A breaking news alert from The Morning Call has just confirmed what this blog reported over 24 hours ago, that the city of Allentown is headed for an Act 47 filing. (Not that Perspectives was given any credit in the paper for breaking this story, but the readers know where they heard it first.)

In typical City Hall fashion, the Pawlowski administration is still denying it, but both Jarrett Renshaw’s and my sources say it is going to happen.

And since I’m on a roll here, I will take this opportunity to reprint something I wrote over five years ago…

Emergency Medicine: Although not perfect, Act 47 could relieve Allentown’s symptoms of financial distress

Maybe I should add the title “psychic” to the other jobs I do.

The arrogance and hubris of this administration for waiting to do what should have been done years ago is a legacy for which it will always be remembered. So all the deception and obfuscation was for nothing but to drive the city further in to debt. Congratulations on putting ego ahead of the needs of Allentown.

Blogger’s Note, 4/6, 2:10 p.m.: City Hall is denying there will be an Act 47 filing. At this point I’m sticking by my sources. I suspect one or both of two things are going on: What the city is really about to apply for is Act 205, the Municipal Plan Funding and Recovery Act and in the game of “whisper down the lane” that information was transformed into Act 47. And/or the unions got wind of a possible bankruptcy filing and decided to strike the first blow. But the bottom line is, something is going on. The city is drowning and it’s looking for a lifeline. Stay tuned…

16 thoughts on “My Reliable Sources: City Appears To Be On Verge of Act 47”

  1. Amazing how quickly this article has changed … at 11:01 they were seeking to apply for Act 47, and at ll:57 they are not.

    1. Yes, I saw that. I’m going to post this reply to you as an “update” to the blog, shortly. At this point I’m sticking by my sources. I suspect one or both of two things are going on: What the city is really about to apply for is Act 205, the Municipal Plan Funding and Recovery Act and in the game of “whisper down the lane” that information was transformed into Act 47. And/or the unions got wind of a possible bankruptcy filing and decided to strike the first blow. But the bottom line is, something is going on. The city is drowning and it’s looking for a lifeline.

  2. Michael Donovan

    Hi.

    Well just so everyone knows, I have not been informed of anything, nor have several of my colleagues with whom I have spoken. If this is indeed going on without our knowledge, I have a couple of actions in mind.

    Best regards,

    Michael

  3. They are in all out panic mode down there. make no mistake this will ripple into the suburbs. If there are major safety department cuts in Allentown, there will be pressure on the suburban forces, volunteer and paid, to help cover the gap.And that is just the start of the problems. The Smoke Machine and all the mirrors are broken.

  4. Pamela Varkony

    Michael,

    Thanks for keeping us informed from your perspective; that is a very important public service. As Chris says in the comment following yours, there seems to be a “bunker mentality” developing where no one is talking and everything is being denied.

    If indeed Act 47 was on the table, I suspect that the outing of the plan may have moved it back in to the closet until there is less public scrutiny.

    It’s clear to anyone who is paying attention that the city is going to run out of cash sooner rather than later, so eventually it’s going to be crunch time.

  5. Pamela Varkony

    Chris,

    We’re on the same page; I think the time for bluffing is over. All the chips are on the table and the administration is going to have to fold.

    What amazes me is why, when so many could see this situation clearly years ago, when it was obvious to anyone who cared to pay attention that the city was running at a deficit, why did the administration not come clean at that time and simply deal with it. It would have been painful, but we might be on the road to recovery by now.

  6. It is not vision, it is timing. The mayor just got another term and has a number of years to position himself for re-re-election. Politician forever, leader never.

  7. Pam,

    Act 47 is a valuable tool, but it isn’t a cure all. To my knowledge, the only city that is of comprable size to Allentown that was able to accomplish anything through Act 47 was Scranton, which actually holds a different class designation than Allentown. The cash problems are not entirely gone in Scranton, but they are far better. There is this perception that Act 47 is the great savior to distressed municipalities but there are some municipalities that have been on the list for years and have made no progress. It doesn’t forgive the city its pension obligations. It doesn’t provide new funding. All it does is provide a road map to improve the fiscal conditions. I am not entirely sure a road map is sufficient.

