Finance director flags collections shortfalls, liquid-fuels overspend and new GASB liability

West Chester Finance Director Barbara Leonte reported at the Finance Committee meeting March 12 that the borough ended February with a slightly higher cash balance but faces several cash-collection and accounting challenges that could affect operations and this year’s audit.

Leonte told the committee the borough began the month with $24,471,388, booked receipts of $2,983,344 and recorded expenditures that left an ending cash balance of about $25,000,008.27. She said the general fund is showing a net loss of $485,464 through Feb. 28 and that earned income tax remains the main revenue source.

The director said the borough mailed real-estate tax bills in February and turned over more uncollected property taxes to collections at Portnoff than in prior years. "Normally, the amount that is uncollected is around 100ks. We turned over 200ks in uncollected property taxes," Leonte said. Committee members asked whether the in-house change to the collections process last year contributed; Leonte said the transition likely caused confusion and that staff sent letters in October and received many phone calls and emails in response.

Leonte said the borough has collected $34,773 year to date on unpaid rental permits from 2023 and 2024 but that roughly $41,000 remains outstanding of an original $75,000. She said returned mail and incorrect forwarding addresses have slowed collection efforts and that staff are contacting account holders and working with Ramsey (staff) to resolve the accounts.

The director raised a separate concern about the liquid fuels fund, which supports road salt purchases. Leonte said salt purchases made through a purchasing arrangement with West Bradford Township were invoiced at incorrect prices and that the fund currently shows an over-expenditure she estimates at $71,830. "Right now, the fund does not have the money to pay these invoices, and we're not going to be able to pay them until April until our annual allocation comes in," Leonte said. She added she has emailed PennDOT to ask whether the issue could affect the borough’s audit.

Leonte also identified two enterprise funds with revenue risks. She said the wastewater fund faces a recurring problem with uncollected sewer accounts; the ACWA aged receivable report showed roughly $764,000 in unpaid accounts as of Dec. 31. "We're going to have to definitely make sure that we're collecting as much as we can for this fund, and we're watching expenses and watching revenues," she said. On the parking fund, Leonte said the borough has not yet received the December 2024 remittance from InPark and that staff are following up.

She warned the committee that an accounting standard change could increase the borough’s liabilities on the trial balance to be delivered to auditors by April 1. The new Governmental Accounting Standards Board (GASB) pronouncement requires recognizing a liability not only for sick-time payouts at retirement but also for unused sick time that employees could use before retirement, Leonte said. She said previous liabilities covered only certain groups but that the new guidance may raise what must be booked and that auditors will review the entries when they arrive in June or July.

The committee also asked Leonte about a $5,000 check in the register made payable to "Barbara Leonte / Borough of Westchester." Leonte said the check was for police informant fees; historically the borough wrote those checks to the police department, but detectives need physical cash and cannot cash department checks. "In order to help them out, we made the check payable to myself, and I went with an officer to the bank to cash that check, and they were able to get the funds that they needed for the department," Leonte said.

Committee members asked several follow-up questions about collections procedures, the location/allocation of upgraded trash receptacles and where two older units will be reassigned; Leonte said she would get details from Public Works Director Don Edwards.

The Finance Committee did not take formal votes on the financial-report items beyond asking staff to continue collection work and to provide follow-up information; several agenda items later on the docket were approved by vote.

Why it matters: The combination of elevated collections turned over to a vendor, unresolved invoices in the liquid fuels fund, a large backlog of uncollected sewer accounts and a potential increase in booked liabilities under new accounting guidance could affect fund-level cash flows, audit presentation and near-term operating choices.

Looking ahead: Leonte said the borough expects to submit a complete trial balance to auditors by April 1 and that staff will continue to press collections, follow up on the missing parking remittance, and pursue PennDOT guidance on the salt-invoice issue.