Pennsylvania Gov. Tom Corbett on Friday nominated 30-year public finance veteran David Unkovic, chief counsel for the Department of Community and Economic Development, to be state-appointed receiver for Harrisburg.
Corbett made the announcement through DCED Secretary C. Alan Walker, who has filed the nomination through the Commonwealth Court of Appeals.
Unkovic has ties to three firms that are representing bondholders in the Harrisburg debt crisis, in which the city is $310 million in debt related to cost overruns to an incinerator retrofir project. He worked for 27 years for Saul Ewing LLP, which is representing bond insurer Assured Guaranty Municipal Corp. Unkovic has also worked for Public Finance Management Inc., which represented Dauphin County in a financing of the incinerator debt, and for law firm Cozen O'Connor LP, which is objecting on behalf of the state to a bankruptcy filing by Harrisburg's City Council.
The state said it is also retaining Washington, D.C., law firm McKenna Long & Aldridge LLP to assist in a recovery plan and to work with forensic consultants hired by the Harrisburg Authority to review the incinerator bond financing. The authority, a local public works agency, operates the incinerator.
A new state law, passed after the City Council rejected a state-endorsed workout plan three times, enabled Corbett to declare fiscal emergency in Harrisburg and appoint a receiver. The law applies to third-class cities such as Harrisburg, in a state that categorizes its cities by population tiers.
The Commonwealth Court must hold a hearing within 15 days and will have 60 days from the date of the filing to act on it.
“The city’s failure to come to an agreement on an acceptable recovery plan has forced the commonwealth to take this action,” Corbett said. “As more time goes by without action, the city’s financial situation continues to get worse.”
Mayor Linda Thompson, in addition to the state, opposes the bankruptcy filing. A hearing on the legitimacy of the Chapter 9 filing is scheduled for Wednesday.
Mark Schwartz, the attorney representing the City Council, said the Chapter 9 filing, if federal Judge Mary France allows it, would nullify the receivership appointment, as well as any lawsuits against Harrisburg.
“With all due respect, the governor is again proceeding recklessly,” Schwartz said. “Moreover, Gov. Corbett’s position remains about process instead of real aid for Harrisburg. He had money to give to an investment bank, and to Penn State Coach [Jerry] Sandusky’s charity, but none for the city of Harrisburg. Interesting priorities.”
Unkovic earned his law degree from Harvard University and his undergraduate degree in political science from the University of Pennsylvania.
