Listed below are some of the laws that impact municipal authorities. Click on the link for the full text of each law.
Municipality Authorities Act – Governing Act of municipal authorities in the Commonwealth of Pennsylvania.
New Bidding Thresholds Published
Act 90 of 2011 amended the Municipality Authorities Act (Section 5614) by raising the bidding thresholds and providing for an annual inflation adjustment based on the Consumer Price Index. The percent growth in the CPI-U over the 12-month period ending September 30, 2013 was 1.2%. Therefore, beginning January 1, 2014, the bidding thresholds for municipal authorities is as follows:
- Purchases and contracts below $10,300 require no formal bidding or written/telephonic quotations.
- Purchases and contracts between $10,300 and $19,000 require three written/telephonic quotations.
- Purchases and contracts over $19,100 require formal bidding.
Please click here to view the Pennsylvania Bulletin announcement for the specifics of the CPI adjustment.
Other Recent Changes to the Municipality Authorities Act:
HB 1719 (Creighton) provides for arbitration procedures and time frames of disputed review and inspection fees and clarifies the amount of financial security held at the end of a project. The PA Builders Association initiated the bill and PMAA and the other local government associations worked with them on agreeable language. HB 1719 reached final passage (Act 155 of 2012).
Protection of Authority Funds
SB 375, amending the Municipality Authorities Act, passed both the Senate and House unanimously and was signed into law (Act 73 of 2012).
Specifically it amends sections 5610 Governing Body and 5612 Money of Authority. It was first introduced in February 2011 by Senator Pileggi, (R-Delaware), the Senate Majority Leader, to address spending of municipal authorities that was not related to their mission. In particular, it amends Section 5612 to prohibit any loans, grants, or expenditures of an authority to be used for purposes outside the mission of the authority. Examples from legislators were expenditures unrelated to the infrastructure service their customers were paying for including the transfer of monies to the incorporating municipality. They noted that with infrastructure funding so critical, it was implausible to use these funds for other purposes.
PMAA worked with Senate members to amend the original version and remove an onerous penalty provision holding authority board members personally and financially liable for repayment of improperly distributed funds. The Senate removed this language and added new language to allow an aggrieved ratepayer standing in the Court of Common Pleas to bring suit against a recipient of authority money not tied to the authority’s purpose, and force the return of that money to the authority. This language now holds the recipient financially accountable and not authority board members.
PMAA then worked with the House Local Government committee to amend the bill to allow expenditures for community-related activities, emergency sharing, and shared purchases. Specifically, these exceptions to Section 5612 are:
1) a monetary contribution to a nonprofit community group or activity not
to exceed $1000
2) an in-kind service, including the provision of water or other resources to
a nonprofit community organization or activity, the value of which does
not exceed $1000
3) an agreement for the joint purchase and use of equipment
4) an agreement for sharing of equipment during emergency situations
After passing the House unanimously, the bill returned to the Senate for concurrence of House amendments. At this time, the Senate added a new amendment intended to address a particular board membership issue through precise and detailed language. Essentially, it changes the composition of an authority board if the authority meets the very narrow criteria outlined below:
Amendment to the Municipality Authorities Act, Section 5610 – Governing Body:
Applies to authorities incorporated by one municipality (a 3rd class city, township, borough, or town) that provides water or sewer service to residents in at least two counties,
AND the authority also has to have a water or sewer project in at least 3 counties. Project is defined as: any pump station, filtering plant, impoundment, dam, spillway or reservoir.
AND the “outside” population base of the municipalities served by the authority, EXCLUDING those customers in the incorporating municipality, must be at least 5 times greater than the population of the incorporating municipality.
If those criteria are met, then the board of the authority will be replaced by a new board that is composed of: 1) appointments made by the county commissioners of each of the counties in which the authority provides services to residents (3 residents from each of those counties) and, 2) the appointment of three members from the incorporating municipality.
We were able to alert a majority of our member authorities to make sure that the criteria in the amendment did not, through unintended consequences, apply to other authorities. SB 375, as amended, was voted by the full Senate (47-0) on June 13th and went to the House for a final concurrence vote (197-0). The governor signed the bill on June 27, 2012.
Given these significant changes to the Municipality Authorities Act, we encourage you to review the full contents of SB 375 with your solicitor.
Tapping Fees Information & Resources:
The section of the Municipality Authorities Act on Tapping Fees is found in Section 5607(d) (24) –(33)].
Tapping Fees Overview (based on latest amendments in the law, Act 57-2003)- pdf
Sample Calculations (based on latest amendments in the law, Act 57-2003)- pdf
Qs & As – pdf
Tapping Fees Resolution – pdf
Additional Right-to-Know Law Information & Resources:
State Ethics Act -pdf
Permit extension language first included in the 2010 Fiscal Code was further extended by three years in the 2012 Fiscal Code (SB 1263) passed by the General Assembly on June 30, 2012. The new permit extension ends on July 2, 2016, instead of 2013. Click on the links below for more information: