Collector decides to strip Chester Councilor William Morgan of municipal financial responsibilities

FILE PHOTO BY MEDIANEWS GROUP

Chester wide receiver Michael T. Doweary.

CHESTER — On Monday, the city’s receiver asks the Commonwealth Court to strip Chester City Councilor William Morgan of his financial operational authority for a variety of reasons, including improperly paying police and firefighters, $750,000 in penalties from the Internal Revenue Service and the purchase of $1,500 in gift cards. last December.

The court has scheduled a hearing on Mandamus’ request from the receiver for 1:30 p.m. It can be viewed here https://youtu.be/1wIvsFy_V_Q. Court rules allow viewing, but recording is prohibited.

Since September 2016, Morgan has served as Chester’s accounts and finance manager and oversees the city’s finance and human resources departments. Mandamus’ request asks the court to suspend its authority solely in this capacity.

Additionally, the receiver is asking the court to reverse the $10,000 pay raises some city officials passed for themselves this year; rescind an application for an economic development liquor license for a property partly owned by a city employee and relating to the mayor; and require city officials and staff to comply with the March 2 receiver’s order regarding financial and human resources operations.

According to court documents, Chester’s attorney, Ken Schuster, in a March 2 meeting with Mayor Thaddeus Kirkland and all council members except Councilor Stefan Roots, advised the receiver that the city ​​would not comply with the order of March 2.

As a result, the receiver filed an application with the Commonwealth Court to issue a warrant of mandamus compelling the city to comply with the order suspending Morgan’s authority as Director of the Finance and Corporate Departments. human ressources.

Morgan referred his comments to the response filed on behalf of city officials by attorney H. Marc Tepper.

In the March 4 court filing, the receiver claimed, “The City of Chester is running out of time. The city is on the verge of bankruptcy. But for federal bailout funding and a $5 million emergency loan from the Commonwealth’s Department of Economic and Community Development (DCED), the city was reported to have run out of cash last year. The city’s financial situation is just as precarious this year.

The filing says the city owes about $37 million in missed pension payments and the police pension fund still has about six to seven months of benefits.

“Put simply,” the receiver continued, “the city is in desperate need of help and the actions some of its elected officials have taken that necessitated this filing not only violates the Amended Recovery Plan and its goals, but renders also much more difficult to obtain this aid and put the City back on solid financial footing.

In its response to those court documents, Tepper filed a response denying those charges, saying the allegations are findings of law to which no response is required or that city officials lack sufficient knowledge or expertise. information to form a belief in the truth. of the allegation after reasonable inquiries.

In 2020 Governor Tom Wolf declared a budget emergency in the city of Chester. In June 2020, the Commonwealth Court appointed Michael T. Doweary as receiver for the town to create and implement a plan to lift Chester out of financial distress. On December 28, 2021, the receivership was extended for two years.

One of the issues with the mandamus application concerns the salaries of some city officials.

Prior to 2020, each city county member and elected comptroller earned $35,000 and the mayor earned $41,000. In 2020, two council members and the comptroller received raises of $25,000 to $60,000 and the mayor received a raise of $34,000 to $75,000.

The mayor argued that previous administrations had cut pay for those positions as they prepared to step down. In the response filed by the city court, they argue that the officials accepted a temporary voluntary pay cut.

During the 2021 budget proceedings, city officials agreed to cut the mayor’s salary to $65,000 and the salaries of city council members and the comptroller to $50,000 each. In December, the city council added $10,000 to the salaries of council members, the comptroller and the mayor, despite the receiver telling them not to.

Court documents also say the receiver learned of a city resolution in February in favor of an economic development liquor license for a property owned in part by Ronald Starr, Chester’s business development manager. and son-in-law of the mayor.

The resolution passed despite the receiver asking the city to remove it from the agenda to “discuss the ethical issues surrounding this resolution.”

Court documents say that while economic development is important, the receiver argues that “businesses must be assured that the level playing field in the city and that no person or business receives preferential treatment from of the municipal administration or elected officials because of the person for whom she works. or to whom they are related.

In the March 2 order, the receiver said he had “serious concerns about internal controls and processes within the finance department.”

“(With Mr. Morgan as manager, I lost faith in the city’s finance and human resources departments (which he oversees) to accurately perform basic city services such as payroll, tax returns tax, financial reporting and preparation for audits,” the receiver wrote in the order.

Additionally, he said Morgan failed to cooperate with Acting Chief Financial Officer Sheila Winfrey-Brown, refusing to give her access to the city’s financial system, refusing to give her a pass or an email to City Hall, excluding him from staff meetings and instructional staff. they have to get his approval before giving him any information.

The March 2 order also sets out a list of other concerns the receiver has regarding the city’s financial and human resource operations.

He noted that the receiver’s team found that a ‘significant number’ of police and firefighters were receiving incorrect base salaries and longevity amounts, with some receiving more than they were entitled to and others less. .

The receiver also alleges that Morgan authorized payroll staff to make unbudgeted payments worth $137,540 to certain employees this year.

“This amount has not been budgeted for 2022, which means we will have to find reductions in other areas to offset these costs,” the order says. “The City remains in a situation where it could run out of money this year and unauthorized, unbudgeted spending like this is completely irresponsible.”

The order says Chester incurred $750,000 in Internal Revenue Service penalties due to late or inaccurate W-2 or W-3 filings.

With the last audit completed in 2018, the completion of the audit, as well as calculations to access lost earnings reimbursements under the American Rescue Plan Act, have been delayed “due to the excessive time required to provide baseline data,” according to the receiver.

Additionally, the receiver said Morgan approved reimbursements for himself for the purchase of $1,500 in gift cards in December and ordered the accounts payable employee to reimburse him. Acting CFO Winfrey-Brown reportedly requested receipts for gift card purchases and had not received them by March 2.

Then, in November 2020, while reviewing the city’s health care plans, the receiver said his team found seven employees on a “very expensive” health care plan that had been halted for active employees. These seven employees included the mayor, attorney Ken Schuster, Morgan, Nafis Nichols, then chief financial officer, and three other employees. After this was brought to Nichols’ attention, those employees were then moved to the plan offered to active employees, according to the order.

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