Monthly Archives: May 2011

Update

Friday 5-6-2011: Request to Harrisburg City Council  to Authorize Cravath, Swaine, & Moore to Undertake Drafting Alternative Act 47 Plan Components. Click to read: Notice to City Council.

  • Saturday 5-7-2011: Harrisburg City Council President Gloria Martin Roberts response to 5-5-2011 Request.
From: Gloria Martin Roberts
To: Neil Grover
Sent: Saturday, May 07, 2011 3:12 PM
Subject: Re: Request for Immiedate Action
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Neil, how do you suggest we pay for this service?  Also, why would you want this action before you give the state a chance?  You are making many assumptions that may not have merit in reality.  Who represents your group, names specifically?
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Gloria Martin-Roberts,President, Harrisburg City Council
Caring cannot be limited to those with which we are comfortable. Our hearts must be open to receive everyone, otherwise we block our own Blessings.
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  • Neil Grover’s Response on behalf of DWH:
From:Neil Grover
To:Gloria Martin Roberts
Sent: Saturday, May 07, 2011 4:39 PM
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Gloria,
 I think you misunderstand our point.  Perhaps I have not been clear, so let me attempt to clarify.  We see the task that we are proposing that Council direct CSM to undertake as already within the scope of work that they stated they were willing and able to undertake.  In other words, it seems within the pro bono work proffered.  We think that the City should maximize the use of the quality services while they have this resource.  We do not expect — and I would guess the City does not expect — that the opportunity to employee such free service to continue indefinitely, so we think the City should get the most out of it while it lasts.  We’re not looking for the City to incur new bills and debts.
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On why we want this action, perhaps we just have different views on how  to proceed.  It seems that for many years and in many situations, our local governments have just blindly relied on what one advisor, contractor, official or office has presented.  It has got us to the horrible point we are at now.  It just seems prudent to be prepared to fully address any forthcoming proposed Plan.  The options the Act 47 Team may be the very best that our community can hope to arrive upon, or maybe we can do much better.  But the time to review it and make that informed decision is very limited by state law.  It will be very hard to meaningfully review the proposed Plan and then — IF the City thinks any one or many options are unwise or unacceptable — to only then start identifying other options for any or all parts of the Plan.  IF the City waits until after it is received to start that work., it will have insufficient time left to do that work.
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It will be great if the City Council, the Administration, the Act 47 Team and the public all come out at the same place on what needs to be in and out of the Plan.  But our local government should be prepared ahead of time to deal with the question they have known is coming since an October 2010 application was submitted.  In its most basic terms, it is no different than a local government not waiting until the first snow to ready its salt plies and inspect its own plows and trucks.  It is the government’s duty to be prepared to act on things they can foresee occurring.
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In a business, if you have the resources, you set multiple groups to work through plans and variations for future steps that will have a major impact on the future of the company.  Harrisburg is fortunate enough to have CSM as a resource right now.  They should task them with examining alternatives, as their work can confirm, clarify or refute the various findings that will be the underpinnings of the Act 47 Team proposal.
We are not rejecting the Act 47 Team’s proposals or we are not saying that they should not be given a chance.  We  are simply stating that Harrisburg apply a common sense approach of being fully prepared for know events.  The coming events that will determine the future and well being of an entire City.
As to “who represents”  DWH, I take that to mean who do we represent.  Every person on the CC of your email who was not a public official or employee of a local governmental body is part of the founders of DWH and what I have tagged as the DE FACTO EXEC Board.  We are an unincorporated association, with roughly 145 local taxpayers as members.  To be a member, you must pay real estate, earned income and/or mercantile/business privilege taxes to the City and you cannot be an elected or appointed public official.
I hope this clarifies our views.   Also, I am including all persons that were included in the original email on this reply too, plus teh City Clerk as Ms Williams bounce back.  These are not private, personal issues.  These are public matters of the highest importance.
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Respectfully,
Neil A. Grover
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P.S.     If you mean that we are assuming the City is not working on options to include in response to an Act 47Plan, that we are assuming.  There has been zero evidence or information to date that any such work has been undertaken.  If it has been undertaken, the City needs to communicate that to the general public.  If they are unwilling or unable to do so in a meaningful and open way, then the lessons of what placed Harrisburg in this long-developing crisis already have been lost.
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Friday 5-6-2011: Letter to The Harrisburg Authority Stating Debt Watch Harrisburg’s Position on LambdaStar, JF, LLC offer to lease Hbg Parking & Incinerator. Click to read: Debt Watch Harrisburg Initial Position Statement to Board of THA 

This Process is Broken

Originally posted on pennlive.com in response to The Patriot News, Laura Vecsey article, “Commentary: There’s no need for a museum — Harrisburg government is Wild West” 5-2-11


There seems to be a rising tide that wants to sweep away all talk of real concessions or write downs by bondholders or their insurer or any others. There is an unwillingness or refusal to say aloud, “This process is broken.”

