Commonwealth Failing Chester

Chester’s Cash Crisis

Chester's Cash Crisis is Not New! The City of Chester’s Cash Crisis is Caused By Years Long Oversight Failures by the Pennsylvania Department of Community and Economic Development

On April 13, 2020, Governor Wolf issued a “Declaration of Fiscal Emergency” for the City of Chester. The City and the Pennsylvania Department of Community and Economic Development (“DCED”) claimed that the City’s current financial distress is related to the COVID-19 pandemic, which “is now threatening all of the progress that the City has made.”1 This is not true and is a story concocted by the DCED to cover up the DCED’s long standing lack of transparency and fiscal mismanagement of Chester going back at least 8 years. Indeed, it appears that none of the $3.9 billion in discretionary federal stimulus funds that Pennsylvania received due to the pandemic have gone to the City of Chester.
The DCED’s hand-picked Receiver for Chester has admitted this COVID-19 centric version of events is not accurate and that Chester’s cash struggles have been building for the last several years. Indeed, in a recent receivership filing the Receiver admits:

The impact of COVID-19 is new and unexpected, but the City’s struggle to finish the year without running out of cash is not. In recent years the City has dealt with this problem by defaulting on its Tax Revenue Anticipation Note (TRAN) repayment (2016); falling behind on its payments for employee health insurance (2016); issuing new debt to cover current year obligations (2017); or pushing a portion of its current year obligations into the next year (2018 and 2019).2

The reason the DCED is playing up the inaccurate COVID-19 cover story is because, behind the scenes of the recent Declaration of Fiscal Emergency, the DCED has been working with the City of Chester and for-profit water companies to attempt to circumvent pending litigation, and to attempt to improperly seize and sell to the DCED’s private water company friends assets that neither the DCED nor the City own, as a way to cover-up the DCED’s lack of oversight that has resulted in the City’s cash crisis and economic collapse.

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The Improper Attempts to Seize the Water System