LGA Lyceum

Purchasing Power!

Purchasing is one of the most powerful functions of local governments. Developing purchasing guidelines – whether for large projects or professional services – is critical as it ensures that all purchasing laws are being followed and that public funds are being used wisely and judiciously. Abuse or misuse of this power can be damaging to a local government and, as a result, very costly to the taxpayers. Attend this upcoming program to help you understand your legal and ethical obligations to engage in proper purchasing procedures.

Click here to register for this program, which will be held on April 7, 2010 between 6:00 and 9:00 PM at the Green Tree Borough Municipal Building.

The Local Government Academy’s upcoming program – Purchasing Power! – will provide you with information about the basic purchasing rules that are outlined in the municipal codes, when competitive bidding is and is not required, purchasing under emergency conditions, the steps of the bidding process versus when informal price quotes are required and special purchasing requirements. Michael Foreman, a Local Government Policy Specialist with the DCED Governor’s Center for Local Government Services will cover these purchasing requirements as they relate to all municipalities.

Additionally, instructors will also spend time covering the process of selecting professional services, such as choosing an engineer or solicitor, a professional planner for a comprehensive plan, an auditor, and municipal banking, pension and insurance services. Since selecting professional services are not subject to the same purchasing requirements, these decisions are often difficult ones to make for local governing boards and are done less often than other large monetary purchases, such as the annual road paving program. Purchasing Power! will also focus briefly on the importance of regularly evaluating professional services as an effective way to control costs and strengthen the way that business is conducted in your municipality.

Participants in this program will receive a sampling of Requests for Qualifications and Requests for Proposals that will demonstrate various ways in which these types of documents can be crafted to ensure that bidders are meeting the municipality’s needs.

Purchasing Power! will also focus on Intergovernmental Purchasing Alliances and the benefits of joint purchasing agreements and programs, including Pennsylvania’s Cooperative Purchasing Program, Co-Stars. Lou Gorski, Executive Director of the South Hills Area Council of Governments will discuss the success of this program and other similar programs in the Commonwealth.

This program is offered FREE OF CHARGE to communities that have been designated as fiscally distressed (Act 47) by the Commonwealth of Pennsylvania, through the support of the DCED Governor’s Center for Local Government Services.

Please encourage elected officials, department personnel, and managers/secretaries in your municipality to attend this important program.

March 19 Energy Program Will Focus on Audits, Recommendations and Practices, Funding Sources

On March 19, 2010 the Local Government Academy and Sustainable Pittsburgh are hosting "Sustainable Development Academy: Putting Energy Savings to Work in Your Municipality" at the Mt. Lebanon Municipal Building between 9 AM and Noon. Click here to register on-line.

Earlier this week, Allegheny County Executive Dan Onorato announced that the County has selected a company to perform energy audits in 104 municipal buildings. To support this initiative and encourage similar programs in other counties and municipalities, the Local Government Academy and Sustainable Pittsburgh have gathered a team of experts, including energy and municipal professionals, to help you understand what to expect from an energy audit and how you can implement the recommendations.

In addition to the presentation, Mt. Lebanon Public Works Director Tom Kelley will give participants a tour of the Mt. Lebanon Municipal Building, which underwent an energy savings renovation a few years ago, allowing the municipality to preserve the history of the building while improving its function and efficiency and ultimately saving taxpayers money on utility bills.

An energy audit is just the first step in the process of improving the energy efficiency of your municipal buildings. Implementing the results is often the most difficult part of the process, as the initial investment is an expense for your community. Funding is available for these initiatives and this program will provide you with information about additional funding opportunities.

For municipalities participating in Allegheny County's program, this program will help you prepare for energy audit by telling you what to expect from the process and give you some recommendations on how to implement the results. Registration discounts are available for Allegheny County municipalities who are participating in the county's energy audit program.

For municipalities outside Allegheny County, or those not participating in the audit, this informational program will be extremely valuable to you as it will teach you about energy audits, how to incorporate energy savings into your municipality, and provide you with information about funding opportunities. Your community may also have other assets, such as swimming pools, parks and community centers, that need audited for energy efficiency. This program will address those concerns as well.

This program is intended for municipal managers/secretaries, public works and building maintenance personnel and finance officers. Please also invite your community's library staff, school district administrators, church clergy and other organizations with aging infrastructure as they will all benefit from learning how to incorporate energy saving practice in their buildings.

We hope to see you on March 19.

