JOHNSTOWN —
Pennsylvania’s first municipality to officially be labeled financially distressed, Farrell, is still in the Financial Recovery Act 47 program.
The Mercer County city received its designation on Nov. 12, 1987.
In the past quarter-century, Farrell, a town with a population of slightly more than 5,000, has switched from a city-based police squad to a regional force, dropped its number of full-time firefighters from 10 to two and lowered the overall number of union workers to six. Also, being in the program enables Farrell, which touches the Ohio border, to impose a four-tenths of a percent tax on out-of-state workers, which brings in more than $200,000 per year.
“They’ve right-sized the municipal government. … You don’t have that fat to trim anymore,” said Farrell City Manager Michael Ceci.
Farrell is one of 27 municipalities to enter Act 47, including Franklin Borough, which received a distressed label on July 26, 1988.
Only six have left the program.
Most recently, Homestead had its status rescinded in March 2007. The Allegheny County borough took an economic dive when U.S. Steel’s Homestead Works closed in the 1980s. It’s similar to how Johnstown struggled when Bethlehem Steel shuttered its doors.
“We lost big daddy,” said the borough’s mayor, Betty Esper. “Big daddy ran Homestead.”
The borough only started to make a significant financial recovery after The Waterfront, an open-air shopping mall with more than 1 million square feet of leasable property, opened in 1999.
“If we didn’t have The Waterfront to bring in the tax base, we’d probably still be on Act 47,” Esper said.
Since Homestead’s departure, four municipalities have entered Act 47, including the state capital, Harrisburg, and Altoona in Blair County.
Harrisburg filed for Chapter 9 bankruptcy protection in 2011 after accumulating more than $1 billion in debt. More than $300 million was caused by expenses incurred when funding a trash incinerator project. The city has been forced into receivership by the state. Harrisburg City Council has filed a federal lawsuit to end the receivership.
“Despite what people across the state might be hearing, the process is moving forward,” said Robert Philbin, Harrisburg’s communications director.
Altoona received a distressed designation on May 3. The city is still paying its bills but foresees some tough financial times ahead, contending it cannot generate enough revenue because Blair County properties are assessed at values from the 1950s.
Since becoming distressed, Altoona has been working with Stevens & Lee, a Reading-based law firm, to develop a recovery plan.
“Basically what we’re doing at this point and time is giving the recovery consulting team rooms and rooms and rooms of information, mostly economical, but anything related to finances,” said Altoona City Manager Joe Weakland.
Click here to subscribe to The Tribune-Democrat print edition.
Click here to subscribe to The Tribune-Democrat e-edition.
Florida FBI Shooting Has Boston Bombing Links
Garcetti Elected Los Angeles Mayor Over Greuel
Raw: New Video of Deadly Oklahoma Tornado
IRS Official Pleads 5th Amendment
Lawyer: Feds Investigating Susan Powell Case
Former Rep. Weiner Running for New York Mayor
Jodi Arias: Death Penalty Would Cause More Pain
Police Ram House to End Hostage Standoff
Families Begin Returning to Their Homes in Moore
Raw: Aerial View of Moore Tornado Damage
Looking for Love? Take the Prague Metro
First Person: Baby Falcons on a New York Bridge
Crews Race to Find Survivors of Okla. Twister
Oklahoma: Images of Devastation, Reunion
Raw: Students Clash With Police in Chile
Protests Outside Cincinnati IRS Office
New Xbox One Entertainment Console Unveiled
