Chester finance committee: February shows $1.1 million favorable variance; city warns Crozer Hospital loss could cost millions

Richard Trautman, Chester’s chief financial officer, told the Finance Committee on April 14 that February 2025 year-to-date results show the city is approximately $1.1 million favorable to the budget after revenues and expenses are considered.

Trautman said the city has about $16,800,000 in operating cash and $15,800,000 in a specialty fund. He reported year-to-date revenues of roughly $9,200,000 — about $100,000 unfavorable to the original budget projection — while expenditures were about $1,200,000 favorable, and the city paid $5,800,000 in bills during February. “So the net result is we’re $1,100,000 favorable to the budgeted negative of 1.1,” Trautman said.

The CFO told the committee that staffing changes are contributing to compensation savings. Trautman said six positions budgeted to be filled remain vacant and have produced approximately $78,000 in compensation savings to date. He cautioned the vacancies are not intended as a long-term plan: “It’s not that I want them to stay vacant because we had an intent as a city that we needed that resource,” he said.

Trautman also identified several revenue sources that outperformed expectations for the month. Real estate collections for February were about $673,000, versus a budgeted target of $500,000 for that month; Trautman said that, combined with other favorable items, produced a $244,000 positive variance in real estate receipts. Earned income tax collections were also ahead of budget by about $70,000.

Committee members pressed Trautman on the city’s legal spending. Trautman said the legal line in the budget is roughly $3,900,000, about 7% of the city’s total budget; he contrasted that with historical outside-counsel spending of around $600,000 per year before receivership. Trautman said the city is working to schedule and clarify which legal costs are the Commonwealth’s responsibility versus the city’s for cases tied to the receivership. “One of the things we’re doing in this case is we’re scheduling out all the law firms and working with the receivers to better understand what is the commonwealth’s responsibility and what is the city’s responsibility,” he said.

Trautman listed three major legal matters that are likely to drive costs: litigation involving the water authority (previously referenced as stormwater), the Paxton Hollow debt matter, and other receivership-related cases. He said the city is attempting to project those costs so officials can target and manage the legal budget.

Council members asked how an unrelated but widely reported issue — potential changes at Crozer Hospital — could affect the city budget. Trautman said the primary fiscal exposure for the city, if Crozer were to reduce or stop local services, would be ambulance coverage and related emergency-transport costs. “The only thing we have control over is potentially, obtaining ambulance service,” Trautman said, adding that replacing that coverage would not be inexpensive: “We’re talking about 7 digits.”

Trautman explained that the city does not own ambulance assets and that ambulances operate inside a 911 system with mutual aid countywide. He said that even if Chester purchased or contracted ambulances, those units would still be deployed based on regional 911 demand rather than solely to the city, and that a county-level approach is more likely to be the practical solution.

On next steps, Trautman said finance staff are conducting a March “deep dive” to validate the numbers, identify timing issues and any “gotchas,” and prepare more detailed projections for the upcoming budget cycle. “It takes a fair amount of time and effort and digging,” he said of the verification work, which he described as intended to produce clearer monthly expectations going forward.

Votes at a glance

- Approval of March 10, 2025 minutes: motion made, seconded; committee voice vote, “Aye,” minutes approved. - Motion to adjourn: motion made, seconded; committee voice vote, “Aye,” motion approved and meeting adjourned.

The committee did not receive public comment at the meeting. Trautman and committee members agreed staff will continue to refine projections and issue further information to support decision makers as the city prepares its next budget.