Please wait while the document is loaded.

A10077
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2557
Session of
2018
INTRODUCED BY ROTHMAN, KIM, KLUNK, TOBASH, RYAN, MILLARD, HELM,
A. HARRIS, DIAMOND, GROVE, COMITTA, DERMODY, FRANKEL,
FREEMAN, SCHLOSSBERG, SCHWEYER, PHILLIPS-HILL AND KAUFFMAN,
OCTOBER 2, 2018
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, OCTOBER 2, 2018
AN ACT
Amending the act of July 10, 1987 (P.L.246, No.47), entitled "An
act empowering the Department of Community and Economic
Development to assist municipalities in avoiding financial
distress; declare certain municipalities as financially
distressed; providing for the restructuring of debt of
financially distressed municipalities; limiting the ability
of financially distressed municipalities to obtain government
funding; authorizing municipalities to participate in Federal
debt adjustment actions and bankruptcy actions under certain
circumstances; authorizing certain taxes; and providing for
the disincorporation of municipalities and the establishment
of unincorporated service districts," in receivership in
municipalities, providing for tax levy.
Establishing intergovernmental cooperation authorities for
certain cities of the third class; providing for powers and
duties; and making an appropriation.
TABLE OF CONTENTS
Chapter 1. General Provisions
Section 101. Short title.
Section 102. Purpose and legislative intent.
Section 103. Legislative findings.
Section 104. Definitions.
Chapter 2. Intergovernmental Cooperation Authorities for Cities
of the Third Class
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 201. Authorities established.
Section 202. Governing board.
Section 203. Powers and duties.
Section 204. Term of existence.
Section 205. Fiscal year.
Section 206. Annual budget of authority.
Section 207. Annual report to be filed and annual audits.
Section 208. Limit on city borrowing.
Section 209. Financial plan of an assisted city.
Section 210. Powers and duties of authority with respect to
financial plans.
Section 211. Investment of funds.
Section 212. Sovereign immunity.
Chapter 7. Miscellaneous Provisions
Section 701. Appropriation.
Section 702. General rights and prohibitions.
Section 703. Nondiscrimination.
Section 704. Construction of act.
Section 705. Limitation of authority powers.
Section 706. Extension of plan.
Section 707. Taxes.
Section 708. Repeal.
Section 709. Effective date.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of July 10, 1987 (P.L.246, No.47), known
as the Municipalities Financial Recovery Act, is amended by
adding a section to read:
Section 710.2. Tax levy.
(a) Continuation.--As of the date of the termination of
A10077 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
distressed status occurring after the termination of
receivership status under this act, a municipality that is
levying, or had been authorized to levy within the previous
three fiscal years, a local services tax in excess of $52, a
judicially approved increase of a residential income tax rate,
or both, may, upon the termination of distressed status, without
court approval, levy the local services tax at a rate which does
not exceed $150 per year, the residential income tax at a rate
that does not exceed a judicially approved rate levied in the
course of receivership or both, for any year wherein the
currently available actuarially reported net other
postemployment benefits obligation of the municipality exceeded,
by at least 17%, the year-end balance of any other
postemployment benefits trust created by or for the municipality
as part of a recovery plan approved in this act. In the event
that a levy is made in excess of $52 for the local services tax,
a levy made in excess of 1% for residential income tax, or both,
the municipality shall solely apply local service taxes in
excess of $52 and a portion of residential income taxes in
excess of 1% in an amount that equals nonresident income taxes
paid for the year immediately preceding receivership, if any, to
defray current year other postemployment benefit obligations and
other postemployment benefit trust contributions or both, until
the other postemployment benefit trust ceases or the actuarial
audited other postemployment benefit trust balance equals or
exceeds 85% of the actuarially reported net other postemployment
benefit obligation of the municipality.
(b) Report.--The following shall apply:
(1) For each fiscal year that a municipality levies a
local services tax, residential income tax or both at a rate
A10077 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
as authorized in subsection (a), the municipality shall,
within 60 days following the end of that fiscal year, prepare
a report setting forth:
(i) The total local services tax, residential income
tax or both collected.
(ii) The currently available actuarially reported
net other postemployment benefits obligations of the
municipality.
(iii) The year-end balance of any other
postemployment benefits trust.
(iv) The amount of local services tax, residential
income tax or both applied solely to defray current year
other postemployment benefit trust obligations, other
postemployment benefit contributions or both.
(2) The report required by paragraph (1) shall be
submitted to:
(i) The Secretary of Community and Economic
Development.
(ii) The President pro tempore of the Senate.
(iii) The Speaker of the House of Representatives.
(iv) The Minority Leader of the Senate.
(v) The Minority Leader of the House of
Representatives.
(vi) The chair and minority chair of the Local
Government Committee of the Senate.
(vii) The chair and minority chair of the Local
Government Committee of the House of Representatives.
(3) A review committee, comprised of the individuals set
forth in paragraph (2), the mayor and three members of the
local business community designated by the mayor, shall meet
A10077 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
annually within 60 days following submission of the report as
provided in paragraph (2) to review the report. Within 60
days following the fifth annual meeting, the committee shall
prepare and submit final recommendations to the General
Assembly and the city regarding taxation authorized by this
section. The individuals set forth in paragraph (2) and the
mayor may appoint a designee.
(c) Prohibition on commuter tax.--A city of the third class
with a population of between 40,000 and 50,000 as of the 2010
decennial census which is located in a county of the third class
with a population of between 240,000 and 275,000 as of the 2010
decennial census that opts to levy rates of taxation authorized
by this section shall be subject to the prohibition on imposing
a tax or fee on the earned income of nonresidents provided in
chapter 6.
Section 2. This act shall take effect in 60 days.
CHAPTER 1
GENERAL PROVISIONS
Section 101. Short title.
This act shall be known and may be cited as the
Intergovernmental Cooperation Authorities Act for Cities of the
Third Class.
Section 102. Purpose and legislative intent.
(a) Policy.--It is hereby declared to be a public policy of
the Commonwealth to exercise its retained sovereign powers with
regard to taxation and matters of Statewide concern in a manner
calculated to foster the fiscal integrity of cities of the third
class to assure that they:
(1) provide for the health, safety and welfare of their
residents;
A10077 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) pay principal and interest owed on their debt
obligations when due;
(3) meet financial obligations to their employees,
vendors and suppliers; and
(4) provide for proper financial planning procedures and
budgeting practices.
