Shamokin to pursue Act 47 status
SHAMOKIN - All five members of Shamokin City Council voted Monday in favor of pursuing entry into the state's Act 47 program for financially distressed municipalities.
Council also approved a letter of intent from Department of Community Economic Development (DCED) for the training of city employees and ratifying an Early Intervention Plan released earlier this month.
It also moved to renegotiate the terms of the Tax and Revenue Anticipation (TRAN) loan, lowering the payment amount from approximately $116,000 to a little more than $60,000 next month. The vote does not affect the principal amount owed by year's end.
Shamokin has been enrolled in the state's Early Intervention Program since 2008. That program is designed to keep municipalities out of Act 47.
Although city officials have worked closely with DCED since last fall, the department secretary must give final approval into Act 47. Should it be accepted, Shamokin will be eligible for a zero-interest loan to cover the $811,000-plus in unpaid bills accumulated in 2013. The city would also be given preference for state grant programs and would be the recipient of consultations from financial, legal and operations experts.
In addition to the outstanding invoices, it's estimated the city would finish 2014 with a $350,000 deficit. A cash shortage is projected by August, and Shamokin's deficit would build to a projected $2.8 million by the end of 2017 if no changes are made.
A municipality need only meet one of 11 criteria to be considered for Act 47. Shamokin meets five: at least three consecutive budget deficits, spending exceeds revenue, a deficit equal to at least 5 percent of municipal revenue for consecutive years, failure to meet its annual pension payment and a maxed-out real estate tax levy.
The Early Intervention Plan adopted Monday was created by a private financial advisor and released to the city earlier this month. It has more than 50 recommendations. In addition to pursuing Act 47, it recommends freezing all employee salaries and lowering the costs of employee health care, raising all city taxes to maximum limits and selling off unused vehicles and equipment.
The plan could be used as a template for what will be created should Shamokin be enrolled in Act 47. City council will have plenty of input in that plan's creation, including what steps to take to increase revenue and reduce spending. Once it's approved, it must be followed closely, a DCED official said last week.
June 1 is targeted as a date of entry into Act 47. A consultative report will be compiled and presented publicly within the next 30 days. Final approval could come within two weeks after that.
In an unrelated move, city council adopted an ordinance setting the hours for city playgrounds at 9 a.m. to 8 p.m. from April through October and 9 a.m. to 5 p.m. from November through March.