Monetization is the process of converting assets into economic value. Looking for options to generate greater revenue, municipalities and public sector entities have begun to consider the transfer to private operators of a greater variety of public assets than in the past. There has also been the development recently of more creative and profitable public-private partnerships. Continue Reading Generating Value from Public Assets

A bill introduced by Representative Kate Harper (R-Montgomery) would impose a new public meeting requirement on municipalities considering selling or leasing their water or sewer systems. The bill was recently approved in the House unanimously, and has been referred to the Senate Consumer Protection and Professional Licensure Committee.

House Bill 477 would require municipalities to hold at least one public meeting prior to entering into an agreement to sell or lease a municipal-owned or operated water or sewer system. The bill would also apply to systems operated by municipal authorities, if the transaction contemplated the dissolution of the authority by the municipality. The meeting would have to be advertised at least twice, on successive weeks, not more than 60 nor fewer than 7 days before the date of the meeting. If the system served customers outside of the municipality considering the sale or lease, public notice would also have to be provided in the municipalities where those customers resided.

Additionally, the potential purchaser or lessee of the system would be required to attend the meeting – presumably to present its plans for the system and to answer questions.

In the event the Senate acts favorably on the proposal, and the Governor signs it, the new public meeting requirement would go into effect in 60 days. Municipalities considering selling or leasing their water or sewer systems should keep a close eye on the status of House Bill 477 to ensure they comply with its requirements in the event it become law.

McNees attorneys Tim Horstmann, Ade Bakare and Kathy Pape recently provided an update on municipal storm water management to the membership of the Pennsylvania State Association of Boroughs. Their presentation addressed recent changes in Pennsylvania laws governing municipal storm water management in boroughs, permissible user fee structures, and additional funding streams that are available to municipalities to pay for necessary projects.

Interested in learning more? A copy of the Power Point presentation is available online.

As the baby boom generation reaches retirement age, many Pennsylvania municipalities face the potential of substantial knowledge and skill loss.  To confront this challenge, municipalities continue look for ways to keep their seasoned employees long enough for knowledge transfer to occur.  The problem can be finding sufficient incentives.  For these employees, the most important benefit is often their pension.  Therefore, municipalities’ ability to entice these employees to stay is often directly linked to pension distributions. Continue Reading In-Service Pension Distributions Now Simplified in Pennsylvania: Is it Time to Amend Your Pension Plan?

For Pennsylvania municipalities facing a rising tide of costs from implementing storm water management plans, the available funding options vary depending on where you are and what you are – but that could change as soon as later this year. The General Assembly has passed several laws that authorize certain municipalities and municipal authorities to impose “reasonable and uniform” fees to fund storm water management plans – and several additional bills are pending that, if passed, would extend these funding mechanisms to municipal entities across most of Pennsylvania. Continue Reading New Funding Mechanisms for Municipal Stormwater Management

Much like a business corporation, a municipality can only act through its employees. A municipal official may inadvertently (or advertently) make representations regarding municipality business, leading to unintended consequences. Municipalities must keep in mind that their agents and employees, including township supervisors and other officials, can bind municipalities to agreements and subject them to liability for breach of contractual obligations.

The Pennsylvania Commonwealth Court decision of Pezzano v. Towamencin Township recently addressed whether a Township can incur contractual liability stemming from the actions of municipal supervisors. In Pezzano, Towamencin Township entered into a confidential separation agreement with an employee, Kevin Pezzano. The terms of the agreement specified that neither Pezzano nor the Township would divulge any information to a third party about the agreement. The Township Board of Supervisors approved the agreement by a vote of 3-2, and the Township’s solicitor signed the agreement. A few days later, the dissenting supervisors, David Mosseo and Harold Wilson, provided statements to a local newspaper. The newspaper published an article which quoted Mosseo and Wilson as saying the Township terminated Pezzano for cause.

In response, Pezzano filed numerous claims against Mosseo and Wilson, individually, as well as a breach of contract claim against the Township. The trial court found that Mosseo and Wilson were entitled to official immunity because they acted within the scope of their authority as township officials and dismissed the claims against them.   The trial court likewise dismissed the claim against the Township because, since Mosseo and Wilson were not parties to the agreement with Pezzano, their actions could not constitute a breach on the part of the Township.

On appeal, the Commonwealth Court disagreed and ruled that the Township could be held liable for breach of contract because Supervisors Mosseo and Wilson were agents of the Township. Consequently, even though an agent of a municipality, such as a township supervisor, may not be personally liable for his or her actions, the municipality itself may still be held liable if its agent breaches an obligation of the municipality.

Pezzano leaves us with some important takeaways. When a municipality is bound to a contract, it will be held vicariously liable for actions by its agents, servants, and employees which amount to a breach of its contractual obligations. Individuals authorized to act on behalf of a municipality, such as a supervisor, mayor, council member, or manager, will be considered agents if their actions are within the scope of their authority. Accordingly, municipal officials must act and choose their words carefully. To avoid potential problems, officials should keep abreast of their municipality’s contractual and other legal obligations, and think carefully before making statements regarding the municipality.

Liability arising from the actions of officials is only one example of the issues faced by municipalities and other local government organizations. The Public Sector Group at McNees Wallace & Nurick can assist solicitors and municipal officials in navigating the unique legal issues that face governmental entities of all sizes.

The author extends a special thanks to summer associate Logan Hetherington for assisting in preparing this article.

This post was originally featured on the McNees Labor and Employment Blog.

Back in 2015, Pittsburgh enacted a paid sick leave ordinance, following a trend among cities throughout the country. Pittsburgh’s paid sick leave ordinance required employers with fifteen employees or more to provide up to forty hours of paid sick leave per calendar year. Employers with less than fifteen employees were not spared. The ordinance required that those employers provide up to twenty-four hours per calendar year. The impact: 50,000 workers would receive paid sick leave.

But, what authority did Pittsburgh have to impose such a requirement? Continue Reading A Tale of Two Cities: The Demise of Pittsburgh’s Paid Sick Leave Ordinance and the Durability of Philadelphia’s

On May 18, 2017, House Bill 1405 was introduced into the Pennsylvania General Assembly.  The proposed legislation, which would restrict a municipality’s ability to utilize revenue generated by a municipal electric system, would significantly impact 35 municipalities in PA that purchase wholesale power on behalf of residents and distribute the power through municipal-owned electric distribution system. Continue Reading Electric Costs in Ellwood City Spur Proposed Legislation to Restrict Use of Electric Revenue to Fund Municipal Operations

Are municipal pension costs eating your budget alive?  Are streets, bridges, water and wastewater systems crying out for capital investment?  Are public safety costs pushing your budget to the brink?  If so, now may be the time to explore unlocking the value of your municipal assets.

Over the past five years, the Pennsylvania General Assembly has enacted several laws that have changed the landscape of municipal water and wastewater assets.  These changes make the sale of water or wastewater assets to a public utility more attractive.  These changes may also result in an increased sale price if your municipality decides to sell. Continue Reading Broken Budget? The Fix May be a Sale of Assets

Pennsylvania State Senators John Blake, John DiSanto, and Mike Folmer recently introduced a trio of new municipal debt reform bills that follow on the package of reform bills introduced in the Senate in March. The new bills – Senate Bill 694, Senate Bill 695, and Senate Bill 696 – would expand the power of the Office of Attorney General to prosecute political crimes at the municipal level, increase the statute of limitations for such crimes, and require third class cities to put out for competitive bid all contracts for professional services.

Continue Reading Pennsylvania Senators Introduce New Municipal Debt Reform Bills