The inability of a city of the third class to provide essential
services to its residents as a result of a fiscal emergency is
determined to affect adversely the health, safety and welfare
not only of the residents of the city but also of other
residents of this Commonwealth.
(b) Legislative intent.--
(1) It is the intent of the General Assembly to:
(i) provide cities of the third class with the legal
tools with which they can perform essential municipal
services; and
(ii) foster sound financial planning and budgetary
practices for cities of the third class, which cities
will be charged with the responsibility to exercise
efficient and accountable fiscal practices, such as:
(A) increased managerial accountability;
(B) consolidation or elimination of inefficient
city programs and authorities;
(C) reevaluation of tax exemption policies with
regard to real property taxes;
(D) increased collection of existing tax
revenues;
(E) privatization or outsourcing of appropriate
city services;
(F) sale of city assets as appropriate;
A10077 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(G) improvement of procurement practices,
including competitive bidding procedures; and
(H) review of compensation and benefits of city
employees.
(2) This act is intended to remedy the apparent fiscal
emergency confronting cities of the third class through the
implementation of sovereign powers of the Commonwealth. To
safeguard the rights of the residents of this Commonwealth to
the electoral process and home rule, the General Assembly
intends to exercise its power in an appropriate manner with
the elected officers of cities of the third class.
Section 103. Legislative findings.
It is hereby determined and declared as a matter of
legislative finding that:
(1) Some cities of the third class have encountered
recurring financial difficulties that may affect the
performance of necessary municipal services to the detriment
of the health, safety and general welfare of residents of
those cities.
(2) It is critically important that cities of the third
class maintain their creditworthiness.
(3) Due to the economic and social interrelationship
among all residents in our economy, the fiscal integrity of
cities of the third class is a matter of concern to all
residents of this Commonwealth, and the financial problems of
these cities have a direct and negative effect on the entire
Commonwealth.
(4) Because cities of the third class consume a
substantial proportion of the products of Pennsylvania's
farms, factories, manufacturing plants and service
A10077 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
enterprises, economic difficulties confronting cities of the
third class detrimentally affect the economy of the
Commonwealth as a whole and become a matter of Statewide
concern.
(5) Because residents of cities of the third class
contribute a substantial proportion of all Commonwealth tax
revenues, a disruption of the economic and social life of
these cities may have a significant detrimental effect on
Commonwealth revenues.
(6) The financial difficulties of cities of the third
class can best be addressed and resolved by cooperation
between governmental entities.
(7) The Constitution of Pennsylvania grants
municipalities authority to cooperate with other governmental
entities in the exercise of any function or responsibility.
(8) The Commonwealth retains certain sovereign powers
with respect to cities of the third class, among them the
powers to authorize and levy taxes, to authorize the
incurring of indebtedness and to provide financial assistance
that may be necessary to assist cities in solving their
financial problems.
(9) The Commonwealth may attach conditions to grants of
authority to incur indebtedness or assistance to cities of
the third class in order to ensure that deficits are
eliminated and access to capital markets is achieved and
maintained.
(10) The conditions must be incorporated into
intergovernmental cooperation agreements between the
Commonwealth or its instrumentalities and cities of the third
class.
A10077 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(11) Cities of the third class and the Commonwealth will
benefit from the creation of an independent authority
composed of members experienced in finance and management
that advises the cities, the General Assembly and the
Governor concerning solutions to fiscal problems cities of
the third class may face.
(12) The creation of an authority will allow cities of
the third class to continue to provide the necessary
municipal services for their residents and to contribute to
the economy of this Commonwealth.
Section 104. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Assisted city." A city for which an authority has been
established under section 201. The term includes any municipal
authority, other authority or other corporate entity that
directly or indirectly performs a governmental function on
behalf of the city, is directly or indirectly controlled by the
city or to which a city has direct or indirect power of
appointment or has directly or indirectly pledged or designated
the city's revenues or the city's credit.
"Authority." An intergovernmental cooperation authority
established in section 201.
"Board." The governing board of an authority.
"Chief fiscal officer." A municipal official in an assisted
city designated as follows:
(1) In the case of a city where the mayor is responsible
for proposing the city's annual budget, the chief fiscal
officer shall be the mayor.
A10077 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) In the case of a city where the budget is proposed
to the governing body by an employee or appointee of the
city, the chief fiscal officer shall be the presiding officer
of the governing body.
"City." A city of the third class or a home rule
municipality which was previously a city of the third class:
(1) with a population of at least 48,000 and not more
than 55,000 based on the most recent Federal decennial census
at the time receivership was terminated;
(2) for which a coordinator under Chapter 2 of the act
of July 10, 1987 (P.L.246, No.47), known as the
Municipalities Financial Recovery Act, is or has been
appointed; and
(3) for which receivership has been terminated.
"City account." A trust fund held for the exclusive benefit
of an assisted city.
"Controller." The elected controller of a city. In the case
of a city which does not elect a controller, the term shall
refer to a person designated by the intergovernmental
cooperation agreement to administer financial controls for the
city.
"Corporate entity." A municipal authority, other authority
or other corporate entity that performs a governmental function
on behalf of an assisted city or to which an assisted city has
power of appointment or has pledged or designated revenues.
"Deficit." A negative fund balance in any principal
operating fund or funds of an assisted city or corporate entity
existing at the beginning of a fiscal year of the assisted city
or projected to exist as of the close of a fiscal year of the
assisted city as may be more specifically identified, calculated
A10077 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and specified in an intergovernmental cooperation agreement or
financial plan of an assisted city described in section 209.
"Federal agency." The United States, the President of the
United States and a department or corporation, agency or
instrumentality created, designated or established by the United
States.
"Governing body." The legislative body of a city.
"Governing law." The applicable statutes, home rule charter,
optional plan or optional charter that provides for the
officers, duties and powers of a city.
"Government agency." The Governor, department, board,
commission, authority and an officer or agency of State
government, including any that is not subject to the policy
supervision and control of the Governor, a political
subdivision, municipal or other local authority and an officer
or agency of a political subdivision or local authority. The
term does not include a court or other officer or agency of the
unified judicial system or the General Assembly or any of its
officers and agencies.
