News Around The Burg
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November 2010

Mayor Proposes Changes to Firefighter Work Schedules

Nov. 29 -- Harrisburg would significantly alter how firefighters work under a cost-cutting plan unveiled today by Mayor Linda Thompson.
Under Thompson's proposal, firefighters would work shifts of 24 hours on and 48 hours off, as opposed to the current schedule of two day shifts and two night shifts, followed by four days off. The shift change also would allow the city to reduce the number of firefighter platoons from four to three.
Thompson notified the executive board of Local Union 428 of the International Association of Fire Fighters today that she plans to make this change.
"We have had to look at every possible efficiency as a result of the city of Harrisburg’s ongoing structural deficit,” Thompson said. “Having determined that this change will allow us to provide the same level of service with fewer resources, we felt compelled to pursue it.”
The administration estimates that the schedule change would slash firefighter overtime, saving the city as much as $1 million per year. A similar plan was suggested by Management Partners Inc., a consulting firm that issued a report last January, listing a number of cost-cutting ideas.
The proposed schedule change coincides with Thompson's plan to eliminate around seven of 82 firefighter positions and close one of four fire stations as part of the 2011 municipal budget. The local firefighter's union opposes all of these changes, stating that the city's Fire Bureau already is understaffed.

Mayor's Budget Proposes Cuts to Fire Bureau, No Tax Hikes

Nov. 23 -- Harrisburg Mayor Linda Thompson proposed a 2011 budget tonight that would not increase property taxes or water rates, but would raise parking fees and lead to cuts to the Fire Bureau.
The $56.4 million spending plan now goes to the City Council, which will hold a series of budget hearings slated for Nov. 30, Dec. 2, Dec. 6, Dec. 8 and Dec. 13. A final council vote on the budget is scheduled for Dec. 16.
Thompson called her budget “an approach that best serves the city of Harrisburg.”
Several council members, though, criticized the plan for suggesting closing one of the city’s four fire stations, laying off five to seven firefighters, boosting residential permit parking fees 15–20 percent and raising parking meter fees from $1.50 to $2.50 per hour. 
“I’m not certain how the city will be served with only three fire stations,” said council member Susan Brown-Wilson.
The budget calls for one new position, a chief of staff, budgeted at $78,000 per year.
The plan is only a general fund budget. It does not account for Harrisburg’s massive debt tied to the city incinerator. That debt will be the focus of a broader financial plan once the city enters the state’s Act 47 program.

Council Prepared to Accept Free Lawyers

Nov. 22 -- The Harrisburg City Council tonight looked a gift horse in the mouth -- and decided it liked what it saw.
The hiring of New York-based Cravath, Swaine & Moore to advise the City Council -- and potentially represent the city -- appears to be a formality, after council President Gloria Martin-Roberts announced her intention to vote to accept the firm's offer of free legal counsel.
The firm would advise the council in matters relating to the city's ongoing financial crisis and even offered to represent the city, at no cost, if it decides to pursue municipal bankruptcy.
Martin-Roberts' announcement came after extensive questioning of Cravath, Swaine partner Paul Zumbro, who appeared before the council to answer questions about his firm's offer of "pro bono" representation. Martin-Roberts said she was concerned with certain aspects of the firm's "letter of engagement," particularly language calling for the reimbursement of most expenses, such as for travel, lodging and incidentals.
"My problem with this is that we can't have an open account for travel," she said.
Zumbro tried to ease her concerns, saying he was open to a cap on expense reimbursement.
"We're not going to nickle and dime you," he said.
Martin-Roberts also raised questions about the Dec. 31, 2011 termination date for the agreement. Zumbro said he expected most work would be completed by that date, after which the firm and the council would have to reach a new agreement.
The council plans to re-draft the letter of engagement tomorrow morning to address these concerns in preparation for a final vote tomorrow night.


Surprise: Harrisburg Expects Balanced Budget

Nov. 16 -- Harrisburg now expects a break-even budget for this year, as the city received word today of a second major cash infusion from its water fund.
City Business Administrator Robert Kroboth said that a budget reconciliation process for the water utility unearthed about $400,000, which, pending City Council approval, will be transferred into the city's general fund. This money comes on top of about $3.8 million that the Harrisburg Authority approved for transfer into the general fund yesterday, the result of the termination of a financial arrangement known as an interest rate swap.
"We believe we will be able to end the year break-even," Kroboth told the council's Budget and Finance Committee.
This news represents a stunning turn of events for the city, which, just a week ago, was in danger of not being able to meet its next payroll. Now, it seems virtually assured that the city will make all three bi-weekly payrolls before the end of the year, plus will be able to pay about $2.9 million in delinquent bills.
These budget figures include only general fund revenues and expenses. They do not include money that the city owes as a result of guaranteeing Harrisburg Authority bonds for upgrades to the city incinerator. The city is in default on many of those bonds.
At the same committee meeting, City Controller Dan Miller said that he expects the city to generate revenues of about $54 million in 2011, about $1 million more than in 2010. However, expenses probably will be about $58 million, meaning that a $4 million hole might have to be filled.
Mayor Linda Thompson is scheduled to present her 2011 budget to the council at a legislative session next Tuesday. In preparation, city department heads will present their preliminary budgets to the administration this Thursday and Friday during a series of public meetings in council chambers. Thursday's session will start at 9 a.m. and will run all day. Friday's session will begin at 9 a.m. and should wrap up by lunchtime.   


