Headlines
Click on the headlines to read the referenced articles in a new window.
February 12th through February 18th
  • The Court sets the date for the public hearing on the Receiver’s Plan. On March 1st at 10:30am, the Commonwealth Court will enact the next step of Senate Bill 1151. Central Penn Business Journal–“Court schedules hearing on Hbg. receiver’s plan“
  • The Dauphin County Gaming Advisory Board recommends the City of Harrisburg doesn’t get any money. After a five and a half month process, the Board announced its recommendations which it will present to the Commissioners on February 22nd. Harrisburg made a request for $2-3 million and the Board put the City on the “Not Fund” list. The Commissioners have the final say, though, and will vote on February 29th.  


February 5th through February 11th


January 29th through February 4th


January 22nd through 28th
  • Harrisburg’s Receiver David Unkovic continues to make his rounds. His Recovery Plan for the City is to be filed on (the quickly approaching) February 6th, yet he made time to meet with the Harrisburg School District Board Budget & Finance Committee. While he is clear about the fact that the massive School District debt is not within the Receiver’s jurisdiction, Unkovic declared he’s not ignorant of the combined burden on Harrisburg’s taxpayers. Residents at the public meeting told him they hoped so. 
  • Harrisburg Mayor-endorsed charter schools get the boot. This past Fall, American Paradigm Schools from Philadelphia proposed to open two charter school locations in closed City elementary schools Lincoln & Hamilton. In October 2011, Mayor Linda Thompson and former City Council President Gloria Martin Roberts publicly endorsed American Paradigm and help establish Boards. The proposed Board for the Hamilton location was to be Gloria Martin Roberts; Bryan Wade (Thompson Administration Ombudsman); and Brenda Alton (Thompson Administration Director of Parks, Rec, & Enrichment). The proposed Board for the Lincoln was to be Gloria Martin Roberts; Alan Kennedy Shaffer; Camille Erice; Nate Gadsen; &  Rabbi Hava Pell. However, the School Board of Directors voted 8-0 to reject the applications as insufficient.  The Patriot News–“Harrisburg School Board rejects two charter school applications”
  • The Harrisburg School District Board of Directors wants the battle between Mayor Linda Thompson and former Superintendent Gerald Kohn to remain a battle between those two. One of Thompson’s campaign promises was to remove Kohn and as soon as she had power to do so, it was done in May 2010. Not surprisingly, Kohn sued the District, the Elected Board of Directors, the Board of Control, as well as Mayor Linda Thompson citing unfair contract termination. Through a series of Court moves, however, Thompson’s name was taken off the suit. The Board wants it back on.  The Patriot News–“New bid made to reinstate Mayor Thompson as defendant in suit over school Superintendent Gerald Kohn’s firing”
  • The Harrisburg Authority Board sending out Requests for Qualifications. The Receiver has said he wants the City’s major assets appraised by April and sold/leased by the end of June. The Harrisburg Authority will do what is required of it by sending out RFQs in preparation of the possible sale/lease of the Incinerator, the water system, and the sewage system. Roxbury News–“Harrisburg Authority_____RFQ”


 January 22nd through 28th
  • Harrisburg’s Receiver David Unkovic made another public appearance. On Wednesday January 18th, Unkovic held a Public Forum on Harrisburg’s Debt Recovery. Amongst things he disclosed: 

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January 7th through 14th
  • The City Budget Process. On the 28th of December 2011, City Council amended and passed the 2012 Harrisburg Budget. Then on January 9th, the Mayor exercised her veto power and vetoed the Council-passed budget saying it endangered the citizens of Harrisburg. In return, City Council voted 6-1 to override the Mayor’s veto, thereby, reinstating the Council-passed Budget. The Budget stands as is unless it is re-opened, which Council has said it will do. They have until the end of January to do so and until the 15th of February to pass a set Budget. In the end, though, the Receiver has the last say.


January 1st through 6th
  • For just two? In a move to cut City expenses, the Mayor issued an Executive Order to eliminate health benefits for the two newly anointed part-time elected officials–a councilmember and the treasurer. While in general there is little dispute to the saving of money, several citizens have questioned why benefits haven’t been cut for all part-time employees, why just these two in particular? Some City Councilmembers have called the Mayor’s move retaliation for the 2012 cut of her two cherished employees–her spokesman & ombudsman/assistant.  


December
  • 12/6/11:
    • Budget time in the City. While no one was quite sure how the 2012 budget process would unfold in light of the State appointed Receiver process, DCED has told Harrisburg to move forward as tradition. So this week, public budget hearings begin. First up: Public Works (12/7 @ 6pm) & Public Safety (12/8 @ 6pm). All meetings are held in City Council Chambers, City Hall. 

