Chester, Pa., Receiver Michael T. Doweary is considering bankruptcy as a way to steer the city toward solid financial footing in light of a looming $46.5 million deficit anticipated next year, the Philadelphia Inquirer reported. Through Pennsylvania Act 47, the receiver has the power to file for bankruptcy and received authorization from the Pennsylvania Secretary of Community and Economic Development in February to proceed with bankruptcy filings. As required by Act 47, Doweary consulted with the Municipal Financial Recovery Advisory Committee on Tuesday regarding taking a step forward in that direction. He has not yet filed for bankruptcy but is engaging in negotiations with relevant groups to avoid such a filing. “What bankruptcy would mean for Chester is that it would provide Chester with the ability to try to reduce its pension to retiree health care … which it has to do to be fiscally solvent,” Vijay Kapoor, Doweary’s chief of staff, said. “The other thing that it would allow Chester to do is the opportunity to negotiate with other creditors so the city would have a fresh start, which it desperately needs.” Chester would continue to provide services to its residents even through bankruptcy, he added, although he said he anticipated that some employees may leave because of the uncertainty around such a situation. In evaluating Chester's general fund from 2013 to 2019, only in 2017 was there a surplus of $7.7 million due to a $12 million cash advance and a $2 million state loan. In the other years, the city's general fund ran a deficit from $2.2 million to $8.6 million.
