The Commonwealth Court of Pennsylvania on Thursday approved Gov. Tom Corbett’s nomination of retired Major General William Lynch as receiver for distressed capital Harrisburg.
During the day-long hearing before Judge Bonnie Brigance Leadbetter, Lynch’s predecessor, David Unkovic, testified that he abruptly quit on March 30 because he expected to be fired. Unkovic, who cited “political and ethical headwinds” in his resignation letter, had served as receiver since November.
Leadbetter had ordered Unkovic to appear before the court, but limited the scope of questioning, saying the hearing was not about the past.
Unkovic said he felt heat from several fronts when he said at town hall-style meetings that creditors should concede more as part of the financial recovery plan. He identified Dauphin County, state Sen. Jeffrey Piccola, and Stan Rapp, the lobbyist for bond insurer Assured Guaranty Municipal Corp.
Also, he said the governor’s office leaned on him in late March after he requested federal and state authorities to investigate the bond deals that have burdened the city with most of its crippling $326 million of debt.
Two days later, and after a county court ruled that major creditors of the incinerator debt were entitled to their own receiver, Unkovic resigned.
The City Council and its attorney, Mark Schwartz, have also called for investigations of the bond deals.
Mayor Linda Thompson applauded Lynch’s appointment. “Gen. Lynch brings precisely the kind of leadership and experience that is needed at this point in the city’s fiscal recovery process. I look forward to working with Mr. Lynch to continue implementation of the city’s recovery plan,” she said.
Others were displeased. Schwartz objected to Thursday’s hearing, saying Leadbetter restricted his questioning of both Unkovic and Lynch. Schwartz wanted the state Supreme Court instead to conduct the hearing. “In Nixonian fashion, Corbett’s people took Unkovic to the woodshed. Unkovic’s not the problem. Corbett’s the problem. It’s a very sad day,” Schwartz said.
Brad Koplinski, one of four City Council members who have opposed state receivership over the past year, said questions are still unanswered. “The court’s limited scope of questioning did not allow the full story to be told,” Koplinski said.
According to Koplinski, Corbett’s pressure on Unkovic “shows again the heavy hand that the commonwealth has put on the city of Harrisburg and its taxpayers.”
Lynch, who will earn $125,000 in his new position, will attempt to continue the recovery plan for the politically divided city that Unkovic introduced on Feb. 6. Unkovic issued requests for qualifications involving the sale or lease of the incinerator, parking garages and water and wastewater systems.
The recovery plan also called for the restoration of the chief operating officer’s position at City Hall, which had been vacant for more than two years. On Tuesday, the City Council, after threatening to hold up the hiring of former Miami public works director Ricardo Mendez-Saldivia, approved the $110,000 position in a 4-to-3 vote.