The Herald, Sharon, Pa.

April 9, 2013

Act 47 exit plan gets first public hearing

By Tom Davidson
Herald Staff Writer

FARRELL — Tonight’s the night for Farrell residents to voice their opinion about the direction the city’s heading.

A special council meeting starts at 6:30 p.m. and council and residents will hear from City Manager Michael Ceci about the city’s new Act 47 recovery plan, which will lay out a way for the city to move beyond the state program for financially distressed communities.

Farrell was the first community to be helped by the program 26 years ago and it could be one of the few to exit it solvent if it follows recommendations to reign in spending and increase taxes over the next few years.

Or it could elect to stay with the status quo as the state’s signature Act 47 community.

“I think the big thing is, even if you don’t try to get out of Act 47, the things we can’t control (expenses) are going to cause us to have to raise taxes,” Ceci said.

The costs of police protection, health care and retirement are out of the city’s direct control and those costs account for more than half of the city’s annual budget of about $2.8 million, Ceci said.

Being an Act 47 community allows the city to levy a nonresident wage tax of 1.4 percent. The rate is generally capped at 1 percent, with 0.5 percent going to the school district.

To exit the Act 47 program, the city would have to decrease that tax rate fourth-tenths of a percent to 1 percent, a reduction of about $250,000 of revenue each year, according to Ceci.

During tonight’s meeting, Ceci will detail the city’s finances and include projections through 2017 so that council members can make informed decisions about the plan.

“We’ll be in a position to at least address people’s concerns,” Ceci said.

He’s also hoping council will authorize him to seriously explore shared services and/or consolidation with neighboring municipalities as part of an overall exploration of how to best cut costs, he said.

Ceci’s also seeking a study of the cost-effectiveness of the Southwest Mercer County Regional Police Department.

The more than $1 million the city pays Southwest for police protection each year is by far the largest line item in the city’s budget.

That study is “not supposed to be divisive,” Ceci said, adding he hopes such a study would help council decide how best to provide police protection.

Farrell has been an Act 47 city since 1987, when the city’s largest employer and financial lifeblood, Sharon Steel Corp., started its slide into oblivion.

Greenville is the only other Mercer County municipality that’s an Act 47 community.