Questions raised about borough finances, plans

A longtime Chester County Democratic gadfly has accused the West Chester Borough Council of secretly beginning a “policy of privatization” of borough services without public input, and has called for changes in the way the council conducts its business with an emphasis on transparency.

In a July 17 letter to the Daily

Local News, West Chester attorney Samuel C. Stretton alleges that the council hid from the public details of an million dollar overpayment in a street paving contract that led to serious financial problems in the borough’s budget and resulted in the layoffs of dozens of borough employees.

The overpayment, Stretton alleges, will have far reaching impacts on the borough’s finances, including an inability to hire new police officers and a delay in annual salary increases for employees, and lead to a state where many borough functions are given out to private companies instead of being done in-house — such as paving, auto maintenance, and grass cutting in parks — to reduce budget costs.

“The bigger issue is that it appears that the borough is starting a policy of privatization without any public discussion or vote,” Stretton wrote in his three-page letter. “When I wrote every council person (in) the borough two months ago and asked them to deal with these issues and make it public, so far they have not done so. This issue has to be addressed immediately.”

All of this has occurred, said Stretton — a former Democratic candidate for Chester County District Attorney, official with the Chester County Democratic Committee, and regular critical commentator on politics and government in the county — without the public being included in the discussion.

“To allow this to happen and to not follow the procedures in place, in my mind, is malfeasance in office,” Stretton wrote. “Whether the basic duties of the borough should be outsized/privatized or not, any change should be the subject of public discussion,” he wrote. “Instead, this has been done privately without the public’s involvement.”

In response, Borough Council President Michael R. Galey said that Stretton’s allegations of financial improprieties covered up

by council and which are propelling the borough toward privatization of services were uninformed and misplaced, even though he acknowledged that there had been a problem with payment of a paving contract that led to a $600,000 shortfall in the 2020 budget.

“Many of the allegations raised by Mr. Stretton in his letter … were not based on accurate information and instead were accusations without substantiation and with little or no effort made to test their

veracity,” Galey said in his own letter to the Daily Local News, dated July 26.

One council source who spoke on the condition of anonymity so as to address Stretton’s comments frankly said the attorney’s accusations were “just wrong on a level that is a bit silly.”

Galey claimed that many of the issues that Stretton criticized as being hidden from the public had, fact, been addressed on multiple occasions and at length at Borough Council meetings, including the pavement contract over-billing. “Although this information may have been new to Mr. Stretton, it certainly was not hidden or otherwise

kept secret, as his letter implies.”

The back-and-forth between the two men comes against the backdrop of a serious deficit in borough finances brought on, in large part, by the COVID-19 pandemic and its concurrent damper in revenue from parking, real estate and earned income taxes, and cancellation of borough special events.

Earlier this month the Borough Council adopted a revised 2020 budget that is meant to address the $4.4 million revenue shortfall reported by council members on the Finance Committee in May. To deal with the deficit, several borough employees were either laid off or furloughed — in its Public Works and Parking Department offices — although most of those have since been re-hired or brought back to work.

Stretton said his concerns were caused by information that $1.5 million had been paid to the MOR Construction Co. for street paving, but which was not voted on by council. There had been no bidding on the contract, he said, and the budget for street paving in the 2019 budget was for only $60,000.

In response, Galey said that the MOR firm was hired by the council to perform paving and street repairs tasks as needed in 2017 and 2018 on an “asneeded” basis when requested by the borough. A three-year extension of the contract was passed in 2018.

In 2019, a borough Public Works employee approved $1.32 million in payments to the MOR firm

for work it had performed, largely on the Gay Street re-paving project after repair work was completed by PECO and Aqua America on underground pipelines along the downtown business district, Galey said.

The borough was reimbursed a total of $907,680 by various entities including PECO and Aqua, resulting in budget overspending of the streets work budget in the amount of $623,839. The employee who approved those expenditures apparently did so without informing supervisors in the borough, and sometimes keeping the invoices that were paid in a desk at the Public Works building instead of forwarding them to the borough Finance Department.

That employee no longer works for the borough, officials said last week while declining to discuss whether he had been terminated or simply not rehired after the pandemic related layoffs. The employee’s name was not disclosed.

“Although we acknowledge the seriousness and significance of the budget overspending in this case, we note that is not uncommon for borough departments to exceed their budgets on particular line items,” Galey wrote. “Mr. Stretton’s claim that he ‘discovered’ an approximate $1.5 million that was spent on paving in 2019 implies that this information was kept secret. It was not.”

Galeys said the overspending was discussed the February Finance and Revenue Committee meeting and had been included

in various reports to council this year – all of which are publicly available on the borough’s website.

“The furloughs of borough employees were enacted only after (the state’s) March 2020 shut-down order and only because of that order and its resultant effects on borough finances,” Galey wrote. “The impact of the overspending of the 2019 Highway Maintenance budget was not the cause of the furloughs.”

In addition, Galey fired back at Stretton’s contention that the council is pursing a policy of outsourcing services, pointing out that examples Stretton had raised — grass cutting, auto mechanical repair, and paving have for years been bid out to private companies or handled as need be by non-borough employees.

“For example in 2019, Council publicly awarded a repaving contract to the lowest responsible bidder, Joseph Sucher & Sons for a contract amount of $723,360.00,” he wrote. “Likewise, grass cutting has been performed by outside contractors since 2001 and is approved through a public bid process by council annually.”

A switch to leasing borough vehicles, a topic that was discussed multiple times at public meetings over the past two years, resulted in repairs being made by the dealer under warranty, he said. Additionally, there have been no delays in the repair and maintenance of police and other borough vehicles by Public Works.

“Again, Mr. Stretton’s allegations that the public

was not advised about these decisions is demonstrably false,” Galey wrote. “In fact, each of these issues raised by Mr. Stretton was discussed publicly and approved during public meetings.”

In response, Stretton continued his attack on the paving payments.

“If you read Mr. Galey’s letter, you would think that everything was done appropriately; that it is normal to go over budget and everything was known by council,” Stretton said in his response. “In fact, none of that is true.”

Stretton appeared to bring up overspending of paving contract funds in his response, and did not specifically address other issues that he had raised, such as whether the layoffs of borough employees were directly related to that issue and not the overall pandemic financial squeeze, or the possibilities of privatization. And he continued to maintain that the paving finances were never brought to the public’s attention, despite Galey’s assertion that they were.

“The suggestion that the public was advised is just false.” He said. “No one knew about this. Borough Council people were not aware. There was no vote. Any discussion by the Finance Committee did not point out the problem, nor did it point out that nothing was approved.”

The council will next meet for its monthly work session on Aug. 18.