"Intergovernmental cooperation agreement." An agreement
between an authority and a city entered into under the
provisions of section 203(d).
"Party officer." The following members or officers of a
political party:
(1) a member of a national committee;
(2) a chairman, vice chairman, secretary, treasurer or
counsel of a State committee or member of the executive
committee of a State committee;
(3) a county chairman, vice chairman, counsel, secretary
or treasurer of a county committee; or
A10077 - 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(4) a chairman, vice chairman, counsel, secretary,
treasurer or ward leader of a city or municipal committee.
"Public official." An elected or appointed official or
employee in the executive, legislative or judicial branch of the
Commonwealth or a political subdivision thereof. The term does
not include:
(1) A member of an advisory board that has no authority
to expend public funds other than reimbursement for personal
expense or to otherwise exercise the power of the
Commonwealth or a political subdivision thereof.
(2) An appointed official who receives no compensation
other than reimbursement for actual expenses.
"Termination date." December 31 of the fourth full calendar
year following the year in which an intergovernmental
cooperation agreement is entered into under section 203(d).
CHAPTER 2
INTERGOVERNMENTAL COOPERATION AUTHORITIES
FOR CITIES OF THE THIRD CLASS
Section 201. Authorities established.
(a) General rule.--A body corporate and politic to be known
as the Intergovernmental Cooperation Authority for (name of
city) is established as a public authority and instrumentality
of the Commonwealth for each city that shall exercise public
powers of the Commonwealth as an agency and instrumentality
thereof. The exercise by the authority of the powers conferred
by this act is declared to be and shall for all purposes be
deemed and held to be the performance of an essential public
function.
(b) Separate authorities.--A separate intergovernmental
cooperation authority shall be established for each city.
A10077 - 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 202. Governing board.
(a) Composition of board.--
(1) The powers and duties of an authority shall be
exercised by a governing board composed of five members
appointed as follows:
(i) One member shall be appointed by the Governor.
(ii) One member shall be appointed by the President
pro tempore of the Senate.
(iii) One member shall be appointed by the Minority
Leader of the Senate.
(iv) One member shall be appointed by the Speaker of
the House of Representatives.
(v) One member shall be appointed by the Minority
Leader of the House of Representatives.
(vi) The Secretary of the Budget and the controller
of an assisted city shall serve as ex officio members of
the board. The ex officio members may not vote and shall
not be counted for purposes of establishing a quorum. The
Secretary of the Budget and the controller of an assisted
city may designate in writing a representative of their
respective offices to attend meetings of the board on
their behalf.
(2) All members and designees must have substantial
experience in finance or management.
(3) All members of the board must be residents of this
Commonwealth and, except the Secretary of the Budget, must
either be residents of the assisted city or have their
primary places of business or employment in that city.
(b) Term.--
(1) Appointing authorities shall appoint the initial
A10077 - 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
members of the board within 30 days of the date of
termination of receivership or the effective date of this
section, whichever is later. The appointed members shall
select a chairperson from among themselves at the initial
organizational meeting of the board and for any subsequent
vacancy in the office of chairperson. The term of a board
member shall begin on the date of the appointment. Except as
provided in paragraph (3), a member's term shall be
coterminous with that of the appointing authority.
(2) The member selected as chairperson shall serve in
that capacity for two years from the date of selection or for
the duration of the member's term on the board, whichever is
a shorter period of time, and may be reelected as chairperson
to subsequent two-year terms.
(3) An appointed board member shall serve at the
pleasure of the member's appointing authority.
(4) Whenever a vacancy occurs among the appointed
members on the board, whether prior to or on the expiration
of a term, the appointing authority who originally appointed
the board member whose seat has become vacant shall appoint a
successor member within 30 days of the vacancy.
(5) A member appointed by an appointing authority to
fill a vacancy occurring prior to the expiration of a term
shall serve the unexpired term.
(c) Organization.--
(1) The appointees of the President pro tempore of the
Senate and the Speaker of the House of Representatives shall
set a date, time and place for the initial organizational
meeting of the board within 40 days of the date of
termination of receivership or the effective date of this
A10077 - 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
section, whichever is later. The initial organizational
meeting shall be held within 45 days of the date of
termination of receivership or the effective date of this
section, whichever is later.
(2) In addition to the chairperson, the members shall
elect other officers as they may determine.
(3) A member may hold more than one office of the board
at any time.
(d) Meetings.--
(1) After the initial organizational meeting, the board
shall meet as frequently as it deems appropriate but at least
once during each quarter of the fiscal year of the authority.
(2) A meeting of the board shall be called by the
chairperson if a request for a meeting is submitted to the
chairperson by at least two members of the board.
(d.1) Quorum and open meetings.--
(1) A majority of the board shall constitute a quorum
for the purpose of conducting the business of the board and
for all other purposes.
(2) All actions of the board shall be taken by a
majority of the board members present, except as otherwise
specifically provided in this act.
(3) The provisions of 65 Pa.C.S. Ch. 7 (relating to open
meetings) shall apply to the board.
(e) Expenses.--A member may not receive compensation or
remuneration but shall be entitled to reimbursement for all
reasonable and necessary actual expenses.
(f) Employees and agents.--
(1) The board shall fix and determine the number of
employees of the authority and their respective compensation
A10077 - 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and duties.
(2) The board may contract for or receive the loan of
services of persons in the employ of other government
agencies, and other government agencies may make those
employees available.
(3) The board may retain an executive director.
(4) The board may hire an independent general counsel to
the authority and may engage consultants and contract for
other professional services.
(5) The board may delegate to the executive director
powers of the board as the board deems necessary to carry out
the purposes of the authority, subject in every case to the
supervision and control of the board.
(g) Public officials and party officers.--
(1) The following provisions apply to members of the
board and the executive director:
(i) Except for the Secretary of the Budget and the
director of finance of an assisted city, neither members
of the board nor the executive director shall seek or
hold a position as any other public official within this
Commonwealth or as a party officer while in the service
of the authority.
(ii) Members of the board and the executive director
may not seek election as public officials or party
officers for one year after their service with the
authority.
(iii) Members of the board and the executive
director may serve as appointed public officials any time
after their periods of service with the authority.
(2) The following provisions apply to employees and
A10077 - 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
agents of the authority, as indicated:
(i) Employees and agents of the authority may not
seek or hold other positions as public officials or party
officers while in the employ of the authority. The
authority may receive the loan of services of persons in
other government agencies in accordance with subsection
(f), notwithstanding that those persons are public
officials.