November
  • 11/30/11:
    • The Mayor continues her town hall meetings about the City’s fiscal crisis. With the Commonwealth Court poised to hold a hearing on the State’s petition for a Receiver for the City of Harrisburg, Linda Thompson travels the city to present her perspective on the matter. And she seems unrestrained in including her opinion as well. CBS 21–“Mayor Thompson continues with her town hall meetings, some unhappy with the message“


    • The Mayor presents her Proposed 2012 Budget. Sounding more like a State of the City address than a budget presentation, for the better part of an hour, Mayor Linda Thompson outlined her budget to Harrisburg City Council, several times chiding them for not passing an Act 47 Recovery Plan nor working with her to develop a Consent Agreement. Going through department by department, the Mayor revealed a proposed budget that includes a .8mils property tax increase, decreased employee benefits, a General Fund operating budget of $55.5 million and a debt service of $105,056,203. But the big question is with a Receiver on the horizon, will Harrisburg even go through its ordinary budget process?
    • The Burg News–“Property Tax Hike Proposed by Mayor”
    • The Patriot News–“Harrisburg mayor’s 2012 budget calls for property tax hike“
    • Fox 43–“Harrisburg Mayor Presents 2012 Budget On The Eve of a Bankruptcy Hearing“
    • The City of Harrisburg’s gaming grant request not to be considered equitably? Harrisburg’s request of $3M in gaming funds is one of 76 applications turned in by various Dauphin County municipalities, authorities, and agencies. $23M in requests for a pool of money not more than $7M. On November 10th, Harrisburg Finance Director Bob Kroboth and Fire Chief Talioni presented the City’s request for funds citing public safety needs in front of the Dauphin County Gaming Advisory Board. They stated that if Harrisburg does not get its gaming money request, then the City will have to lay off 13 police officers and 12 firefighters. Per this article, the Dauphin County Commissioners already seemed biased against Harrisburg’s application. The Patriot News–“Dauphin County commissioners are skeptical about Harrisburg’s plea for gaming funds”
    • Occupy Harrisburg is evicted from Riverfront Park. Around 1pm on Friday afternoon, about 20 police officers stood guard while City of Harrisburg Public Works staff took down the camp, all the while the 19 or so protestors chanted in unison, sitting en masse as their tents, food, and goods were loaded into the back of a truck and taken away. Harrisburg Director of Communications Robert Philbin and Police Chief Ritter looked on. 
  • 11/17/11:
    • As the crisis carries forth, entities want to be sure their names are cleared. Harrisburg Incinerator operator Covanta sent out an internal memo that lets employees know what to say to assure clients business is just fine. It’s the City’s problems, not Covanta’s. Reuters-“Harrisburg incinerator operator pushes back in memo“
    • Assured Guaranty doesn’t have very positive things to say about Harrisburg. Seems to all but call the City “ungrateful.” The Bond Buyer–“Assured Reflects on Bankruptcies“
  • 11/15/11:
    • There ended up being no first-ever PA Consent Agreement via the City of Harrisburg. On Friday November 11th, the Mayor of Harrisburg sent a letter of concessions along with a draft Consent Agreement to the City’s creditors without any of the City Council Majority’s consent. Three members of City Council signed the letter, but a fourth signature was needed to seal the deal. The fourth signature was never obtained, and a Monday morning Creditors Meeting resulted in no shows from not only four City Council members, but also the bond insurer, Assured Guaranty. Apparently, though Assured Guaranty was on “stand-by” to negotiate if any one of the Council Majority decided to change sides. None did, the Consent Agreement deadline passed, and now the City of Harrisburg awaits the process of Receivership.

  • 11/11/11:
    • The bond insurers are a no show. On Thursday, November 10th Harrisburg had scheduled a Creditors’ Meeting to negotiate concessions in the City’s debt crisis. The City said, “We want $100M” and bond insurer Assured Guaranty not only said “no,” they refused the meeting. See the letter from Assured Guaranty as well as City Council Majority’s response here: “Heardsaid” 
    • Senator Piccola announces retirement from the PA Senate. Having spearheaded what has been dubbed the “Takeover Harrisburg” bill that would see a State-appointed Receiver control the City’s finances, he gallantly says he won’t run for reelection, no matter that his district is proposed to be gerrymandered from the City anyway. No way for his constituents to get to him in support or avenge. WHTM–“Pa. Sen. Piccola will not seek re-election“
    • The negotiations continue. On Monday, the Mayor and City Council met in public to negotiate terms of the Consent Agreement. They decided to include the sale of the Incinerator in the Agreement along with the lease of the City’s Parking System. At the same time, officials called for more concessions from creditors. Those talks will take place once more Thursday, November 10th. A Consent Agreement must be presented to PA Department of Community & Economic Development by November 14th for the Secretary’s consideration. If it’s viable to him, then the City’s averts State takeover. If not, the Receiver will be called upon. 

