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.
Recent Changes to the Municipality Authorities Act:
In June 2013, Act 68 passed the General Assembly adding stormwater responsibilities as an authorized project permitted under the Municipality Authorities Act for existing and or newly created authorities. PMAA had language included to protect existing authorities already engaged in some type of stormwater control as part of managing combined or sanitary sewer overflows, or for flood control projects.
BMPs for Stormwater Act 123 enacted in July 2014 adds language to the Municipality Authorities Act (MAA) further defining implementation of stormwater charges. Act 123 allows a property owner to implement best management practices (BMPs) to curtail stormwater runoff and allows stormwater authorities, if they choose, to incorporate these implemented BMPs into their rate structure.
HB 1296 (Harper) signed into law as Act 10 of 2016 broadens the scope of investment options for authorities and local governments with safeguard measures to protect those investments. It adds high quality money market instruments including repurchase agreements, commercial paper, negotiable certificates of deposit and bankers’ acceptances to the authorized list of investments for authorities and local governments.
By expanding the list of permitted investments, and establishing reasonable criteria and constraints on the use of these investments, authorities and local governments can increase returns, become aligned with national best practices for public funds investment, allow their investment officers the same tools as their counterparts in most other states, and institutionalize appropriate risk-management strategies to protect public funds. PMAA supported this as well as the other local government associations.
Bidding Thresholds Published
Bidding Thresholds Increase (Effective Jan. 1, 2015)
Pennsylvania Department of Labor & Industry published the authority and municipal bidding thresholds for 2016 under Act 90 of 2011. Under Act 90, the bidding thresholds provide for an annual inflation adjustment based on the Consumer Price Index for All Urban Consumers.
The percentage change for the 12-month period ending September 30, 2015, is 0.0%. Beginning on January 1, 2016, the bidding thresholds for municipal authorities will be the same as in 2015 as follows:
Purchases and contracts below $10,500 require no formal bidding or written/telephonic quotations.
Purchases and contracts between $10,500 and $19,400 require three written/telephonic quotations.
Purchases and contracts over $19,400 require formal bidding.
Click here to view the Pennsylvania Bulletin announcement and for the specifics of the CPI adjustment.
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:
a monetary contribution to a nonprofit community group or activity not to exceed $1000
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
an agreement for the joint purchase and use of equipment
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:
appointments made by the county commissioners of each of the counties in which the authority provides services to residents
residents from each of those counties)
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)
Sample Calculations (based on latest amendments in the law, Act 57-2003)
Qs & As
Tapping Fees Resolution
Other Laws impacting Authorities:
Act 3-2008 (Right-to-Know Law)
Additional Right-to-Know Law Information & Resources:
Right-to-Know Law (Open Records Act) Overview of Changes
PMAA’s sample Right-to-Know Law policy
Article from The Authority (12-08 issue)
New Open Records Law: The Essentials of Authority Compliance
Office of Open Records
Municipalities Planning Code
State Ethics Act
Sunshine Act (Open Meetings)
Fiscal Code Amendment 2010
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:
Highlights of the law regarding permit extensions
SB 1263 of 2012 (extension period to June 2016 on page 22)
SB 1042 of 2010 (Act 46 of 2010 -relevant sections pgs. 99-110)
DEP’s Guidance for Implementation