Harrisburg to DC: Megabus Expands Service

Nov. 16 -- Starting in mid-December, Harrisburg area residents will have another option for travel to Washington, D.C., as low-cost carrier Megabus is initiating express service between the two cities.
Several months ago, Megabus began daily service from Harrisburg to State College, Philadelphia and Pittsburgh. It will begin nonstop service to Washington on Dec. 15. All buses leave daily from pole 32 at the Harrisburg Mall parking lot at 10 p.m. The DC leg leaves at 10:45 a.m. from 10th and H streets NW.
Megabus has rates as low as $1 each way, depending upon demand. The one-way trip will take about 2 1/2 hours. For more information, visit us.megabus.com.


City Reaps Windfall from Water Utility

Nov. 16 -- In a strange twist of fate, Harrisburg’s utility authority is coming to the financial aid of the city, transferring $3.8 million into the general fund.
The cash infusion will cover much of the city’s year-end deficit of about $4.8 million, allowing it to continue to make payroll.
The Harrisburg Authority voted unanimously to transfer the money to the city after accumulating a large budget surplus in its water division, largely due to terminating a financial arrangement called an interest rate swap.


Freebie: Harrisburg Promised Pro Bono Legal Counsel

Nov. 10 (updated) -- Harrisburg has been handed a rare piece of good news, as the prestigious, white shoe law firm of Cravath, Swaine & Moore agreed to represent the city for free as it struggles through its financial crisis.
The New York-based firm was one of five law firms interviewed by the City Council, which was seeking legal counsel to advise it on such complex matters as the state’s Act 47 “distressed municipality” program and Chapter 9 municipal bankruptcy. Council member Brad Koplinski broke the news at a council meeting that the firm had agreed to provide legal services going forward at no cost, also known as “pro bono.”
“This could save the city of Harrisburg millions of dollars,” said Koplinski.
Koplinski said that Cravath, Swaine & Moore, which has a large pro bono practice, agreed to take on Harrisburg as a client for free because the case is potentially history-making and already is generating a great deal of media attention. A council committee now will hold a hearing on the resolution to hire the firm; a full council vote may follow.
Mayor Linda Thompson soon announced her support for the Cravath, Swaine offer, an important development since the administration selects legal counsel for the city.
“The firm will help clear the air of many of the misconceptions about bankruptcy,” said Thompson, in a statement. “[The administration] will cooperate fully with the Cravath, Swaine and Moore lawyers and provide any information that will make their task easier.”
Free legal representation would remove one of the most powerful arguments against filing municipal bankruptcy--the enormous pricetag, mostly from legal costs.

Another Hearing Slated for "Distressed Municipality" Program

Nov. 9 -- What are you doing next Wednesday, Nov. 17, at about 4 p.m.?
If you're a community activist, you may find yourself at City Hall for the unexpected second part of Harrisburg's "Act 47" hearing as the city again attempts to enter the state's program for distressed municipalities.
After the original, Oct. 20 hearing, an affirmative decision was expected imminently. However, a number of motions delayed and complicated the issue, requiring the hearing to be re-opened, said Fred Reddig, director of the state Department of Community and Economic Development's Center for Local Government Services.
DCED staff already has proposed that Harrisburg enter the program, a recommendation awaiting the affirmation of DCED Secretary Austin Burke.
"[After the hearing], the secretary then will consider the entire record and make a decision," Reddig said.
In the meantime, DCED has hired former Pennsylvania Speaker of the House Robert O'Donnell, now principal of the law firm, O'Donnell Associates, to provide Harrisburg with fiscal expertise until the Act 47 ruling can be made.
"O'Donnell . . . will immediately begin work with DCED and will provide assistance to the mayor, city council, other city officials and other stakeholders to identify options and achieve consensus on actions to relieve Harrisburg's financial difficulties," according to a DCED press release.
In his law practice, O'Donnell has built a specialty in public finance. With this appointment, O'Donnell is viewed as the probable choice to become the city's Act 47 coordinator once Harrisburg formally enters the program.

