Unsanctioned pay and unauthorized board members: Chester receiver unloads more allegations at stormwater authority

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Chester’s state-appointed receiver, Michael Doweary, on Tuesday accused the Stormwater Authority for the City of Chester (SAC) of conducting an unauthorized board expansion, stonewalling officials, and paying board salaries without authorization.

These recent allegations are among many instances of bad governance and wrongdoing that the receiver has made public about the SAC.

Doweary, who’s tasked with rescuing city finances, and his chief of staff, Vijay Kapoor, said these transgressions amount to a failure to adhere to Pennsylvania’s Municipal Authorities Act (MAA).

“We have an obligation. I have an obligation to complete our due diligence and look at every aspect of city operations,” Doweary said at the monthly Municipal Financial Recovery Advisory Committee meeting.

SAC officials did not immediately respond to a request for comment.

Citing the stormwater authority’s articles of incorporation, Kapoor said the October 2016 document establishes the authority’s creation under the MAA — and allows for only five board members. However, recent meetings show the board has grown to nine members.

SAC never amended its articles of incorporation — outside of recent attempts through improper channels. Kapoor said the authority is violating its own rules. Additionally, the MAA states that board salaries must be “determined by the governing body of the municipality.”

The receiver’s office asked city solicitor Ken Schuster to find records of city council approving or establishing board salaries. The solicitor was unable to find any record. Kapoor said that’s “significant.”

“Those board members who improperly received salaries may have to pay the salaries back as restitution, because the stormwater authority was never legally authorized to compensate its board members,” Kapoor said.

Because the receiver is still investigating and has yet to receive the required documentation from SAC, Doweary said it may be “too early to speculate” any punishment.

The city stormwater authority has come under increased scrutiny in recent months for several ethics-related issues. In April, first-term Mayor Stefan Roots accused council members Fred Green and Portia West of violating the city charter.

Both Green and West serve on SAC’s paid board and receive two salaries from the city. Roots and Schuster said this is not allowed, yet the council members remain on the board.

In May, the receiver’s office filed a motion in federal bankruptcy court, demanding that the authority hand over financial information. Doweary cited serious concerns with the authority’s management of budget and funds.

Chief among the “red flags” was a documented instance of SAC borrowing money from its executive director, Dr. Horace Strand and his church to make payroll.

SAC officials have rejected these claims and have resisted handing over any documentation. Instead, SAC  told city hall and the receiver’s office to file open records requests.

“I’m not sure if anyone really believes, because we certainly don’t, that if we filed a Right-to-Know request that we’d have these documents by now,” Kapoor said. “Because again, the story just keeps changing here in terms of why we are not able to be provided with public information regarding a public authority that the receiver has jurisdiction over both under Act 47 as well as the fact that we’re in the bankruptcy process.”

At the conclusion of the MFRAC meeting, Roots inquired Kapoor about a potential typo in his presentation. The receiver’s office appeared to be seeking compensation documentation from months before the stormwater authority’s creation.

Kapoor said it was not a typo. SAC has meeting minutes dating back to May 2016.

“I don’t even know what happened prior to this, but we just want to make doubly sure that if compensation was provided to those board members or to the people who purportedly were the board members at that time, that we find out what that is,” Kapoor said.