    • A bit different from the past way it’s been done. Much earlier in the day that usual and the Harrisburg Mayor wasn’t alone since the Scranton and Reading mayors were invited. But a State of the City all the same. Don’t think the Mayor Linda Thompson didn’t notice the differences. She did.  WITF–“Mayors of Harrisburg, Reading and Scranton say bankruptcy not the answer“
October
  • 10/30/11:
    • A month of headlines of Harrisburg, PA. As October draws to a close, it’s worth a review of some of the City’s outstanding appearances in the media. What a month for the capital city.

    • There are definitely many an attorney in Harrisburg, PA bankruptcy talks. Several paid for with taxpayer dollars from every which way—local, county, and the state. Philadelphia Inquirer–“There’s money in bankruptcy – for lawyers“
    • Call for reform of Pennsylvania’s Municipal Financial Recovery Act, i.e. Act 47. State representatives and senators met this week for a public hearing on the pros and cons of Act 47. One testifier–an Act 47 Coordinator, Public Financial Managment’s Dean Kaplan–declared Act 47 hasn’t been good at developing fiscally challenged municipalities. He testified that too often, the State-appointed people come in when “the sky’s falling & put whatever props in place we can.” The Standard Speaker–“Agency proposes aid for municipalities in financial distress“

    • What’s a City to do?  For years, the Reed Administration avoided raising various fees, which would help support the City’s infrastructure. Now when Harrisburg so desperately needs the money, many basic & usual increases are being met with great opposition. And in many ways, the opponents are right. Such bad timing for a City so challenged to make a positive impression on the region. Central Penn Business Journal–“Parking proposals make noise in Harrisburg“
    • Some similarities, some differences. Central Falls, Rhode Island seems to be the model PA State officials are looking to–receivership. Inevitably, though, this tiny town filed for Chapter 9.  Fox News–“Tiny New England City Faces Big Financial Problems“


Pennsylvania Finance Vet Mark Schwartz Ready to Wade Into Harrisburg Quagmire

Monday, October 3, 2011  By Paul Burton

Bond banking, law, and government all decorate Mark Schwartz’s resume. “I have a tripolar background,” he said.

In the mid-1970s, Schwartz, fresh out of college, got a taste of government as a legislative assistant at the Pennsylvania capitol to Majority Leader K. Leroy Irvis, who later became the first African-American House speaker in any state legislature since Reconstruction.

“I managed the calendar, among other things. I learned a lot about the legislative process, what can work and what can’t,” he said of his days inHarrisburg.

Another mentor was Sidney Ruffin, the bond counsel who helped orchestrate Pittsburgh’s revival.

Years later, Schwartz is re-entering Harrisburg as the newest player in a municipal-distress case rife with political and legal drama that accompanies $310 million worth of incinerator-related bond debt.

Harrisburg’s City Council voted last week to retain Schwartz — who lives in Bryn Mawr and runs a Philadelphia-area law firm — to help combat an attempted state takeover in an escalating tug-of-war between the capitol and City Hall.

“I tend to take interesting cases,” said Schwartz, who says he will bill the struggling city later for services “unless the governor takes over my finances.”

“I would hope there wouldn’t be this great rush to straitjacket Harrisburg,” he said in an interview. “Can’t we all just wait a second? I see some fundamental issues of sovereignty.”

The city of 49,000 is struggling to deal with $300 million of debt stemming from an over-budget incinerator project.

Legislation that would enable Gov. Tom Corbett to declare a state of fiscal emergency and appoint a receiver to run Harrisburg easily passed the House last week and will be on the calendar when the Senate reconvenes the week of Oct. 17.

“I’m no bond expert, but I’ve been told there’s legitimate concern when a municipality walks away from bondholder commitments,” said Rep. Glen Grell, R-Hampden Township, whose suburban Cumberland County constituency lies across the Susquehanna River from Harrisburg.

“Bondholders will be less inclined to get involved with other nearby communities, and even possibly the state itself.”

His amendments, which attempt to strengthen Corbett’s hand, revived a takeover bill filed last June by Sen. Jeffrey Piccola, R-SusquehannaValley, whose district includes parts of Dauphin County, which includes Harrisburg.

Grell’s comments reflect those in Rhode Island, where state lawmakers, worried about the contagion effect of a bankruptcy filing by Central Falls, passed a preemptive bill last spring that guarantees lenders first rights to their property taxes and general revenue.

Central Falls filed for Chapter 9 protection on Aug. 1, prompting a flurry of downgrades to other Rhode Island municipalities and issuers, most recently North Providence, which Moody’s Investors Service lowered one notch to Baa2 on Thursday.

In Harrisburg, embattled Mayor Linda Thompson has admitted throughout the summer and fall that bondholders are skittish.

“No bond insurer will touch the city of Harrisburg with all the dysfunction and uncertainty going on,” she said at a recent town meeting, echoing remarks she made last month when the council rejected a proposed financial recovery plan under the Act 47 program for distressed Pennsylvania communities.

Three times, all by 4-to-3 votes, the council has turned down such a plan, which, among other measures, called for the city to sell or lease the incinerator and its parking garages.

