The state receiver appointed to oversee the financially distressed City of Chester filed for bankruptcy protection Thursday and asked for a federal mediator’s help to resolve a worsening fiscal crisis in Delaware County’s only city.
The filing comes three weeks after the city disclosed that it had lost $400,000 in a phishing scam in June, a development that receiver Michael T. Doweary said was “extremely troubling.”
Chester, which has been under some degree of state oversight for 27 years, is in “grave financial condition,” Doweary’s office warned in a presentation in September.
Among the many municipalities with which the receiver’s staff has worked, it said, “without a doubt, Chester’s financial situation is by far the worst that we have.” Bankruptcy was the “only path,” it said.
Said Chester Mayor Thaddeus Kirkland, “This is not the direction we wanted to go in.”
The city of 33,000, which has a 30.4% poverty rate, one of the state’s highest, confronts a $46.5 million deficit in 2023 on a budget of about $55 million. It has been running deficits since 2013, the receiver’s office said. As of Dec. 31, it said, the city was $39.8 million behind on pension payments.
» READ MORE: A phishing scheme drained $400,00 from Chester’s coffers
It has been able to pay some bills with the help of $30.4 million in federal money it received last year from the Biden administration’s American Rescue Plan Act, and $5 million in an interest-free “revenue…
