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Chester takes steps to deal with its pension crisis

One day after the state auditor general announced that Chester City's pension funds had fallen to "dangerously low" levels, a top city official attempted to assure residents at a town-hall meeting Thursday night that the situation was under control, saying managers "have done a number of things to address" the long-looming issue.

One day after the state auditor general announced that Chester City's pension funds had fallen to "dangerously low" levels, a top city official attempted to assure residents at a town-hall meeting Thursday night that the situation was under control, saying managers "have done a number of things to address" the long-looming issue.

Chief Financial Officer Nafis Nichols' comments offered without detail a look at how Chester aims to repair its three pension plans. According to the report by Auditor General Eugene DePasquale, Chester had one of the highest unfunded pension liabilities in the state, $61.2 million, in 2015.

The audit, which covered 2013 to 2015, found that enormous overtime payouts to police and firefighters contributed in part to the pension crisis.

At the end of the year, Chester will owe $15 million on its three funds, including nearly $9 million in outstanding contributions and interest to its police pension plan.

"We have been working collaboratively to negotiate better terms in collective bargaining," Nichols told the audience of about 50, citing contracts that expire at the end of this year as one reason for the crisis.

After the meeting, he said the city also was exploring cash infusions and would attempt to limit the number of disability pensions.

The report from DePasquale marks another unfavorable view of the Delaware County city this year.

In August, independent consultants released an analysis of Chester's financial situation that concluded that "extreme measures must be taken" to save the city.

Since 1995, Chester has languished in the state's Act 47 program, a last resort for towns in financial distress. Chester must exit - by balancing its budget and eliminating most of its deficit - by May 2018. The August report proposed hiring a chief financial officer, boosting development, and reducing personnel costs through attrition.

At the meeting, Mayor Thaddeus Kirkland offered only a few updates on progress to exit Act 47, using the time to hear residents' concerns instead. Still, he highlighted Nichols' hiring, the opening of a Dollar General store in November, and plans for a hotel that is to begin construction next year.

The town hall came nearly one year after Kirkland, 61, became the city's top official. Until November, he also served as a state legislator, splitting time between the two roles.

The meeting was also called to recognize Police Commissioner Darren Alston, who will retire at the end of the year.

cmccabe@philly.com 610-313-8113 @mccabe_caitlin