PA Gov. Tom Corbett's DCED secretary C. Alan Walker, whose job includes attempting to guide cash-strapped cities to keep paying bondholders even if it means cutting services to citizens, has asked Commonwealth Court to appoint David Unkovic. a lawyer for the state, and the Washington, DC law firm McKenna Long & Aldridge as receivers for the city of Harrisburg.
A proposed state plan would force the city to sell parks and other assets and break union and vendor contracts. City Council has refused so far to go along, preferring to raise income or sales taxes, which is unpopular among state workers and voters in Harrisburg's suburbs. So Corbett is trying to take control of the city's finances directly.
“The city’s failure to come to an agreement on an acceptable recovery plan has forced the commonwealth to take this action,” Corbett said in a statement.
Unkovic, a Penn and Harvard Law graduate, is a veteran bond lawyer who has advised Pennsylvania local governments, authorities and school districts over the past 30 years, as municipalities borrowed more and more money for public projects and, in some cases, to pay operating costs.
"With all due respect, the Governor is again proceeding recklessly," said Mark Schwartz, lawyer for Harrisburg's city council, which is resisting the state takeover and has filed instead for federal bankruptcy protection in hopes of trimming the bond debt inherited from previous administrations. "It is our position that the automatic stay attendant to the Bankruptcy Proceedings is a bar to any lawsuits against the City as well as these proceedings to appoint a receiver.
"Moreover Governor Corbett's position remains about process instead of real aid for Harrisburg. He had money to give to an investment bank, to Penn State Coach Sandusky's charity, but none for the City of Harrisburg," Schwartz added.