Issue Analysis: Does Receiver’s Plan Go Far Enough?


Thompson Hints Tomorrow State May Help Harrisburg

By Frank Pizzoli
(March 15, 2012) – On the Ides of March about 200 people crowded into Midtown Scholar Bookstore where the ubiquitous Harrisburg Hope and Alan Kennedy-Shaffer hosted court-appointed Harrisburg Receiver David Unkovic, Mayor Linda Thompson, and City Council Vice President Eugenia Smith discuss the city’s fiscal future.

The receiver’s fiscal recovery plan is now in play after Commonwealth Court Judge Bonnie Brigance Leadbetter March 12 gave the 180-page document the green light.

The plan is not without its critics.

Ten nearby municipalities argued before the court that the receiver’s plan is unfair to their jurisdictions. Their plea since rejected, the group asserted past sewage fund transfer practices and the plan’s resolution to those practices puts them at an unfair disadvantage.

Citizen’s organization Debt Watch objected in court to the receiver’s plan as almost identical to the original plan put forth by the state Dept. of Community and Economic Development. The original DECD plan and a second, modified plan by Thompson, also criticized as too similar to DCED’s document, have been rejected by Harrisburg City Council.

City Controller Dan Miller, along with Harrisburg City Treasurer John Campbell, City Council President Wanda Williams, City Council member Eugenia Smith, challenged the receiver’s plan in court as inadequate. They pleaded “bankruptcy is inevitable”.

A significant caveat in the judge’s March 12 order – and a victory of sorts for its detractors – is that Unkovic must “bring back concrete details” regarding the sale or lease of city assets. Miller told Central Voice, “The judge referred to the plan as ‘preliminary’ in her order. She wants him to bring back concrete details.” He says that’s “a big victory as now the judge is involved”. Miller and other challengers will have a chance to present an opposing view if necessary. (See below “What Court Decision Means to Harrisburg City”)

With regard to one aspect of his plan, Unkovic has released a list of 14 parties interested in leasing city parking facilities, a deal he hopes to have complete by June.

Perhaps foreshadowing, payment of $5 million on two general bond obligations due today will not be made. “It’s unfortunate,” Unkovic told the crowd. He decided to “pay payroll, not bonds” and continue operating city services. On two other occasions the city was able to find money for similar payments by raiding rainy day funds not intended for that purpose or through other maneuvers. Unkovic said he “stopped those transfers.”

Any viable financial recovery plan must cover $326 million left over from a dizzying swirl of financial deals, credit swaps, and fiscal line dances in which a number of local and regional players participated as bond counsel, legal counsel, and related pass-the-baton teams.

Not yet clear, and a source of distress to elected officials and engaged citizens, is exactly how the receiver’s plan will cover the city’s structural deficit estimated between $8 and $12 million and growing like weeds on an abandoned city lot owned by an absentee landlord. Unkovic called the city’s irksome structural deficit a problem that “will be fixed.” City council member Smith reiterated her consistent concern that filing for bankruptcy is “the only option.”

Although Unkovic’s plan indicates proceeds from a parking garage sale and/or lease would accrue to city expenses, the plan is a moving target with every significant step along the way requiring tedious negotiations among parties heretofore only hissing at one another. It’s easier to get the parties to a court house than a table.

Simply put: Under Unkovic’s plan there may not be enough dough to go around for both incinerator debt and the city’s ballooning deficit. Plus the role of the city’s three labor unions and possible “give back” concessions remain in the “you first” stage of negotiations. Signaling that communications may not be full throttle, union firefighter representative Eric Jenkins, again waiting for a public forum, asked about ongoing activity regarding firefighters.

Another matter irking the public is finding a way to hold accountable players in the round of financial deals that landed the city in such a deep mess. Unkovic has consistently indicated that his ongoing analysis of past financial deals – and they are legion – may result in civil damage suits if legal time and timing allow. Funds shaken loose from civil actions may provide more money to pay down city debt, and as Unkovic indicates in his plan, for economic development.