Faced with missing two general obligation bond payments and the September payroll, the city obtained a $7.4 million up-front payment from the Harrisburg Parking Authority for a 10-year lease extension with city garages.

Meanwhile, another suitor is lurking for the troubled incinerator, which sits four miles from downtown. Last week, the Harrisburg Authority, which runs the trash burner, acknowledged interest from a second, unnamed suitor.

A neighboring incinerator agency, the Lancaster County Solid Waste Management Authority, has already offered $124 million for the Harrisburg facility.

“We did receive a second letter of intent, but at this point we’re still not ready to reveal the identity,” Harrisburg Authority board member and local attorney William Cluck said at last week’s meeting.

Schwartz has asked Corbett’s general counsel, Stephen Aichele, to meet and discuss the legal aspects of the state takeover bill, as well as a law enacted in June that prohibits cities of Harrisburg’s size from filing for bankruptcy protection under the threat of the loss of all state aid.

The bankruptcy law, which Piccola sponsored late in the session, passed as part of an amendment to Pennsylvania’s fiscal code.

Some council members and others at City Hall have argued that the city should file under Chapter 9 anyway, and test the legality of the law.

“Have you seen the wording on that Piccola bill? It’s very weird. It never made sense,” one city official said. “It says you can’t file bankruptcy, but then a few paragraphs down, it says that if you do file bankruptcy, the state will cut off your aid.”

Schwartz has his own critique.

“Act 47 is a step-by-step process, with the final step to file for bankruptcy if necessary,” he said. “I have a question about a process that starts when bankruptcy is a clear option, then all of a sudden, people say, ‘Whoops, you can’t do that.’ ”

“They’re trying to take bankruptcy off the table, but I don’t see any meaningful distinction between bankruptcy and receivership,” Schwartz said.

“This process isn’t helping anybody but the consultants. I read the 400-page Act 47 report. It just reads like a civics lesson,” he added. “Frankly speaking, significant state taxpayers’ money has been wasted on a process that would have been better spent in the form of direct support to the city.”

Grell, however, said city officials have already had their chance.

“They’ve refused to accept any plan and they never came to the state,” he said. “It’s unfortunate that the city has come to this situation. We’ve tried to encourage the parties to resolve this on their own, but that has not happened.”

The post-receivership role of Thompson, whose acerbic comments have made her a target for critics, was the subject of widespread debate last week as takeover legislation raced through the House.

In Central Falls, the state-appointed receiver, Robert Flanders, stripped powers from the mayor and City Council immediately upon taking power.

Brian Fraser, a partner at law firm Richards Kibbe & Orbe LLP in New York, said Pennsylvania is on solid ground. He also said lack of a “good-faith effort” to resolve financing problems works against Harrisburg.

“Municipalities aren’t sovereign,” Fraser said. “They’re creatures of state law, and state law can be changed as in Central Falls, where officials were removed and the state receiver took over control.”


    • A Harrisburg must read report. In 2003, Harrisburg City Council made a choice to guarantee The Harrisburg Authority’s $125 million loan to fix the incinerator. Only one City Council member voted against it–Pat Stringer. The rest voted “yes” despite public outcry that it would lead the City to bankruptcy. The Reed Administration’s spokesman at the time, Randy King, pshawed opposition to the Reed-advocated guarantee going so far as to call the objectors liars. 6-1 the vote passed and the guarantee was done. Those City Council members who voted “yes” were Otto Banks, Richard House, Vera Reynolds, Eric Waters, John Wright, and Linda Thompson. CBS 21–“Harrisburg financial collapse was predicted”
    • Why politicize it, Mayor Linda Thompson & City Council President Gloria Martin Roberts? A curious endorsement, worrisome involvement, and uncalled for influence as the Mayor & Council President endorse a charter school in the City…before the School Board has even had a chance to vet it.  The Patriot News–“Harrisburg Mayor Linda Thompson supports nonprofit’s charter effort”


September
    • Another company wants to buy the Harrisburg Incinerator and The Harrisburg Authority makes the next move towards that possible end. The identity of the company won’t be disclosed quite yet, though. Roxbury News--“Harrisburg Authority___A confidential party”
  • 9/22/11:
    • Mayor Linda Thompson’s Town Hall Meetings. In a late notice announcement, the Mayor declared she will begin to travel around Harrisburg with large charts, the City lectern, and a mic to spread the word that the reason the City is as bad off as it is is because of Steve Reed and City Council, pretty much the same things she’s been saying since she took office. Wonder how much those charts cost. The Patriot News–“Harrisburg mayor rails against City Council during town hall forum”
    • The big one. TD Bank, M&T Bank, NY Mellon, & Assured Guaranty versus The Harrisburg Authority & the City of Harrisburg. As first guarantor on several of THA’s incinerator bonds, the city of Harrisburg is being sued by the bond trustees and the bond insurer for the money already paid to the bondholders when THA and Harrisburg could not. Asking for an Order of Mandamus, the plaintiffs want the City’s “first dollar” of revenue and all other monies. That is, they want the next $67 million of the City’s before that money goes anywhere else—payroll, services, public safety, so on and so forth. The Patriot News–“Mandate for Harrisburg to pay $67 million on incinerator debt would cripple the city, lawyer says”





