Siger v. City of Chester

309 A.3d 698

Rick SIGER, in His Capacity as Acting Secretary of the Department of Community and Economic Development

v.CITY OF CHESTER

Appeal of: City of Chester, Mayor Thaddeus Kirkland and City Council of the City of Chester

Rick Siger, in His Capacity as Acting Secretary of the Department of Community and Economic Development

v.City of Chester

Appeal of: City of Chester, Mayor Thaddeus Kirkland and City Council of the City of Chester

No. 12 MAP 2023

No. 15 MAP 2023

Supreme Court of Pennsylvania.

Argued: May 24, 2023

Decided: January 29, 2024

Appeal from the Order of the Commonwealth Court Order dated January 31, 2023 at No. 336 MD 2020, Ellen Geisler, Judge.

Appeal from the Order of the Commonwealth Court Order dated February 14, 2023 at No. 336 MD 2020, Ellen Geisler, Judge.

Andrew Kabnick Garden, Esq., Conrad O’Brien, P.C., Megan Anne Guernsey, Esq., Kevin Dooley Kent, Esq., Clark Hill PLC, for Amicus Curiae Chester Water Authority

Kandice Kerwin Hull, Esq., McNees Wallace & Nurick LLC, for Amicus Curiae County of Delaware

Quintes D. Taglioli, Esq., Markowitz & Richman, for Amicus Curiae Pennsylvania Lodge Order of Police

Charles Matthew Gibbs, Esq., McMonagle, Perri, McHugh, Mischak & Davis, P.C, for Appellant Morgan, William

Mark D. Pfeiffer, Esq., Buchanan, Ingersoll & Rooney, P.C., for Appellants

Kirkland, Thaddeus, City of Chester, City Council of the City of Chester

H. Marc Tepper, Esq., Buchanan, Ingersoll & Rooney, P.C., for Appellants Williams, Elizabeth, West, Portia, Kirkland, Thaddeus, Morgan, William, City of Chester

J. Michael Adams Jr., Esq., for Appellees Davin, Dennis, Pennsylvania Department of Community and Economic Development, Siger, Rick

Tiffany R. Allen, Esq., Campbell Durrant, P.C, Bradley John Betack, Esq., Patrick James Harvey, Esq., John Patrick McLaughlin, Esq., Campbell Durrant Beatty Palombo & Miller, P.C., Benjamin Richard Patchen, Esq., Philadelphia City Solicitor’s Office, for Appellee Doweary, Michael

Sean Christopher Campbell, Esq., Pro se

Steven Alan Hann, Esq., William Grady Roark, Esq., Hamburg, Rubin, Mullin, Maxwell & Lupin, PC, for Appellee Stormwater Authority of the City of Chester

Thomas Helbig Jr., Esq., for Appellee PFS VII, LLC

Lori K. Irwin, Esq., Pennsylvania Office of General Counsel, for Appellee Pennsylvania Department of Community and Economic Development

Justin Andrew Zimmerman, Esq., Pennsylvania Department of Community & Economic Development, for Appellee Davin, Dennis Pennsylvania Department of Community and Economic Development, Siger, Rick

Chester Economic Development Authority, Pro se

Chester Parking Authority, Pro se

Chester Redevelopment Authority, Pro se

William Jacobs, Pro se

TODD, C.J., DONOHUE, DOUGHERTY, WECHT, MUNDY, BROBSON, JJ.

Justice Wecht delivers the Opinion of the Court with respect to Parts I, II, III, IV(A), IV(B)(ii)-(v), and IV(B)(vii)-(viii) and an opinion in support of affirmance.

ORDER

PER CURIAM

AND NOW, this 29th day of January, 2024, because the Justices are unable to reach consensus regarding the disposition of the Commonwealth Court’s order, the order of the Commonwealth Court is AFFIRMED by operation of law.

OPINION

JUSTICE WECHT

Because the people of Pennsylvania receive many essential government services through their municipalities, the fiscal health of our cities is a matter of tremendous importance. For several decades, municipalities facing financial peril have been subject to a comprehensive remedial scheme under a law commonly known as Act 47.¹ If a fiscal emergency reaches a critical stage, Act 47 allows the Governor and the Department of Community and Economic Development ("Department") to resort to a drastic measure—the appointment of a receiver for the municipality.²

This appeal concerns the authority of a receiver for a financially distressed municipality under Act 47. Since 2020, Michael T. Doweary (the "Receiver") has served as the Receiver for the City of Chester (the "City"). In late 2022, finding the existing recovery plan inadequate to address the City’s challenges, and due in no small part to the failure of local officials to cooperate with his efforts, the Receiver sought the Commonwealth Court’s approval of numerous modifications to that plan. The Commonwealth Court confirmed certain of the Receiver’s proposed initiatives, struck others, and allowed the Receiver to amend the modification request to address various deficiencies. The City, Mayor Thaddeus Kirkland, and the City Council³ sought this Court’s review of several initiatives that the Commonwealth Court had confirmed.⁴ In light of the City’s assertions that certain confirmed initiatives unlawfully deprive its elected officials of their authority to govern on behalf of the City’s residents, this Court assumed jurisdiction pursuant to our King’s Bench powers.⁵ We affirm the order of the Commonwealth Court.