NEOC 2009 Opening Day Photo Album

Opening Day for the 2009-2010 Newly Elected Officials Course was a success! More than 100 newly elected officials were in attendance at the Sheraton Station Square on Saturday, November 21. Throughout the morning, officials were guided through a Mock Council Meeting, where they learned the ins-and-outs of conducting a public meeting.

After lunch, officials were divided into groups where they were led through a Learning Style Inventory exercise by experienced municipal professionals.

We would like to thank all of the municipal professionals who assisted with each aspect of Opening Day. The event was a true success and a valuable learning experience for the participants.

Pension Bill Signed into Law

Submitted by Colleen Deer,
Mockenhaupt Benefits Group
412.394.9333 (direct and fax)
800.405.3620 (toll-free)
Colleen.Deer@MBGbenefits.com

On Friday, September 18, the governor signed House Bill No. 1828 into law. The primary purpose of the bill, now known as Act 44 of 2009, is to provide financial relief to local government pension plan sponsors in the wake of significant financial losses in 2008.

Some of the provisions of the bill offer widespread financial relief to plan sponsors statewide, while others are targeted at the most distressed, underfunded plans. Municipalities whose Minimum Municipal Obligations for their defined benefit plan(s) for 2010 will be calculated based on the 2007 actuarial valuation report may not see any relief from this bill until 2011.

Highlights of the bill include:

• Assignment of new distress scoring system based on the aggregated funding ratio of all of a municipality’s pension plans (total actuarial value of assets divided by total actuarial accrued liabilities) at the last valuation
* Distress Level 0 – funding ratio of 90% or more
* Distress Level 1 – funding ratio of 70% - 89%
* Distress Level 2 – funding ratio of 50% - 69%
* Distress Level 3 – funding ratio of less than 50%

• An increase in the maximum value that can be used for the actuarial value of assets in the 2009 valuation from 120% of market value to 130%; extension of this provision to the 2011 valuation for Level 1 and to the 2013 valuation for Levels 2 and 3

• Decrease in the amortization periods for discretionary changes that increase or decrease the plan’s unfunded liability (such as assumption changes or locally modified benefits)

• Increase in the assumption periods for non-discretionary changes that increase or decrease the plan’s unfunded liability (such as actuarial losses, actuarial gains, and state mandated benefit enhancements)

• Permit payment of MMO with 75% of amortization payment for distressed municipalities for up to 6 years, depending on Distress Level

• Mandatory aggregation of plan assets for municipalities with more than one defined benefit plan that are Level 2 or 3 Distress, and voluntary aggregation for Level 1

• Mandatory submission of a plan for administrative improvement for Level 2 and 3 municipalities (voluntary for Level 1)

• Special taxing authority for Level 2 and 3 Distress municipalities

• Establishment of a new plan for new hires for Level 3 Distress plans (voluntary for Level 2)

• Authorization of DROP provisions for all pension plans

• Standardized DROP provisions for all new DROPs

• Specific relief measures for Pittsburgh and Philadelphia

• New regulations on professional services contracting to reduce "pay to play"

The legislation will affect municipalities differently, and you should contact your Actuary for further information.

Towards Better Pension Accounting: A Practitioner's View

On July 28, 2009 LGA convened a Roundtable discussion in order to provide comments in response to the Governmental Accounting Standards Board’s (GASB) Invitation to Comment (ITC) on Pension Accounting and Financial Reporting. The comments were provided to the GASB in order to communicate the group’s suggestions on how to proceed with this important topic. We asked one of our participants, Bob Lentz, Assistant Deputy for Accounting, Allegheny County Controller’s Office, to provide some insights and opinions on the ITC process and what is needed in terms of changes to pension accounting.

The ITC is a useful document that gives governmental officials and financial managers, as well as the public, a forum to express their opinions to the GASB before they adopt standards on an accounting issue.

With regard to Pension Accounting and Financial Reporting, the main two calculations associated with the basic premise of the Pension ITC currently exist in Allegheny County’s government-wide statements or within the notes of its financial statements. For example, the first calculation determines the Annual Required Contribution (ARC) that is expected to provide sufficient resources for funding both normal costs and the Unfunded Actuarial Accrued Liability (UAAL) over an amortization period of 30 years or less. The County’s cumulative deficiency of underfunding the required annual contribution on December 31, 2008 was $27.8 million. As required, this deficiency is recorded on governmental-wide statements. However, the second calculation that estimates the UAAL is only disclosed in the notes and is $181.4 million. Based on the distinct possibility that this liability may be recorded in the near future, the County’s unrestricted net deficit at December 31, 2008 would have grown from $30.7 million to $184.3 million.

