.
News Around The Burg
June 2011

Mass Layoffs, No Tax Hike in School Budget

June 27 -- The Harrisburg school board tonight unanimously passed an austere budget that will lead to 214 layoffs, including 153 teaching positions.
The $124 million school budget is essentially unchanged from the preliminary 2011-12 budget introduced last month. In addition to the layoffs, the budget shutters four schools, but does not include a property tax hike for residents living in the school district.
"This was not done lightly," said school board President Roy Christ, referring to the job losses. "It was done in a thoughtful and methodical manner."
As previously announced, the Hamilton, Lincoln and Shimmell schools will close, as will the William Penn School, which was partially shut last year and scheduled to close completely.
The school portion of Harrisburg's property tax will remain unchanged at 26.3074 mills.
The best news is that the school board hopes to retain full-day kindergarten as it expects to receive an additional $1 million earmarked for that purpose once the state budget passes. The preliminary budget had reduced kindergarten to half-day sessions.
The school board also was able to close a large budget gap of about $8 million after receiving somewhat greater federal and state funding. In addition, the district terminated two bond swaps, a type of financial instrument, that brought in $3.2 million.
Christ, however, emphasized that much of this funding was from one-time sources that may not be repeated in next year's budget.
"It's going to be an ongoing challenge to find additional revenue resources," he said.


Harrisburg Residents Rally against State Takeover

June 27 -- Amid chants of "Kill the Bill," Harrisburg residents gathered on the steps of the Federal Building downtown today to protest a state Senate proposal that would force the city to accept the recommendations of the Act 47 team.
Amid the glare of media, passersby and government workers out for lunch, dozens of residents listened as Neil Grover, founder of Debt Watch Harrisburg, which organized the rally, denounced Senate Bill 1151, sponsored by Sen. Jeff Piccola (R-Dauphin County).
"We are going to stay in the fight as long as the fight goes on," Grover told the crowd. "We ask you to come along every step of the way."
The bill would impose a three-member management board on Pennsylvania cities, possibly including Harrisburg, that fail to adopt financial recovery strategies based upon plans set forth by their state-sponsored Act 47 teams.
Harrisburg's team released its report two weeks ago, advocating asset sales, municipal worker layoffs and tax hikes, among many other steps, to plug a multi-million-dollar annual structural deficit and pay back an estimated $310 million debt that resulted after the city backed incinerator-related bonds issued by the Harrisburg Authority, which then defaulted on its obligations.
Grover -- and many other critics -- believes that the Act 47 plan goes against the best interests of the city and is probably not capable of being implemented as written, as it relies on many assumptions and calls on Dauphin County and the bond insurer, AGM, to take certain actions they may not undertake.
Agreeing with that analysis, a sharply divided City Council last week asked its lawyers to begin to prepare for a possible municipal bankruptcy filing. That move caused Piccola to try to fast-track legislation that would coerce the city to accept the Act 47 plan and prevent it from filing for bankruptcy.
"This bill is unfair, it's unjust and it's un-American," said Councilman Brad Koplinski, who spoke at the rally.
The rally was conducted at the Federal Building because organizers also want the U.S. government to conduct a probe of how Harrisburg was able to assume such massive debt and get into a financial crisis.
"We started with a Declaration of Independence that gave us the right to self-government," said former mayoral candidate Nevin Mindlin. "They're trying to take that away from us. Don't let them do it."
A public forum on the Act 47 plan is scheduled for tomorrow at 5:30 p.m. at John Harris High School.