  • 9/12/11:
    • Harrisburg’s saga told again. A history of borrowing because of the incinerator with new borrowing on the horizon as the Harrisburg Parking Authority moves to take a loan with expensive terms. The Mayor says she sees no choice but to keep the cycle going. The Wall Street Journal–“The Incinerator That Kept Burning Cash”
  • 9/1/11:
    • Harrisburg City Council votes down the Mayor’s Act 47 Plan. In a 4-3 vote, Council members rejected Mayor Linda Thompson’s Recovery Plan. A full house watched as one by one, the 7 City Council members stated their yeas or nays. The steady four–Brad Koplinski, Susan Brown Wilson, Wanda Williams, and Eugenia Smith–all said “no” when their turns came. Earlier in the meeting, there was a discussion with the PA Department of Community and Economic Development Executive Director and counsel about City Council’s ability to amend the Plan. While after a pause, it was determined that although City Council could offer amendments, any amendments would have to be accepted by the Mayor. Not believing the Mayor would accept City Council amendments, City Council did not take that route and instead chose to be the first PA municipality to take the Act 47 process to this place with its rejection. The main sticking point for Brad Koplinski and Wanda Williams was the stranded debt issue. Originally, the Act 47 Coordinator figured the stranded debt after the sale/lease of assets to be $26 million, but both Koplinski and Williams argued that is an unreliable figure and a miscalculation. They asserted that more concrete solutions needed to be included in a Harrisburg Plan in order to project and address the inevitable stranded debt. Otherwise, they worried that in the end, after the sale and lease of the City’s assets, taxes and cuts would need to be raised above and beyond what the Plan called for. ”Yes” votes Gloria Martin Roberts, Patty Kim, and Kelly Summerford believed it was a Plan that needed passed as-is in order to start the process towards the road of financial solvency. With the threat of a State takeover hanging over Harrisburg, all three declared a yes vote was necessary to stop a Management Board from being put in place. As it is now, Piccola’s “takeover” Bill has to work its way through the House before it lands on Governor Corbett’s desk. Rep Glen Grell (R) is working on a House Bill version, attempting to overcome some of the possible problems that Piccola’s Bill could face. Thus “takeover” still isn’t defined for Harrisburg. After the vote, Mayor Linda Thompson said she was “disappointed” in City Council’s rejection of her Plan saying Council has never been clear on what they want and have now taken her authority away. Of immediate concern to her was making the $3.3 million bond payment September 14th and having enough money for payroll the second half of the month. City Council did vote to extend the lease agreement with the Harrisburg Parking Authority which could result in a $7.5 million payment to the City.
    • Piccola’s Bill is already losing confidence. Just as some have speculated, Piccola’s “takeover” bill may face some problems outside of the abstract realm of possibility. Worried about “legal and constitutional” issues Piccola’s Bill may confront if enacted, Representative Glen Grell is overseeing the writing of a different version of a Harrisburg “takeover” bill.  


August
    • Similar battles ahead for Harrisburg? Harrisburg’s greatest expense is public safety personnel. Without restructuring and/or cuts to public safety, the City won’t see significant changes to its structural financial situation. Not an easy task, especially with union contracts in place. On Tuesday, Mayor Linda Thompson revealed her plan to deal with the three public unions in Harrisburg—once City Council okay’s her Act 47 Plan, then based on recommendations from the State, the Mayor is giving the unions 90 days to negotiate their contracts. If consensus isn’t met in those 90 days, then the union contracts become void. Undoubtedly, legal battles will ensue. The City of Scranton (which has been in Act 47 since 1993) has been battling its public safety unions for years. This is the latest one. The Scranton Times-Tribune–“Scranton attorney, public safety union attorney battles over layoffs”
  • 8/25/11:
    • First, positive reinforcement is in order. Kudos to Harrisburg’s Friends of Midtown! Their initiatives lately have been consistent and epitomize  goodwill & volunteerism. These types of initiatives will carry our City through the the rough times with a positive attitude and a communal spirit. 
    • Classic Harrisburg Mayor Linda Thompson. She takes questions from the public. WITF Radio Smart Talk–“Mayor Linda Thompson”
    • Payroll or general obligation bond payment? The Mayor will have to choose. Two weeks ago during a presentation to City Council attempting to persuade them into voting for her Act 47 Plan, Mayor Linda Thompson said she would be making the September 15th debt service payment thereby not having enough money in the City coffers to make any of the City’s other obligations, including payroll. She called for swift action by Council so this quandary could be avoided. Her solution? A $7.5 million “pre-paid rent” loan from the Harrisburg Parking Authority. However, the HPA has yet to secure that loan themselves to be able to forward it to the City. As the HPA and the City waits for word from the bank, City spokesperson Robert Philbin comes out and says if Harrisburg finds it in a “this or that” situation on September 15th, payroll will be paid before debt.
    • The vote is scheduled for August 31st at 6pm. Anyone who’s been observing the situation can see, Mayor Linda Thompson’s Act 47 Plan doesn’t seem to be winning over her audience. The Bond Buyer–“Harrisburg Braces for Final Vote“
  • 8/22/11:
    • A financial advisor gives Harrisburg & State officials some advice on the City’s financial situation. “Forced to exist in a netherworld of de facto insolvency but restricted from exercising the remedies of a de jure recognition of the fact, Harrisburg has forcibly had the negotiating leverage of a bankruptcy filing removed from it.  Removing leverage from a debtor is the absolute antithesis of sound restructuring strategy.” Business Insider–“Harrisburg Officials: Bankruptcy Makes Sense”
  • 8/16/11:
    • Jefferson County, Alabama extends negotiations. Last Friday, after 5 hours behind closed doors, the County Commissioners decided not to take the bondholders’ deal and not to file for Chapter 9 just yet. Negotiations have been extended for another month. Harrisburg, take notes. 
    • Vallejo, California. The one so many people point to. After 3 years of an extremely costly and difficult ride through Ch. 9, this CA city emerges on the other side, and some say for the better. The attitude from many in the city is that it’s a city ready to rebuild on the lessons learned by a community which had to do so much for itself. 