To remain consistent with private industry and GASB 34 standards, which indicate that government-wide statements should assess government finances in their entirety, the pension UAAL should be recorded. Most users of governmental financial statements are well aware of the unfunded long-term pension liability.

Though I agree with recording the full liability, calculating and liquidating the liability remains a more difficult enigma to solve. At present, the County uses a rate of return of 8% on the investment of present and future assets. While this rate may seem high for the last two years, the County utilizes an aggressive 15 year amortization period. In order to ensure that governments produce consistent and comparable financial data, the GASB must ensure that the number of acceptable actuarial cost methods is reduced; amortization periods be standardized; discount rates be determined objectively and address whether cost-of-living adjustments should be included in projected pension benefits.

But, once accurate and consistent liabilities are recorded, what plan does the government have to fund these liabilities? Although the UAAL is recorded, there is no guarantee that funds will be available to liquidate the liability. The most feasible process would be to pay the ARC, calculated using standards adopted above, to prevent future generations from being saddled with the entire unfunded liability. In addition, steps should be taken to reduce the UAAL by eliminating excessive overtime, lump sum payments and other one-time enhancements from the pension calculation.

Also crucial is that the County and municipalities avoid reacting to short-term economic changes. In 2000 and 2001, the County reduced the employee and employer contribution, through its Pension Plan, to 3.8% of covered payroll from its previous and current rate of 6%. The Pension Plan would have better withstood the poor investment returns of the past two years if it had not reacted to the previous boon years.

Finally, the ITC expressed that many participants in the GASB’s research group would like to see the UAAL recorded in the Plan’s statements and include a statement of changes in the liability from year to year. Because the primary government negotiates labor contracts and has the ability to exert pressure for pension plans to increase or decrease contribution rates, the ARC and/or UAAL liabilities should only be recorded on the County’s government-wide financial statements.

The invitation to comment is only the start of the GASB standard setting process. Watch for future LGA events providing opportunities to engage and express opinions on emerging standards and expectations for local governments.

Municipal Leaders Learn about Accelerating the Policy & Practice of Sustainable Development

Submitted by
Michael A. Spotts
Sustainable Pittsburgh
425 Sixth Avenue, Suite 1335
Pittsburgh, PA 15219
www.sustainablepittsburgh.org

On June 4, 2009, the Sustainable Development Academy (an ongoing training initiative of Sustainable Pittsburgh and the Local Government Academy) presented Sustainable Community Development Essentials: Tools, Strategies, and Case Studies. This hands-on program engaged 32 representatives from 22 local governments and organizations from around the region. Faculty representing diverse community interests led the session, including Susan Hockenberry of the Local Government Academy, Matt Mehalik of Sustainable Pittsburgh, John Trant of Cranberry Township, and Joy Wilhelm of the DCED Governor’s Center for Local Government Services.

The seminar introduced participants to the concept of sustainability with the goal of helping them lead by example through governance, policymaking, municipal operations, and education. The seminar began by identifying sustainability as a process for continuous improvement that takes into consideration social equity, natural capital, and a resilient and restorative economy. The conversation then transitioned to implementation as the audience learned about the steps Cranberry Township has taken to adopt sustainability as the framework for municipal operations, planning, and programming. Finally, attendees learned about the attributes of a municipal government supportive of sustainability. Namely, a sustainable government features principles, policies, and practices that:

• Enhance organizational capacity
• Utilize best management practices
• Exhibit professionalism
• Encourage intergovernmental cooperation
• Foster civic engagement
• Attract investment
• Provide strong stewardship for the community
• Establish sustainable development as a culture of practice and policy

The session emphasized the point that a municipal government’s financial situation is fully linked to its sustainability. Fiscal health is necessary for a municipality to be responsive to the needs of its constituents, from service provision to proper maintenance of infrastructure. This fiduciary responsibility includes budgeting and planning, completing the audit process, and performance monitoring/evaluation.

Furthermore, the municipal budgeting system can serve as a leverage point for implementing sustainability initiatives. Through budget planning and reconciliation, the net costs and benefits from activities (for instance, newly adopted energy saving techniques) can be quantified, and hopefully serve as a catalyst for broader acceptance and implementation.

