By James Roxbury
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From our archives.
Published November 27, 2014.
Eric Darr, President of Harrisburg University made a 17 minute presentation to Dauphin county commissioners on Wednesday November 18th.
The presentation was part of four days of public meetings discussing the proposed 2015 Dauphin county budget.
Eric Darr.
Recruting International students.
From Harrisburg University web site.
International Students: Why Choose HU?
Gain the American experience and a great student-centered education in highly-sought after science, technology, engineering and mathematics fields.
An international student planning to study at the University with a student (F-1) visa must satisfy the appropriate admissions requirements and procedures, demonstrate proficiency in the English language, and provide an affidavit of financial support. Academic records should include courses studied, grades earned, diplomas, certificates, and results of comprehensive national examinations. A certified translation of previous education records is required if the records are in a language other than English.
Another loan default related to the $15,000,000 bond guarantee by Dauphin county.
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Published September 18, 2014.
Bonusgate Attorney Jeff Foreman is disbarred.
As released by The Disciplinary Board of the Supreme Court of Pennsylvania.
Harrisburg. By Order of the Supreme Court of Pennsylvania dated Sept. 17, 2014, Dauphin County attorney, Jeff Foreman (#72657), whose registered address was S. Front Street in Harrisburg, PA, has been disbarred from the practice of law in this Commonwealth retroactive to Nov. 23, 2009.
Archive video July 2008.
Attorney General Tom Corbett.
Jeff Foreman claimed to work more than 25 hours in a day.
From the Grand Jury presentment
"One former employee described how she dreaded Foreman's approach, envisioning him as the "grim reaper," moving from desk to desk and spreading sorrow by asking employees to give up portions of their lives, it said. "She described one incident when Foreman asked another employee to volunteer in October, and that employee then cried because she knew that she would have to miss trick-or-treat with her young son in order to comply with Foreman's "volunteer request."
Jeff Foreman testifies in the BIG trial. February 23, 2012.
Jeff Foreman former COS to Mike Veon testified Thursday during the Veon BIG trial, Foreman was on the stand for more than five hours with the majority of the time under cross from defense attorney Dan Raynak, Foreman admitted that his firm (Foreman & Foreman) received a $4K per month retainer from Veon's non profit Beaver Initiative for Growth (BIG) Foreman's firm was paid $156K over three years for what Foreman admitted to was a minimum 6-8 hours of work per month, Foreman went on to say that the firm was paid even though some months they preformed no legal work for BIG.
Jeff Foreman as solicitor for the Harrisburg Parking Authority, May 7, 2008.
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Published Financial Statements of the Harrisburg Parking Authority 2013.
On March 3, 2010, HPA commenced a civil action against the University in the Court of Common Pleas of Dauphin County, Pennsylvania. HPA sought specific performance of an agreement to purchase a parking garage from the University.
HPA also sought reformation of a related contract with the University to which a mistaken exhibit had been attached. HPA also sued the University for non payment of a contractual subsidy obligation in the amount of $778,919, and a rent obligation in the amount of $39,000, both of which obligations continued to accrue. The University countersued HPA for non pay meant of change orders in the amount of $723,026 and for failing to use its best efforts to lease unusedUniversity parking spaces.
As a result of the Agreement described in Note 14, HPA and the University entered into a settlement agreement, dated December 17, 2013. The agreement requires HPA to pay $3.6 million of the proceeds to the University for release of the trustee’s lien on the parking facility, and settlement of all claims asserted against one another.
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As published by EMMA - Electronic Municipal Market Access January 9, 2014.
Harrisburg University. Events of Default - Revenue Bonds, Series B 2007.
UMB
UPDATE TO BONDHOLDERS.
THE HARRISBURG AUTHORITY UNIVERSITY REVENUE BONDS (THE HARRISBURG UNIVERSITY OF SCIENCE AND TECHNOLOGY PROJECT) SERIES B OF 2007 (THE “BONDS”)
Please forward this Notice to beneficial holders.