I. Act 47

A. Overview

Because this Court has had few opportunities to address Act 47, it is helpful to begin with a brief discussion of the law generally, its purpose and structure, and the particular provisions that apply to the instant dispute. "As its formal name im- plies, Act 47 is designed to offer relief to any city that is considered to be financially distressed."⁶ Act 47 embodies the stated "public policy of the Commonwealth to foster fiscal integrity of municipalities so that they provide for the health, safety and welfare of their citizens; pay principal and interest on their debt obligations when due; meet financial obligations to their employees, vendors and suppliers; and provide for proper financial accounting procedures, budgeting and taxing practices."⁷ The failure to perform these essential functions, the General Assembly has declared, adversely affects "the health, safety and welfare not only of the citizens of the municipality but also of other citizens in this Commonwealth."⁸

The General Assembly included within Act 47 numerous express statements of its intent in crafting the statutory scheme, as well as legislative findings that reinforce that purpose. Given the parties’ focus upon the General Assembly’s declarations, we set forth these provisions at some length. The legislature stated its intent as follows:

(1) It is the intent of the General Assembly to:

(i) Enact procedures to provide municipalities showing early indicators of financial distress with training and technical and financial assistance.

(ii) Enact procedures and provide powers and guidelines to ensure fiscal integrity of municipalities while leaving principal responsibility for conducting the governmental affairs of a municipality, including choosing the priorities for and manner of expenditures based on available revenues, to the charge of its elected officials, consistent with the public policy set forth in this section.

(iii) Enact procedures for the adjustment of municipal debt by negotiated agreement with creditors.

(iv) Provide for the exercise of the Commonwealth’s sovereign and plenary police power in emergency fiscal conditions to protect the health, safety and welfare of a municipality’s citizens when local officials are unwilling or unable to accept a solvency plan developed for the benefit of the municipality.

(v) Provide for the exercise of the Commonwealth’s sovereign and plenary power to establish and abolish local government units and provide essential services in areas of this Commonwealth in which the fiscal integrity of existing local government units cannot be sustained.⁹

These statements reflect the legislature’s embrace of varying degrees of intervention within distressed municipalities, from the mere provision of "training and technical and financial assistance" to the exercise of the power to "abolish local government units." As discussed below, the escalating severity of the remedies referenced in these declarations correlates to actions authorized under different chapters of Act 47.

The General Assembly also reinforced its statement of intent with a number of specific findings and declarations. The legislature declared: that "[p]olicies of certain municipalities are so ineffective and the financial conditions so severe that the provision of vital and necessary services is threatened"; that "[s]ustained failure of a municipality to enact or implement a fiscal plan to adequately address or prevent insolvency after repeated opportunities to do so … constitutes a fiscal emergency"; and that such failure "signifies … a breakdown in the function of municipal government," "a dereliction of its elected officials’ paramount public duty to safeguard the health, safety and welfare of its citizens," and "a threat to the fiscal stability of neighboring communities."¹⁰ The General Assembly further noted that municipalities "may face such deteriorated economic conditions that all reasonable efforts to restore economic viability have failed," and that in such circumstances, "[i]t is the intent of the General Assembly that, for municipalities incapable of continuing to function as general purpose units of local government, procedures exist to ensure the provision of essential and vital public services to the residents of those areas absent a functioning municipal government."¹¹

Consistent with the General Assembly’s acknowledgment that different financial situations may require different interventions, Act 47 provides a suite of options depending upon the severity of a municipality’s financial condition. Chapter 2 concerns determinations of municipal "financial distress" and the appointment of a coordinator to prepare a recovery plan. Chapter 3 authorizes the provision of emergency financial aid to distressed municipalities, including grants and interest-free loans. Chapter 6 concerns the Governor’s power to declare a "fiscal emergency" where a municipality’s situation transcends mere "financial distress." Chapter 7—our focus in this appeal—addresses the appointment of a receiver where necessary to respond to a fiscal emergency. And Chapter 4 allows...