The session identified critical factors in the development of sustainable communities through fourteen Sustainable Community Essentials resource sheets. Attendees applied the lessons from the seminar and these Essentials in a case study of Shaker Heights, a suburb of Cleveland, OH. Looking at statistical and municipal information about the community, they conducted a Rapid Assessment of Shaker Heights’ strengths, weaknesses, and areas for improvement.

The Sustainable Community Essentials resource sheets and Rapid Assessment used in this seminar are available to the public at: www.sustainablecommunityessentials.org. For more information about the Sustainable Development Academy and other Local Government Academy events, please visit: http://www.localgovernmentacademy.org/ or subscribe to Sustainable Pittsburgh's weekly e-news, 3E Links by emailing info@sustainablepittsburgh.org.

Michael A. Spotts, Intern
Sustainable Pittsburgh
425 Sixth Avenue, Suite 1335
Pittsburgh, PA 15219
Office Phone: (412) 258-6649
Fax: (412) 258-6645
E-mail: mspotts@sustainablepittsburgh.org
www.sustainablepittsburgh.org

Federal Stimulus Funds Available for Municipal Broadband Projects

Submitted by

Daniel S. Cohen
Cohen Law Group
www.cohenlawgroup.org

 

Much has been published on the recent federal stimulus legislation, known as the American Recovery and Reinvestment Act, including funding opportunities for municipal projects.  These opportunities are typically discussed with respect to transportation, education, energy and housing projects.  Very little has been reported, however, on the substantial stimulus funding that is available for municipal broadband projects, especially in the area of public safety.    

 

The stimulus package allocated allocates a total of $7.2 billion for broadband-related projects through two programs: 1) $4.7 billion for the Broadband Technology Opportunities Program (“BTOP”) in the Department of Commerce; and 2) $2.5 billion for the Distance Learning, Telemedicine and Broadband Program (DLTB”) in the Department of Agriculture.  The specific agencies charged with disbursing the funds are the National Telecommunications and Information Administration (“NTIA”) for the BTOP program and the Rural Utilities Service for the DLTB program.  The federal share of any projects funded by these programs may not exceed 80% (in other words, there is a 20% local match).

 

            The grant recipients for these programs expressly include local governments. The Act requires that the agencies disperse all monetary awards by September 30, 2010 and that the projects supported by these awards be substantially completed within two years of receiving a grant.  Local governments may never again see such a tremendous opportunity to receive federal assistance for broadband technology projects.  It is important, therefore, that local officials learn about these programs so as not to miss out on any timely opportunities.  Given the higher funding allotment for the BTOP program and the space constraints of this article, we will focus on the BTOP program here.

 

            The purposes of BTOP are as follow: 1) providing access to broadband service in unserved areas; 2) improving access to broadband services in underserved areas; 3) providing broadband education, awareness, training, access, equipment, and support; 4) improving access to, and use of, broadband service by public safety agencies; and 5) stimulating the demand for broadband, economic growth, and job creation. (emphasis added)  Based on our firm’s experience in representing municipalities in cable and telecommunications matters, improving public safety communications is a universal need among local governments.  The opportunity now exists to receive federal grants to fund these needs. 

 

            Grants awarded under the BTOP may be used for many purposes, including acquiring equipment for broadband services; constructing and deploying broadband service related infrastructure; and constructing and deploying broadband facilities that improve public safety broadband communications services.  While the NTIA has not yet specified the types of eligible public safety projects, it appears that such projects may include mobile data units for public safety vehicles, digital surveillance camera systems, and public safety interoperability enhancement.  Our discussions with the NTIA have revealed that the agency will be receptive to projects that include partnerships with other community anchors, including other levels of government, school districts, or hospitals.

 

To be eligible for a financial award under the BTOP, an applicant must submit an application during one of the three rounds of grant periods.  As of today, the first round is expected to be August-September, 2009.  The second round is currently scheduled for November- December, 2009, and the third round is scheduled for April-May 2010.  It is expected that one-third of the available funding will be awarded during each round.

 

            The application must meet the criteria outlined by the NTIA which requires, among other things, that the applicant provide a detailed explanation of how any award received will be used to carry out the purposes of the Act in an efficient and expeditious manner, including a showing that the project would not have been implemented during the grant period without federal grant assistance.  The applicant must show that it has the ability to meet the 20% match requirement and disclose any other federal or state funding that the applicant receives to which the application relates.

