Altoona: A Journey from Distress to Recovery

The Department of Community and Economic Development (DCED) administers the Municipalities Financial Recovery Act, Act of 1987, P.L. 246, No. 47. Under Act 47, DCED has a responsibility to assist Pennsylvania municipalities that are experiencing severe financial difficulties in order to ensure the health, safety and welfare of their citizens. Altoona was designated as financially distressed under Act 47 in May 2012 and exited in September 2017, becoming the fastest municipality to exit the program and the first municipality to do so under the time limit imposed by Act 199. We spoke to Altoona Mayor Matt Pacifico about how Altoona’s community and DCED worked together to change its fate.

As you saw it, what led to Altoona’s distressed status under Act 47 in 2012?

Ultimately, we had a budget deficit — the city’s expenses were exceeding revenues.

Specifically, Altoona was declared distressed because we met three criteria established by the Act: the municipality had maintained a deficit over a three-year period, with a deficit of 1 percent or more in each of the previous fiscal years; its expenditures had exceeded revenues for a period of three years or more; and we had seen a decrease in a quality and quantity of municipal service from the preceding fiscal year.

How did the municipality address these issues?

Everybody worked together. I was elected during the first full year of Altoona’s distressed status, and my goal was to get the city out of Act 47 and not be one of those cities that stays in for 20 to 30 years.

It came down to hard work and dedication from elected officials and city staff, who worked diligently for five years to implement elements of our recovery plan. For example, we worked with our local water authority to get it back under city ownership, and then we leased the operations of the water authority back to the authority to be the operators in exchange for a payment, so it became something we were able to add to our budget.

How did DCED support Altoona and contribute to its recovery?

DCED was so helpful to the city while we were in Act 47 by providing grant opportunities and ongoing support. In 2016, we applied for the Strategic Management Planning Program grant for technical assistance to help us address blight, which DCED awarded us in the amount of $32,400. In addition, the funding from Act 47 helped enhance and upgrade Altoona’s information technology capabilities; helped upgrade our tax administration software; and assisted in the development of a detailed housing strategy and downtown investment plan. We have also formed a Blight Task Force, and DCED continues to help us address blight issues.

DCED also helped with annual budget reviews, monitoring of cash flows, and technical assistance as needed. They were never shy about answering any questions we had — it was good to have them on our side to be able to lean on for advice or questions throughout this process.

How will Altoona maintain this progress in the long term?

Number one, we need to continue to be fiscally responsible — the last thing we want is to end up back in Act 47 in a couple of years. We need to continue to bring new revenue sources into the city by growing the tax base.

We’re seeing a resurgence in our downtown. After 40-plus years, that’s the place people want to be again — so we’re trying to keep that momentum going by redeveloping our downtown and finding new ways to be innovative and get businesses to come here.

Additionally, our Blight Task Force met for the second time in November, and will meet two more times after that.

We made a promise to residents that we were going to strive to successfully exit Act 47. It was satisfying to be able to fulfill that promise.

To learn more about Act 47, visit DCED’s website. Discover more about DCED’s Strategic Management Planning Program on the DCED website and follow DCED on X, LinkedIn, and Facebook for up-to-date news on community and business development across the state. Become a Keystone Ally to help share positive PA news.