(ii) Employees of the authority may not seek
election as public officials or party officers for one
year after leaving the employ of the authority.
(3) No member of the board or employee of the authority
may:
(i) directly or indirectly be a party to or be
interested in any contract or agreement with the
authority or with the assisted city; or
(ii) use his office or employment or any
confidential information received through his office or
employment for the private pecuniary benefit of himself,
a member of his immediate family or a business with which
he or a member of his immediate family is associated.
(4) Any member or employee who shall willfully violate
paragraph (3) shall forfeit his office or employment and
shall be subject to other criminal and civil sanctions as may
be imposed by law.
(5) Any contract or agreement knowingly made in
contravention of paragraph (3) shall be void and
unenforceable.
(6) For purposes of this subsection, the term "immediate
family" shall mean a parent, spouse, child, brother or
A10077 - 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
sister.
(h) Statutes applicable to authority.--
(1) The provisions of the following acts shall apply to
the board:
(i) Except as specified in paragraph (3), the act of
July 19, 1957 (P.L.1017, No.451), known as the State
Adverse Interest Act.
(ii) The act of February 14, 2008 (P.L.6, No.3),
known as the Right-to-Know Law.
(iii) 62 Pa.C.S. (relating to procurement).
(iv) 65 Pa.C.S. Ch. 7.
(v) 65 Pa.C.S. Ch. 11 (relating to ethics standards
and financial disclosure).
(2) The provisions of the following acts shall apply to
the executive director of the authority:
(i) Except as set forth in paragraph (3), the State
Adverse Interest Act.
(ii) 65 Pa.C.S. Ch. 11.
(3) Notwithstanding the provisions of the State Adverse
Interest Act, the Secretary of the Budget and the director of
finance of an assisted city shall, while serving as ex
officio members of the board, also serve in their official
capacities with respect to the negotiation and execution of
intergovernmental cooperation agreements and other agreements
between the assisted city and the authority.
(i) Advisory committee.--
(1) The board may appoint one advisory committee
comprised of professionals engaged in municipal management
and finance or other experts as the board deems necessary.
The members of an advisory committee must reside within the
A10077 - 18 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
assisted city or a county within the statistical metropolitan
area in which the assisted city is located.
(2) The provisions of subsection (g) shall be applicable
to members of an advisory committee; however, the board may
allow the governing body to designate a liaison from the
governing body to serve on an advisory committee.
(3) An advisory committee shall consist of no more than
six members, excluding any liaison to the governing body.
(4) A member of the advisory committee shall not receive
compensation or remuneration but shall be entitled to
reimbursement for all reasonable and necessary actual
expenses.
Section 203. Powers and duties.
(a) General powers and duties.--Each authority is
established for the purposes, without limitation, by itself or
by agreement in cooperation with others, of assisting the
assisted city in solving its budgetary and financial problems.
(b) Specific duties.--Each authority shall have the
following powers and duties:
(1) To assist the assisted city in achieving financial
stability in any manner consistent with the purposes and
powers described by this act.
(2) To assist the assisted city in avoiding defaults,
eliminating and financing deficits and debts, maintaining
sound budgetary practices and avoiding the interruption of
municipal services.
(3) To negotiate intergovernmental cooperation
agreements with the assisted city containing terms and
conditions as will enable the assisted city to eliminate and
avoid deficits, maintain sound budgetary practices and avoid
A10077 - 19 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
interruption of municipal services.
(4) To prepare an annual report within 120 days after
the close of the assisted city's fiscal year to the Governor
and the General Assembly describing the assisted city's
financial condition and the authority's progress with respect
to restoring the financial stability of the assisted city and
achieving balanced budgets for the assisted city. An annual
report shall be signed by the chairperson of the board and
shall:
(i) Be submitted to the Governor, the presiding
officers of the Senate and the House of Representatives,
the chairperson and minority chairperson of the
Appropriations Committee of the Senate and the
chairperson and minority chairperson of the
Appropriations Committee of the House of Representatives
and the governing body, chief fiscal officer and
controller of the assisted city. The report shall be
publicly available in the assisted city during normal
business hours for public inspection, shall be posted on
the authority's publicly accessible Internet website and
may be provided to a member of the public upon request at
a cost not to exceed commercial costs of reproduction.
(ii) Clearly show by consistent category the last
five years of operating revenues and expenditures,
capital expenditures, gross and net indebtedness
transactions, including a schedule of principal and
interest, five-year projections of the assisted city's
operating and capital budgets, and the entire projected
indebtedness transactions, including a schedule of
principal and interest of the indebtedness until any and
A10077 - 20 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
all debt has been completely retired.
(iii) Contain a narrative explaining progress of the
assisted city in meeting its annual and five-year
budgetary objectives, an appraisal by the authority of
the progress the assisted city is making to achieve its
goals and an appraisal of the extent to which the
assisted city is making a good faith effort to achieve
its goals.
(iv) Disclose any violations of Federal and State
law that the authority may have discovered.
(v) Include as appendixes all historical loans or
other contracts entered into by the assisted city and its
corporate entities.
(5) To establish and maintain a publicly accessible
Internet website that contains, but is not limited to, all of
the following:
(i) Intergovernmental cooperation agreements entered
into under paragraph (3).
(ii) Annual reports required under paragraph (4).
(iii) The authority's annual budget adopted under
section 206.
(iv) Annual reports and audits required under
section 207.
(v) Contracts that the authority has entered into
with third parties.
(6) To adopt and publish a records retention policy that
is consistent with the records retention policy of the Office
of Administration as published in Manual 210.9, The
Commonwealth's General Records Retention and Disposition
Schedule, adopted September 5, 2018. The policy shall be
A10077 - 21 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
updated annually to remain consistent with the policy of the
Office of Administration.
(c) Specific powers.--In addition to the powers and duties
otherwise provided in this act, each authority shall have the
specific powers:
(1) To obtain copies of all reports and documents
regarding the revenues, expenditures, budgets, deficits,
debts, costs, plans, operations, estimates and any other
financial or budgetary matters of the assisted city.
(2) To obtain additional reports and information on the
above matters in forms as are deemed necessary by the
authority.