Harrisburg Makes First Move Towards Bankruptcy

June 21 -- A divided Harrisburg City Council tonight instructed its lawyers—Cravath, Swaine & Moore—to begin preparing for a bankruptcy filing.
By a 4-3 vote, the council passed a resolution asking the New York-based firm, which is serving the city pro bono, to begin drafting a municipal bankruptcy petition.
A council majority believes that the prospect of Chapter 9 municipal bankruptcy would act as leverage with the city’s creditors, convincing them to negotiate in good faith. In addition, bankruptcy may be necessary if one of several lawsuits goes against the city, several members have said.
Other council members fear that such a filing could dissuade bond insurer Assured Guaranty from working cooperatively with the city to resolve its financial crisis.
Similarly, Mayor Linda Thompson disagreed with the suggestion of bankruptcy.
“The mayor thinks there are better options contained within the Act 47 recovery plan structure itself to minimize the impact on city citizens and services, while maximizing the shared economic pain,” said spokesman Robert Philbin.
The vote on bankruptcy preparation followed a lengthy council meeting on the Act 47 plan, which was released last week in an effort to resolve Harrisburg's financial crisis. Council members grilled the state-appointed Act 47 team, which prepared the plan, on everything from union contracts to the closing of a fire station.
The seven-member council showed rare moments of unity, roundly criticizing the plan for placing the full burden on the residents of Harrisburg. Meanwhile, council members said, Dauphin County took huge risks of its own by backing about half the incinerator debt, as did Assured Guaranty for insuring the bonds.
Under the current timeframe, the council is expected to have the final Act 47 plan, with any modifications, in hand by July 8. It then will have 20 days to vote on it.


Sunoco Gets Its Way as Council Votes to Approve Station/Store Plan

June 14 -- By late this fall, the corner of 2nd and Maclay streets will have a new Sunoco convenience store and gas station, following City Council action Tuesday night that approved a replacement of the oil company’s 55-year-old facility.
The council voted 5-1 to permit Sunoco to redesign the half-acre site across the street from the Governor’s Residence with a larger, more modern store and a gas-pump canopy almost three times the size of the current one. Councilwoman Patty Kim was absent and Councilman Kelly Summerford was the lone no vote.
Construction should begin in August and take 90 days to complete, said Sunoco's Jeff Bauer.
Council approved Sunoco's design after the Harrisburg Architectural Review Board was unable to agree in May on the configuration for the store and canopy. The board’s split vote sent the issue to the council.
The Historic Harrisburg Association and many area neighbors, while supportive of the project, objected to the store’s architecture. They saw it as not compatible with neighborhood homes and its configuration as more conducive to a suburban than an urban lifestyle.
HHA expressed disappointment in a statement released after the council meeting that read in part: “While we commend and encourage economic development, the decision by City Council this evening does not provide for a structure which respects and enhances the architecture of the surrounding neighborhoods.” 
City council was less concerned about aesthetics and more concerned with keeping Harrisburg business-friendly. Councilman Brad Koplinski praised Sunoco for always paying its annual $4.2 million in taxes on time and for “being a good community partner.”
The other council members who voted to approve Sunoco’s plans made similar statements. They cited Sunoco for agreeing to design its convenience story with faux brick and a faux mansard roof that would mimic the neighborhood architecture.
“To me, this is almost kind of nit-picking,” said Council President Gloria Martin-Roberts. “It will not take anything away from the historic value of those properties.”
Since Sunoco began seeking approval, it had met resistance and concern from the Zoning Hearing Board and HARB about its configuration and its initially proposed flat-roof, box-like store that lacked even the slightest conformity to the architecture in the historic Olde Uptown neighborhood.
Even the state Department of General Services weighed in with concern about lights from cars shining into the Governor’s Residence. The current configuration of the pumps requires cars to face Maclay Street, eliminating that concern.
Sunoco’s new configuration has the store and canopy facing 2nd Street, but moves it to the back of the property to allow for the 99-foot-long-by-24-foot-wide canopy and store, which will expand from 1,700- to 3,000-square-feet, with parking in front.
Sunoco’s “A Plus” store has served as a gas station since it was built in 1956, while the Governor’s Residence has stood across the street since 1968.