July 


  • 7/20/11:
    • Harrisburg City Council voted down the Act 47 Plan.  In a 4-3 vote, City Council members rejected the Act 47 Plan presented to them by the Novak Consulting Group. President Gloria Martin Roberts, Patty Kim, and Kelly Summerford all voted in favor of the plan, while members Brad Koplinski, Susan Brown Wilson, Wanda Williams, and Eugenia Smith voted against the plan. While Council members who voted for the plan admitted that the plan was not perfect, all claimed the will to vote for the plan because at least it was a plan. Those Council members who voted “no” to the Plan reasoned that the more deliberate, innovative, and fair solutions could be developed to confront the City of Harrisburg’s situation. The Mayor held a press conference right after the meeting’s adjournement. She now has 14 days to present an alternative plan for City Council’s consideration. Mayor Thompson and City Council members expressed a readiness to work together to come up with a plan.
    • The move to save District Off 12-1-03 fails. When Judge Solomon retires, so does his office. The Patriot News–“Judge denies bid to save Harrisburg office of district judge”



    • A correlation between diversity and crime? This article suggests the more diversity, the less crime. All the more reason to embrace Harrisburg’s rich diversity & snip in the bud the attitude of segregation. The Atlantic–“Why Crime Is Down in America’s Cities”
    • To sell or not to sell assets? That’s not really the question Harrisburg may have the luxury to ask, but there are definitely questions for the taxpayers to ask about potential sales/leases of public assets. Chicago Tribune–“Tread carefully before selling public assets”
  •  7/12/11:
    • On Monday night, Harrisburg City Council met with its attorney, Richard Levin of Cravath, Swaine, & Moore, presumably to discuss the Revised Act 47 Plan. All members attended expect Council president, Gloria Martin Roberts.  Roxbury News–“Cravath Swaine & Moore____Richard Levin”


June

    • We’ve heard this one before. Mayor Linda Thompson says she’ll have a plan. She’ll need to present one within 14 days if City Council rejects the Coordinator’s Plan. Or maybe she has another plan for her plan. Even if City Council accepts the Coordinator’s Plan, it’s LT’s prerogative to sign the ordinance into law or not. If she doesn’t sign it, then she has 14 days to present an alternative.



    • At the Act 47 Plan Presentation to the Dauphin County Commissioners on Wednesday, June 15th, the Commissioners had a lot to say, but not about the County-issued cars they drive. WHTM–“Commissioners refuse questions on Act 47 plan“
  • 6/12/11:
    • Even with the Act 47 Plan coming upon Harrisburg, it’s the lawsuit that trumps all. Unfortunately, there’s nothing the Plan can do to stop the suits, and it doesn’t seem as if negotiation has worked either. In December 2010, Dauphin County paid in full nearly $35M on 2007 THA-issued bonds, which THA could not pay off by the December 15th date. Both the City of Harrisburg and Dauphin County had guaranteed those bonds, yet since the City could not make the payment, either, it fell on the County to do so. The City was supposed to include the payment in its 2010 budget, but City Council refused to include it.  That led to the lawsuit. The lawsuit was brought by Dauphin County Commissioners and two city taxpayers–the Lahrs–against the City, City Treasurer and members of City Council.  The Commissioners paid for Mette Evans law firm to represent the two taxpayers, who are Republican Committee persons living in the City. Senior Judge Charlie Brown from Centre County had dismissed the lawsuit declaring that the County’s rights were not equitable. He informed the County it could refile the lawsuit and claim breach of contract.  The County refiled the lawsuit and filed an appeal to Commonwealth Court. Commonwealth Court ruled that the County has a right to Specific Performance under the Guarantee Agreement but that the County does not have the right to seek mandamus against the City Treasurer under the Local Government Unit Debt Act.  Mandamus would require the next $35 million in tax revenue be transmitted to the County while Specific Performance requires the City to budget for the payment.  The Commonwealth Court also ruled that the two taxpayers do have a right to seek mandamus against the City.  The City defendants have various procedural and appellate rights that they will have to determine whether to pursue.  If the case is not appealed, it goes back to County Court, and it is up to the County and the taxpayer plaintiffs to determine when to file their motion to enforce the appellate court decision (many thanks to William Cluck, Esquire for this explanation).

