PRINTER'S NO. 949
No. 766 Session of 2007
INTRODUCED BY RHOADES, LOGAN, RAFFERTY, BOSCOLA, TARTAGLIONE,
WOZNIAK, KASUNIC, TOMLINSON, MADIGAN, COSTA, ERICKSON,
McILHINNEY, MUSTO, O'PAKE, D. WHITE, FONTANA, GREENLEAF AND
SCARNATI, MAY 2, 2007
REFERRED TO LOCAL GOVERNMENT, MAY 2, 2007
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 adding a definition; and further providing for contents of
12 the coordinator's plan.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Section 103 of the act of July 10, 1987 (P.L.246,
16 No.47), known as the Municipalities Financial Recovery Act, is
17 amended by adding a definition to read:
18 Section 103. Definitions.
19 The following words and phrases when used in this act shall
20 have the meanings given to them in this section unless the
21 context clearly indicates otherwise:
22 * * *
1 "Expenditure goal." The total percentage of expenditure
2 reductions proposed by the coordinator.
3 * * *
4 Section 2. Section 241 of the act, amended June 30, 1992
5 (P.L.336, No.69) and repealed in part October 13, 1994 (P.L.596,
6 No.90), is amended to read:
7 Section 241. Contents.
8 A plan formulated by the appointed coordinator shall be
9 consistent with applicable law and shall include any of the
10 following factors which are relevant to alleviating the
11 financially distressed status of the municipality:
12 (1) Projections of revenues and expenditures for the
13 current year and the next two years, both assuming the
14 continuation of present operations and as impacted by the
15 measures in the plan.
16 (2) Recommendations which will:
17 (i) Satisfy judgments, past due accounts payable,
18 and past due and payable payroll and fringe benefits.
19 (ii) Eliminate deficits and deficit funds.
20 (iii) Restore to special fund accounts money from
21 those accounts that was used for purposes other than
22 those specifically authorized.
23 (iv) Balance the budget, avoid future deficits in
24 funds and maintain current payments of payroll, fringe
25 benefits and accounts through possible revenue
26 enhancement recommendations, including tax or fee
27 changes.
28 (v) Avoid a fiscal emergency condition in the
29 future.
30 (vi) Enhance the ability of the municipality to
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1 negotiate new general obligation bonds, lease rental
2 debt, funded debt and tax and revenue anticipation
3 borrowing.
4 (vii) Consider changes in accounting and automation
5 procedures for the financial benefit of the municipality.
6 (viii) Propose a reduction of debt due on specific
7 claims by an amortized or lump-sum payment considered to
8 be the most reasonable disposition of each claim possible
9 for the municipality considering the totality of
10 circumstances.
11 (3) [Possible changes in collective bargaining
12 agreements and permanent and temporary staffing level changes
13 or changes in organization.] Set an expenditure goal limiting
14 the financial impact of a collective bargaining agreement on
15 a municipality.
16 (4) Recommended changes in municipal ordinances or
17 rules.
18 (5) Recommendations for special audits or further
19 studies.
20 (6) An analysis of whether conditions set forth in
21 section 261 exist, whether specific exclusive Federal
22 remedies could help relieve the municipality's financial
23 distress and whether filing a Federal debt adjustment action
24 under Subchapter D is deemed to be appropriate.
25 (7) An analysis of whether the economic conditions of
26 the municipality are so severe that it is reasonable to
27 conclude that the municipality is no longer viable and should
28 consolidate or merge with an adjacent municipality or
29 municipalities.
30 (8) An analysis of whether functional consolidation of
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1 or privatization of existing municipal services is
2 appropriate and feasible and recommendations for where and
3 how this could be done.
4 (9) A capital budget which addresses infrastructure
5 deficiencies.
6 (10) Recommendations for greater use of Commonwealth
7 economic and community development programs.
8 Section 3. Section 252 of the act is amended to read:
9 Section 252. Plan not affected by certain collective bargaining
10 agreements or settlements.
11 A collective bargaining agreement or arbitration settlement
12 executed after the adoption of a plan shall [not in any manner
13 violate, expand or diminish its provisions.] be determined
14 pursuant to the act of June 24, 1968 (P.L.237, No.111), referred
15 to as the Policemen and Firemen Collective Bargaining Act, or
16 the act of July 23, 1970 (P.L.563, No.195), known as the Public
17 Employe Relations Act, the totality of which shall not exceed
18 the expenditure goal.
19 Section 4. This act shall take effect in 60 days.
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