Pennsylvania Wolf Administration Announces Nanticoke is Ready to Terminate Distressed Status Becoming the First City to Exit Act 47

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Pennsylvania Department of Community & Economic Development

Aug 24, 2015, 01:25 ET

HARRISBURG, Pa., Aug. 24, 2015 /PRNewswire-USNewswire/ -- Department of Community and Economic Development (DCED) Secretary Dennis Davin announced today that the City of Nanticoke's status as a distressed municipality under Act 47 is terminated. Nanticoke is the first city and tenth municipality to exit the program.

"Today is an exciting day as we recognize the positive steps taken by Nanticoke's leadership and citizens to get its fiscal house in order and exit Act 47," said Davin. "Local leaders and citizens should be commended for making the tough decisions to put the City of Nanticoke back on the path to becoming a strong, stable community. Governor Wolf's policies will ensure that we continue to build strong, stable communities all across the commonwealth."

Davin issued a determination letter in Nanticoke City Council Chambers today, finding that termination of the City's distressed status was appropriate under Section 255.1 of Act 47. Davin made the decision after a thorough review of the City's audits and financial data and the record from a public hearing held on June 22, 2015.

"I am excited about our future plans for the City and look forward to working with other elected officials, city employees, the Luzerne County Community College, the Greater Nanticoke Area School District, the neighboring municipalities throughout the Lower South Valley, other stakeholders and our residents for the betterment of our region," said Mayor Richard Wiaterowski.

"Our staff is working passionately to ensure that the circumstances which led up to the City of Nanticoke's distressed status do not reappear," said City Manager Andy Gegaris. "While we are extremely grateful to be exiting Act 47, we are keenly aware of the effort necessary to sustain ourselves and will work feverishly to not only manage, but maximize our scarce resources."

The Hearing Officer's report indicated that the City has eliminated structural deficits and has greatly reduced debt service payments. The Hearing Officer also determined that the City now has the tools to make the decisions necessary to maintain responsible budgets, meet its obligations to vendors and creditors, and provide essential services to City residents.

"The cooperation of state leaders, city leaders, and the citizens of Nanticoke has produced what no other City has been able to do in the history of Pennsylvania," said Senator John Yudichak. "Nanticoke will become the first city to exit Act 47, and they are doing it in a strong fiscal position with important new investments being made in our downtown and our neighborhoods."

"This is a great day for the citizens of Nanticoke. Many have worked tirelessly working towards this day including both state and local officials including the Home Rule Charter committee for a little more than nine years," said Representative Gerald Mullery. "Nanticoke is a city in the midst of revitalization and removing the stigma of Act 47 status is another step forward."

The City of Nanticoke was designated as distressed under Act 47 on May 25, 2006. This determination was made following a series of recurring fiscal deficits in excess of 1.0 percent from 2001 to 2005, ineffective financial management practices and an inability to retain professional management staff, a default on the City's tax anticipation note (TAN) in 2001 and 2003, the use of long-term financing to pay operational expenses, tax base erosion, and levying the 30 mill maximum real estate tax rate for general operations of the City.

The City, working with the Act 47 Plan Coordinator, Pennsylvania Economy League, and DCED, developed a Recovery Plan in 2006 that was designed to stabilize the City's finances and operations. Along with many other components, the Plan also initiated the hiring of a full-time City Manager while maintaining strict expenditure controls. The City also began to accumulate and maintain a positive general fund balance, allowing the financial institutions in the community to recognize Nanticoke's sound financial management practices.

The Municipalities Financial Recovery Act, Act 47 of 1987, was enacted to provide a broad-based program of fiscal management oversight, technical assistance, planning and financial aid to municipalities experiencing severe fiscal distress.

For more information on Act 47 or the Governor's Center for Local Government Services visit www.newpa.com.

MEDIA CONTACT: Lyndsay Kensinger - 717-783-1132

SOURCE Pennsylvania Department of Community & Economic Development