Harrisburg Officials Seek Court Hearing on Receiver
By Romy Varghese -Apr 5, 2012 12:01 AM ET
Harrisburg officials, including the controller and treasurer, said they are asking the state’s Commonwealth Court to hold a hearing on the resignation of David Unkovic as receiver for the insolvent Pennsylvania capital.
Unkovic’s departure on March 30, two days after he requested state and federal probes of bond deals that sparked the community’s fiscal distress, “rings alarm bells,” City Council President Wanda Williams said yesterday.
Unkovic’s hand-written resignation letter to the court that approved his appointment Dec. 2 said he found himself “in an untenable position in the political and ethical crosswinds.” The receiver had devised a plan to lease or sell city assets to help resolve a crisis that has piled up debt of about five times the city’s general-fund budget and keep it out of bankruptcy.
“Before the appointment and confirmation of a replacement, the court, the city and its residents need to learn the real circumstances that led to his departure,” Williams said yesterday at a City Hall news briefing. A court hearing would help “get to the bottom of the Unkovic resignation,” she said.
Councilwoman Patty Kim called on Governor Tom Corbett, a Republican, to look into the issues raised by Unkovic’s letter.
Corbett “just sat there and Unkovic was drowning by himself,” she said. The council members were joined in the briefing by other elected municipal officials, including Controller Dan Miller and Treasurer John Campbell.
“The Harrisburg receiver is appointed by the state to act in an independent capacity and Mr. Unkovic was provided that independence,” Kelli Roberts, a Corbett spokeswoman, said by e- mail in response to the call for a hearing.
“Given that the court has accepted Mr. Unkovic’s resignation, I’m not sure what a hearing would accomplish,” Roberts said. “The administration will stay focused on finding the right person to take over this important position.”
The judge overseeing the Harrisburg case, Bonnie Leadbetter, was unavailable to comment, said a person who answered the telephone at the courthouse yesterday. Art Heinz, a spokesman for the Pennsylvania courts, said he was unaware of any hearing being scheduled regarding Unkovic’s resignation.
In letters sent March 28, Unkovic asked U.S. Attorney Peter J. Smith in Harrisburg and Pennsylvania Attorney General Linda Kelly to investigate financings for a municipal incinerator overhaul and expansion. The work created a debt burden of more than $300 million.
An audit released in January said municipal officials and advisers “knew or should have known that, at a minimum, there was substantial risk” the plant wouldn’t produce enough cash to cover costs. Since resuming operations, the trash-to-energy plant hasn’t generated revenue sufficient to cover all its debt obligations.
“There’s been challenges from a number of people that I didn’t rubber stamp the Act 47 plan from the summer,” Unkovic said in an interview on March 29, referring to a proposal by consultants hired under the state’s distressed cities program, known as Act 47. The council has rejected that approach.
Bob Philbin, a spokesman for Mayor Linda Thompson, didn’t respond to a call for comment yesterday on the request for a hearing on Unkovic’s resignation.
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