More Parking Meters May Arrive in Midtown

Nov. 9 -- A few months back, some Midtown businesses suspected something was afoot, as painted marks suddenly appeared near the street curb, strangely spaced at car-length intervals.
Now, their suspicions have been confirmed, as the City Council tonight introduced an ordinance that, if passed, would allow the city to install 88 parking meters along the rapidly developing commercial district. Specifically, the ordinance would allow 2-hour meters along N. 3rd Street from Verbeke to Harris streets and along Reily Street from Susquehanna to Williams streets.
A hearing, yet unscheduled, will be held in the council’s Public Safety Committee. Final action on the ordinance by the full council could follow.
Midtown businesses were generally critical of the proposal, saying that parking meters could staunch an emerging recovery in the long-suffering commercial zone.
“I sympathize with the need to raise revenue,” said Eric Papenfuse, owner of Midtown Scholar Bookstore on N. 3rd Street. “However, I don’t think that impeding business traffic is the way to go.”
Two doors down, Jose Montano, owner of JM’s Thrift & Vintage, expressed similar concerns, saying that parking meters could put an end to his growing out-of-town customer base.
“This is a huge mistake,” he said. “Why would we tear down what we’ve been trying to build up?”
Along Reily Street, Ray Diaz, owner of Nonna’s Deli Sioso, said he doubts that meters would affect his business. The one silver lining, he said, could be that meters might encourage Harrisburg Area Community College students to park in the HACC parking lot, instead of taking up street spaces, which he identifies as a continual problem.
Business owners agreed on one thing: the proposal came with no input from the community.
"How this just came out of nowhere is a huge problem," said Papenfuse.

Tax Abatement Renewal on Council's Agenda

Nov. 8 -- To abate or not to abate?
That's a question before Harrisburg right now, as a City Council committee tonight began to consider the complex--and sometimes controversial--issue of property tax abatements.
The council's Community and Economic Development Committee held a hearing on the city's 30-year-old tax abatement program, which expires at year-end. The program is currently city-wide, offering property owners as long as 10 years before they have to fully pay taxes on the assessed value of property improvements.
The administration proposes continuing the program, but with significant changes. It wants to limit the scope of the program to four census tracts in Allison Hill and Uptown Harrisburg and accelerate the program's timeframe, so that qualified property owners would be fully taxed on the value of their improvements after just five years. 
The city's developer community strongly opposes any changes to the current program, showing up in force to tell council members that the tax abatement program has been critical to putting blighted properties back into use and improving city neighborhoods.
"We think the current program works and that it's worked well," said Brad Jones, vice president of Harristown Development Corp.
Council member Susan Brown-Wilson repeatedly questioned the cost of the program, asserting that Harrisburg, in the midst of a financial crisis, cannot afford to forego any amount of property tax revenue.
"We need to look at whether we can afford to continue the abatement process for the city as a whole," she said. "I think the 10-year abatement we've had has cost the city millions of dollars."
Several developers pointed out, however, that many, if not most, of the 1,400 improvement projects covered by the program never would have been undertaken at all without the abatement, meaning that the city has lost little, if any, revenue. Meanwhile, the tax abatement program can be directly linked to the stunning renaissance of Olde Uptown as a vibrant urban neighborhood, as well as to substantial improvements elsewhere, said several speakers.
"Many projects that have been done wouldn't have been done without it," said Jones.
Committee chairperson Patty Kim indicated that the issue needed further study and debate before she would feel comfortable sending an ordinance to the full council for consideration. She has backed a second proposal, not discussed at the hearing, that would keep the current tax abatement plan in place until 2015.

They're Back: Mosaica Re-Purchases Ron Brown Charter School Buildings

Nov. 5 -- A charter school soon may again occupy the landmark Moose Temple lodge in Midtown Harrisburg, as for-profit Mosaica Education has re-purchased four buildings it once owned and that had housed the Ronald H. Brown Charter School at N. 3rd and Boas streets.
New York-based Mosaica, through its real estate arm EFA Co. LLC, finalized the sale on Oct. 5 for $320,000, purchasing the properties from Statewide Enterprises LLC, a company controlled by Harrisburg developer Philip Dobson. Dobson bought the buildings at a judicial tax sale last spring for a total of $188,000, including transfer taxes. At the time, he said he was considering the buildings for office space or for another charter school.
The buildings, at 916-922 N. 3rd St., include the historic Beaux Arts-style Moose lodge and three much smaller townhouses, together comprising nearly 50,000-square-feet of space and 60 parking spaces.
According to Dauphin County property records, Mosaica/EFA paid $6.6 million in 2000 for the property group, which takes up an entire square city block. Mosaica also made extensive, expensive renovations to the buildings, including the controversial move of slicing off the backs of the townhouses to make room for an outdoor play area.
Reached by telephone, Tom Keane, a Mosaica senior vice president, confirmed that the company had purchased the properties, but declined to specify further. 
“We are planning something,” he said. “When we know something firm, we’ll let you know.”
Soon after purchasing the buildings in 2000, Mosaica entered into a management agreement with the Ronald H. Brown Charter School, which actually ran the school. Alleging performance, fiscal and operational deficiencies, the school district’s Board of Control, which then oversaw Harrisburg schools, refused to renew the Brown School’s five-year charter after its expiration in 2005, a ruling later affirmed by the state’s Charter School Appeal Board.
The 400-student school closed, the buildings were foreclosed upon and the buildings have been a vacant, boarded-up eyesore since. Unable to find a buyer, the receiving bank allowed the properties to go to tax sale, completing the five-year circle back to Mosaica.


North Street Re-Opens as One-Way Road

Nov. 5 -- After being closed for construction for nearly two years, North Street, between 7th Street and Commonwealth Avenue in back of the Capitol building, has re-opened. However, the street is now one-way off 7th Street. Drivers can no longer turn off Commonwealth Avenue to go east on North Street. Parking along the street is for state employees.