(3) To make factual findings concerning the assisted
city's budgetary and fiscal affairs.
(4) To make recommendations to the assisted city and the
General Assembly concerning the budgetary and fiscal affairs
of the assisted city, including consideration of the
following issues and other issues at the discretion of the
authority:
(i) Consolidation or merger of services performed by
the assisted city and a school, county or other
municipality surrounding the assisted city.
(ii) Consolidation of public safety services.
(iii) Appropriate staffing levels of city
departments and corporate entities.
(iv) Cooperative agreements or contractual
arrangements between health care facilities licensed by
the Department of Health.
(v) Financial or contractual obligations of the
assisted city.
A10077 - 22 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(vi) Pensions and other postemployment benefits
obligations of the assisted city.
(vii) Contributions of nonprofit or charitable
organizations that receive the benefit of municipal
services provided by the assisted city.
(viii) Reduction or restructuring of debt
obligations.
(ix) Cooperative agreements between the assisted
city and the county in which the assisted city is located
or municipalities that border the assisted city.
(x) Cooperative agreements between the assisted city
and school districts located in the assisted city.
(xi) Collective bargaining agreements and other
contracts of the assisted city.
(xii) Elimination, sale or transfer of assisted city
services or property.
(xiii) Implementation of cost-saving measures by the
assisted city.
(xiv) Increased managerial accountability.
(xv) Performance of government operations and
delivery of municipal services.
(xvi) Reevaluation of tax exemption policies and
practices with regard to real property taxation within
the assisted city.
(xvii) Improvements in procurement practices.
(xviii) Implementation of user fees for services,
including sewage, water treatment and refuse collection.
(xix) Privatization and outsourcing of appropriate
assisted city services.
(xx) Increased collection of fines and costs
A10077 - 23 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
relating to parking violations or violations of other
city ordinances.
(xxi) Competitive bidding of appropriate assisted
city services and competitive bidding practices.
(xxii) The use of technology to achieve cost
savings.
(xxiii) A study of health care and other benefits
offered by the assisted city to its employees.
(xxiv) The sale of the assisted city's workers'
compensation fund.
(xxv) The sale of unencumbered assets of the
assisted city or authorities of the assisted city.
(xxvi) The elimination or reorganization of
authorities or departments.
(xxvii) The use of budgetary practices and
principles as they relate to forecasting, public
openness, projections, estimates, tax policy, lending,
borrowing and strategic planning.
(xxviii) The transfers of employees and assets by
and between bureaus, departments, authorities and
corporate entities of the assisted city.
(xxix) Prior suggestions published by others prior
to the date that the city became an assisted city.
(xxx) A review of the taxing authority of the
assisted city.
(xxxi) A review of the ratio of debt service to
general fund outlays of the assisted city, the
appropriate ratio and the means to achieve the ratio.
(xxxii) A review of outstanding debt, debt payments
and the ability to prepay the debt.
A10077 - 24 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(5) To make recommendations to the Governor and the
General Assembly regarding legislation or resolutions that
relate to the assisted city's fiscal stability. The authority
shall submit a preliminary report of the recommendations to
the Governor and the General Assembly within 180 days of the
initial organizational meeting of the board in section
202(c). The report shall include, but not be limited to,
recommendations as to whether or not an assisted city needs
additional revenues, the best sources of those revenues and
ways for the assisted city to reduce expenditures. Any
recommendations for new revenue, if warranted, shall state
whether the revenues should be earmarked for specific
expenditures, including, but not limited to, prepayment of
debt and whether the revenues should be subject to expiration
provisions.
(6) To exercise powers of review concerning the
budgetary and fiscal affairs of an assisted city consistent
with this act and the assisted city's governing law.
(7) To receive revenues from any source, directly or by
assignment, pledge or otherwise.
(8) To sue and be sued, implead and be impleaded,
interplead, complain and defend in all courts.
(9) To adopt, use and alter at will a corporate seal.
(10) To make bylaws for the management and regulation of
the authority's affairs and adopt rules, regulations and
policies in connection with the performance of the
authority's functions and duties that, notwithstanding any
other provision of law to the contrary, shall not be subject
to review under the act of June 25, 1982 (P.L.633, No.181),
known as the Regulatory Review Act.
A10077 - 25 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(11) To make and enter into contracts and other
instruments necessary or convenient for the conduct of the
authority's business and the exercise of the powers of the
authority.
(12) To appoint such officers and hire such agents and
employees as the authority deems necessary.
(13) To retain counsel and auditors to render
professional services as the authority deems appropriate. The
authority shall not be considered either an executive agency
or an independent agency for the purpose of the act of
October 15, 1980 (P.L.950, No.164), known as the Commonwealth
Attorneys Act, but shall possess the same status for that
purpose as the Auditor General, State Treasurer and the
Pennsylvania Public Utility Commission, except that the
provisions of section 204(b) and (f) of the Commonwealth
Attorneys Act shall not apply to the authority.
Notwithstanding 42 Pa.C.S. Ch. 85 (relating to matters
affecting government units), the authority shall defend
actions brought against the authority or its members,
officers, officials and employees when acting within the
scope of their official duties.
(14) To cooperate with any Federal agency or government
agency.
(15) To acquire, by gift or otherwise, purchase, hold,
receive, lease, sublease and use any franchise, license, or
property, real, personal or mixed, tangible or intangible, or
any interest therein. The authority shall be absolutely
limited in its power to acquire real property under this act
to real property that will be used only for the office space
in which the authority will conduct its daily business if
A10077 - 26 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
necessary. If possible, the assisted city shall provide
office space to the authority at no cost to the authority as
part of an intergovernmental cooperation agreement.
(16) To sell, transfer, convey and dispose of any
property, real, personal or mixed, tangible or intangible or
any interest therein.
(17) To enter into contracts for group insurance and to
contribute to retirement plans for the benefit of the
authority's employees and to enroll the authority's employees
in an existing retirement system of a government agency.
(18) To accept, purchase or borrow equipment, supplies,
services or other things necessary or convenient to the work
of the authority from other government agencies. All
government agencies are authorized to sell, lend or grant to
the authority equipment, supplies, services or other things
necessary or convenient to the work of the authority.
(19) To invest any funds held by the authority as
provided in section 211.
(20) To receive and hold assets, money and funds from
any source, including, but not limited to, appropriations,
grants and gifts.
