PRINTER'S NO. 3209
No. 2294 Session of 2005
INTRODUCED BY DIVEN, CALTAGIRONE, CREIGHTON, MUSTIO, PISTELLA
AND W. KELLER, DECEMBER 5, 2005
REFERRED TO COMMITTEE ON STATE GOVERNMENT, DECEMBER 5, 2005
AN ACT
1 Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An
2 act empowering the Department of Community Affairs to declare
3 certain municipalities as financially distressed; providing
4 for the restructuring of debt of financially distressed
5 municipalities; limiting the ability of financially
6 distressed municipalities to obtain government funding;
7 authorizing municipalities to participate in Federal debt
8 adjustment actions and bankruptcy actions under certain
9 circumstances; and providing for consolidation or merger of
10 contiguous municipalities to relieve financial distress,"
11 further providing for contents of the coordinator's plan.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 241 of the act of July 10, 1987 (P.L.246,
15 No.47), known as the Municipalities Financial Recovery Act,
16 amended June 30, 1992 (P.L.336, No.69) and repealed in part
17 October 13, 1994 (P.L.596, No.90), is amended to read:
18 Section 241. Contents.
19 A plan formulated by the appointed coordinator shall be
20 consistent with applicable law and shall include any of the
21 following factors which are relevant to alleviating the
22 financially distressed status of the municipality:
1 (1) Projections of revenues and expenditures for the
2 current year and the next two years, both assuming the
3 continuation of present operations and as impacted by the
4 measures in the plan.
5 (2) Recommendations which will:
6 (i) Satisfy judgments, past due accounts payable,
7 and past due and payable payroll and fringe benefits.
8 (ii) Eliminate deficits and deficit funds.
9 (iii) Restore to special fund accounts money from
10 those accounts that was used for purposes other than
11 those specifically authorized.
12 (iv) Balance the budget, avoid future deficits in
13 funds and maintain current payments of payroll, fringe
14 benefits and accounts through possible revenue
15 enhancement recommendations, including tax or fee
16 changes.
17 (v) Avoid a fiscal emergency condition in the
18 future.
19 (vi) Enhance the ability of the municipality to
20 negotiate new general obligation bonds, lease rental
21 debt, funded debt and tax and revenue anticipation
22 borrowing.
23 (vii) Consider changes in accounting and automation
24 procedures for the financial benefit of the municipality.
25 (viii) Propose a reduction of debt due on specific
26 claims by an amortized or lump-sum payment considered to
27 be the most reasonable disposition of each claim possible
28 for the municipality considering the totality of
29 circumstances.
30 (3) [Possible changes in collective bargaining
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1 agreements and permanent and temporary staffing level changes
2 or changes in organization.] Recommended mandates applicable
3 to collective bargaining which will:
4 (i) Set broad perimeters limiting a collective
5 bargaining agreement's financial impact on the
6 municipality and should not include specific line item
7 changes.
8 (ii) Set changes in permanent and temporary staffing
9 levels or changes in organization.
10 (4) Recommended changes in municipal ordinances or
11 rules.
12 (5) Recommendations for special audits or further
13 studies.
14 (6) An analysis of whether conditions set forth in
15 section 261 exist, whether specific exclusive Federal
16 remedies could help relieve the municipality's financial
17 distress and whether filing a Federal debt adjustment action
18 under Subchapter D is deemed to be appropriate.
19 (7) An analysis of whether the economic conditions of
20 the municipality are so severe that it is reasonable to
21 conclude that the municipality is no longer viable and should
22 consolidate or merge with an adjacent municipality or
23 municipalities.
24 (8) An analysis of whether functional consolidation of
25 or privatization of existing municipal services is
26 appropriate and feasible and recommendations for where and
27 how this could be done.
28 (9) A capital budget which addresses infrastructure
29 deficiencies.
30 (10) Recommendations for greater use of Commonwealth
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1 economic and community development programs.
2 Section 2. This act shall take effect in 60 days.
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