DCED Declares Farrell No Longer Fiscally Distressed
Farrell, PA – Today, on behalf of Governor Wolf, Department of Community and Economic Development (DCED) Secretary Dennis Davin announced that the City of Farrell’s status as a distressed municipality under Act 47 is terminated. Farrell is the 15th municipality to exit Act 47.
“Farrell’s commitment to rebuilding a strong and vibrant community is exemplary,” Secretary Davin said. “And it demonstrates that collaboration among the community, the state, businesses, and partners played a key role in achieving Farrell’s goals. For the last 30 years, the state has provided crucial support to the city – but today, we congratulate Farrell for all of their hard work to put this city on the path to financial prosperity.”
Secretary Davin issued a formal determination letter in a ceremony at the Farrell Municipal Building, finding that termination of the city’s distressed status was appropriate under Section 255.1 of Act 47. Secretary Davin made the decision after a thorough review of the city’s audits, financial data, and the record from a public hearing held in January.“I am proud to report that after over 30 years, the stigma of being a fiscally distressed community has been lifted off the City of Farrell,” said Farrell Mayor Olive McKeithan. “My sincere thanks go out to many for their dedication to this cause, including current and past employees, local elected officials, community groups, business owners, residents, and certainly the commonwealth.”
The hearing officer’s report indicated that operational deficits have been eliminated and financial conditions demonstrate healthy management practices. The officer also determined that the city now has a consistent series of revenue streams to provide realistic and affordable services to residents, while also meeting its obligations to vendors, creditors and employees. Farrell was designated as distressed under Act 47 on September 23, 1987. This determination was made after years of increasing deficit, insufficient revenues, and a decrease in the level of municipal services.
The city’s recovery efforts included the consolidation of services through collaboration with other governmental entities; a significant growth in revenues supported by an increase on the collection of taxes and fees; the modernization of payment methods; and the diversification of funding streams. The city also made the difficult decision to raise Real Estate Tax rates and Resident EIT rates in 2015, which were important steps toward the effort to eliminate its reliance on Act 47-enabled revenues.
Farrell is the sixth municipality under the Wolf Administration to recover from distressed status. Prior the Farrell, the City of Pittsburgh, Allegheny County, had been the most recent community to recover, exiting Act 47 status on February 12, 2018. Plymouth, Luzerne County; Nanticoke, Luzerne County; and Clairton, Allegheny County and Altoona, Blair county also exited under the Wolf Administration.
The Municipalities Financial Recovery Act, Act 47 of 1987, was enacted to provide a broad-based program of fiscal management oversight, technical assistance, planning and financial aid to municipalities experiencing severe fiscal distress.
For more information on Act 47, visit the Governor’s Center for Local Government Services at the Department of Community and Economic Development. Be sure to stay up-to-date with all of our agency news on Facebook, Twitter, and LinkedIn.
Michael Gerber, DCED, 717.783.1132