The temporary receiver for Harrisburg still hopes Pennsylvania’s capital city can close on the sale of its troubled incinerator and other assets to raise cash by the end of June, a target his predecessor had established.
“That remains the goal, and at this point, the process continues to move forward. The reviews are under way as we speak,” said Fred Reddig, the executive director for the Governor’s Center for Local Government Services within the state Department of Community and Economic Development. The DCED is coordinating the takeover of Harrisburg.
On Tuesday, DCED chairman C. Alan Walker appointed Reddig to the interim position. David Unkovic, whom Gov. Tom Corbett appointed in November, abruptly resigned as receiver on March 30, saying political and corporate pushback over his proposed financial recovery plan was excessive.
Unkovic’s plan included valuing city assets, including the trash burner, its parking garages, and its sewer and wastewater systems, and closing on a sale or lease of the assets by June 30. He issued a request for qualifications on Feb. 7.
He quit three days after a Dauphin County court ruled that major incinerator creditors, including Assured Guaranty Municipal Corp., were entitled to a separate receiver to oversee debt related to the trash burner.
Harrisburg has about $310 million of incinerator-related bond debt that it cannot pay. It has skipped about $65 million in related bond payments, and last month missed two general obligation payments totaling $5.3 million.
Reddig spoke at Wednesday’s first meeting of the state-appointed Municipal Financial Recovery Advisory Committee, though the receiver does not serve on the panel. Its members include Mayor Linda Thompson, City Council President Wanda Williams, Harrisburg Regional Chamber president David Black, and Dauphin County assistant solicitor Fred Lighty.
“I’m optimistic,” Thompson said of the asset-sale timetable. “It’s the second step along in the plan. We’ve already identified who the big players are. That’s why the RFQ went out, to separate who can and who can’t.”
Corbett, who must name a permanent replacement subject to the approval of the Commonwealth Court of Pennsylvania, denied that Unkovic was pushed out. “Absolutely false,” he told reporters. “That’s speculation. Nobody has any facts. I have not had any contact with Dave for quite a while.” The governor also took a jab at municipal officials, saying: “This city government is not easy to work with.”
City Council attorney Mark Schwartz has called on the Commonwealth Court to investigate Unkovic’s resignation. Schwartz said a status report to the court on the receivership, submitted by law firm McKenna Long & Aldridge LLP, which no longer represents Unkovic, said basically nothing.
“The report should have disclosed what the governor and the receiver’s counsel knew about [Unkovic’s] 'untenable situation,’ ” Schwartz said. “These lawyers have certain obligations to come forward with what they know.”