(21) To procure insurance, guarantees and sureties the
authority determines necessary or desirable for its purposes.
(22) To pledge the credit of the authority as the
authority determines necessary or desirable for authority
purposes.
(23) To do all acts and things necessary or convenient
for the promotion of its purposes and the general welfare of
the authority and to carry out the powers granted to it by
this act or any other acts.
A10077 - 27 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(d) Intergovernmental cooperation agreements.--
(1) The authority may enter into and implement an
intergovernmental cooperation agreement, as approved by the
board, with the assisted city.
(2) An assisted city may enter into an intergovernmental
cooperation agreement in which the city, consistent with this
act, covenants to cooperate or agree in the exercise of any
function, power or responsibility with, or delegate or
transfer any function, power or responsibility to, the
authority upon the adoption by the governing body of the city
of an ordinance authorizing and approving the
intergovernmental cooperation agreement.
(3) An ordinance that authorizes an assisted city to
enter into an intergovernmental cooperation agreement with
the authority shall specify:
(i) The purpose and objectives of the agreement.
(ii) The conditions of the agreement.
(iii) The term of the agreement, including
provisions relating to termination of the agreement.
(4) An intergovernmental cooperation agreement may not
be entered into earlier than 60 days following the initial
organizational meeting of the board under section 202(c).
(e) Limitation.--Notwithstanding any purpose or general or
specific power granted by this act or any other act, whether
express or implied, the authority shall have no power to pledge
the credit or taxing powers of the Commonwealth.
Section 204. Term of existence.
The following apply:
(1) The authority shall exist until the termination
date.
A10077 - 28 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) Upon termination of the authority, records and
documents of the authority shall be transferred to the
assisted city.
(3) The authority shall submit a final report on its
activities and the assisted city's fiscal condition to the
Governor and the General Assembly within 60 days of the
termination of the authority.
Section 205. Fiscal year.
The fiscal year of each authority shall be the same as the
fiscal year of the Commonwealth.
Section 206. Annual budget of authority.
(a) Budget.--
(1) Within 60 days of the initial organizational meeting
of the board under section 202(c) and each October 15
thereafter, an authority shall adopt a budget as approved by
the board specifying in reasonable detail the projected
expenses of operation of the authority for the ensuing fiscal
year, including the salary and benefits of the executive
director and any other employees of the authority, and the
projected revenues of the authority to be derived from
investment earnings and any other money of the authority that
are estimated to be available to pay the operating expenses
specified in the budget.
(2) A copy of the authority's budget shall be submitted
to the Governor and to the General Assembly.
(3) The authority or its designated representatives may
be afforded an opportunity to appear before the Governor and
the Appropriations Committee of the Senate and the
Appropriations Committee of the House of Representatives
regarding the authority's budget.
A10077 - 29 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(b) Limit on operating expenses.--
(1) Following the submission of the authority's budget
to the Governor and the General Assembly and any hearing held
by an appropriations committee under subsection (a), the
General Assembly, by concurrent resolution with presentment
to the Governor, in accordance with section 9 of Article III
of the Constitution of Pennsylvania, may limit the operating
expenses of the authority.
(2) In that event, it shall be unlawful for the
authority to spend more for operating expenses than the limit
established for the ensuing fiscal year by the concurrent
resolution.
(3) If the General Assembly does not adopt a concurrent
resolution prior to May 30, the authority's budget shall be
deemed approved for the ensuing fiscal year.
(c) Examination of books.--The chairperson and minority
chairperson of the Appropriations Committee of the Senate and
the chairperson and minority chairperson of the Appropriations
Committee of the House of Representatives may at any time
examine the books, accounts and records of the authority.
Section 207. Annual report to be filed and annual audits.
By December 31 following the end of each fiscal year of an
authority, the authority shall file an annual report with the
chairperson and minority chairperson of the Appropriations
Committee of the Senate and chairperson and minority chairperson
of the Appropriations Committee of the House of Representatives,
that makes provisions for the accounting of revenues and
expenses. The report shall be signed by the chairperson of the
board. The authority shall have its books, accounts and records
audited annually in accordance with generally accepted auditing
A10077 - 30 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
standards by an independent auditor who must be a certified
public accountant, and a copy of the audit report shall be
attached to and be made a part of the authority's annual report.
A concise financial statement shall be published annually in the
Pennsylvania Bulletin.
Section 208. Limit on city borrowing.
An assisted city and its corporate entities may not borrow or
receive funds for any lawful purpose unless the assisted city
has entered into an intergovernmental cooperation agreement with
the authority and there is an approved financial plan in effect.
Section 209. Financial plan of an assisted city.
(a) Requirement of a financial plan.--Each assisted city
shall develop, implement and periodically revise a financial
plan as described in this section.
(b) Elements of plan.--The financial plan shall include:
(1) Projected revenues and expenditures of the principal
operating fund or funds of the assisted city for five fiscal
years consisting of the current fiscal year and the next four
fiscal years.
(2) Plan components that will:
(i) Eliminate any projected deficit for the current
fiscal year and for subsequent fiscal years.
(ii) Restore to special fund accounts money from
those accounts used for purposes other than those
specifically authorized.
(iii) Balance the current fiscal year budget and
subsequent budgets in the financial plan through sound
budgetary practices, including, but not limited to,
reductions in expenditures, improvements in productivity,
increases in revenues or a combination of these steps.
A10077 - 31 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(iv) Provide procedures to avoid a fiscal emergency
condition in the future.
(v) Enhance the ability of the assisted city to
access short-term and long-term credit markets.
(vi) If applicable, eliminate the levy of rate of
taxes authorized under section 707 on or prior to the
termination date.
(vii) If recommended by a coordinator's plan under
the act of July 10, 1987 (P.L.246, No.47), known as the
Municipalities Financial Recovery Act, and not previously
established, establish a trust to fund the benefit
obligations of other postemployment benefits of the
assisted city and engage an investment manager in
connection with the trust.
(c) Standards for formulation of plan.--
(1) All projections of revenues and expenditures in a
financial plan shall be based on prudent, reasonable and
appropriate assumptions and methods of estimation. All
assumptions and methods shall be consistently applied and
reported in the financial plan. The financial plan of an
assisted city may not include projected revenue that in order
to be collected requires the enactment by the General
Assembly of new taxing powers.
