Harrisburg Elected Leaders Say Bankruptcy Inevitable

Opposition to Receiver’s Plan Grows as April 6 Deadline Looms

Next Opportunity: March 15 – Receiver Unkovic at Harrisburg Hope Panel

By Frank Pizzoli
Central Voice
Feb. 29, 2012, 4:58 p.m.
Opposition to court-appointed Harrisburg City Receiver David Unkovic’s fiscal recovery plan continues to grow. For three consecutive days public actions reflect mounting frustration.

First reported by Tara Leo Auchey of Today’s the Day, on Feb. 27 nearby municipalities asked for time before the court tomorrow in a scheduled hearing to plead its case that the plan is unfair to their jurisdictions. Tomorrow’s hearing is a step in the process requiring that Unkovic’s plan be approved by the court which must make a final decision, unless more extensions are sought, by April 6.

Yesterday, Debt Watch, a citizen’s organization, held a public forum on the plan, calling the receiver’s plan almost identical to the original plan put forth by the state Dept. of Community and Economic Development.

This afternoon Harrisburg elected officials said bankruptcy for the city is “inevitable” and called out what they see as deficiencies in the receiver’s 180-page plan.

City leaders
In the atrium of Harrisburg’s City Hall, a building some have suggested should be sold and leased back to the city as one of many steps needed to resolve the city’s $330 million fiscal doomsday, City Treasurer John Campbell, City Council President Wanda Williams, City Council member Eugenia Smith, and City Controller Dan Miller, this afternoon agreed “bankruptcy is inevitable”.

Miller, Campbell, and Williams have also formally asked the court for time during tomorrow’s hearing to express their concerns as elected public officials.

With today’s move, the elected leaders say they seek to combat the common perception that Harrisburg’s city leadership can’t work together. The three office holders head three of the four branches of city government.

In discussing the city’s fiscal situation, the options for its future and Unkovic’s proposal, the group‘s press advisory referred to Unkovic’s plan as not “fair and balanced and in the best interests” of the city.

City controller Miller pointed out what Unkovic said in his own report: “What is obvious is that the two main fiscal problems of the City – long term debt and a structural deficit – are in fact interrelated”. He criticized the plan for addressing long term debt but not the city’s growing structural deficit. The group’s material called the plan a “false choice” and states that the solution “requires a comprehensive recovery plan that really works”.

Further complicating the confusing situation is, Miller claims, a structural deficit – a number that grows like weeds as time goes on – that is larger than previously stated.

In a projected balance sheet prepared for today’s press conference, Miller projects that the city’s actual deficit by end of 2012 will be nearly $29 million, growing to $32 million by 2013. He says his numbers reflect all of the city’s fiscal obligations for both years. Yet, the receiver’s plan, Miller says, puts the sale of city assets “into high speed motion,” denying the city the revenue from them as part of a recovery plan but not adequately address the growing deficit.

He also said he thinks there has not been proper attention paid to formally looking into new sources of revenue should assets be sold, further hampering the city’s long term recovery.

Debt Watch
Last evening (Feb. 28) city-based watchdog group Debt Watch hosted about 40 people for an evening with Neil Grover and Bill Cluck moderated by Auchey. The community forum was held at Midtown Scholar Bookstore which has become a hub for meetings on the festering problem. Grover founded the organization in response to the city’s ongoing quagmire.

Although a member of The Harrisburg Authority, an entity that finds itself in the middle of an irksome fiscal imbroglio, Cluck spoke as an individual. THA has just completed a forensic audit of a series of financial transactions that is available on the authority’s web site www.hbgauthority.com.

The purpose of the public meeting was to compare Receiver Unkovic’s financial recovery plan to the original plan proffered by the state Department of Community and Economic Development, a plan rejected by Harrisburg City Council a swell as the next plan produced by Harrisburg Mayor Linda Thompson.

Grover characterized the Receiver’s plan as reflecting what he thinks is an “unsolvable problem” as it currently appears. Cluck called the proposal “virtually identical” to all previous plans.

Municipalities challenge
In a tangible step signaling that leaders outside the city recognize that “regionalism” is a two-way street, 10 municipalities and agencies on Feb. 27 asked to intervene in the court’s March 1 hearing on Unkovic’s plan.

The entities are Susquehanna Township, Susquehanna Township Authority, Steelton Borough, Steelton Borough Authority, Lower Paxton Township, Lower Paxton Township Authority, Swatara Township, Swatara Township Authority, Paxtang Borough, and the Borough of Penbrook.

The 10 challengers dispute an aspect of the plan that tethers them to the city regarding their sewage service fees through a city-operated water system owned by The Harrisburg Authority. In short, the group asserts past sewage fund transfer practices and the plan’s resolution to those practices puts them at an unfair disadvantage, the main point they hope to make at tomorrow’s court hearing.

Next Opportunity
The next opportunity for public comment on the receiver’s fiscal recovery plan is March 15, 6 p.m. at Midtown Scholar Bookstore when Alan Kennedy-Shaffer and Harrisburg Hope hosts Receiver Unkovic, Harrisburg’s Mayor Thompson, City Council Vice President Eugenia Smith. The intended format is that after moderator Kennedy-Shaffer asks a few questions, the public then is asked to step up to the microphone.

The March 15 public discussion is one of three Harrisburg Hope forums to be held at the bookstore, both at 6p.m. The next two forums are March 1 when four candidates for the 103rd State House seated held by longtime Rep. Ron Buxton address the public. Buxton is not seeking re-election and has been criticized for not playing a stronger role in protecting the city’s interests as the city’s fiscal dilemma’s unfolded.

This first state house debate features Harrisburg City Councilwoman Patty Kim, former Council President Gloria Martin-Roberts, former School Board President Roy Christ, and charter school administrator Karl Singleton.

March 8 is a Senate Candidates Forum featuring both Democrats and Republicans at an open candidates forum. Invited candidates for the 15th District Senate seat are Rob Teplitz, Alvin Taylor, Josh First, John McNally, and Bill Seeds. Sen. Jeff Piccola is not seeking re-election and is the legislative architect of legislation that has, among other things, eliminated until June 30, 2012 the ability of the city to petition the court for bankruptcy.

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