Distressed Cities

Together with professionals from our affiliate FSL Public Finance, we provide legal and financial consulting services and financial process audits to municipalities in Pennsylvania and beyond. The depth of our knowledge in this area of the law has led to our engagement by the Pennsylvania Department of Community and Economic Development (DCED) on behalf of several distressed cities to assist in developing and implementing a financial restructuring plan under the Pennsylvania Municipalities Financial Recovery Act (Act 47).

We have served as Act 47 coordinator in connection with the City of Shamokin Act 47 Recovery Plan (2014), the City of Altoona Act 47 Recovery Plan (2012), the City of Harrisburg Act 47 Recovery Plan (2011) and the City of Reading Act 47 Recovery Plan (2010). Some of the services our multidisciplinary team has performed on behalf of DCED for cities in Act 47 include:

  • Provided legal counsel to the Act 47 team in connection with statutory and case law as applicable to the development and implementation phases of the Recovery Plan, including preparing and reviewing documents and notices necessary to comply with the Act 47 statute
  • Reviewed a broad spectrum of municipal taxation and fees and prepared recommendations
  • Reviewed and assessed each line of insurance coverages for best practices adequacy, risk management and claims management and made recommendations for the entire insurance program
  • Reviewed all collective bargaining agreements and developed initiatives to modify these agreements to obtain significant current and future cost reductions, including modifications to wage scales, wage and longevity freezes, reduction of paid holidays and personal leave, reduction of paid vacation leave, reduction of paid sick leave, modifications related to overtime; modifications related to court overtime; redesign of health care benefits, including maximum cost increases to the municipality for such benefits and increased employee contributions; containment of post-retirement health care costs; retention of management rights; modifications in compensatory time; limitations on future compensation and benefits enhancements
  • Reviewed and analyzed all data related to all workforce initiatives, including health care benefits information and plan design and personnel costs related to specific items
  • Served as the labor solicitor for the Office of the Receiver, City of Harrisburg, involving negotiating with various unions for modifications to the existing collective bargaining agreements
  • Reviewed retirement plans and their related actuarial valuations, investment management agreements and other disclosure documents for compliance with applicable state pension law, applicable federal tax law and conformance to the collective bargaining agreements
  • Analyzed all outstanding debt
  • Assisted DCED in the structuring of alternatives to existing municipal debt
  • Reviewed municipalities’ taxing authorities and assessed tax structure, including preparing a summary of taxes and yields, and a separate calculation of the total local tax rates by including those imposed by the school district and county, assessing major areas where additional capacity to tax (including pursuing revenue from property now classified as exempt and increasing collections through tax amnesty programs, increased enforcement and higher penalties), and indicating the principal competitive impact of each major tax option
  • Recommended initiatives to consider as a means of increasing tax revenue, reducing tax collection expenses and improving voluntary compliance
  • Reviewed and analyzed the composition of exempt properties and suggested ways to increase utilization of Payment-in-Lieu-of-Tax (PILOT) agreements
  • Reviewed tax ordinances and regulations and made recommendations for revisions
  • Reviewed current economic development strategy and formulated new economic and community development strategies based upon information obtained at key stakeholder meetings
  • Analyzed and provided recommendations for improved organizational structure to better administer and coordinate economic development activities
  • Assessed overall economic and community development activities and organizations which impacted these activities
  • Developed initiatives based on findings through key economic and community development stakeholder meetings