The Commonwealth Court of Pennsylvania on Friday confirmed attorney David Unkovic as receiver for Harrisburg.
Appellate court senior Judge James Kelley, in announcing the confirmation, said Unkovic, previously the chief counsel for the state's Department of Community and Economic Development, has 30 days to develop a recovery plan for a city that is $310 million in debt and has skipped about $60 million in bond payments tied to an incinerator retrofit project.
Kelley confirmed Unkovic one day after holding a nomination hearing, at which Unkovic called the incinerator bond deals "troubling."
Unkovic would not elaborate, however, saying he would await the results of a forensic audit by the Harrisburg Authority, the public works agency that operates the incinerator.
Last week a bankruptcy court denied the City Council's Chapter 9 filing on behalf of the city.
"I am pleased that any questions about the bankruptcy filing by City Council and the appointment of attorney David Unkovic as city receiver have been resolved so that the focus can narrow in the next 30 days to the development of a financial recovery plan that moves the city of Harrisburg to long-term fiscal solvency," Mayor Linda Thompson said in a statement.
The City Council's attorney, Mark Schwartz, could not question Unkovic on Thursday, with the judge citing a procedural dispute.
"I regret that I was unable to participate in the hearing, but the council and I look forward to working with him," Schwartz said Friday.
Gov. Tom Corbett's nomination of Unkovic has drawn fire because of the latter's previous ties to major creditors in the Harrisburg debt crisis.
Unkovic has worked as a lawyer for Saul Ewing LLP, which represents the incinerator's bond insurer, Assured Guaranty Municipal Corp.; Public Financial Management Inc., which represented Dauphin County in a financing of the incinerator debt; and Cozen O'Connor LP, which the state retained to object to the City Council's Chapter 9 bankruptcy filing.
But Kelley said in his order: "David Unkovic is found qualified, [and] has no disqualifying conflicts of interest."
Speaking with reporters after the nomination hearing Thursday, Unkovic said Pennsylvania law will require him to study all financial recovery plans, including those proposed under the state's Act 47 workout plan by Novak Consulting Group Inc. and a similar one Thompson endorsed.
"I do intend to look at those, but I also want to have everybody involved in the process provide input," Unkovic said.
After the Harrisburg City Council rejected the Act 47 plan three times, state lawmakers and Corbett crafted legislation calling for receivership and also limiting bankruptcy options until July 1, 2012. The law also bans a commuter tax.
Any recovery plan is likely to call for a sale of the incinerator and a sale or lease of the city's revenue-producing parking garages.
"He really has a tough job ahead of ahead of him," Schwartz said of Unkovic, while adding that a commuter or 1% sales tax would help the city. "He can roll up his sleeves and sell every asset the city has, but it won't solve the problem. You need a revenue source. The governor and the legislature are great at taking away tools for Harrisburg but not providing any."
On Thursday, three Harrisburg citizens, including former mayoral candidate Nevin Mindlin, sued the state in federal court, saying the takeover violated the due process and equal protection clauses of the 14th Amendment to the Constitution because minorities were excluded from the Act 47 process.
Thompson and five of the seven council members are African-American. Roughly 70% of the city's population is minority, the court filing said.