Salvation or Sinkhole? State Issues Act 47 Plan for Harrisburg

June 13 -- Sell assets. Fire city workers. Boost property taxes. That's the broad outline from the state-appointed Act 47 team, which today released its long-awaited financial recovery strategy for Harrisburg.
The team released a 422-page report that specified numerous measures that the city could take to help it crawl out from under its massive debtload.
"There is something in here that everyone will dislike," said Julia Novak, president of the Novak Consulting Group, which led the Act 47 team and later testified to the City Council about the plan. "It's like we invited everyone to dinner and served nothing but peas and liver."
To address its annual structural deficit, Harrisburg should take a series of steps that includes modernizing sanitation collection; re-negotiating union contracts and freezing worker wages; transferring park maintenance to the Public Works Department; improving management and accounting; and selling certain city assets, according to the report. The report advises 19 worker layoffs, including five firefighters, which would result from a change in shift schedules, and nine employees from the recreation programming staff.
The report also recommends closing Fire Station #6, also known as the Paxton Station, at 336 S. 2nd St. Last year, Mayor Linda Thompson also proposed shutting the station, which led to a fierce backlash among firefighters and the public.
To address the incinerator-related debt, now estimated at $310 million, the report states that Harrisburg should sell the incinerator, sell or lease assets of the Harrisburg Parking Authority and restructure the remaining debt.
Harrisburg then would need to generate $2.5 million annually to pay debt service and compensate for lost parking revenue. The report suggests that Dauphin County could make a $2 million annual contribution to the city out of gaming funds, and the city could levy a property tax increase of about $50 per household.
In addition, the county and the city's bond insurer, AGM, should relieve the city of certain fees and penalties, as well as guarantee new debt issuances, which, the report says, they seem willing to do.
The plan stresses that certain actions should be considered last-resort, including a large property tax hike for city residents and additional firefighter and police layoffs. It also implied that some of Harrisburg's crisis is political, originating from an unwillingness by the mayor and City Council to cooperate, coordinate and share power over many years.
If the city fails to agree on a financial rescue plan -- or if one of several court cases goes against the city, forcing it to pay large settlements -- Chapter 9 municipal bankruptcy would almost certainly result, said the report.
Thompson said she hopes to work cooperatively with the City Council to mount a united response to the plan.
"I think my office and City Council together can quickly determine where we agree and disagree and focus on finding compromise on any disagreements," she said.
Councilman Brad Koplinski said, at the very least, the plan should finally force all players -- the mayor, the council, the county and AGM -- to begin to talk seriously about a comprehensive way to solve Harrisburg's debt crisis.
"I'm hoping this plan, whether we approve it or tweak it or disapprove it, will get everyone in the room together and talking," he said.
The council is slated to discuss the plan during a special session on June 21 at 6 p.m. in council chambers. A public hearing will follow on June 28 at John Harris High School. After the hearing, the mayor and council will have 25 days to act on the plan. 


Residents Invited to Speak Out on School Closings

June 6 -- The Harrisburg school board has scheduled three public forums so that residents and parents can sound off on proposed school closings and budget cuts.
The meetings will be held over the next two weeks at Hamilton School, Lincoln School and Shimmell School -- the same schools that the board expects to close at the end of this school year. The tentative budget also includes a proposed mass layoff of more than 200 workers.
The public forums are slated for June 9 at the Hamilton School, 1701 N. 6th St.; June 14 at the Lincoln School, 1601 State St.; and June 16 at the Shimmell School, 548 S. 17th St. Each forum will begin at 6 p.m.
Final action on the 2011-12 school budget is expected at the June 20 school board meeting.


GreenWorks Paves 2 Midtown Lots for Parking

June 2 -- Grading and paving are underway at two empty lots in Midtown Harrisburg -- one at the corner of Green and Reily streets and the other at Susquehanna and Calder streets – to provide parking for more than 60 vehicles for the businesses located in the Campus Square Building on Reily Street.
Both lots are owned by GreenWorks Development, which previously had tried to get a zoning exception to turn the lot at Green and Reily, adjacent to Midtown Cinema, into a parking area for a Magisterial District Judge office. That was denied.
However, in 2007, GreenWorks was granted special exception permits by the city Zoning Board to develop both lots into surface parking areas for no more than 10 years from the date of occupancy of the Campus Square Building, according to city Planning Bureau records.
The purpose of the permits is to provide parking until a parking garage is constructed in Midtown, according to the Planning Commission resolution.
Those permits still stand and are the basis by which GreenWorks is developing the parking areas, which also will serve the Midtown Cinema. The parking lot next to the cinema will have 28 spaces; the other lot will have 36 spaces.
“It starts to give us a decent amount of parking for the cinema,” said Matt Tunnell, senior vice president of GreenWorks.