 

            The full text and of the BTOP is found in Section 6001 of the American Recovery and Reinvestment Act of 2009. The NTIA’s website, www.ntia.doc.gov/broadbandgrants, and the RUS’s website, www.usda.gov/rus/telecomalso provides important information.  Finally, many local governments are employing consultants to guide them through the application process, due to complexity of these grant programs, the fact that they are brand new, and the short timeframe for application submission.  If you have any questions regarding these broadband stimulus grants, please feel free to contact Dan Cohen (412-447-0130 x11 or dcohen@cohenlawgroup.org) or Phil Fraga (412-447-0130 x12 or pfraga@cohenlawgroup.org).

 

Daniel S. Cohen

Cohen Law Group

1000 Gamma Drive, Suite 305

Pittsburgh, PA 15238

Phone: 412.447.0130 ext. 11
Fax: 412.447.0129

dcohen@cohenlawgroup.org

www.cohenlawgroup.org

 

Attributes of Governance that Support Sustainability

Submitted by:

Anita Lengvarsky, Director of Programs
Local Government Academy 

 

 

The following outline was created for the 9th Annual Southwestern Pennsylvania Smart Growth Conference entitled "Sustainable Community Essentials" held on May 21, 2009.  Visit http://www.sustainablecommunityessentials.org/ for more information and to provide comment.

Below are seven attributes of governance that support sustainability and resources available from the Local Government Academy to attain them.

 

 

7 Attributes of Governance that Support Sustainability and LGA Resources

1.      Organizational Capacity

 

Newly Elected Officials Course - provides a comprehensive review of the basic duties of municipal officials, taught by experts in their fields.  Offered every other year following the municipal election, it is a one-of-a kind course, unique in Pennsylvania for its scope and content.
Next Scheduled: Opening Day - November 21, 2009

Municipal Intern Program - provides a service to communities by placing students from graduate and undergraduate programs at local colleges and universities in municipalities, authorities and Councils of Governments to complete summer internships.
Next Application Deadline – January 31, 2010  

Pillars of Good Government - for use in evaluating the value and performance of local government services.  The process for establishing the standards engages local governments, the academic community, businesses and nonprofit organizations around 8 "pillars" of good government.  Contact LGA to serve on a Pillars Team

 

2.   Best Management Practices

 

Annual Training Calendar - various best management practice sessions for elected officials and staff in the areas of human resources, public safety, public works, budget and finance, intergovernmental cooperation, ethics, community development, and powers & duties of municipalities and local officials. 
Visit the LGA website to sign up for an e-newsletter to receive program updates.

 

LGA Lyceum – a forum to create dialogue on current local government issues.  Read and comment on local government best management practices.  
www.lgalyceum.org

 

Municipal Intern Program – see above

 

3.    Professionalism

 

Pledge to Excellence - Candidates for local office have an opportunity to demonstrate to voters their commitment to good government and professional development by signing the Pledge to Excellence. The pledge is a commitment to lifelong learning and meeting the requirements of public office through professional and personal development.    Sign the pledge online at www.localgovernmentacademy.org 

 

Local Government Job Network - LGA is often contacted by municipalities and other organizations looking for help in finding individuals with the knowledge and skills relevant to local government.     http://lgjobnet.org

 

Newly Elected Officials Course – see above 

  

4. Intergovernmental Cooperation

 

Multi-Municipal Planning Grant Program - supports the creation and implementation of multi-municipal plans in conformance with the PA Municipalities Planning Code (MPC).  Applicants are eligible for grants up to $8,500 per municipality.  The program is administered by LGA with funds from the Heinz Endowments. 

Next Application Deadline – November 1, 2009

Road to Excellence Conference – Annual conference on intergovernmental cooperation

Next Scheduled: Intergovernmental Cooperation in Public Safety  September 17, 2009    9:00 – 3:00  

 

5.      Civic Engagement

 

Contemplating Governing - is an introduction to serving in local government.  These sessions will help individuals decide if local government service is right for them and encourage responsible campaigning.  This program provides citizens the chance to consider the opportunities, challenges, requirements, and reasons to serve in local elected office. 

Next Scheduled: January 2011  

LGA Lyceum – a forum to create dialogue on current local government issues.    www.lgalyceum.org

 

Newly Elected Officials Course – see info above

 

6.      Attract Investment

 

Annual Training Calendar - of Community Development programs including sessions on topics such as planning, zoning, economic development, reducing blight, stormwater, transportation, and more.

