CHESTER, PA — Chester Water Authority is asking Pennsylvania’s Department of Community and Economic Development to reassess the city’s receivership, arguing that persistent pension liabilities, delayed audits and financial-control problems show state oversight has failed to resolve Chester’s structural fiscal problems while devoting too much attention to the water authority.
In a Sept. 8 letter to DCED Secretary Rick Siger, CWA solicitor Francis J. Catania said the agency should examine whether the receiver’s continuing focus on the authority is consistent with the purpose of Pennsylvania’s Act 47 municipal-recovery law.
The letter comes as Chester remains under an Act 47 receivership that began in 2020. Vijay Kapoor has served as receiver since July 2025, succeeding Michael Doweary, according to DCED.
CWA’s central argument is that Chester’s most significant financial problems remain unresolved despite years of state intervention. The authority cited deficits, pension delinquencies, other post-employment benefit liabilities, debt-covenant violations, weak internal controls, and delayed financial reporting.
The authority pointed in particular to Chester’s 2021 audit, completed in November 2025. According to the letter, auditors disclaimed opinions on the city’s General Fund, governmental activities and aggregate remaining fund information because they could not obtain sufficient audit evidence.
That audit also identified three material weaknesses, including problems with closing procedures, federal reporting requirements and internal financial controls. The letter says payroll-control failures resulted in payments to “ghost employees” and former employees.
CWA also cited continued deterioration in Chester’s pension position. Unpaid pension contributions and interest increased from about $36.6 million at the end of 2021 to $39.7 million in 2022 and $42.9 million in 2023, according to figures cited from the city’s audited financial statements.
The city’s broader balance-sheet pressures remained substantial as well. CWA said Chester reported a negative net position of about $418.8 million in 2021, $427.2 million in 2022 and $411.1 million in 2023.
The letter also cited Pennsylvania Department of the Auditor General compliance audits covering 2023 and 2024 that found instances of noncompliance across Chester’s police, fire, and officers-and-employees pension plans, including failures to pay minimum municipal obligations.
CWA further criticized financial controls surrounding a 2022 phishing incident in which Chester City Council reportedly sent about $400,000 to a scammer posing as the city’s workers’ compensation insurance broker. The authority said the receiver later maintained that he did not learn of the incident until the city issued an October 2022 press release.
The authority also pointed to Chester’s failure to make required principal payments on Series 2017A and 2017B bonds in 2023 and noncompliance with a covenant requiring timely annual financial statements.
Chester entered Chapter 9 bankruptcy in November 2022. CWA argues in its letter that the bankruptcy and the city’s continuing fiscal problems undermine claims that the receivership has stabilized municipal finances.
The authority’s criticism is intertwined with its long-running legal dispute with Chester over control of the water system. Earlier this year, the Pennsylvania Supreme Court ruled that Chester could not unilaterally convey CWA’s assets, reversing a Commonwealth Court decision on the scope of the city’s authority under Pennsylvania’s Municipality Authorities Act.
CWA argues that the receiver’s attention to the authority has diverted state resources from Chester’s underlying fiscal problems. The letter specifically criticized the receiver’s participation in CWA board matters and the receivership’s previous attempts to pursue control of the authority through bankruptcy litigation.
At a July meeting of Chester’s Municipal Financial Recovery Advisory Committee, the receiver said the city had become financially more stable after years spent responding to repeated crises, according to statements quoted in CWA’s letter. The authority disputed that assessment, citing the city’s audits and outstanding liabilities.
CWA is asking DCED to refocus the recovery process on realistic budgeting, timely financial reporting, pension and other post-employment benefit reform, stronger internal controls, improved collections and a bankruptcy strategy addressing Chester’s underlying liabilities.
The authority serves more than 200,000 residents in Chester and Delaware counties, according to the letter, and maintains that its finances are separate from Chester’s fiscal distress.
CWA’s letter does not substantiate several additional allegations contained in the accompanying press-release material, including claims that the receiver has received roughly $2 million in compensation, called a CWA board “racist” or placed a convicted murderer on staff. Those claims were therefore not included as established facts in this report.
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