(2) All revenue and appropriation estimates shall be on
a modified accrual basis in accordance with generally
accepted standards agreed to by the authority, such as those
promulgated by the Governmental Accounting Standards Board,
and shall be subject to the following provisions:
(i) Revenue estimates shall recognize revenues in
the accounting period in which they become both
A10077 - 32 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
measurable and available.
(ii) Estimates of city-generated revenues shall be
based on current or proposed tax rates, historical
collection patterns and generally recognized econometric
models.
(iii) Estimates of revenues to be received from the
Commonwealth shall be based on historical patterns,
currently available levels or on levels proposed in a
budget by the Governor.
(iv) Estimates of revenues to be received from the
Federal Government shall be based on historical patterns,
currently available levels or on levels proposed in a
budget by the President or in a congressional budget
resolution.
(v) Nontax revenues shall be based on current or
proposed rates, charges or fees, historical patterns and
generally recognized econometric models.
(vi) Appropriation estimates shall include, at a
minimum, all obligations incurred during the fiscal year
and estimated to be payable during the fiscal year or in
the 24-month period following the close of the current
fiscal year and all obligations of prior fiscal years not
covered by encumbered funds from prior fiscal years.
(vii) Any deviations from these standards of
estimating revenues and appropriations proposed to be
used by an assisted city shall be specifically disclosed
and must be approved by a majority of the board.
(3) All cash flow projections shall be based on prudent,
reasonable and appropriate assumptions as to sources and uses
of cash, including, but not limited to, prudent, reasonable
A10077 - 33 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and appropriate assumptions as to the timing of receipt and
expenditure thereof, and shall provide for operations of the
assisted city to be conducted within the resources so
projected. All estimates shall take due account of the past
and anticipated collection, expenditure and service demand
experience of the assisted city and of current and projected
economic conditions.
(d) Form of plan.--Each financial plan shall include,
consistent with the requirements of an assisted city's governing
law:
(1) For each of the first two fiscal years covered by
the financial plan, information that reflects an assisted
city's total expenditures by fund and by lump sum amount for
each board, commission, department or office of an assisted
city.
(2) For the remaining three fiscal years of the
financial plan, information that reflects an assisted city's
total expenditures by fund and by lump sum amount for major
object classification.
(3) Projections of all revenues and expenditures for
five fiscal years, including, but not limited to, projected
capital expenditures and short-term and long-term debt
incurrence and cash flow forecasts by fund for the first year
of the financial plan.
(4) A schedule of projected capital commitments of the
assisted city and proposed sources of funding for those
commitments.
(5) A statement describing in reasonable detail the
significant assumptions and methods of estimation used in
arriving at the projections contained in the plan.
A10077 - 34 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(e) Annual submission of plan.--
(1) Within 90 days of the initial organizational meeting
of the board under section 202(c), the assisted city shall
develop and the authority shall review and act upon an
initial five-year financial plan that includes a report on
the status of implementation of prior published suggestions
regarding consolidation and cost savings.
(2) During each subsequent fiscal year, the chief fiscal
officer of the assisted city shall, at least 100 days prior
to the beginning of the assisted city's fiscal year or on
another date as the authority may approve upon the request of
the assisted city, prepare and submit its proposed five-year
plan.
(3) At the same time the plan is submitted, the chief
fiscal officer shall also submit to the authority:
(i) The chief fiscal officer's proposed annual
operating budget and capital budget, which budgets shall
be consistent with the first year of the financial plan
and prepared in accordance with the assisted city's
governing law.
(ii) A statement by the chief fiscal officer that
the budget:
(A) Is consistent with the financial plan.
(B) Contains funding adequate for debt service
payments, legally mandated services and lease
payments securing bonds of other government agencies.
(C) Is based upon prudent, reasonable and
appropriate assumptions and methods of estimation.
(D) Complies with any balanced budget
requirements contained in the governing law and
A10077 - 35 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
ordinances of the assisted city or State law.
(f) Balanced budget requirement.--
(1) The chief fiscal officer of the assisted city shall
submit, and the governing body of the city or assisted city
shall adopt, a balanced budget each year consistent with the
assisted city's governing law.
(2) A balanced budget of an assisted city may not
include projected revenues that in order to be collected
require the enactment by the General Assembly of new taxing
powers or the approval of a court of common pleas of the
county in which the assisted city is located.
(3) The failure of the assisted city to comply with this
subsection shall result in the withholding of Commonwealth
funds under section 210(e) and (f).
(g) Authority review and approval of plan.--
(1) The authority shall promptly review each financial
plan, proposed operating budget and capital budget submitted
by the assisted city. In conducting the review, the authority
shall request from the controller of the assisted city an
opinion or certification, prepared in accordance with
generally accepted auditing standards, with respect to the
reasonableness of the assumptions and estimates in the
financial plan.
(2) The controller and other elected officials of the
assisted city shall comply with a request under paragraph
(1).
(3) Not more than 30 days after submission of a
financial plan and proposed operating budget, the authority
shall determine whether:
(i) The financial plan projects balanced budgets,
A10077 - 36 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
based upon prudent, reasonable and appropriate
assumptions as described in this section, for each year
of the plan.
(ii) The proposed operating budget and capital
budget are consistent with the proposed financial plan.
(4) If the authority determines that the criteria under
paragraph (3) are satisfied, the authority shall approve the
financial plan.
(5) The authority shall not be bound by any opinion or
certification of the controller or other official of an
assisted city issued under this subsection.
(6) If the authority fails to take any action regarding
a financial plan within 30 days following submission of the
plan to the authority, the financial plan as submitted shall
be deemed approved. If, during the 30-day period, a written
request by two members of the board for a meeting and vote on
the question of approval of the financial plan has been
submitted to the chairperson and a meeting and vote do not
take place, the financial plan shall be deemed disapproved.
(h) Authority disapproval of plan.--
(1) If the authority disapproves the proposed financial
plan of the assisted city, the authority shall, when it
notifies the assisted city of the authority's decision, state
in writing in reasonable detail the reasons for the
disapproval, including the amount of any estimated budget
imbalance.
(2) The assisted city shall submit a revised financial
plan to the authority within 15 days of a disapproval under
paragraph (1), and the revised plan must eliminate the budget
imbalance.