Next Scheduled: Sustainable Community Development Essentials June 4, 2009  9:00 – Noon  

 

Before the Storms: 2009 Stormwater Conference  September 3, 2009  9:00 – 3:00  

7.      Stewardship

 

Annual Training Calendar - of Budget & Finance sessions, as well as programs on Ethics and Accountability

Next Scheduled: Act 32 Earned Income Tax Collection: Is Your School District or Municipality Ready?  June 2009 Multiple Dates & SWPA Locations 

2009 Grant Writing Workshop  June 10, 2009  9:00 – 3:30 

GASB 54 program  Summer Date TBA

 

Technical Assistance is available through the Local Government Academy in all of the above 7 attributes.

Visit www.localgovernmentacademy.org for more information.

 

Anita Lengvarsky
Director of Programs
Local Government Academy
alengvarsky@localgovernmentacademy.org

PA Supreme Court Rules on Permissible Local Land Use Regulation of Natural Gas Well Drilling Activity

 

Submitted by
Blaine A. Lucas, Esquire
Babst Calland Clements & Zomnir
2 Gateway Center
Pittsburgh, PA 15222

412-394-5400

 

On February 19, the Pennsylvania Supreme Court issued two landmark decisions addressing the extent to which the Pennsylvania Oil and Gas Act (the “Act”) preempts, or supersedes, local municipal regulation of gas well drilling activity. Both decisions were unanimous.

 

In Huntley & Huntley v. Borough Council of the Borough of Oakmont, the Supreme Court reversed the Commonwealth Court’s decision that a local ordinance was preempted by the Act. The Supreme Court ruled that a municipality has the power to designate zoning districts where oil and gas wells can be permitted or prohibited.

 

In Range Resources – Appalachia, LLC v. Salem Township, the Supreme Court upheld the invalidation of a township subdivision and land development ordinance that extensively regulated gas well drilling operations in the township, on the basis that the township was attempting to enact its own “comprehensive regulatory scheme relative to oil and gas development within the municipality.”

 

The implications of these two decisions are significant for both the oil and gas industry and Pennsylvania local governments. The most notable impact is that as a result of the decision in Huntley & Huntley oil and gas companies will have to comply with municipal zoning ordinances which (1) require an operator to go through a public hearing and approval process as part of a conditional use or special exception application; or (2) in the most aggressive scenario, prohibit the drilling of wells altogether in designated zoning districts. On the other hand, the Range Resources opinion makes it clear that a municipality cannot adopt a “regulatory apparatus parallel to the one established by the Act and implemented by the Department” of Environmental Protection on matters such as well bonding, drilling permits, site restoration and plugging. Whether there are any other permissible categories of municipal regulation between these two extremes remains open to question.

BCCZ’s Natural Resources Development Group closely tracks state and local regulatory and litigation developments. For more information regarding the cases discussed above or their impact on your business, please contact Blaine A. Lucas at (412) 394-5657 or blucas@bccz.com, Joseph K. Reinhart at (412) 394-5452 or jreinhar@bccz.com or Kevin J. Garber at (412) 394-5404 or kgarber@bccz.com.

 

Copyright 2009* Babst, Calland, Clements and Zomnir, P.C.
Two Gateway Center*Pittsburgh, PA 15222 * 412-394-5400

Where We Are: Status of Implementation of Act 32 Consolidated Earned Income Tax Collection

GOVERNOR’S CENTER FOR LOCAL GOVERNMENT SERVICES RESPONSIBILITIES

 

Submitted by Michael Foreman, Local Government Policy Specialist

Department of Community & Economic Development

Governor's Center for Local Government Services 

 

Act 32 of 2008 amended Act 511 of 1965, the Local Tax Enabling Act which authorized municipalities and school districts to levy a local earned income tax. Act 32 of 2008 establishes the collection and administration of the local earned income tax on a countywide level by establishing 69 tax collection districts of which Allegheny County is divided into four. The Act also sets forth strengthened administrative, accountability and enforcement provisions.

Act 32 identifies the Department of Community and Economic Development (DCED) as the lead State agency through the Governor’s Center for Local Government Services (Center) to work with political subdivisions to provide technical assistance to implement provisions of the law as they transition into the new collection system which is to be fully implemented by January 1, 2012.

