Act 47
10:46 am
Fri June 6, 2014

Another PA City to be Declared "Distressed"

While City Council and Mayor Bill Peduto try to finalize a third, 5-year recovery plan for Pittsburgh under Act 47, the city of Shamokin in Northumberland County will soon become the 21st municipality in the commonwealth currently declared financially distressed.

"This is a financial mess," says Shamokin City Clerk Robert Slaby.

The Act 47 list includes Clairton (population: 6,767)  and Aliquippa (9,315) which are comparable in size to Shamokin (7,316).  Act 47 provides for the restructuring of debt of the financially distressed municipalities, Aliquippa was the first municipality to placed  under Act 47 oversight (December 1987) and remains so. Clairton was designated as "distressed" one month after Aliquippa and also has not exited state oversight. 

Shamokin wants a $1.2million dollar loan from the state to pay more than $800,000 worth of delinquent bills and patch another budget deficit.

Following a hearing Wednesday the Department of Community and Economic Development (DCED) declared Shamokin “distressed.”  If DCED Secretary Allen Walker agrees, Shamokin will be eligible for the loan.  

Slaby says the problems are a result of some bad fiscal habits.

"Taking from Peter to pay Paul constantly. Always anticipating more money around the corner that never came. They just cannot get out of this hole."

If all goes as expected, the city will pay back more than $800,00 owed to vendors within a month or so, and avoid running out of money this summer.

The city’s recovery plan will determine the focus of long-term improvement efforts. Work on that won't start until after DCED picks Shamokin’s Act 47 coordinator.  

Harrisburg was the most recent municipality to enter Act 47 (October 2010), and  Millbourne, Delaware County was the most recent community to emerge from oversight--three months ago--after 11 years as "distressed."

Keystone Crossroads is a collaboration of 90.5 WESA, WITF, WHYY and WPSU reporting in depth on the root causes of our state's urban crisis  and on possible solutions.