A10077 - 37 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(3) Not more than 15 days after the submission of the
revised financial plan, the authority shall determine whether
the revised plan satisfies the criteria under subsection (g)
(3).
(4) If the authority determines that the criteria are
satisfied, the authority shall approve the financial plan.
(5) If the authority fails to approve the financial
plan, the authority shall, in accordance with section 210(e),
certify the assisted city's noncompliance with the financial
plan to the Secretary of the Budget, the President pro
tempore of the Senate and the Speaker of the House of
Representatives.
(i) Revisions to plan.--
(1) The plan shall be revised on an annual basis to
include the operating budget for the next fiscal year and to
extend the plan for an additional fiscal year. The chief
fiscal officer of an assisted city shall, within 90 days of
assuming office, propose revisions to the financial plan or
certify to the authority that the chief fiscal officer adopts
the existing plan.
(2) An assisted city may, during the course of a fiscal
year, submit proposed revisions to the financial plan and
shall submit a proposed revision for any amendment to the
city's operating or capital budget.
(3) The authority shall review each proposed revision
within 20 days of its submission. The authority shall approve
the revision if it will not, based on prudent, reasonable and
appropriate assumptions, cause the plan to become imbalanced.
(4) Proposed revisions shall become part of the
financial plan upon the approval of the authority unless some
A10077 - 38 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
other method of approval is permitted by authority rules and
regulations approved by the board or pursuant to an agreement
with the assisted city contained in an intergovernmental
cooperation agreement.
(5) If the authority fails to take action within 20 days
on a proposed revision, the submission shall be deemed
approved unless a written request for a meeting and vote has
been made in accordance with subsection (g)(4), in which
event, if a meeting and vote do not take place, the proposed
revision shall be deemed disapproved.
(6) If the governing body of a city adopts a budget
inconsistent with an approved financial plan, the assisted
city shall submit the enacted budget to the authority as a
proposed revision to the plan. The authority shall review the
proposed revision within 30 days of its submission in
accordance with the criteria under subsection (g) and the
approval process under paragraph (3).
(j) Supplemental reports.--
(1) Within 45 days of the end of each fiscal quarter of
an assisted city, or monthly if a variation from the
financial plan has been determined in accordance with section
210(c), the chief fiscal officer of the assisted city shall
provide the authority with a report describing actual or
current estimates of revenues and expenditures compared to
budgeted revenues and expenditures for the period reflected
in the assisted city's cash flow forecast.
(2) A report required under this section shall indicate
any variance between actual or current estimates and budgeted
revenues, expenditures and cash for the period covered by the
report.
A10077 - 39 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(3) An assisted city shall also provide periodic reports
on debt service requirements in conformity with section
210(b).
(k) Effect of plan upon contracts and collective bargaining
agreements.--
(1) A contract or collective bargaining agreement in
existence in an assisted city prior to the approval by the
authority of a financial plan submitted under this section
shall remain effective after approval of the plan until the
contract or agreement expires.
(2) After the approval by the authority of a financial
plan submitted pursuant to this section, an assisted city
shall execute contracts and collective bargaining agreements
in compliance with the plan. If an assisted city executes a
contract or a collective bargaining agreement which is not in
compliance with the plan, the contract or agreement shall not
be void or voidable solely by reason of the noncompliance,
but the assisted city shall submit to the authority a
proposed revision to the plan which demonstrates that
revenues sufficient to pay the costs of the contract or
collective bargaining agreement will be available in the
affected fiscal years of the plan.
(3) Nothing in this act shall be construed to in any
manner violate, expand or diminish the provisions of the
Municipalities Financial Recovery Act relating to collective
bargaining agreements.
(l) Effect of plan upon certain arbitration settlements.--
(1) After the approval by the authority of a financial
plan submitted pursuant to this section, any arbitration
settlement of a board of arbitration established pursuant to
A10077 - 40 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
the provisions of the act of June 24, 1968 (P.L.237, No.111),
referred to as the Policemen and Firemen Collective
Bargaining Act, providing for an increase in wages or fringe
benefits of an employee of an assisted city under the plan,
in addition to considering any standard or factor required to
be considered by applicable law, shall take into
consideration and accord substantial weight to:
(i) the approved financial plan; and
(ii) relevant market factors, such as the financial
situation of the assisted city, inflation, productivity,
size of workforce and pay and benefit levels in
economically and demographically comparable political
subdivisions.
(2) The arbitration settlement shall be in writing and a
copy thereof shall be forwarded to each party to the dispute
and the authority. Any arbitration settlement of the board of
arbitration which provides for an increase in wages or fringe
benefits of an employee of an assisted city shall be in
writing and shall state with specificity all factors which
the board of arbitration took into account in considering and
giving substantial weight to the factors referred to in
paragraph (1).
(3) Any party to a proceeding before a board of
arbitration may appeal to the court of common pleas to
review:
(i) consideration under paragraph (1); or
(ii) failure of the board of arbitration to issue an
arbitration settlement under paragraph (2).
(4) An appeal under paragraph (3) must be commenced not
later than 30 days after the issuance of a final arbitration
A10077 - 41 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
settlement by the board of arbitration.
(5) The decision of the board of arbitration shall be
vacated and remanded to the board of arbitration if the court
finds:
(i) that the board of arbitration failed to take
into consideration and accord substantial weight to the
factors referred to in paragraph (1); or
(ii) that the board of arbitration has failed to
issue an arbitration settlement under paragraph (2).
(6) If, after the exhaustion of all appeals, the final
arbitration settlement is not in compliance with the approved
financial plan, the arbitration settlement shall not be void
or voidable solely by reason of such noncompliance, but the
assisted city shall submit to the authority a proposed
revision to the plan which demonstrates that revenues
sufficient to pay the costs of the arbitration settlement
will be available in the affected fiscal years of the plan.
(7) As used in this subsection, the term "arbitration
settlement" shall mean an adjustment or settlement of a
collective bargaining agreement or dispute. The term includes
a final or binding arbitration award or other determination.
Section 210. Powers and duties of authority with respect to
financial plans.
(a) Formulation and approval of plan.--To advance the
financial recovery of an assisted city, the authority shall
require the assisted city to submit a five-year financial plan
in accordance with section 209. With regard to the formulation
of the financial plan, the authority shall:
(1) Consult with the assisted city as it prepares the
financial plan.
A10077 - 42 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30