    My gut says that Act 47 is a plus for the city of Allentown in addressing some of its fiscal issues, but it is not a cure all. I suppose I am asking for expectations to be tempered.

  8. Patrick Henry

    Michael Donovan said: “If this is indeed going on without our knowledge, I have a couple of actions in mind.”

    *********************************************************************

    If the past is an indicator, I assume those “actions” will be an expression of “concern” and vowing to discuss the matter at a council committee meeting.

  9. Pamela Varkony

    RS,

    It’s true that with the new term the mayor can play for time. But I will be very surprised if he runs for a third term. By then, all the financial chickens will have come home to roost. I suspect he will get the heck out of Dodge and leave it for someone else to clean up. Personally, I’ll be surprised if he stays for the entire term, but that’s just my opinion.

  10. Pamela Varkony

    Geoff,

    Your overview of Act 47 is a good one; it is not a panacea, but we are at a point, where I think it is a good place to start. And although Scranton is not a third class city, much of what they did right, we would be able to do.

    I continue to be frustrated and angry at the lack of courage shown by this administration.

  11. Pamela Varkony

    “Pat”

    I can’t say I disagree with you: council in general has been a disappointment, but at least Michael doesn’t hide. He puts himself out there and communicates.

    There’s little doubt that we’re headed for some sort of financial showdown because eventually the money is going to run out. Council will then have to stand up or lay down.

  12. Pam –

    I find it hard to believe that the city is going to run out of cash anytime soon. I would think that right now they are rolling in money, since the EIT and real estate tax receipts are coming in.

    That would make me believe that this problem can be pushed off for a good bit of time.

    While I like to occasionally “needle” Mr. Donovan about the inaction of him and the rest of the Council, I remain hopeful that he or someone on that Board will step up to the plate. But they need to do so now, not later.

    It boggles my mind that they will spend time on Trail Plans and other frills (that will cost the city money) while burying their heads in the sand about where the city is financially.

  13. Patrick Henry

    Update 4/7/10, 2:55 pm

    Pam –

    My sources are telling me that the Mayor did in fact meet with union heads to tell them the city will be pursuing Act 47. They are sticking to that story.

    We all know the Mayor has a problem with the truth, so I don’t necessarily believe his denial (through a spokesman) in today’s paper.

    Whether the city is headed toward Act 47 or Act 205, I still find Mr. Donovan’s comments troubling. With a choice of believing the Mayor or Mr. Donovan, I’ll choose Mr. Donovan and take his word that city council has no knowledge of any such actions.

    That being said, I think it’s time for council to assert itself, use its subpoena power, and hold a PUBLIC meeting on the city’s financial situation.
    Bring in the Mayor, the department heads and the union heads.

    Council is supposed to represent the taxpayers and be a check and balance on the mayor – not a co-conspirator in keeping the truth from the people.

  14. Pamela Varkony

    Pat,

    I stopped believing the mayor a long time ago. As I said in my original post, I rarely post blind items, but my source was so reliable that I didn’t hesitate to put up the Act 47 story…and why I have not retracted or amended it.

    I also choose to believe Michael when he says he knows nothing about this. There is a meeting scheduled for this Friday so it will be interesting to see what comes out of that.

    I’m not quite where you are…yet…on issuing subpoenas but I’m close. That is a very big move and should not be done without very careful consideration and giving the administration every opportunity for transparency. But I do agree it may be necessary.

    Just at the end of my term on council, I discovered that there were huge discrepancies in the finances at the municipal golf course. I could not get any cooperation from the mayor’s office and was just about to go the subpoena route when I ran out of time. It has always bothered me that I couldn’t reconcile those differences for the taxpayers.

    I just hope council has the courage to do what they need to when the time comes, which is soon.

  15. Maybe I’m wrong, but I believe that Scranton and Allentown are both cities of the third (population) class. Philly is in the first class, I believe Pittsburgh is the only one in class 2 and all other cities from Pottsville, Easton up are third class. Just a very small detail, I know, since the main subject is so serious.

    Allentow’s ignominious slide continues, greased I’m afraid by a succession of poor leadership at the top.

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