Exit Plan Released
The commonwealth last month released Harrisburg’s newest Act 47 exit plan, which calls for maintaining the city’s current Local Services Tax (LST) and Earned Income Tax (EIT) rates through 2020, as the city concurrently seeks special taxing provisions from the state legislature.
Harrisburg’s Act 47 coordinator had to craft an exit plan based on current state law, which would require Harrisburg to relinquish some of its taxing authority when it leaves Act 47 in three years. The city currently collects $11.8 million in annual revenue from heightened LST and EIT rates permitted under Act 47.
The report encourages Harrisburg officials to continue lobbying for the right to levy those current tax rates indefinitely.
To that end, it offers a four-year budget strategy that would give Harrisburg time to continue its lobbying effort. It would allow the city to maintain its status quo tax rates and expenditures through 2020.
If the city does not secure a legislative victory by 2021, DCED would revise the budget projections in the exit plan and would ask the city to change its revenue structure and cut spending.
If state laws have not changed by 2021, the coordinator recommends that Harrisburg lower its EIT to 1.5 percent, reduce its spending, and begin using its fund balance to reduce any budget deficits.
In 2022, the city would have to reduce its EIT to 1 percent and its LST to $52 per year.
The plan also outlines initiatives that the city can undertake to curb spending and increase revenues while it implements the four-year budget strategy.
They include asking more tax-exempt organizations to make payments in lieu of taxes (PILOTs), performing a cost analysis of its union and non-union represented personnel expenditures, and limiting enhancements in its future collective bargaining agreements.
DCED also recommends that the city study its split-rate property tax structure and consider moving to a single-rate system. The report says that the split-rate system benefits homesteads at the expense of landowners.
“As revitalization and property improvements continue within the City, the City’s split rate millage is not fully capitalizing on the growth—the county and school district are,” the report reads.
Councilman Ben Allatt said that the revised exit plan was a marked improvement over the first draft, which suggested huge property tax hikes in excess of 100 percent.
“We’re headed in a much better direction than the initial exit plan,” he said. “I think the strategy is to not force the city to make all these crazy decisions in a 30-day period without the state acting. Because the fact is that if we want to resolve our long-term financial situation, then we need to compel the state to act.”
DCED must now hold a public hearing on the revised exit plan.
Teachers Asked to Return Pay
The Harrisburg School District made a big accounting error when it offered dozens of teachers inflated salaries in 2016, and administrators are now asking them to pay some of it back.
Two years after it violated a collective bargaining agreement by hiring 65 teachers at the wrong salary level, the school district is asking them to take a pay cut and give back the wages they were overpaid.
The recouped wages would total almost $500,000, with individual teachers accountable for amounts ranging from $600 to $12,000, according to Harrisburg Education Association leaders.
HEA says the offer violates the contracts of the teachers being asked to take a pay cut and insults 79 longtime teachers who are currently being underpaid. They fear it will lead more teachers to resign from the district.
“It’s ridiculous,” said union President Jody Barksdale. “We’re in a position where we will lose dedicated people because of the lack of promise. When you say you’ll pay someone a certain amount of money, they budget their life around that amount of money.”
HEA filed a grievance against the district in 2016, asking administrators to either reduce the new teacher salaries or promote HEA teachers who had been frozen on the salary schedule. They put forth a $320,000 proposal to bring 79 underpaid employees up to their rightful pay grade, Barksdale said.
Now, the district is fulfilling one of their requests. They’ll cut the new salaries to match HEA pay levels, but they want the teachers they overpaid to give back their wages.
The proposal would bring in half-a-million dollars for the district, even though administrators set aside $1.9 million for the grievance settlement in the 2018-19 budget that was approved by the board in June.
Barksdale said that HEA wants underpaid teachers to be brought up to step instead. She also said the whole fiasco could have been avoided if the district’s Human Resources Department had worked with them in 2016.
“Our counsel tried to explain the language in the bargaining agreement to new personnel in the HR office,” Barksdale said. “It’s like they didn’t believe us or trust us.”
A visibly frustrated Barksdale said that the district’s administration is driving away talented teachers and hurting children.
“The only way this district will move forward is if the district sits down and has honest, transparent conversations with us,” Barksdale said.
Bridge Work Ahead
Harrisburg drivers should brace themselves for some short-term pain, as PennDOT is replacing a small, but well-traveled bridge over Paxton Creek.
