It’s About Money: The City Versus The State

Harrisburg City Council wants the Receiver to release funds so it can pay to defend itself against him, but he said no.

So City Council asked the Judge to stop the proceedings and make the Receiver make the money available. The Receiver said no way should there be anymore delay. He claims he’s within his rights not to allow City Council to hire counsel for itself.

Here’s how this whole story line goes:

The old Receiver quit, but before he did, his City of Harrisburg Recovery Plan was confirmed by the Court. Thus, it was put in place. After David Unkovic resigned, Harrisburg was almost two months with no Receiver to charge ahead with the Plan, rather the State appointed an Administrator of the Office of the Receiver to oversee the process. Then the new Receiver emerged tasked with implementing the Recovery Plan.

Since it was first laid on the table, Harrisburg City Council—the majority of the seven members—didn’t entirely support the Plan. In general, they declared it didn’t address the structural debt the City would be burdened with once the assets were sold or leased. However, they seemed consoled by the fact that Unkovic was clear that this Plan was “preliminary.” And he told the Court just that and this: once assets were appraised, he would head back to the negotiating table and hammer out the details with creditors, return to Court for a public hearing, and put forth a permanent Recovery Plan.

For the preliminary Recovery Plan to work, though, City Council needed to approve two items—the Mayor’s spokesperson and an increase in the Earned Income Tax (EIT) on City residents. The majority of the Councilors said “no” to both.

Once Unkovic quit in sensational assertions of corruption, wrongdoing, and immorality, it gave the majority even more resolve to reject the Recovery Plan until there were investigations and State response to Unkovic’s claims of parties pushing against the City and its best interests. On top of the February letter Council had sent to the U.S. Attorney’s Office, on top of the repetitive speeches Councilors delivered each Legislative meeting, after Unkovic left the Office of the Receiver, press statements and orations began in even greater earnest.

In response, the Administrator of the Office of the Receiver, the Governor, and the Mayor even, talked about City Council as if they were naughty children who weren’t doing as they were supposed to. To enforce this point, on May 23rd the Administrator of the Office of the Receiver filed a Notice of Non-Compliance against City Council because it wouldn’t follow the Plan. A day later, William Lynch was affirmed as the new Receiver and he took over the reigns of enforcement by officially ordering City Councilors to comply. If they didn’t, he made it clear he would take them to Court per his statutory authority. During a June 13th public meeting, City Council President Wanda Williams looked Lynch right in the eye and said, “You’ll have to take me to Court.”

Because bureaucracy is rarely ever swift, a month of deadlines to comply came and went, another letter of warning with City Council responding by a) filing a Federal lawsuit against the State claiming Receivership is unconstitutional and b) going on summer hiatus. On July 10th the Secretary of the Department of Community and Economic Development on behalf of the Receiver turned to the Court and requested Judge Bonnie Brigance Leadbetter force City Council do what the Receiver ordered. A Petition of Writ of Mandamus filed because City Council refuses to do what the Receiver told them to do.

The issue—the law says the Receiver cannot levy taxes without City Council’s assent. The law also says the Receiver can order City Council to act to implement the Recovery Plan. While the Receiver has no power to impose taxation, the Receiver does have the power to command City Council. The Receiver wants taxes raised, but can’t do that himself. So he’s ordering City Council to do it for him.

A paradox, no?

To Court it must go. Without a doubt. How this case is decided is of State-wide concern, especially in light of the increasing troubles of cities like Scranton, Altoona, and definitely more to come. This Receiver law is brand new, unused by anyone in Pennsylvania except the City of Harrisburg. A desperate and quickly scribed law, it sought to put reigns on the capital city as it gained more momentum to seek justice and fairness for itself as the burden of public debt threatened to crush it. With a mayoral Administration utterly incapable of handling the job, this momentum was characterized by a majority of City Council, and their stride has remained fairly consistent despite the people out there who want to label them as obstacles to progress. Of course, when the old Receiver resigned, he gave credence to City Councilors’ resistance.

After some shuffling around, the Commonwealth Court hearing on the Mandamus petition was set for August 14th and City Council retained a reliable and qualified legal team to represent it in the paradoxical matter.