 

Following enactment of Act 32 in July 2008 the Center formed an internal Implementation Committee made up of Center management and staff and assisted by the DCED Legal Office to strategize transition and implementation issues and to fulfill the Department’s responsibilities under the Act. The Center is directly engaged in ongoing outreach efforts to communicate information to government officials and the public on transition and implementation provisions. A continuously updated list of frequently asked questions, timetable of key implementation deadlines and other general information on Act 32 is now being maintained on the DCED website (www.newpa.com).

 

Informational sessions are being conducted by Center staff with elected and appointed officials of political subdivisions throughout the Commonwealth. A comprehensive training program is planned for this spring at locations around the Commonwealth.  Responses to inquiries are being provided by Center staff through our toll free number (1-888-223-6837).

 

The Center has established an Earned Income Tax Collection System Advisory Committee made up of stakeholder organizations (i.e., legislative caucus, municipal and school associations, non-profit organizations representing business community) who were involved in the process leading to the enactment of the new law. The Advisory Committee will continue to provide input and feedback to the Center on its various responsibilities concerning phases of transition and implementation efforts over the next few years.

DCED has certain responsibilities to meet under Act 32 as part of the ongoing transition and implementation process. Several are being undertaken simultaneously.

 

The Governor’s Center published a list of each of the 69 tax collection districts on January 28, 2009 in the Pennsylvania Bulletin. This list and an accompanying map are currently available on the DCED website.

 

As called for in the Act, the Center is undertaking a study of existing earned income tax collection best practices with particular attention to current tax bureaus for the purpose of identifying, collecting and comparing those practices, methods, structures, bylaws, budgets, policies/procedures, regulations, software/information technology, forms, codes, agreements, request for proposals, governance alternatives to promote the greatest likelihood of effectiveness, cost efficiency, loss prevention and intergovernmental cooperation.

 

No later than December 31, 2009, the Center is required to provide each tax collection district with a best practices report of the findings and recommendations including sample bylaws, procedures, regulations, forms, agreements, requests for proposals for the selection of tax officers, request for proposals for the procurement of software systems and other appropriate samples.

 

By September 15, 2009 each municipality and school district that currently imposes an earned income tax is to appoint a representative to serve on the tax collection committee. The Committee is to be convened by the Chair of the County Commissioners or County Executive depending on the form of government. The Center will develop a sample template for the first meeting of the tax collection district for county officials to use to facilitate the selection process of the chair, vice-chair and secretary of the tax collection committee which is to occur no later than November 15, 2009.  

The Center is required to calculate and release the weighted vote to each tax collection committee by September 1, 2009. The weighted vote is used for the first meeting. For subsequent meetings the weighted vote is used unless the bylaws provide otherwise.      

 

The Center is responsible for the development of an audit format for the annual audit required each year by a CPA conducted on behalf of the tax collection committee of the tax officer. The audit report is required to include specific elements and is to be filed not only with the tax collection committee but also all of the political subdivisions of the tax collection district by September 1 of each year.

 

The Center is responsible for the development of mandatory training and education for tax officers on an annual basis. The Center is required to adopt regulations, guidelines and procedures to establish the qualifications and requirements a tax officer must meet prior to appointment and must meet for continuing appointment. A tax collection committee may establish additional qualifications and requirements a tax officer must meet prior to being appointed and must meet for continuing appointment.

 

The Center is responsible for prescribing political subdivision and tax collection district codes for use by employers and tax officers.

 

Tax collection committees will have the responsibility of sending notice of the first meeting to the Center by September 15, 2009; notifying the Center of appointment of the tax officer within 10 days of September 15, 2010; and notifying the Center of whether the new tax officer will collect 2011 taxes by December 1, 2010.

 

While there is no specific funding program enacted through Act 32, DCED has agreed to prioritize funding under its Shared Municipal Services Program to assist with start-up costs. GCLGS will continue to provide technical assistance to local officials and the tax collection committees and will be fully engaged throughout the entire transition process.

 

Contact the Center at 1-888-223-6837 for technical assistance. Please check our website www.newpa.com periodically for additional resources and updated information.

 

Act 32 FAQs

 

Act 32 Timetable

 

 

Michael S. Foreman
Local Government Policy Specialist
Department of Community & Economic Development

Governor's Center for Local Government Services

1403A State Office Building
300 Liberty Avenue
Pittsburgh, PA 15222-1210
Phone: (412) 565-5199

Fax: (412) 565-7983
www.newPA.com