Wolf Administration Announces Altoona Has Successfully Terminated Distressed Municipality Status Under Act 47

Harrisburg, PA – Today, on behalf of Governor Wolf, Department of Community and Economic Development (DCED) Secretary Dennis Davin announced that the City of Altoona’s status as a distressed municipality under Act 47 is terminated. Altoona is the 13th municipality to exit the program and completed the fastest exit of distressed status by a city.

“Altoona’s dramatic turnaround provides an inspiration for all Pennsylvania municipalities that fiscal stability, achieved through thoughtful and proactive collaboration among stakeholders, is a fully attainable goal within a five-year period,” said Sec. Davin. “It also affirms state government’s important role in providing struggling municipalities with additional financial support so they can rebuild strong and effective communities. This is a vital lifeline that must be preserved.”

Altoona, which adopted its revised Act 47 Recovery Plan on Dec. 10, 2012, is the largest municipality to ever recover from distressed status under Act 47. Altoona also became the first city to exit distressed status under the time limit constraints imposed by Act 199, which modified Act 47 in 2014.

Sec. Davin issued a formal determination letter in a ceremony at Penn State University Devorris Downtown Center in Altoona, finding that termination of the city’s distressed status was appropriate under Section 255.1 of Act 47. Davin made the decision after a thorough review of the city’s audits, financial data, and the record from a public hearing held on August 9, 2017.

“I am grateful to DCED for its guidance and assistance in helping Altoona swiftly exit Act 47,” said Altoona Mayor Matthew Pacifico. “Today is a momentous day and means everything to this city. I took office the first year the city was in Act 47, and I heard from concerned citizens then that nothing would ever change. It is gratifying to be exiting Act 47 today, not to prove those individuals wrong, but rather to demonstrate to them and the community that we are capable of following through on our promises. I look forward to ushering in a new chapter of economic development and growth for the city and its residents.”

The hearing officer’s report indicated Altoona is demonstrating sound financial management practices, is on stable financial footing and that all operating fund deficits have been eliminated. The hearing officer also determined that the city now has the tools to make the decisions necessary to maintain responsible budgets, meet its obligations to vendors and creditors, and provide essential services to residents.

“I know the city officials worked diligently to pull the city out of the distressed status as quickly as possible,” said state Senator John H. Eichelberger Jr. “I congratulate them for their fine work.”

Altoona was designated as distressed under Act 47 on May 3, 2012. This determination was made after years of uncontrolled spending and inadequate financial day-to-day management. The city suffered from insufficient revenues, the inability to control expenditures, and using debt to maintain necessary services.

Along with many other components, the city’s recovery efforts included a change to a Home Rule Charter form of government, an increase in revenues supported by increasing the resident earned income tax rate, a countywide property reassessment, controls on expenditures, better overall management, and elimination of indebtedness.

Altoona is the fourth municipality since 2015 to recover from distressed status. Nanticoke, Luzerne County, exited under Act 47 on Aug. 24, 2015, after more than nine years, and Clairton, Allegheny County, exited on Nov. 24, 2015, after more than 27 years. Previously, the Township of Plymouth, Luzerne County, had been the most recent community to recover, exiting Act 47 status on May 3, 2016.

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, and be sure to stay up-to-date with all of our agency news on Facebook, Twitter, and LinkedIn.

MEDIA CONTACTS:
David Smith, DCED, 717.783.1132

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