DCED Acting Secretary Davin Determines Borough of Colwyn Financially Distressed; Will Officially Enter Act 47

Department of Community and Economic Development (DCED) Acting Secretary Dennis Davin has determined that the Borough of Colwyn, Delaware County is “financially distressed” under the provision of Pennsylvania’s Municipalities Financial Recovery Act, or Act 47.

Davin now has 30 days to appoint a recovery plan coordinator for Colwyn. Once named, the coordinator will have 120 days from contract execution to develop and propose a plan to the mayor, city council and DCED.

Colwyn has encountered circumstances that have resulted in a need to seek state support in developing a plan for recovery,” Davin said “This is a turning point on the road for recovery for Colwyn and today’s determination further supports the need for Governor Wolf’s proposed increase to the Early Intervention program which will allow DCED to be proactive rather than reactive in assisting municipalities experiencing fiscal difficulties.”

The Secretary’s decision was made after his review of information presented on the record at a April 7 public hearing that provided verification that Colwyn meets the below criteria set forth in Act 47:

  • The municipality has failed to make the required payment of its minimum municipal obligation as required by the Municipal Pension Plan Funding Standard and Recovery Act within the time period to make required said payments.

Further based on the testimony provided at the hearing the borough will be unable to fulfill the policy objectives of Act 47 to provide for the health, safety, and welfare of their citizens; pay principal and interest on their debt obligations when due; meet financial obligations to their employees, vendors, and suppliers; and provide for proper financial accounting procedures, budgeting and taxing practices without Act 47 intervention.

Davin stressed that while DCED and the appointed coordinator will provide oversight, elected officials have ultimate responsibility for the borough’s policies and day-to-day management of borough affairs.

Act 47 designation triggers procedures, guidelines, and powers that help financially distressed municipalities provide vital services, meet debt and other financial obligations, and implement improved accounting, budgeting and taxing practices. State oversight emphasizes long-term fiscal management improvements, service delivery efficiencies, intergovernmental cooperation, and economic and community development priorities.

Including Colwyn, DCED has now declared 29 municipalities as distressed since 1987. Nine municipalities have successfully emerged from the program, most recently, Westfall Township, Pike County and the Borough of West Hazleton, Luzerne County had their Act 47 status rescinded on October 21, 2014.

For more information on the resources available for local governments experiencing financial distress, or additional information on Act 47, visit www.newPA.com or call 1-866-466-3972.

Media contact: Heidi Havens, DCED; 717-783-1132

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