UMB Bank, N.A. (the “Trustee”) is successor indenture trustee under the Trust Indenture (the “Indenture”), dated as of January 1, 2007, by and between The Harrisburg Authority (the “Authority”) and Commerce Bank, National Association, as trustee, pursuant to which the Authority issued its University Revenue Bonds, Series A of 2007 (The Harrisburg University of Science and Technology Project) and its University Revenue Bonds, Series B of 2007 (the Harrisburg University of Science and Technology Project) in the aggregate principal amount of $87,915.000 (together, the “Bonds”). Reference is made to the Indenture and to the Loan Agreement (the “Loan Agreement”), dated as of January 1, 2007, pursuant to which the Authority loaned the proceeds of the Bonds to The Harrisburg University of Science and Technology (the “University”). The Authority assigned all of its rights in, to, and under the Loan Agreement to the Trustee. Capitalized terms not defined herein have the meanings ascribed to them in the Indenture and the Loan Agreement.
Events of Default.
The Trustee previously notified Holders of the failure by the University to make the March 1, 2013 and September 1, 2013 Debt Service Payments. Following discussion between the Trustee and Holders, the Debt Service Reserve Fund was not utilized to make the March 1, 2013 or September 1, 2013 payments and those payments were not paid to Holders.
Additionally, pursuant to section 4.2 of the Loan Agreement, the University was required to make a Loan Payment to the Trustee in the amount of $1,806,750 at least seventy-five (75) Business Days prior to March 1, 2014. The University failed to make that payment. Such failure constitutes an Event of Default under section 7.1(a) of the Loan Agreement and section 6.1(e) of the Indenture. As a result of the failure by the University to make the required Loan Payment, the Trustee requested payment from the County under the Guaranty and Credit Support Agreement in the amount of $1,500,000, which is the maximum amount that may be requested during any one calendar year. Such funds are to be received from the County not later than three days prior to the March 1, 2014 Debt Service Payment Date.
Parking Garage Transaction.
As security for the performance of the obligations of the University under the Loan Agreement, the University entered into an Open-End Mortgage and Security Agreement (as amended, modified, or supplemented from time to time, the “Mortgage”), pursuant to which the University granted to the Trustee a security interest in and mortgage on the Mortgaged Property, including the Land, Building, Property, and Parking Unit (all as defined in the Mortgage).
The University entered into an Agreement of Sale and Purchase, dated as of January  , 2007, with the Harrisburg Parking Authority (“HPA”) wherein, inter alia, the University represented that the University intended to submit the Property to a condominium form of ownership and agreed to sell to HPA one condominium unit (the “Parking Unit”) within the Mortgaged Property, to consist of seven floors of parking facilities to include 392 parking spaces, for a purchase price of $14,000,600. Such purchase price (except for a payment related to certain change orders on construction of the building) was paid and thereafter used, along with proceeds of the Bonds, to construct the Building.
In mid-2013, HPA demanded that the University deliver a deed conveying the Parking Unit free and clear of all mortgages and liens, including the Trustee’s Mortgage. The Trustee advised HPA and the University that, under the terms of the Mortgage, the Trustee had no obligation to release its lien so long as any Event of Default existed. As a consequence of existing Events of Default, the Trustee refused to release its lien on the Parking Unit.
Following discussion with the Holders, the Trustee entered into negotiations with HPA regarding payment to be made by HPA to the Trustee in return for the Trustee releasing its Lien upon the Parking Unit. With the agreement of a majority of the Holders, the Trustee agreed to release its lien on the Parking Unit upon payment to the Trustee of $3,600,000. On December 23, 2013 the Trustee received payment from HPA in the amount of $3,600,000, whereupon the Trustee released its lien on the Parking Unit. The Trustee retains its lien on all other property subject to the Mortgage.
Distribution.
As noted below, an interest payment in the amount of $3,613,500 will be made to Holders. The Trustee has assigned January 19, 2014 as the record date (the “Special Record Date”) and January 29, 2014 as the payment date for this Distribution to Holders. Holders of the Bonds as of the Special Record Date will receive the following distribution of the proceeds:
Forbearance Agreement.
