Westfall Township is believed to be the first Pennsylvania municipality to file for Chapter 9 bankruptcy protection. The Township sought Chapter 9 protection to force negotiations on a $20 million federal judgment entered in favor of a developer. Chapter 9 was used to reduce the award to $6 million, which will be paid in $75,000 quarterly payments over 20 years. The Township will also construct certain sewage facilities needed by the developer.

The Municipalities Financial Recovery Act, more commonly known as Act 47, is Pennsylvania’s program which permits municipalities to apply for a designation of financially distressed under certain circumstances. Under Act 47, a municipality which is found to be distressed works with a plan coordinator to develop a financial recovery plan and may be eligible for certain benefits.

Municipalities can forego Act 47 and instead file for Chapter 9 bankruptcy for municipal debt adjustment in very narrow circumstances. These circumstances include: (1) after recommendation of the Act 47 plan coordinator; (2) where there is imminent jeopardy of an action by a creditor, claimant, or supplier of goods or services which is likely to substantially interrupt or restrict the continued ability of the municipality to provide health or safety services to its citizens; (3) where one or more creditors of the municipality have rejected the proposed or adopted financial recovery plan and efforts to negotiate resolution of their claims have be unsuccessful for a ten-day period; (4) where a conditions substantially affecting the municipality’s financial distress is potentially solvable only by utilizing a remedy exclusively available to the municipality through the Federal Municipal Debt Readjustment Act; or (5) if a majority of the current or immediately preceding governing body of a municipality determined to be financially distressed has failed to adopt the financial recovery plan or to carry out the recommendations of the coordinator.

For more information about Act 47, please contact Amanda Sundquist in the West Chester office.

The use of windmills as an energy source is on the rise and rapidly growing in Pennsylvania, even in residential neighborhoods. While windmill farms can be an interesting and peaceful sight from afar, the construction of a windmill in a backyard in a residential neighborhood may not be as welcoming. In the case Tink-Wing Mountain Lake Forest Property Owners Association v. Lackawaxen Township Zoning Hearing Board recently handed down by the Pennsylvania Commonwealth Court, the Court upheld the Zoning Officer’s issuance of a zoning permit for the construction of a windmill on residential property for private use.

The Court found that the windmill use was a permitted accessory use providing an essential service and that the Zoning Officer was correct in issuing a permit. Although windmill use was not specifically enumerated as an accessory use in the Township’s Zoning Ordinance, the Court found that the windmill use was a use customarily incidental and subordinate to the principal residential use – comparing windmills to solar panels, outdoor fireplaces, satellite television – all of which are now often considered to be customarily incidental to principal uses.

With the increased interest in wind power, Townships may need to consider adopting ordinances which specifically regulate this growing use in Pennsylvania. Check out the out the Pennsylvania Land Trust Association’s website for more information on the use of windmills as an environmentally friendly source of power.

For more information on the above, please contact Kim Venzie in our West Chester location.

In a recent case involving a broken ankle suffered during a flag football game in Philadelphia’s Fairmount Park, the Commonwealth Court has broadly construed governmental immunity from certain lawsuits.  In Davis v. City of Philadelphia, the Court found that the Recreational Use of Land and Water Act (RULWA) protected the city from suit.  The plaintiff broke the ankle after tripping in a depression on a field, and sued (among others) the City of Philadelphia.

RULWA protects municipal bodies from suit where users of unimproved public land are injured.  The plaintiff claimed that the City’s Fairmount Park is highly developed and therefore not protected by RULWA.  However, the Court found that the field in question was by and large unimproved, and threw the claim out as against the City. 

The conclusion:  even in a highly maintained park system where a municipality might otherwise be liable for a condition of real estate, the courts may look to the site of the injury itself, rather than the entire park, to determine whether the land is unimproved and RULWA-protected.

The interplay between RULWA and other immunity statutes, such as the Tort Claims Act, creates a complex analysis, and local governments must consider various facts and issues in determining legal exposure.  For more information on municipal liability and public lands, contact Andrew D.H. Rau.

In an unusual verdict, a jury for the United States District Court for the Eastern District of Pennsylvania, in MFS, Inc. v Dilazaro, has found four Pennsylvania Department of Environmental Protection employees individually liable for $6.5 million dollars in damages. Typically, government workers are protected by the doctrine of sovereign immunity from such claims when acting within the scope of their official duties. However, MFS, in asserting First Amendment retaliation and equal protection claims under §1983 and procedural and substantive due process claims, alleged the employees had acted outside of the scope of their employment. The jury agreed.

The case arose out of a series of disputes dating back to 2001 involving odors from a mineral wool manufacturing facility that MFS had operated since 1988. The disputes culminated in 2007, when the Department declined to renew MFS’s Title V Operational Permit. The Department claimed MFS’s facility was emitting malodors, even though MFS had not recently received any notices of violation. Ultimately, the Department issued a draft of a conditional Title V permit which contained 91 conditions. MFS objected to two conditions which it alleged were not legally valid or reasonable: (1) a condition which imposed an operating permit compliance schedule that would have altered the terms of a Consent Decree entered into as part of a previous case, and (2) a condition which granted the Department the absolute right to shut down MFS upon issuance of a notice of violation. Shortly thereafter, MFS brought suit. More factual background can be found on the Court’s website here and here.

The Philadelphia Inquirer reports that the Department has a motion pending before the Court to have the verdict overturned. Stay tuned for new developments on this case.

For more information, contact Amanda Sundquist.

Selling to and purchasing for local governments in Pennsylvania poses unique challenges because local government in Pennsylvania is very local. The Brookings Institution has calculated that Pennsylvania has 2,566 municipalities: 56 cities; 962 boroughs; 91 first class townships, and; 1,457 second class townships. This does not include Pennsylvania’s 501 school districts, 29 intermediate units or 67 counties. Each type of these political subdivisions is bound by specific procurement requirements. Although these laws generally require that all public contracts for non-professional services in excess of $10,000 be awarded through a bidding process, each can be subject to change and has its own wrinkles.

Although this purchasing regimen may seem daunting to both the buyers and sellers, the laws governing purchasing are similar and may be navigated by an experienced practitioner. Furthermore, Pennsylvania allows certain local governments to participate in purchasing collectives. However, both purchasers and sellers must be sure to strictly comply with the laws regarding collectives. For the vendors, obtaining prequalification from a collective is important, and for purchasers they must assure that they pass and comply with the required resolutions and that the collective from which they are purchasing complies with all aspects of the law.

If you would like more information about purchasing from these collectives or selling goods and services to Pennsylvania’s municipalities and other political subdivisions, please contact Dan Dwyer in our West Chester office.

As discussed in my February 18, 2010 blog entry, the United States Court of Appeals for the Third Circuit reached conflicting results in two student free speech cases: Layshock v. Hermitage School District and J.S. v. Blue Mountain School District.  An article in the Legal Intelligencer reports that lawyers on both sides of the issue are urging the Court to vacate the two decisions and hold rearguments before the full court, in hopes of clarifying the confusion arising from the conflicting rulings. Stay tuned for updates on whether the Court agrees to the requested course of action.

Contact Amanda Sundquist for more information.