Press packet of the Chester financial audit press conference

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PRESS CONFERNECE
October 7th, 2013 - Chester City Democratic Committee Headquarters Councilwoman Portia L. West

First I want to thank the press, State Representative Thaddeus Kirkland and our supporters for coming out this morning. My Co-Councilor William Al Jacobs and I are here to address certain issues and allegations that our republican opponents have made against our ALL Democratic administration. But first we need to address some issues that we have with statements that have been made concerning how the city’s finances were left.

Our opponent has said he left the City 5 million dollars, but we know and he knows he’s mixing apples with oranges. The city has more than one account however the accounts he has been referencing have restricted funds in them and cannot be used to operate the city’s day to day functions, like payroll and vendor payments. The General Fund which is the account used to make such payments had a balance of $998,000 when our administration took office. Bills that were generated in 2011 which came in for payment in 2012 in the amount of $1,029,000.00 had to be paid out of that general fund. Even though these bills came in 2012, they still had to be deducted from 2011’s fiscal year, leaving that account with a deficit. Which by the way was reported by act 47 as a deficit for year ending 2011.

Now our opponents have stated that this administration has not been transparent like we said we would be, and they are right we haven’t been as forth coming about the obstacles that we faced when we took office from their republican administration. But we can start today:

First when the republicans lost the election in 2011 they sent the firemen’s negotiations out for arbitration in which the firemen were awarded 2.4 million dollars. Keep in mind this was a contract that could have been settled 5 years prior to 2011. It is ridiculous that people who put their lives on the line for our citizens would have to wait 5 years to be made whole.

Second the policemen’s contract had to be settled for an additional $560,000 dollars.

When this democratic administration took over in 2012 the first thing we did was stop the abuse of paying salaried employees overtime, because we understood that you cannot be both salaried and hourly, you can only be one or the other. While one of our republican opponents was over the Department of Accounts and Finance in 2011, he authorized payments to 8 salaried employees for almost $170,000 in overtime. There were 4 employees in particular whose overtime was so egregious that in order to make the overtime they were paid, they would have had to work over 70 hours a week. One employee whose annual salary was $45,791.33 made $24,357.45 in overtime, another employee whose annual salary was $56,227.70 received $32,439.08 in overtime. Another employee whose annual salary was $41,491.79 received $36,800.04 in overtime while another salaried employee whose annual salary was $45,797.54 received $50,506.65 in overtime. Now I don’t know about you, but where I come from, that is ridiculous. Our opponent also allowed the same practice in 2010 as well.

All this was going on while I was trying to get a one dollar raise for our per diem employees who at the time were only making $7.25 an hour. This sounds just like the republicans in Harrisburg and Washington D.C. who don’t want to raise the minimum wage for average Americans. It’s funny how our opponents keep saying they are not like the National Republicans., but the actions say something different.

At this time I would ask that my colleague on council and co-candidate for re- election, William Al Jacobs come forward to address the 2011 audit which is now finally available.

PRESS CONFERENCE
October 7th, 2013 – Chester City Democratic Committee Headquarters Councilman William Al Jacobs

Good morning everyone and again thank you all for coming to this informative press conference. When our Democratic Administration took office in January of 2012, we knew we would need an extensive audit of the city’s finances, because we wanted a clear picture of what we would be facing.

That audit took a very long time to complete because there was so much information that was either not documented or not made available to us from the previous Republican Administration’s records.

However, finally the audit is available. I would like to share with you just some bullet points about some of the findings.

The City faced some significant challenges associated with closing its books and preparing its financial statements for the year ended December 31, 2011. These challenges resulted from changes in finance and accounting staff, difficulties in obtaining information and documentation relative to prior year balances, errors and omissions in prior year financial statements and the complexity involved in applying generally accepted accounting principles (GAAP) in a government environment. For example, certain information needed to prepare the 2011 financial statements was not available from 2010 and needed to be re- constructed. In addition, a number of corrections needed to be made to 2010 financial statement amounts that carried over to 2011 and the 2010 financial statements were missing a number of required disclosures that had to be added in 2011. These issues not only slowed down the City’s preparation of its financial statements, but also slowed down the audit of those financial statements.

The financial statements of the City for 2011, as is true for all financial statements, depend on the accuracy of prior year amounts that carry over to the next year. For example capital assets represent buildings, equipment and other assets that were acquired over a period of years that need to be carried over from year to year to properly reflect the value of assets owned by the City.

As noted, there were a number of significant issues associated with the City’s prior year (2010) financial statements that resulted in errors that carried over to the 2011 financial statements. For example the City is party to a contribution agreement with Delaware County in connection with funding for the soccer stadium. Although the City is obligated to make payments under the contribution agreement of over $12 million, a liability for this obligation was never recorded when the agreement was executed in 2009. The City’s financial statements for 2009 and 2010 were misstated for this unrecorded obligation. A lack of confidence in the prior year balances due to such major errors caused our auditors to conclude that they were not able to rely on certain balances carried over from 2010.

In short the accounting practices of the past administration were not what they should have been to make sure the city’s finances were balanced properly.

If you have any questions please do not hesitate to contact:
 
Anthony Moore
Chester City Democratic Committee - Campaign Manager
403  Avenue of the States 
Chester, PA 19013
 
610-842-2838 cell
484-490-5781 office