More than 250 Chester residents packed a special meeting last week to hear suggestions by a Philadelphia-based independent firm charged with finding ways to reduce the city’s overwhelming deficit and help the city break free of Act 47, distressed municipality, status.
A report filed by Econsult Solutions that was released prior to the meeting, calls for cutting police personnel by 10 percent and reducing fire department staff by 30 percent. It also calls for closing of one of Chester’s two fire stations, raising earned income taxes temporarily, initiating an amusement tax on Philadelphia Union tickets, and changing the distribution of gambling revenues from Harrah’s casino.
“Revenues remain stagnant, the tax base is not growing and expenditure growth continues by mandated wage increases and large benefits packages,” said Steve Mullin, president of Econsult Solutions. “… We consider centralized financial oversight and management to be critical. Personnel cost containment must be achieved to balance the budget… The city must also grow its tax base and implement a community development plan.”
The city’s operating deficit is expected to be $9.2 million in 2016 with an accumulated deficit of $16.3 million, and the report says that if changes are not made to Chester’s current expenditures and revenues, the city will continue to experience annual operating deficits.
Residents were unhappy with the suggestion of reducing police officers and firefighters and expressed concern and anger about the possibility of having only one fire station. One especially vocal resident was removed from the room by police for interrupting and disturbing the flow of the meeting.
“I know that most of the construction in the city is pre-1955, which means there’s no fire stops in the walls,” said former Fire Commissioner Jimmy Johnson. “Much of our housing stock (is) row homes. If you have a fire, your neighbors will also have a fire. The men and women of the Chester Fire Department risk their lives every day. You can’t put a dollar amount on someone’s life. In terms of closing the fire station to cut the budget, there’s a reason that station is down there (in the west end). That fire house got there because of response time. The lives of the people who live on the west side are as valuable as those on the east side… I live in the west end of the city and you are not closing that fire house. ”
Calvin Williams, a 60-year resident, said the city cannot afford to lose any police or firefighters.
“I’m quite sure there are other ways of saving money rather than closing fire stations or removing police officers,” Williams said. “There has to be another solution to finding money.”
The residents were extremely complimentary of both the police and firefighters.
“They do a good job for us,” said one resident. “We don’t need them decreased.”
Resident Melvin Campbell said city officials have to do a better job of getting people to pay their taxes and get more businesses to come to the city.
“We need to keep our money in the city,” Campbell said. “And, we have landlords who own property and don’t pay taxes at all. Go after them.”
Kim Jennings reiterated Campbell’s statement, adding that there are a large number of vacant and abandoned properties in the city.
Questions were also raised as to whether large corporations such as Harrah’s Racetrack and Casino and Talen Energy Stadium are “paying their fair share.”
Mullin said Harrah’s is paying nearly 35 percent of the city’s general revenue, which is twice the amount of the entire property taxes for the city.
The report’s recommendation, that a chief financial officer and deputy CFO be hired in place of having an elected Council member serve as director of Accounts and Finances, was also challenged. Mullin said both salaries would be paid by the state Department of Community and Economic Development (DCED), thus costing the city zero dollars.
“Chester City is a $50 million-a-year organization,” Mullin said. “Currently, one Council member is the chief financial officer. It’s really hard for any single person to be doing that part-time. Not that anything was done wrong. We are just saying, this is a very important job… There was no malfeasance or misappropriation of funds. We found none of that. The ability to stay on top of finances is a full time job. “
Chester has been in Pennsylvania’s Act 47 for 21 years. According to the report, the city’s dire financial situation peaked in 2006, when it was necessary to obtain a deficit-funded loan to meet payroll and deliver basic services.
The city’s financial condition improved in 2008 with the opening of Harrah’s and the new source of revenue allowed Chester to operate within its budget for several years including establishing a reserve fund with excess revenues. The addition of PPL Park (now Talen Energy Stadium) also played a positive role.
Unfortunately, over the past few years, the city has reverted back to distress status. Other revenue sources have stagnated, and economic growth has been slow.
A revised plan will be reissued on Friday (Aug. 12th), taking residents’ comments into consideration..
City Council has until Aug. 27th to accept the revised plan. If accepted, the recovery plan will go into force immediately. If the plan is not approved, the mayor must present an alternative recovery plan within 14 days, which will either be accepted or rejected by the DCED. If the plan is rejected, the last step will be placing the city into receivership, or Chapter 6.
“The mayor and city officials fully understand the severity of this and we have worked hand-in-hand,” said Mullin, “and we will continue to work together going forward.”
City Council said an alternate plan will be formally introduced at the next Council meeting.