Goodbye, Town Hall? Part II

Goodbye, Town Hall? Part II

In 2014 we wrote about amendments to Act 47 (in Act 199) that opened up the possibility of disincorporation for distressed municipalities (among other options after proceeding through the Act 47 process) and noted that Pennsylvania, along with a handful of other states, not only had the presence of incorporated territory wholly within their states, but also had nothing in statute allowing for those incorporated municipalities to disincorporate.

Yesterday a task force report was released on “voluntary municipal disincorporation”.  The report examines disincorporation laws around the country (38 states have one) and how they function.  The task force proposes a state law change that would apply only to counties of the second class (Allegheny); it would allow all municipalities to consider disincorporation (it is not known if the intent of the proposal would allow Act 47 municipalities in Allegheny County–currently there are four–to be permitted to follow the task force proposal or to be exempted and follow the Act 199 process so long as they are in fiscal distress status) by starting with an ordinance of the governing body, public hearings, a referendum, and then the disincorporated municipality to become “an entity of the county”.  An advisory committee would be created and an essential services plan would outline the services the unincorporated area would receive and the taxes and fees that would be levied to provide said services.  The task force report states that liabilities of the former municipality–such as debt–would remain the obligation of the former municipality.  That sounds very familiar to the “urban services district” framework that came out of the 2008 report on consolidating the City of Pittsburgh and Allegheny County.

The report notes that the County would try and offer some of the services it provides now to all municipalities in the county “…to build economies of scale to help offset the cost of delivery to unincorporated areas”.  Some of the services listed in the report are ones that the County does not provide currently (building inspection, emergency medical, solid waste collection) and are either provided “in house” currently by municipalities, through multi-municipal arrangements or authorities, or contracted out to private companies.

The report provides no examples of a municipality in Allegheny County under its present composition and how it would be better, worse, or the same if it were to disincorporate and receive services from the County.  The current County Executive even pondered “Why would a community want to do it if it doesn’t improve their tax situation and service situation?”, but there is no way to tell beyond initiating the process (the report notes “although the exact tax and fee rates are determined by the essential services plan, residents should understand the basic parameters of how it will be determined” which would have to come about by education from officials of the disincorporating municipality and the County).

If the County cannot sell its services on a broad scale as mentioned, would it even be worthwhile for a municipality that becomes disincorporated?  Does the County envision charging a per-capita fee for services regardless of the population and area of a municipality that opts for the change?  If not, then it would seem uniformity of taxation issues come up.

Already municipal officials have given a less than lukewarm reaction to the proposal.  While the report notes some states allow citizens to petition for disincorporation, or in some cases for states to disband municipalities if certain conditions exist, the proposal as presented yesterday puts the elected body of the municipality in the position to start the process, and it is not surprising few would entertain that.