Since the Harrisburg Strong Plan was unveiled in late August, after fifteen months of corralling by Receiver William Lynch and his team, its components have moved towards enactment with the momentum of a stampede.
Mayor Thompson, taking credit for seeing the city through receivership, spoke of the plan’s implementation as a foregone conclusion. Eric Papenfuse, the Democratic nominee for mayor, wrote in an op-ed for the Patriot-News that he had “never been more optimistic about our city and more confident that its best days are ahead.” The board of the Lancaster Solid Waste Management Authority rapidly approved the purchase of the Harrisburg incinerator, a key provision of the plan. (This morning the Harrisburg Authority board kept up its end of the bargain, voting to approve the sale.)
But in the chambers of City Council, particularly this week, the pace has momentarily faltered. In four consecutive nights of hours-long hearings, council members questioned the plan’s proponents over virtually every corner of its tangled territory. Meanwhile, a handful of high-profile citizens have come forward with their concerns.
On Tuesday, Nevin Mindlin, the independent mayoral candidate who was struck from the ballot in August, lectured council from the microphone during public comment. “This is a term sheet, not a contract,” Mindlin said, referring to the outline of the proposed long-term lease of the city’s parking assets. “Do not commit yourselves to anything until you see the contract.”
On Wednesday, Dan Miller, the city controller and Republican candidate for mayor, sent council an open letter. Identifying himself as the city’s “elected fiscal watchdog,” Miller asserted that the Harrisburg Strong Plan “dismantles city government” and places the burden “disproportionately on the residents and taxpayers of the city.”
The warnings, it would seem, have reached the ears of an already skittish council. Tuesday night, council voted to retain a consulting firm, Alvarez and Marsal, to conduct an independent review of the parking plan. That night, during the hearing, Councilman Bruce Weber pointedly asked Steven Goldfield, from the receiver’s team, whether he was operating “in the best interest of the city of Harrisburg.” (Goldfield replied with a “two-part” answer: an “unequivocal yes,” and an addendum that he is “technically counsel to the office of the receiver, whose job is to work in favor of a solution.”) By Wednesday, they were cribbing Mindlin’s term-sheets line, insisting they wouldn’t feel assured until they saw a contract.
In short, days before its next legislative session, council has started to behave as though, deep in the recovery plan’s weeds, something was lurking that could sting them. “If you wanna go riding in the tall green grass,” as Neil Young sang, “try to not spook the horse.” The horse, it would appear, is spooked.
At the center of council’s worry is—or should be—the effects of the parking plan. The earned-income hike, as I’ve argued before, is comparatively modest and, besides that, is a long-overdue remedy to the structural deficit concealed by Reed-era borrowing. The water and sewer system transfer, meanwhile, replaces complexity with transparency, and constitutes not only the restoration of a true municipal authority, but also the removal of a substantial (and unaffordable) environmental liability.
But the parking transaction, to abuse a final equine metaphor, is a horse of a different color. Steven Goldfield, the transaction’s chief architect and the receiver’s financial dab hand, spoke advisedly when he said his loyalty was to a “solution,” and not necessarily to Harrisburg. His achievement, in the form of the garage-and-meter transfer, is an ingenious way of eliminating stranded debt. He has also gone to considerable lengths to do right by the city’s long-term needs, engineering an annual $3.3 million payment to Harrisburg from the parking system’s revenues.
None of this should obscure the fact that the agreement is less than ideal. In contrast to the sewer transfer, which pulls the Harrisburg Authority into the sunshine, the parking transfer marches deeper into the labyrinth. The “purchase” of the parking assets—the garages, lots, and meters, along with rights of collection and enforcement—will be funded by the issuance of tax-exempt bonds by PEDFA, a state financing agency. PEDFA, in turn, will enter into agreements with AEW, a multinational real-estate management corporation, and Standard Parking, a national company that, according to its website, manages “more than one million parking spaces in the United States and Canada.”
PEDFA has limited capacity to administer contracts of this scope and complexity. As a result, it will delegate duties to an outside designee, currently slated to be the Capital Region Economic Development Corporation, or CREDC, to the great chagrin of council. (Last December, members of council had a widely publicized spat with CREDC over an imprudent video at the latter’s awards night.)
In other words, control of the city’s parking will be flung far indeed from the clutches of city residents. A consolation prize is that meter and garage rates, along with penalty fines, will be structured in such a way as to force non-residents into garages, effecting a sly commuter tax under a different name. But the transaction’s conditions also require a raft of legislation from council, to lock in hiked initial meter rates and to provide for new Midtown meters.
They also—again, in contrast to the sewer transfer—leave the city with several liabilities. If, for instance, an undetected environmental problem, like asbestos, compromises the use of a garage, the city and the parking authority will be accountable. The same applies if one or another of the garages becomes structurally unsound and needs replacing. (At one time, according to Goldfield’s testimony on Tuesday, this was projected to occur on two garages, in 2027 or 2028 and in 2032, respectively, at a potential cost of $90 million. Recent engineering surveys apparently—and rather conveniently, one might add—reversed this prognosis.)
And the city will also be signing off on an elimination of union labor. The transfer excludes “existing labor agreements,” and though negotiations with the local union council are ongoing, by now the likely outcome is clear. Jobs that once paid $12 to $15 an hour will trend towards minimum wage. I spoke with one current parking employee who said that workers had been offered either a buyout of one year’s unemployment, or continued employment at a lower wage, with no guarantee of a job after one year. (“I’m not sure I can keep going to work, doing the same thing I was doing before, but getting paid less,” the employee said.)
In light of all this, is it any surprise that Council has sought to proceed carefully? There’s a sense in which their objections are mere quibbling: the momentum, in virtually every quarter, is solidly behind the receiver’s plan. Yet their questioning plays a vital role. Besides the mayor, whose position is abundantly clear, council members are the only representatives in the recovery elected by the citizens of Harrisburg. The hearings, more than any other forum since the plan was unveiled, have aired its inner workings for public review.
In the long march to recovery, the electorate, along with the media, has been preoccupied with fairness, in the form of concerns over whether the receiver’s plan represents “shared pain.” But the intricacies of the parking transaction have much less to do with fairness than with necessity.
“Every stream of revenue you can put into the system is a multiplier,” council’s attorney Neil Grover said at Tuesday’s hearing. “It increases the price you can get for leasing the assets.”
Harrisburg’s immediate needs are to shed its debt and to access unreachable capital. Everything in the transfer, from the involvement of PEDFA to the hiking of rates right down to the slash through labor, is a product of that necessity. And the members of City Council, under the pressure of necessity, must weigh whether to sign off on its consequences. No wonder they’re watching their steps.