Preliminary work began last month to remove and replace the rust-marred Herr Street Bridge that passes over the creek between N. Cameron and N. 9th streets near the Subway Café. That portion of Herr Street averages more than 12,300 vehicles a day, according to the state Department of Transportation.
In August, work began with single-lane restrictions, as crews drove in micro-pilings to prepare for the actual replacement of the 98-year-old single-span, steel-girder bridge.
Then, on Sept. 7, weather permitting, Herr Street, between Cameron and N. 7th streets, will close entirely for as many as 10 days so that crews can remove the existing bridge, replace it with a precast concrete superstructure and rebuild the roadway.
A detour will route motorists around the work zone using Cameron, Maclay and N. 7th streets, said PennDOT.
Atglen, Pa.-based J.D. Eckman is performing the design and construction work under a $3.2 million contract, which includes building the precast superstructure in a nearby lot along Herr Street.
PennDOT said that it expects the entire project, which also includes utility, pavement and signage work, to be finished by mid-October.
State Grant for Office Building
A new downtown Harrisburg office building is a bit closer to reality, as the 2nd Street project last month received a $1 million state grant.
Gov. Tom Wolf’s office announced that Second Street Associates, a partnership headed up by Harristown Development, will receive the funds through the state’s Redevelopment Assistance Capital Program (RACP), which aids projects deemed economically, culturally or historically important.
The money will go towards constructing a new, six-story office building at 21 S. 2nd Street, with retail on the ground floor, along with the rehabilitation of the historic, six-story structure next door at 17 S. 2nd St., which houses the SkarlatosZonarich law firm. The two buildings then would be joined inside to form a single, interconnected structure.
“I am proud to support the construction of this new office and retail tower in downtown Harrisburg,” Wolf said in a statement. “This investment supports the efforts of the region to create more jobs, bolster shopping and retail opportunities, and will strengthen the city’s tax base and local economy.”
Last year, Harristown bought and then razed the dilapidated, three-story, 19th-century structure that once housed the Coronet Restaurant. The building had been largely empty since a fire destroyed the restaurant several decades ago.
Harristown had requested $3 million for the building project. Most RACP applicants are denied funding and, when granted, awards typically are significantly lower than amounts requested.
So far, in the 2018 round of funding, the only other RACP award in Dauphin County has gone to the city of Harrisburg, a $2 million grant to begin the Paxton Creek reclamation project. In 2017, the Harrisburg Midtown Arts Center (HMAC) received $1 million to complete its build out, the Salvation Army Harrisburg received $500,000 for its new building on Rudy Road and Hershey Towne Square received $750,000 towards a three-story parking garage.
So Noted
Harrisburg University last month introduced the 15 full-scholarship members of its new varsity e-sports team and unveiled their uniform, logo and team name, The Storm. The season begins this month with competition in the team-based, multiplayer game, Overwatch, and continues next semester with the games League of Legends and Hearthstone.
Higher Information Group last month announced that it had acquired Pennsylvania Telephone Products Co. The Harrisburg-based business-to-business company said that PTP would be folded into its IT division.
Lola Lawson was appointed last month to the Harrisburg school board, filling a seat vacated by Tyrell Spradley, who resigned after just four months. The board voted 5-3 to appoint Lawson, a school board veteran, during a contentious, crowded meeting at which many residents supported other candidates for the seat.
