2016 Budget Passed

Harrisburg City Council last month passed the city’s 2016 spending plan, a $60.7 million budget crafted by the city administration

Council voted 5-2 in favor of the budget, though council President Wanda Williams said the spending plan would be reopened and reconsidered in January, once three new council members take their seats.

Two public hearings will precede a vote on a revised budget, she said.

As passed last month, the budget adds 36 new positions, half in a newly created Neighborhood Services division, which would be funded out of city trash bills. Besides sanitation, the new division absorbs many functions previously funded by taxes, including some road and parks maintenance.

The administration also has proposed tripling the local services tax (LST) to $3 per week per worker. The Commonwealth Court must first approve the hike, which then must be sanctioned by council.

The LST is a tax on people who have jobs in the city and earn more than an annual threshold income, which is proposed to be about $24,000. While it does affect some city residents, most of the burden falls on commuters, a point made repeatedly last month by Mayor Eric Papenfuse.

Council members Brad Koplinski and Sandra Reid were the lone votes against the spending plan. Both said they believed the budget contained excess spending and objected to any increase in the LST.

It was the final meeting for Koplinski and Reid, as well as for three-term Councilwoman Susan Brown-Wilson. Reid and Brown-Wilson did not seek re-election last year, while Koplinski lost his seat in the Democratic primary.

This month, three new council members will be sworn into office: Cornelius Johnson, Westburn Majors and Destini Hodges.

TRAN OK’d

For a third straight year, Harrisburg is issuing a tax and revenue anticipation note, a form of short-term borrowing meant to cover a potential budget shortfall.

City Council voted unanimously last month to enter into an agreement with M&T Bank for the $4.5 million TRAN, which carries an interest rate of 2.53 percent and includes a $5,000 nonrefundable fee. Any drawdown on the loan must be repaid by June 30.

Municipal finances are typically tight for the first three months of the year, until the city begins to receive property tax revenue in March. Harrisburg entered into similar loan agreements in 2014 and 2015, but never had to tap them for funds.

City officials, however, said they were more concerned this year due to the state budget deadlock. At press time, the legislature still had not passed a budget, meaning that the state’s $5 million annual contribution to the city for emergency services had not been agreed to or paid.

Streetlight Project Launched

Harrisburg last month officially launched its citywide streetlight project, which will replace all 6,100 existing streetlights with new LED bulbs.

The $3.7 million project, the largest of its kind in Pennsylvania, should be completed by April.

Officials said the project would cut the city’s electric bill by two-thirds, saving more than $500,000 per year, and that the project would pay for itself in about six years. The savings are guaranteed under a contract with The Efficiency Network, a Pittsburgh-based company managing the upgrade.

The bulk of the project cost is being paid with a $3.2 million loan from M&T Bank. The city is seeking a grant from Impact Harrisburg, a nascent nonprofit promoting infrastructure improvement and economic development, which would allow it to pay off the bank loan early if awarded.

Part of the cost is also being paid by a $500,000 grant from the Pennsylvania Energy Development Authority and a $30,000 donation from Lighten Up Harrisburg, an organization that raises money to improve city lighting through an annual 5K run.

State Rebukes Fraud Charge

The state agency overseeing Harrisburg’s financial recovery has sharply critiqued public accusations of fraud by Mayor Eric Papenfuse in a private letter, calling them “unsubstantiated” and “categorically untrue.”

Dennis M. Davin, secretary of the Department of Community and Economic Development, wrote that his agency was “distressed” by Papenfuse’s claims that consultants had intentionally misrepresented how much money the city would get from its parking system.

“The team dedicated to supporting the City of Harrisburg’s recovery efforts is committed to providing the highest level of professional assistance,” Davin wrote in the letter, which TheBurg obtained through an open records request. “Given this fact, we take any allegations of fraud very seriously.”

Davin signed the letter in his role as chairman of the Pennsylvania Economic Development Financing Authority, a funding arm of his department that issued $286 million in bonds to finance the 2013 lease of the city’s parking system.

