An Act 47 For Fiscally Distressed Schools Takes Shape

HARRISBURG – School districts are being evaluated this fall to determine if they belong in fiscal watch status, a new category for designating local government entities on a slippery financial slope.

The state Department of Education is identifying which districts need monitoring because of such factors as low cash on hand or limited ability to generate tax revenue and take on more debt as it implements the School District Financial Recovery Law enacted in July.

The law establishes a state oversight process for school districts similar to what Act 47 offers for fiscally distressed municipalities.

Four urban districts – Harrisburg, York City, Chester-Upland and Duquesne – have received preliminary declarations as districts in financial recovery, the ultimate distress category that triggers the appointment of a chief officer to develop a recovery plan.

Read more:  http://thetimes-tribune.com/news/an-act-47-for-fiscally-distressed-schools-takes-shape-1.1381357

Scranton Gets $6.2M Short-Term Loan; State Sets Public Hearing On Plan For Today

Editor’s note:  We are pleased to see that the mayor and council president have put aside their differences and are working together.  It’s making a difference!

Like dominoes falling, Scranton has finally adopted a revised recovery plan, and because of that the city now will receive a $2.2 million state aid package and a $6.25 million short-term bank loan that will allow the city to pay bills and payrolls while continuing to seek long-term borrowing to fund its 2012 budget.

The flurry of separate, yet related, developments has bought the city some time to resolve its short-term financial crisis, however the city still needs to secure other borrowing to end the year in black, Mayor Chris Doherty and council President Janet Evans said.

The stage was set with the city’s proposed revised recovery plan having received approval in recent days from its Act 47 recovery coordinator, Pennsylvania Economy League.  That approval will allow the city to receive the $2.2 million state aid package from PEL’s overseer, the state Department of Community and Economic Development.  With PEL and DCED on board with the city’s recovery plan and the state aid package on the way, the city was able to secure on Wednesday night a $6.25 million tax- anticipation note from Amalgamated Bank of New York and Washington, D.C., the mayor and Mrs. Evans announced late Thursday afternoon in front of City Hall, shortly before the council meeting.

“This buys us time,” Mr. Doherty said of the bank loan and state aid package.  “With the recovery plan being passed, it sends a positive message for our future borrowing.”

Read more: http://thetimes-tribune.com/news/city-gets-6-2m-short-term-loan-state-sets-public-hearing-on-plan-for-today-1.1363190

State Extends Deadline For Scranton Recovery Plan After PEL Raises Concerns

Hours after receiving a “rejection” of its revised recovery plan by a state-appointed recovery coordinator, Scranton City Council on Thursday forged ahead with introducing the plan anyway.

The council voted 3-1 to introduce an ordinance to implement the revised plan that was agreed upon last Friday by Mayor Chris Doherty, council President Janet Evans and council finance chairman Frank Joyce.

The plan then was sent for review to the city’s Act 47 recovery coordinator, Pennsylvania Economy League, which also would have to OK the plan before it would take effect.

On Thursday, shortly before the council’s meeting, PEL issued a letter to the city detailing numerous concerns about the recovery plan, chiefly that much of its revenue sources that are alternatives to real estate taxes – such as a commuter tax and sales taxes and significantly increased voluntary donations from nonprofits – are not guaranteed to occur. PEL wants to the city to identify backup revenues sources should speculative revenue sources never materialize.

Read more: http://thetimes-tribune.com/news/state-extends-deadline-for-scranton-recovery-plan-after-pel-raises-concerns-1.1353735