Franklin Borough officially exits Act 47 after 35 years, eager to 'move forward,' leaders say

Feb. 1—JOHNSTOWN, Pa. — Franklin Borough has exited Pennsylvania's Act 47 program for financially distressed municipalities.

The Department of Community and Economic Development issued a termination order last month that became effective on Tuesday.

Franklin entered Act 47 on Nov. 28, 1988, as the once-prosperous community was reeling from the collapse of Bethlehem Steel Corp. and a population drop from 2,632 in 1920 to 864 in 1970 to approximately 275 today.

Franklin has spent the third-most time out of past and current participants in the program that was formed by the Municipalities Financial Recovery Act of 1987.

Participation used to be open-ended until state law changed, requiring municipalities to exit by certain dates, based upon their particular timelines. Franklin, though, also took steps in recent years to improve its financial condition before exiting.

"We're excited to be out of Act 47, and we want to move forward and we want to keep getting better," Franklin Borough Councilwoman Sharon Lydic said.

Then-acting DCED Secretary Neil Weaver specifically pointed to four steps the borough took when issuing his order of termination. Franklin finished with an excess of revenue over expenditures for each of the past four years and maintained sufficient funds to meet its obligations.

There are no claims or judgments that would jeopardize its future finances, Weaver said. The borough is also projected to have enough money to meet its operating expenditures.

"This has been a long road for Franklin Borough, as it's been nearly 35 years since they were first designated a financially distressed municipality," current DCED acting Secretary Rick Siger said in a statement.

"This is a great reflection of the persistence, hard work and determination of Franklin Borough's community, businesses and partners to get this done.

"Today is truly a great day for the borough."

Deborah Grass, the borough's Act 47 coordinator, also pointed out that Franklin's approximately $150,000 fund balance is "the highest it's probably been in over a decade."

Grass said: "We're really pleased that they've made the (necessary) decisions, and it appears that this is sustainable."

Being in Act 47 provided Franklin increased access to state funding and DCED assistance.

"They helped us," Franklin Borough Mayor David Gustkey said. "I can't say enough about the people."

Municipal officials also made decisions that shored up the finances, such as eliminating the full-time police force, according to Gustkey. Lydic also cited a combination of "hard work, watching our bills, watching our spending, doing what we can with what we have."

She credited borough residents and officials, both past and present — including Franklin Council President William Gustkey Sr., Councilman Leonard Yarina, Secretary/Treasurer Nancy Geyer and Solicitor Alex Svirsko — for working together in preparing the municipality for its exit.

"I just want to give kudos to the ones that came before us, because basically we just followed up on what they were doing," Lydic said. "We just made sure that everything was going through as it needed to be."

Franklin will now lose direct access to Act 47 benefits, but, as Grass explained, "We've also offered to continue to provide some support both at the DCED level and from our perspective as the coordinator."

Lydic and Mayor Gustkey said the borough must continue the work of trying to attract new residents and businesses. One positive development is that the Cambria County commissioners designated a former Bethlehem Steel brownfield site as a Keystone Opportunity Zone, which will provide Green Diamond Services with tax benefits in its effort to develop the land.

"We'd like to attract businesses, possibly people to come in and live," Lydic said. "There are some houses for sale. You can get them at a relatively good price and fix them up a little bit, while some of them are move-in ready. We need good people to move in, and we need businesses."

Franklin is the 19th municipality to leave Act 47.

Johnstown, which has been in Act 47 since 1992, is scheduled to exit by April 28. DCED recently held a public hearing regarding the city's termination.