Changing Hands
Brookwood St., 2200: K. Reinoso to F. DeJesus, $62,500
Camp St., 633: Amtwo Investors LLC to J. Addison, $44,900
Chestnut St., 316: G. & M. Peck to D. Pedroza, $117,000
Derry St., 2436: M. & I. Collins to B. Wolfe, $75,000
Derry St., 2615: S. Mejia to S. Salleb & M. Aiz, $42,500
Green St., 801: Bricker Boys Partnership to Capitol River LLC, $264,900
Forster St., 217 & 222 Briggs St.: G. Rothman c/o RSR Realtors to M. Three Properties, $525,000
Green St., 1729: A. Toberman to P. Lee & S. Willard, $145,000
Green St., 1830: J. Becknauld to Berlin Group LLC, $76,000
Green St., 2345: J. Chirdon to J. Marsh, $83,700
Green St., 3236: D. Conner to C. Devaney, $71,500
Harris St., 212: R. Evanchak to G. Rhone, $138,000
Harris St., 235: M. Barrette to T. Kline, $80,900
Harris St., 429: S. Rao to McClellan Development Group LLC, $76,000
Herr St., 315: J. Montgomery to P. Shaughnessy, $124,500
Holly St., 1837: Skye Holdings LLC to E. Torres, $30,000
Hudson St., 1256: M. Shatto to Marsico Realty LLC, $105,000
Kelker St., 236: D. Zurick to E. Strobel & M. Bragers, $185,500
Kensington St., 2213: P. Flores to S. & A. Popoola, $63,500
Kensington St., 2266: D. Selvey to A. Tilghman, $66,240
Kittatinny St., 1215: A. & R. Apa to S&P Property Holdings LLC, $285,000
Maclay St., 318: Skye Holdings LLC to A. Nebbou & C. Myers, $30,000
Market St., 1920: G. Norman to F. Grooms, $99,000
Nagle St., 123: K. Snyder & C. Kaufman to L. & C. Jerome, $152,500
N. 2nd St., 1829: M. Nolt to E. & G. Stailey, $134,900
N. 2nd St., 1935: R. & A. Apa to G. & J. Geiges, $70,000
N. 2nd St., 2904: F. & B. Pinto to J. Hamley & M. Nolt, $315,000
N. 2nd St., 3007: A. Harris to E. Kotz & S. Wissler, $168,000
N. 3rd St., 1700, L57: J. Cody to PA Deals LLC, $63,500
N. 3rd St., 2201 & 2205: A. & R. Apa to S&P Property Holdings LLC, $275,000
N. 3rd St., 2333: R. Oberton Sr. to 2333 N. 3rd Street LLC, $115,000
N. 4th St., 2225: P. Yoder & E. Murphy-Yoder to 2225 4th LLC, $45,000
N. 5th St., 2403: Skye Holdings LLC to A. Nebbou & C. Myers, $34,900
N. 5th St., 2409: 2409 N. 5th St. LLC to Harrisburg Homes Investment LLC, $31,480
N. 5th St., 2605: 42 5th St. LLC to Harrisburg Homes Investment LLC, $37,690
N. 14th St., 1216: L. Dodd to S. Mejia, $30,000
N. 15th St., 1625: C. Cade to Ma Ambashakti LLC, $30,000
N. Front St., 1525, Unit 406: Z. Fogel to J. Davis, $98,900
N. Front St., 2837, Unit 201: R. & L. Barry to H. Witte, $128,750
Penn St., 1622: S. Simon to E. & J. Mallory, $102,000
Penn St., 2232: N. & J. Weaver to T. Cook, $53,000
Pennwood Rd., 3207: C. Gaither to M. Katzman, $125,000
Pine St., 224: Pennsylvania Retailers to PSREU LLC, $110,000
Race St., 604: S. Cairns to A. Heinzel, $165,000
Reel St., 2605: J. Clark to A. Winter, $42,599
Reily St., 255: E. Harman to R. Wodele, $142,500
S. 13th St., 333: Eastern Mennonite Mission to Herman International Ministries, $132,000
S. 14th St., 1400: M. Vargas to City of Harrisburg, $59,000
S. 14th St., 1405: M. Allsup to City of Harrisburg, $39,000
S. 17th St., 1111: Federal National Mortgage Assoc. to V. Ceballos, $40,000
S. 19th St., 1117: C. Runne to F. Payero, $93,000
S. 20th St., 25: P. Morton to C. Arnold, $55,000
S. 20th St., 631: F. & R. Rivera to E. & D. Cortes, $92,000
S. 20th St., 1226: W. & M. Branche to W. & J. Venable, $143,900
S. 22nd St., 713: A. Sahovic to EGG Gourmet Solutions LLC, $820,000
S. 25th St., 725: K. Brown to G. & L. Davis, $130,000
S. 25th St., 729: 729 25th Street LLC to Y. Suero & N. Richard, $183,000
S. Cameron St., 1327: E. & R. Kehr to J. Swigart, $44,500
S. Front St., 811: Bank of New York Mellon Trustee & NationStar Mortgage LLC to R. Shokes Jr., $52,000
State St., 1502: R. & A. Sharp to S. Kochis, $73,820