Headlines in Scranton last week are telling. They report about budget woes and structural deficits. That town has been in Act 47 for years. We are much worse off now than they ever have been. So too will be our future if we stay the present course.

There are suggestions and hints from some corners that Chapter 9 cannot provide Harrisburg what it needs. With that fear in mind, many have quietly returned their hope to an Act 47 Plan. It is good to have hope, but it should not replace plain sense about what lies before you.

The evidence to date suggests that despite the very best efforts by the folks tasked with crafting a plan to solve Harrisburg’s money woes, Act 47 is a tool ill-designed for the task. Like a rescue team at a deep mine collapse, they are trying to find a way – any way — to reach the people at risk, only they’ve been issued picks and axes, instead of more modern tools. No matter how hard and how long they dig, the team cannot hope to reach the people trapped by this disaster. They need new and better suited tools, or the job will be hopeless.

In Harrisburg, the new tools needed to save our City are changes in the laws. Governments need to recognize and act like they are those given the power to govern. If they have made laws and rules that no longer suit the season, they can change those laws to address the current needs of society.

Harrisburg and other local governments need to be able to refinance their obligations in tough times through the pooling of governmental obligations and risks. They need to be able to tell the wolves at the door that the rules can and will change, so stand down. They need to remind the well-healed who are “shocked” that these debts are somehow unable to be repaid that they too answer to governments, or more correctly, the people who have empowered their governments to act. Local governments need the ability to reorganize their affairs when the structure no longer serves the citizenry. To change boundaries, merge services, regionalize services and even disband and reestablish local municipal governmental structures when the structures are more of an impediment then a sound way to manage the needs of the people they serve.

Right now, the creditor train is coming around a curve and soon will be hitting the straightaway. Don’t be fooled. Its destination is the pocketbooks of everyone in all of Central Pennsylvania – not just those who live in the Capital.

DWH & CS&M

  • 5/2/11: Letter from Debt Watch Harrisburg to Cravath, Swaine, & Moore: DWH Letter to CSM
  • 5/3/11: Response from Richard Levin, CSM, to Debt Watch Harrisburg (in regard to letter sent 5/2/11):

Dear Neil,

Thank you for your letter.  We are sharing it with our client, who is the ultimate decision-maker on matters such as those that your letter addresses.

With best regards.

Richard Levin, Esq.

Cravath, Swaine and Moore LLP, Worldwide Plaza

Debt Watch Harrisburg Meeting w/Act 47 Team Representative, Bob O’Donnell

Five (5) of our members sat down for about 1 1/2 hours with Mr. O’Donnell on the evening of April 6. That happened to be the same date the Cravath report to City Council was made public, so we had not reviewed it in any detail at the time of the meeting.

Mr. O’Donnell advised that the Act 47 Team was looking at any and all options in addressing the Debt Crisis. All present appeared to agree that we have two (2) distinct problems that are now facing Harrisburg, which are now entwined — the incinerator debt and the structural debts of the City government. Much of what he communicated was reiterated last week at his update to City Council. I encourage everyone to watch the replay.

The Act 47 Team seemed to be looking for a global solution to the problems that did not simply push off addressing the problems to some future date. He did not indicate that they had arrived upon recommendations yet, but did demonstrate they were looking to identify the real numbers associated with any aspect of a proposed solution. No one item suggested by any party was seen as offering the complete solution being sought.

The meeting was cordial and sobering. The sale of assets — pro and con — were discussed. Tax increases — pro and con — were discussed. The reduction of service — pro and con — were considered. The prospects of regionalization of some services, the role and powers of municipal authorities, Chapter 9 — pro and con — were all reviewed. Changes in State law was raised. The role of the Act 47 team in negotiations was touched upon.

In sum, at the time of that meeting on April 6, everything was still on the Act 47 Team table and, as was represented to our group, all ideas of significant financial impact were being considered, fiscally evaluated and decided on its merits.

Any solution will be hard and ugly, as the problems we face are hard and ugly. In the near, near future, the reality of the crisis will be setting in for most everyone. We are 25 days and counting to the Proposed Act 47 Plan.