2 for 2: Furlow Redevelopment Approved 1 Day after Museum Project

June 2 -- The state today approved $2.5 million in matching funds for the re-development of The Furlow Building, a six-story landmark structure that now sits as an empty shell on N. 3rd Street in Midtown.
GreenWorks Development will develop the building in partnership with Brick Box Enterprises, owned by Dan Deitchman, developer of Riverview Manor. Matt Tunnell, vice president for GreenWorks, said groundbreaking should occur in the fall.
The developers are matching the $2.5 million grant to transform the 19,000-square-foot Beaux Arts building, erected in 1908, into 20 to 24 one-bedroom apartments and about 1,000 feet of commercial space on the ground floor.
“3rd Street is going to change a lot,” Tunnell said, noting that the more than $10 million invested over the next 12 to 18 months should spur more development and business growth in Midtown, particularly along N. 3rd between Forster and Maclay streets.
Furlow’s developers anticipate young and old professionals will be in the market for their apartments. One enticement is the tax abatement that residents would receive as the building is in a tax-deferred Keystone Opportunity Zone, Tunnell said.
The Furlow Building is the second key project in Midtown Harrisburg to be approved by the state in two days, both involving GreenWorks. Yesterday, Gov. Tom Corbett signed off on a $5 million state grant for the Susquehanna Art Museum’s new location in the historic, empty Keystone/Fulton bank building at N. 3rd and Calder streets.
The museum project, which will include a modern-designed, two-story addition to the 95-year-old building, is expected to be 20,000 to 25,000 square feet and have the latest in security and environmental controls to meet accreditation from the American Association of Museums.
The total cost of the project is anticipated at $5.5 million. The state grant requires matching funds, but GreenWorks Development, which owns the property on which SAM will call home, was given credit to meet the match for the nearly $50 million in public and private dollars it has spent redeveloping parts of Midtown.
GreenWorks has completed several large projects in the area, including Harrisburg Area Community College’s Midtown campus at N. 3rd and Reily streets and the Campus Square building across the street.
A groundbreaking date for SAM’s new home is not certain. First, a deal needs to be struck between GreenWorks, the property owner, and the museum as to whether the museum will buy or lease the property. Tunnell said negotiations are underway, but, before construction begins, “The deal needs to be completed.”
Not only did the property and bank building meet SAM’s space needs, but Stephen A. Moore, the museum’s board president, said Midtown has become a corridor of the arts with the many galleries and the monthly 3rd in The Burg event.
“It’s a growing, but thriving area where there has been significant investment,” Moore said earlier this year, citing HACC’s Midtown campus, WCI Partners' residential developments, Midtown Scholar Bookstore, a new federal courthouse and a condo/commercial project that the Vartan Group is now building at N. 6th and Reily streets.
Until late last year, the Susquehanna Art Museum had been located for 10 years at 301 Market St., in the nine-story Kunkel Building. It’s now temporarily housed in Strawberry Square.


Thompson takes City Controller, Treasurer to Court

June 2 -- Harrisburg Mayor Linda Thompson has taken her battle over the city's automatic payroll deposit to the next level, requesting court action against both city Controller Dan Miller and city Treasurer Paul Wambach.
The filing asks the Dauphin Court of Common Pleas to compel Miller and Wambach to comply with the city's direct deposit system.
"This state of noncompliance, which can result in heavy per-diem fines for the city, is unacceptable to the good governance of the capital city," said Robert Philbin, city spokesman.
Thompson and Miller have been at loggerheads over direct deposit since she took office in early 2010. As controller, Miller is tasked with supervising the city's spending to ensure that outlays do not exceed budgeted expenditures. He believes that direct deposit, as currently configured, prevents him from supervising payroll expenditures and thus impedes his ability to do his job.

Harrisburg to Hand Over 9-11 Operations on June 26

June 2 -- Dauphin County is set to take control of Harrisburg's emergency dispatch operations on June 26, county and city officials confirmed today.
At a press conference, Mayor Linda Thompson and county Commissioner Mike Pries both said they expected the transition to be "seamless" and transparent to Harrisburg residents.
"Public safety in the city and across the county is our number one priority," said Thompson.
Last year, the Thompson administration asked Dauphin County to assume emergency dispatch responsibilities in order to save the city money and streamline city government operations. Thompson said the city should save about $800,000 in operational costs due to the handover. Twelve city workers have lost their jobs with the closure of Harrisburg's long-standing emergency dispatch center, she said.
Dauphin County has hired six workers and bought three workstations for its dispatch center to handle the increased call volume from Harrisburg. The additional staffing will cost the county about $258,000 annually, most of which is covered by 9-11 funds from the state, said Pries.
Thompson stressed that residents should dial 9-11 for all emergency calls. The non-emergency number for the Police Bureau remains 255-3131.