CHESTER, Pa. (KYW Newsradio) — Chester is close to losing its status as a city, unless officials can get their finances right. The financial crisis is so dire that the city’s government is at risk of dissolving by the end of the year.
Should that happen, Chester would no longer be a city but an “unincorporated service district,” said Micheal Doweary, the state-appointed receiver in charge of overseeing Chester’s finances and get the city off Pennsylvania’s list of distressed communities.
Becoming an unincorporated service district means city government officials would be replaced by a state appointee who would oversee all operations, Doweary explained.
“What it all entails and what it all means is unprecedented. Hopefully it never comes to fruition and we don’t have to figure that out.”
Doweary says the problems did not come overnight.
“The challenges that Chester is facing are not uncommon. As a former industrial hub, after years of decline, they don’t have the strong industries that were there at one point,” he said.
The state has had financial oversight over the City of Chester, under Act 47, since 1995. At the beginning of the pandemic, in April 2020, Gov. Tom Wolf declared a fiscal emergency in the city. Doweary was appointed in June of that year.
With cash-strapped Chester facing deficits and significant debts, Doweary filed for Chapter 9 bankruptcy protection in November of last year. Bankruptcy would give the city a chance to reduce costs and negotiate with creditors “so that the city can have a fresh start, which it desperately needs,” he said last fall.
Since his appointment, his office has expressed frustration with city officials for what is described as a lack of cooperation while trying to get finances in order. That includes one official waiting three months before he publicly reported a phishing scam that cost the government $400,000 last year.
To avoid the worst, some pretty big changes are necessary, Doweary said. “My focus over the next eight months is to do everything we can to avoid that possible outcome.”
If the city is disincorporated, there will be a ripple effect through the region. "This is everyone’s problem," Doweary said.
Chester has until the end of the year to figure things out.
“Really need to put everything into this federal process of adopting a plan of adjustment in the next eight months,” Doweary said. “That plan has to come together so we can spend the balance of ’24 implementing whatever the solutions are that are in that plan.”
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