Chester receiver takes city officials to court for interfering with financial recovery efforts

The city of Chester is on the verge of bankruptcy and now Michael Doweary, the state-appointed receiver entrusted to save the cash-strapped city from collapse, has petitioned the Commonwealth Court of Pennsylvania for a writ of mandamus — a request for the court to order city officials to cooperate — against the mayor and council for behavior that he believes has interfered with his efforts.

“Chester is running out of time and on the brink of insolvency, and actions that have been taken here by city officials are making it very difficult for us to do our jobs,” Doweary said in an interview with WHYY News.

Since the start of 2022, the receiver’s office and Mayor Thaddeus Kirkland have publicly clashed on matters concerning a “very one-sided” parking meter contract that Chester is not seeing a “dime” from, accusations that city officials increased their own salaries at the behest of the receiver, and the renewed contract with the controversial incinerator operator.

The receiver is asking the court to address the salary issue, as well as to enforce two recent orders that raised ethical concerns sent to city officials that were ultimately rejected.

“The first of those orders was requiring city council to reverse their action which supported an application for an economic development liquor license and then the other one was to comply with our order regarding the finance and human resources department staff and internal controls,” said Vijay Kapoor, the chief of staff to the receiver.

Because of a vacancy in the Commonwealth Court, these points of contention were most likely going to simmer until a new judge was appointed to oversee the city’s situation. However, the disregard for Doweary’s orders in city hall has forced his hand.

Receiver: Liquor license awarded to city employee related to Mayor Kirkland

Doweary issued two orders directed towards city officials on March 2. The first of which dealt with a Feb. 23 Council meeting where the government body passed a resolution that granted an economic development liquor license at property “partially owned” by Chester’s business development director — who, according to the legal petition filed by Doweary, happens to be the son-in-law of Kirkland.

Doweary sent two emails to the mayor, city council, and the solicitor leading up to the vote directing them to remove the item from the meeting agenda. Only the solicitor responded to the email correspondence, according to the order, but it was to inform the receiver’s office that the city intended to move forward with the agenda.

“​Despite this direct order, the Mayor and City Council acted on the resolution and it passed with Councilmembers William Morgan, Portia West, and Elizabeth Williams in favor. Councilman Stefan Roots voted no and the Mayor abstained,” the order read.

The receiver’s order also raised concerns regarding transparency — it said that it was never disclosed during the meeting that a city official, who happened to be a relative of the mayor, was the one on the receiving end of the license. The order called for a reversal of the action and went on to say that “the ethical issues of this action should be obvious.”

WHYY News reached out to a spokesperson for Mayor Kirkland, but he was not immediately available to comment.

Chester’s finance and human resources departments are under the spotlight

The second of Doweary’s directives sent to city officials focused on the job Councilmember William Morgan has done as the city’s director of Finance and Human Resources Departments and how his performance has impacted the receiver’s Recovery Plan for Chester.

The order stated Doweary has “lost confidence” in the city’s ability to carry out “basic municipal services.”

The order goes on to say that attempts to address the situation with Morgan have been unsuccessful and that Morgan has “refused to fully cooperate” with the interim Chief Financial Officer Sheila Winfrey-Brown. In layman’s terms, the order restricts Morgan from performing any duties related to his role as Chester’s Director of Accounts and Finance — citing several instances of questionable actions taken by Morgan or missteps that have happened under his watch.

Among the incidents listed in the order are Chester facing about $750,000 in tax penalties due to late or inaccurate W-2 and W-3 filings, a “significant number” of police officers and firefighters receiving the incorrect base salary, and delayed audits of city finances.

On top of those things, there was another incident that was a primary rationale for the order and is subsequently stated in the mandamus.

“In December 2021, Councilman Morgan approved reimbursements to himself, and verbally directed a City employee to reimburse him for the purchase of $1,500 in gift cards without sufficient documentation, and to date, has not provided the requested documentation to the Interim CFO,” the mandamus read.

WHYY News reached out to a spokesperson for Morgan, but he was not immediately available to comment.

But for American Rescue Plan Act funds and a $5 million loan from the Pennsylvania Department of Community and Economic Development, Chester would’ve run out of money at this point, Doweary said.

“We can’t waste time with stuff like this with these actions and unfortunately, we’re to a point where we need to take it up to Commonwealth Court to rein this in and navigate a path forward here. So hopefully, the Commonwealth Court will support us and we’ll be able to make some more progress here and get back to being focused on what we need to do,” Doweary said.

The receiver and city officials will meet virtually on Tuesday at the bi-monthly Municipal Financial Recovery Advisory Committee meeting.

The Commonwealth Court has set an argument date for the mandamus on March 14.