Well oddly I tried setting the permissions to the local folders and the files are chmod 755 already. However, that did not fix the issue with automatic deletion. Now, I am able to select manual deleting of the files and delete the files from KMC which removes them. It is just not working with the automatic process.
As for the FTP permission the user being used owns the files on the server the files are being pulled from. So that is not the issue as I mention is my long narrative and the error logs show the batch does not connect properly on the upload process of FTP. I still have not tried using SFTP yet so I am not sure if that will yeild different results or not.