Papenfuse made his remarks at the authority’s Oct. 21 board meeting, when he addressed shortfalls in the so-called “waterfall” payments that provide critical money to the city out of overall parking revenues. The mayor suggested that professionals working on the lease had knowingly misrepresented the amount of money the system would produce.

“Frankly, I believe that these numbers of waterfall payments were inflated simply to make the numbers work for the Strong Plan, which means that essentially a fraud was perpetrated on you and us and the residents of the city,” Papenfuse said.

Papenfuse told the board that annual parking revenues to the city were around $1 million short. He said that as a result the city would have to raise taxes, and he urged the board to “hold somebody accountable” for the incorrect projections.

New School Board President

A divided Harrisburg school board last month elected Danielle Robinson as its new president.

Robinson was elected by a 4-3 vote, eking past James Thompson, who will remain vice president.

The board needed to seat a new president after the sudden resignation of former President Jennifer Smallwood, who was just re-elected in November. At press time, the board had not yet selected a replacement for Smallwood.

HDID Reauthorized

The Harrisburg Downtown Improvement District has been reauthorized for another two years.

The Harrisburg City Council voted to reauthorize the nonprofit through Dec. 31, 2017, countering the wishes of HDID officials, who had sought a five-year extension.

Since forming in 2000, the HDID has had three, five-year renewals. However, the city administration supported just a two-year extension this time so that it could more quickly assess HDID’s progress in making downtown cleaner, more attractive and more supportive of businesses.

Most of HDID’s $780,000 annual budget derives from a tax on commercial properties within the district, which covers a 25-block area of downtown Harrisburg from State Street to just south of Harrisburg Hospital.

In a public hearing in October, HDID officials staunchly defended their record of helping to keep downtown attractive and safe, even though some business owners said it should expand its mission to include areas like parking and promotion.

“Two years, five years, 10 years—it doesn’t matter,” said HDID Executive Director Todd VanderWoude following the council vote. “We’ll just keep on rolling.”

Jackson Hotel Sells

The historic Jackson Hotel has new ownership, as former City Council candidate Jeremiah Chamberlin last month bought the dilapidated property with plans to restore it.

Chamberlin purchased the three-story building on the 1000-block of N. 6^th Street in Harrisburg for $4,000 from Kerry and Lessa Helm, who had bought it earlier in the year from Dave and Diana Kegris.

For many years, German Jackson operated a hotel from the property, catering primarily to African-American visitors who were shut out of the city’s whites-only establishments.

Jackson willed the property to Kegris, who opened the Jackson House restaurant next door. Kegris, though, could not find funds to restore the large, Gothic-style main building, which became increasingly run down.

So Noted

GK Visual soon will move into a new home in the Old Fox Ridge neighborhood of Midtown Harrisburg, allowing the visual production company to grow and expand capacity. Owner Nate Kresge said his company bought the 7,000-square-foot building at 933 Rose St. last month. The building triples the company’s space from its current location in Uptown Harrisburg.

Harristown Enterprises has purchased the building housing one of Harrisburg’s oldest businesses, Walker’s Art & Framing. Under its acquisition wing, Dewberry LLC, Harristown bought the building for $350,000 from the Walker family, who will continue to run the 58-year-old business at 25 S. 3^rd St., said Harristown President and CEO Brad Jones. Harristown needed the building to complete its acquisition of a five-townhouse row, which will now be renovated with commercial space on the ground floors and apartments above, Jones said. Harristown also is renovating a six-story brick building across the street, converting the long-time office space to 15 high-end, one-bedroom apartments.

Amma Jo LLC opened a showroom location last month in Strawberry Square at 320 Market St. Run by Amma Johnson, Ammo Jo focuses on designer handbags and accessories. It serves as a fulfillment center and also features special in-store retail events. For more information, visit www.shopammajo.com.

