12 Pa. Code § 115.8
The coordinator, as part of the fiscal solvency plan, may recommend that a distressed municipality consolidate or merge with adjacent local governments. If a municipality is declared distressed, either the electors of the affected municipality by initiative, or by passage of an ordinance by the governing bodies of the municipalities proposed for consolidation or merger, may place the question of consolidation or merger on a referendum as provided in Chapter 4 of the act (53 P. S. §§ 11701.401-11701.423). In either situation a referendum shall be held at the next primary or general election. A consolidation or merger may not become effective unless the referendum is approved by majority vote in each affected municipality. It is the policy of the Commonwealth to give priority to consolidated or merged municipalities in economic and community development programs funded by the Commonwealth. The Secretary will notify Commonwealth agencies of this priority.
12 Pa. Code § 115.8