  • 6/3/11:  
    • 911 Dispatch Center Transfer set for June 26th. In a joint press conference, Dauphin County Commissioner Mike Pries and Harrisburg Mayor Linda Thompson discussed the upcoming 911 dispatch center transfer from the City of Harrisburg to Dauphin County. Representatives from both, have been meeting weekly since March to plan, develop, and execute the transfer. Mayor Thompson said the City will save $800,000 but did not specify if this was an annual cost savings or if it included initial savings. Dauphin County stated that after initial personnel training, the cost to the County will be $200,000 a year. While Commissioner Pries acknowledge there will most likely be hiccups, both leaders stressed that the transfer should be relatively seamless. It seems the biggest hurdle will be getting City residents who are used to calling 255.3131 for emergencies as well as non-emergencies to dial 911instead. As of June 26th, all emergency calls within the City of Harrisburg, will go to the Dauphin County Emergency Management Agency. According to Thompson, roughtly 12 people will lose their jobs as a result of this change.



May

  • 5/19/11: 
  • 5/11/11:
    • A snafu in Harrisburg’s relationship with Cravath, Swaine, & Moore. CS&M bill the City for about $13,000 more than budgeted, it would seem. Of course, the contract/agreement was never made public, so it’s difficult to judge the exact terms here, but for resistors from the start like City Council President Gloria Martin Roberts, this is just the type of told-you-so ballyhoo the City doesn’t need. Since CS&M are only charging for travel & agreed upon incidentals, maybe they should just do their work for us from NYC. We still need this resource. What’s coming down the line, well…it doesn’t seem City Council will be able to handle it on their own without some expert counsel. The Patriot News–“Harrisburg’s ‘free’ legal work on fiscal recovery plan still costly“

  • 5/9/11:
    • Harrisburg Tax Abatement? Although the City believed it had an incentive program worked out, oversight and discord with Dauphin County & the Harrisburg School District are threatening  it. Central Penn Business Journal–“Hbg. tax abatement crucial for growth, business community says”


April


    • The Harrisburg Parking Authority Board makes its decision & removes a firewall to do it. At a Special afternoon meeting, the HPA Board voted 4-1 to approve the contract of Public Financial Management (PFM). During public comment, Harrisburg City Councilman Brad Koplinski laid out a sequence of reprove citing conflicts of interest, ignoble intentions, and a lack of strategic thinking using problems at the Harrisburg School District and the Harrisburg Authority as examples in his argument. Also during public comment, HPA Board member (and School Board candidate) Jennifer Smallwood read a statement which referred to political grandstanding and claimed that such actions (implication to Koplinksi) during last summer stymied progress that was being made at that time. As to compare and contrast, she went on to proclaim that it was “stonewalling under the guise of openness” that was “a factor that drove the City to Act 47.” Fellow Board member Corky Goldstein also took great umbrage to Brad Koplinski’s statements and went into a fervent defense against them. Fighting words were everywhere. Then the Board voted.
    • Back at the Harrisburg Parking Authority for another Special Meeting. This meeting was called to amend the Resolution that appointed Public Financial Management (PFM) as financial advisor in order to remove a “firewall requirement.” Yet during public comment, both Board member Kate McMullen and Harrisburg Councilman Brad Koplinski pointed out that this meeting didn’t properly notify the public per Sunshine Act. After a bit of confirmation, the Board realized they were correct, and the meeting quickly became a non-meeting. But not before Koplinski got a chance to express dismay at the HPA Board peculiar moves over the past few weeks by voting for a financial advisor, dismissing that financial advisor, then voting on another financial advisor. He especially was concerned with the fact that the financial advisor the Board settled on, PFM, requires not only a waiver of conflict of interest, but also a removal of a “firewall requirement.” Koplinski said, “The simple fact is that HPA, despite all warnings & advice to the contrary, is doing exactly what the bond mkt is most afraid of.”