Keystone K9, a “one-stop pet service,” debuted last month at 931 N. 7^th St. in Harrisburg. In addition to a doggie daycare, Keystone K9 offers training, grooming and boarding. More information can be found at www.keystone-k9.com.

Phyllo Greek Cuisine opened last month in the stone building of the Broad Street Market. Run by mother Anna Ntzanis and her daughter, Katerina, the stand offers a menu of Greek food staples, such as pastitsio, moussaka and spanakopita. The Ntzanis family has long run Harrisburg’s Midtown Tavern.

Capital Area Transit last month began new bus service between Harrisburg/Steelton and the Allen Road warehouses in Carlisle. The new Route C allows workers to connect to jobs in the growing warehouse complex, which houses several major employers.

Changing Hands

Calder St., 122 & 1332 N. 2^nd St.: R. & C. Horst to Bitner Rentals LLC, $600,000

Conoy St., 117: N. Woods to Mannjeim LLC, $40,000

Edward St., 240: E. Pappas to C. Messinger, $205,000

Fulton St., 1400: PA Deals LLC to Heller Investments LLC, $110,000

Green St., 1928: M. & S. Young to J. Hardie & T. Craven, $207,000

Green St., 1935: N. Williams to R. Holder, $212,000

Hale Ave., 375: M. & V. Cecka to RDR Property Management LLC, $50,000

Kensington St., 2318: M. & V. Cecka to RDR Property Management LLC, $45,000

Lewis St., 245: Secretary of Housing & Urban Development & Michaelson, Connor & Boul to M. Sheehan, $47,011

Market St., 1435: K. Quenzer to J. & M. Fitzgibbon, $33,000

North St., 239: K. Sheetz to D. McClellan, $225,000

N. 2^nd St., 935: C. Group to Zecharya International Inc., $50,000

N. 2^nd St., 2135: PA Deals LLC to Heller Investments LLC, $96,400

N. 2^nd St., 2743: US Bank National Association to A. McGinley, $60,000

N. 2^nd St., 3107: S. Howell & F. Nedermeyer to P. Bernd, $114,900

N. 3^rd St., 3221: PA Deals LLC to G. & J. Modi, $145,000

N. 4^th St., 1629: GWD Capitol Heights LP to E. Harrington, $97,000

N. 5^th St., 1628, L159: M. Saavedra to Braemar Properties LLC, $111,387

N. 5^th St., 2552: M. Haubert to D. Mallek & W. Sarris, $99,900

N. 15^th St., 183 & 185: N. Gorzynski to S. & D. Fenton & Exit Realty Capital Area Property Management, $56,935

N. Front St., 1525, Unit 313: K. Schiebel to M. Hadginske, M. Pasick & A. Steel, $89,000

N. Summit St., 28: JSD Properties LLC to L. Pitts, $32,318

Rudy Rd., 2323: O. Saleh to S. Oberlin & R. Delumen, $145,000

Rumson Dr., 310: R. & P. Giordano to E. Allen, $79,000

S. 2^nd St., 304: K. Harrison to R. & C. Trimnell, $49,000

S. 3^rd St., 25: D. & J. Walker to Dewberry LLC, $350,000

S. 17^th St., 1038: C. & S. Vazquez to C. Nguyen, $66,000

S. 19^th St., 21; 2042 N. 4^th St.; 228 Boas St.; & 1901 Forster St.: R. Shokes & Shokes Enterprises LLC to JDP 2014 LLC, $327,000

S. 25^th St., 602: M. & V. Cecka to RDR Property Management LLC, $50,000

S. 27^th St., 737: N. Shrawder to R. Reyes, $80,000

S. Front St., 801: Wells Fargo Bank NA to M. Boyer, $66,000

Susquehanna St., 1606: F. Cadmus to S. Christ, $95,000

Harrisburg property sales for November 2015, greater than $30,000. Source: Dauphin County. Data is assumed to be accurate.