

“I’m going to meet with the governor’s office,” Kirkland said. “My goal is to meet with the members of the appropriations committee, the Pennsylvania Legislative Black Caucus, and the Speaker of the House. Hopefully, I’ll have the chance to meet with members of the [Department of Community and Economic Development] to talk to them about the needs of Chester, how they can be helpful, if they can be helpful, to the city of Chester.”

The mayor said that nearly a quarter-century as a state representative has given him relationships in Harrisburg he hopes will see Chester through the crisis.

“I want to be able to talk to the legislators,” he said, “to make my pitch and plea for a community that I love and a community they should not leave behind, cannot leave behind.”

“There’s $8 billion in the state’s Rainy Day Fund,” he added. “Well, it’s storming right now, and we could use that umbrella.”

Chester County controller Margaret Reif’s mismanagement is creating a host of financial problems that are not only costing taxpayers, but snowballing into other headaches, according to one county commissioner.

Commissioner Michelle Kichline says Chester County’s pension was overdrawn by approximately $1 million at one point under Reif’s management. The commissioner also noted that the IRS hit the county with $22,000 in payroll-tax late fees in late June.

The county is also paying penalties for delayed payments to vendors, has seen nearly 50 percent turnover of controller staff positions, and operated with unreconciled financial books from June until October, she said.

These revelations come on top of public scrutiny Reif faced in July for payroll problems. Initially, numerous county staffers either did not receive their paychecks on time or were underpaid. Soon, overpayments to other employees began to pop up, totaling over $100,000.

Reif said the problems affected about 10 percent of the county’s workforce after the county contracted with Lancaster-based Inova Payroll of Pennsylvania to manage salary disbursements. According to Kichline, Reif presented the idea of switching payroll vendors as a means to “modernize” the county payroll system and asserted it would be “net neutral” in terms of cost.

“I can assure you it has not been ‘net neutral,’” the commissioner said.

According to Kichline, the employees most impacted are those at the county prison, the Pocopson Home long-term care facility, and Chester County Emergency Services. She observed workers at these departments not getting proper overtime pay nor getting hazard pay for working in high-risk environments during the coronavirus pandemic. Others who were overpaid had to work extra, uncompensated hours for months to make up the difference.

“These people rely on this money for their rent, for their mortgages, for the food on their table,” Kichline said. “It’s been really, absolutely disheartening to see what these people are going through. They’re very upset.”

The commissioner said she’s been inundated by messages from county staffers struggling under the circumstances.

Workers who have been with the county for more than two decades wrote a letter discussing the administrative burdens the payroll glitches have caused them. Along with improper compensation, some are having trouble ascertaining how much time off they can take—an increasingly important issue as the holiday season nears.

In the wake of these concerns, both the county’s general payroll manager and the prison payroll manager have resigned.

Kichline and other county sources have also stated that, while each Chester County department is typically allocated $8,000 for legal expenses, Reif’s allotment, per her request, exceeded that standard legal budget by over $10,000 during a six-month period in 2020. They indicated that the solicitor receiving those funds was Tony Verwey, now a Democratic candidate for judge in the Chester County Court of Common Pleas.

Kichline said she finds that arrangement “ironic” insofar as she recalls Democrats criticizing the Republicans who led the county until 2017 for hiring politically connected attorneys. She said she has long called for reviewing the present system that allows such attorneys to profit from the county and then shortly go on to run for county office.

“Profiting at the public expense is not a good thing,” she said.

The county’s contract with Advaite, a Malvern-based biotech company, has also made unsettling headlines. In April of last year, Chester County entered into  agreement  the agreement to provide the county health department with COVID-19 rapid antibody test kits. After the tests were administered, however, many probable false-positive results were seen.

While the county halted its order of a million kits after reportedly receiving only 102,000 of them, it paid more than $13.2 million of the agreed upon $20 million. One source has said that Advaite actually delivered no more than 79,000 of the kits on schedule and that the county’s purported overpayment to the company is now the subject of litigation in the Chester County Court of Common Pleas.

Reif has clashed with Chester County Commissioners Kichline, Josh Maxwell and Marian Moskowitz) over which of their offices has proper authority to investigate the contract and ensuing payments. But while Reif has contended she should probe this purchase that the commissioners approved, her Republican opponent Regina Mauro has criticized her for disbursing millions of dollars of taxpayer money to Advaite and not questioning the contract from the start.

Specifically, Mauro has raised doubts about the corporation’s short history (about three years), its modest staff, its unidentified clientele, and its unrelated general focus (on diagnosis and treatment of eye conditions).

“As the county’s fiscal watchdog, the controller is expected to prevent or advise against anything that poses a financial risk or loss, especially in difficult times when funds are most needed,” Mauro said. “While it was not within the controller’s purview to negotiate or enter into this agreement on behalf of the county, as its fiscal watchdog, the controller would have been expected to have a powerful voice making the case against taking on such obvious risk, or at least insisting on specific provisions that would protect the county.”

“I have heard directly from many people who have had problems with the way the controller has run the office,” Mauro said. “Sadly, the first thing some ask me is if I know what I’d be getting into, because it is that bad. It is regrettable that all are in fear of reprisal should they come forward to testify on the condition that the office is in, and all the costly mistakes that have been caused by the controller’s decisions.”

Reif’s office did not return a call for comment.

This article first appeared in Broad and Liberty.