Then on March 24, 2011:

Yet a week later on the 31st of March:

With such an awkward turn of events, it’s hard not to wonder what’s going on. Let’s stay on top of this one. Some backtracking & current events to keep us well versed on the subject:

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March

    • Taxpayers win against a tax. The choice seems to come down to this— either a tax or Chapter 9 Bankruptcy it may be for Jefferson County, Alabama. Harrisburg will probably have to this very same discussion soon, too.  Bloomberg–“Alabama Supreme Court voids tax in troubled county”
  • 3/18/11:
    • Words of advice as financially struggling municipalities like Harrisburg’s weigh the options. Slate–“Cities for Sale”
  • 3/10/11: 
    • The complications in the Harrisburg School District only get more complicated. Former HSD employee Lisa Paige questions the legality of Monday night’s surprise Board vote to hire Sybil Knight-Burney as superintendent. Tiffany Penn, who resigned from the Board that night, rescinds her abrupt notice to quit. The Patriot News–“Harrisburg School Board examines legality of superintendent vote”
  • 3/7/11:  
    • While cities are struggling across the nation….states, too….Harrisburg remains a unique case. New York Times--“Broke Town, U.S.A.” 
February
  • One of the most glaring scenes of the night at the Harrisburg School Board meeting was when ex-School District employee Lisa Paige got up to the mic. She called Board President Roy Christ’s comments in a recent Patriot News article “slanderous,” calling for a public apology from Christ. Paige stated that there is not nepotism in the School District, citing that the previous superintendent ended that.  She stood strong on her claim that Kohn stopped nepotism…..despite boos and hollers from the crowd.  Christ didn’t apologize, merely responding that he wasn’t surprised to see Paige there at this time.  The Patriot News, Laura Vecsey Commentary–“Commentary: Old tensions linger in Harrisburg’s school district”
  • 2/22/11: Central Falls, RI under State receivership. While we may be utterly unhappy with our leader in Harrisburg, what if the risk is that all of our elected officials are stripped of their authority? The New York Times–“One More Job Lost in the Recession: The Mayor’s”
  • The Central Penn Business Journal calls for Mayor Thompson to step down. CPBJ has been gracious enough to make this edition available to the public.  Download entire edition here:  “Vol 27. No. 8“
  • 2/17/11: No matter what we do, Act 47 team, will Harrisburg really ever be able to meet its debt obligations? The Wall Street Journal–“Harrisburg Heads Into Red”
  • Ironies never cease here in Harrisburg. Former Mayor Stephen Reed honored with an award for ” his devotion to historical correctness.”  The same man who spent hundreds of thousands of dollars on fraudulent artifacts. Not surprising he doesn’t have much to say about our City. The Patriot News–“Former Harrisburg Mayor Stephen Reed stays silent on city’s woes”
  • 2/16/11: The Act 47 Team presents a few pre-plan recommendations. The team of coordiators sent a letter to Mayor Thompson & City Council members outlining financial directives with the suggestion they be enacted immediately.



  • HA Board sends a letter of umbrage. “While we understand Moody’s concerns over the city of Harrisburg’s financial situation, downgrading the water system’s 2008 bonds is fundamentally unfair,” authority executive director Michele Torres wrote in a Feb. 9 letter to Moody’s. “We strongly believe that the water system’s operations and finances are fundamentally strong and that your rating decision was based primarily on the misguided fear that a potential Chapter 9 bankruptcy could have disastrous impact on the water system’s operations and finances. We take issue with the downgrade.”

by Ammon Perry

  • The Harrisburg Parking Authority’s Board Meeting and some significant changes and decisions are made. The Board elects a new Chair; issues an RFP for a financial advisor; decides not to publicly release the Wilbur Smith draft appraisal report; increases a no-bid contract up to $7,500; and talks about the unfortunate association with the City that causes the HPA consequences.
  • 1/28/11: What does she know that she’s not telling….and why isn’t she? “We are not having the real conversation yet,” says Thompson in an interview with Forbes Magazine–“Capital Crunch.”
  • Mayor Thompson on the radio about the City’s situaion. On The Diane Rehm Show on NPR.
    • Audio of show (Thompson’s interview begins at 36:39). Here.
    • Transcript of show (Thompson’s interview can be found about 2/3 down). Here.
  • 1/10/11: CORRECTION: I originally posted this as Harrisburg School District receiving money from this settlement.  It was my misread, thus, my misinformation.  In actual fact, no money for the HSD out of this one, but it does affect The Harrisburg Authority. A few of THA’s incinerator bonds & swaps and water deals are part of this federal case. The forensic audit should help disclose how THA has been impacted by this….unless the Attorney General calls before then. Curious to know how much money THA could be talking about if they had to consider a settlement.  Apologies for the error.
  • There are several points of concern & confusion in this story, not least of which is that the Administration refuses to say what kind of settlement it reached with the fake artifact vendor. So much for being transparent. WHTM News 27–“City artifacts sale nearing”

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Piccola bill would allow state takeover of cities under Act 47

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