As this was all happening, on a parallel avenue, more of the public has been coming around to the fact that there may indeed be a false narrative in place about what exactly City Council has been doing, saying, and professing, or at least a narrative that should be questioned. There’s been claim of a Grand Jury investigation and the Pennsylvania Senate Local Government Committee has announced hearings on the fiscal crisis of Harrisburg. As if that wasn’t enough, it was just revealed that one of the “ethical and political crosswinds” named by Unkovic—Senator Jeff Piccola—is in the middle of addressing fourteen claims of professional misconduct for his work as an attorney.

A paradox, no?

Truths and inquiry are bubbling to the surface giving fresh perspective to the real story of the City of Harrisburg’s predicament.

As this fresh perspective gains traction, the State’s takeover arm, i.e. the Office of the Receiver, is getting more despotic. Weeks ago, the Receiver’s attorney vocalized that the State would be opposed  to releasing any funds for City Council to pay for its legal counsel. The Receiver, after all, is the boss of the City’s finances. Once informed about the State attorney’s remark, President Williams sent the Receiver a letter requesting a release of $125,000 to serve as a retainer so that City Council could preserve its legal representation of Neil Grover, Esquire, unanimously voted upon. In response, Lynch wrote, “If I were to allow scarce City resources to be used to fund the refusal of City Council to abide by the Court’s March 9, 2012 Order and directive, I would be abdicating my fiduciary responsibility to prudently oversee the financial affairs of the City.” Request denied.

On behalf of City Council, Grover came back with an Emergency Application for Special Relief In the Form of Injunctive and Declaratory Relief.

What’s this mean? It means that City Council is asking the Court to stop the proceedings and to declare that City Councilors have a right to defend themselves as public officials and should have the funds to do so, especially considering that City Council is battling the State in a complex question of authority.

The Court responded by moving the August 14th Writ of Mandamus hearing until a not-yet-determined date, so that the Judge can instead hear the arguments about the money on that day.

This did not make the State happy at all. The Office of the Receiver is calling for an expedited hearing, as soon as possible. The Receiver wants to explain to the Judge why he is legally correct about withholding funds from City Council. He wants to assure the Judge he has not overstepped his bounds of the authority vested in him by the State. He wants to convince her that more delay is harmful to the City and its residents.

Based on the State’s request for an expedited hearing, that may just happen—an expedited hearing. It could happen very quickly and the Judge will be put in an accelerated position to acutely consider the nuance and overtones of law and rights. Precedence will be established about a new way of State jurisdiction and local existence.

Local existence. Where we live and breath and reside. Where actual things happen based on the lofty abstractions of dominion, province, and authority. The very stuff this young country was built on and continually wrestles with.  Now, in the City of Harrisburg in the Commonwealth of Pennsylvania, it is a debate of the city versus the state. It is a battleground of distinction. It may seem tiresome, tedious, and confusing, but what the people of Harrisburg have to do is to consider the strategies at play. What’s at stake? What’s the take? What’s it mean not just for the here and now, but for the future to come? This isn’t necessarily about us the citizens of Harrisburg anymore. It’s bigger than that and that’s why the Senate chose to get involved and maybe even the Federal government. It’s why David Unkovic risked so much by resigning so loudly rather than quietly being compelled to be quiet.

Let no one be mistaken that this is a trifling fight. In actuality, it’s about much more than that. Much, much more than that.

 

UPDATE: The expedited hearing occurred & Judge Leadbetter issued an Order. As follows: 

• City Council’s legal funds are limited to $7,500 for the defense of the Writ of Mandamus & made payable only at approval of the Court
• The deadline to file a response to the Writ of Mandamus is Monday, August 13, 2012
• The hearing on the Writ of Mandamus is scheduled for Thursday, August 23rd at 10:30am (Courtroom 3002, PA Judicial Center)

 

• Access:
  • Letter from Receiver to City Council Denying Legal Funds
  • Emergency Application for Special Relief
  • Receiver’s Request for Expedited Hearing
  • Judge Leadbetter’s August 7th Court Order