Pols “In”
Inevitably, the city’s fiscal failure has candidates for city-linked state House (103rd) and Senate (15th) seats refining their talking points on the issue. Sen. Jeff Piccola, the architect of the city’s fiscal take-over by the court-appointed Unkovic, and Rep. Ron Buxton, often criticized for not taking stronger stands on defending city interests, are not seeking re-election. “They took us to the dance too many times and left us there. And they know it,” said one city observer.
103rd House District candidates who weighed in for a March 1 Harrisburg Hope panel are Harrisburg City Councilwoman Patty Kim, former Harrisburg Council President Gloria Martin-Roberts, former Harrisburg School Board President Roy Christ, and charter school administrator Karl Singleton.

On March 8, Harrisburg Hope hosted candidates in the 15th Senate District. That race is between Democratic candidates Rob Teplitz, chief counsel to Auditor General Jack Wagner, and former county commissioner candidate Alvin Q. Taylor; Republican and Harrisburg businessman Josh First, Lower Paxton Township Supervisor Bill Seeds, and former Dauphin County Republican Committee chairman John McNally. Although invited, McNally and Taylor did not attend the Senate debate hosted by Harrisburg Hope.

As the state House and Senate candidates have expressed on the campaign stump, not one of them is pleased with the situation. Why are their views important?

Recent regional history tells us that it took one House member, one Senate member, a city council, bus loads of lawyers, lobbyists, and assorted carpetbaggers, to arrive at this cliff. The path out of this fiscal mess will involve a group grope on the city’s fiscal reigns. The solution will reflect Harrisburg Hope’s mission of civil discussion for the good of the larger order rather than the private interests of any one person or group.

Crime Scene
Butting up against an already cranky public, web site Neighborhood Scout this week ranked Harrisburg as the 20th most dangerous US city. That means the capital city has about 15 violent crimes per 1,000 residents or five times more dangerous than Philadelphia.

Three days ago the city’s local daily called for the state police to step in, same as when in 2009 former Mayor Steve Reed asked Gov. Ed Rendell for help after 19 shootings in one summer month. Thompson has decided not to ask Gov. Tom Corbett for state police assistance, explaining at a previous press conference that such assistance comes with an invoice for which there are no funds to pay.

Although not specifically asking for state police help as did Reed, Thompson did tell the crowd that as soon as tomorrow she may have an announcement that the Commonwealth of Pennsylvania may be offering help.

Thompson also said the city needs about $500,000 for hiring extra police. Other efforts to stem rising violent crime include an offer by Dauphin County District Attorney Edward Marsico of $25,000 from his funds to cover police overtime and for help with crime camera installations. The mayor is also asking residents to step up crime watch activity. (See below “Harrisburg City Crime Stats, Feb. 26-March 3”)

“My No. 1 priority since taking office” has been crime,” Thompson assured the gathering. Every Monday of the week, the city police department holds public briefings on crime.

What Commonwealth Court Decision Means to Harrisburg City
By Frank Pizzoli
Elected City Controller Dan Miller explains for Central Voice the Commonwealth Court’s recent decision to require the court-appointed Receiver David Unkovic to bring his asset lease or sale plan back for her review. Miller is running for mayor in the next election cycle.

Numbers
In a nutshell, the receiver’s side “admitted that there is only a general plan and not a detailed plan with numbers,” Miller points out. The judge referred to the plan as “preliminary” in her order. “She wants him (Unkovic) to bring back concrete details,” Miller said.

Details
The receiver’s requirement to “bring back concrete details” means that he has to come back to court before he can sell or lease assets. Miller says that’s a “big victory as now the judge is involved” because Miller and other challengers will have a chance to present an opposing view if necessary.

Cooperation
The receiver’s attorney said in court that they would be glad to work with both City Treasurer John Campbell and Miller in order to agree on numbers. “They have not worked with us in the past and this gives us a chance to get correct numbers before we go back to court,” Miller said.

Assets
Miller says the most important part of the judge’s decision is that “in her summation she says that it doesn’t make sense for Harrisburg to sell assets if the plan is ultimately going to fail. If we can convince her the plan will not work, then that would stop her from allowing him to sell assets.” Basically, Miller says the judge allowed Unkovic to proceed constructing a complete plan and then brings it back to the court.

“We were extremely pleased with what happened in Commonwealth Court,” Miller concluded.

Harrisburg City Crime Stats, Feb. 26-March 3
Source: Today’s the Day, Tara Leo Auchey
Via Spotcrime and compiled by Jan Konkle

17 vandalism
34 thefts
5 robberies
6 burglaries
24 assaults
1 shooting
1 arson

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