New bills would let Pennsylvania local governments hire firms as managers

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Local governments in Pennsylvania might soon have the option to hire professional firms to be municipal managers, a change that proponents say could improve local government services while saving taxpayers money.

Three sets of bills in the legislature would amend the governing laws for Pennsylvania boroughs, second class townships, and third class cities — classified by population sizes — and provide an alternative municipal management option. First class townships have had the choice since 2020.

Under current law, Pennsylvania municipalities can only appoint individuals as managers, a rule that state Rep. Bob Freeman (D., Northampton) said can be particularly burdensome for smaller communities that are unable to pay the salary and benefits of a full-time administrator or manager on their own.

The change would allow municipalities to hire a range of professional groups to serve as managers, said Freeman, a prime sponsor for one of the bills. The option also would address increased costs and a shortage of municipal managers that have made hiring difficult, he added.

Professional local government managers specialize in accounting and budgeting, hiring and maintaining qualified staff, and navigating politics, said George Dougherty, a professor and public policy expert at the University of Pittsburgh. Many of them are what he calls “generalists” who also have experience with administering public services like fire and police protection.

“Well-financed, well-resourced municipalities that want to have good quality management can certainly afford and find those people,” Dougherty said. “It’s the municipalities that want it and can’t afford it that end up having problems.”

The proposed change could give local governments the option to contract with a professional management firm on a part-time basis, which could balance the cost and needs of a given community, he said. It’s also possible that several municipalities could share services from one company, creating a regional relationship.

Scarcity of professional municipal managers is a driving force behind the proposal, said Ron Grutza, senior director of regulatory affairs at the Pennsylvania State Association of Boroughs.

Grutza said the flexibility of the proposed change would benefit both municipal leaders and taxpayers.

While it’s entirely up to each of Pennsylvania’s more than 2,500 municipalities to decide how they want their local government managed, Dougherty noted a potential trade-off of hiring an outside firm.

“What elected officials and communities want out of the municipal managers is not always just efficiency and competence,” he said. “In some cases, they hire folks simply because they trust them rather than for their expertise. … There is a little bit of loss of local control, and there's some loss of the community connectedness.”

Dougherty added that firms can garner trust by actively engaging with communities, while Freeman said the proposed change has a safeguard of accountability built in it.

“If there’s an individual who’s chosen to serve from [a] professional management team as the official designate of a city administrator, or township manager, they would have to be considered employees of the municipality and comply with all Ethics Act standards as well,” said Freeman, who serves as the chair of the state House Local Government Committee.

Although it’s unclear how many first class townships have taken up the provision, state associations representing other classes of municipalities are in favor of making the option available statewide. Freeman pointed to the unanimous passage of his bill in the state House — and two in the Senate — as evidence for broad support.

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