After discussion with Holders, the Trustee entered in negotiations with the University on a forbearance agreement. With the consent of a majority of the Holders, the Trustee entered into such an agreement on December 6, 2013. The agreement requires, among other things, that the University pay the Trustee the amount of $71,000 per month. The Trustee received the first payment of $71,000 on December 30, 2013.
As stated above, the University remains in default of its obligations. The Trustee and Holders of a majority in aggregate principal amount of the Bonds are in continuing discussions with the University on matters relating to the Bonds.
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December 19, 2012.
Dauphin County To Make Another Bond Payment for Harrisburg University.
For the second year in a row, Dauphin County is planning on making a $1.5 million bond debt payment for the Harrisburg University.
As acknowledged by Dauphin County's Chief Clerk Laura Evans, the County recently received notification from the Harrisburg University's bond trustee informing the County that as guarantor of the University's debt, it would have to step up and make the payment. This is based on the Harrisburg University declaring it does not have the funds to make the upcoming March 2013 payment, and as guarantor, the responsibility falls to Dauphin County.
Previously, Dauphin County Gaming funds were used to make the first $1.5 million payment in the spring of 2012.
by Tara Leo Auchey
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June 16, 2012.
Harrisburg University - RCAP Money and Student Housing.
A look into how Harrisburg University has spent some of the $49 million in RCAP grants provided by the Commonwealth of Pennsylvania. In this video we take a look at the Universities student housing contract.
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Five part series on the financial problems of Harrisburg University.
Part 1 May 25, 2012.
On April 9, 2010, Dauphin County signed a $1 million agreement with Harrisburg University for a loan the University needed to for "funds for necessary and appropriate activities related to the operation of Harrisburg University." Per the agreement, the loan was to be paid in full---principle and 1% annual fixed interest---on December 31, 2010. Signed by Dauphin County Commissioners Jeff Haste, Nick DiFrancesco, and George Hartwick III as well as Harrisburg University President Melvyn Schiavelli, the loan was defined as a "bridge financing loan."
On October 21, 2010, Schiavelli requested a 6-month payment extension in order to "provide a much needed safety net" to the University, thereby making the new due date to be June 30, 2011. However, on June 22, 2011, Dauphin County and the University entered into a Supplemental Agreement not only extending the due date for a second 6-month period (making a new due date of December 31, 2011), but also issuing a second loan to the University for an additional $1.2 million for "certain operating expenses." Collateral for this loan was cited as "tuition paid by Harrisburg University students."
Commissioners Jeff Haste and Mike Pries signed this Supplemental Agreement with George Hartwick's signature noticeably missing.
Again, on behalf of the University, President Melvyn Shiavelli signed. Dauphin County requested that the University include the principle amount of $2.2 million plus the 1% accrued interest be included in the 2011 Budget. To date, no payment on these loans as yet been made.
---Tara Leo Auchey
Photo/Natalie Cake
Part 2 May 27, 2012.
In 2007, Dauphin County gave a limited guarantee on Harrisburg University Revenue Bonds, Series B. According to the guarantee, the County agreed to back $1.5 million a year for 10 years beginning in 2010 on the $60,225,000 bonds. While the County's guarantee had not been triggered in 2010 or 2011, on January 6, 2012, Dauphin County Commissioner Chairman Jeff Haste and Harrisburg University's Vice President of Finance/CFO Duane Maun received a letter from TD Wealth's Vice President Joan Wallett's informing the parties that per the Guaranty Agreement and the Credit Support Agreement, TD Wealth was giving the Guarantor Dauphin County the required 55 days notice of the need to transfer its obligation of $1.5 million into the debt service account since Harrisburg University was deficient. Unwilling to adjust its conditions, TD Wealth stated it expected the funds to be deposited no later than 3 days before the March 1st due date. Therefore, on February 27, 2012, Dauphin County Budget Director Michael Yohe sent a memo to the Dauphin County Controller and Treasurer directing them to wire $1.5 million to TD Wealth "as a result of the default of the Harrisburg University on these payments." At that point in time, Dauphin County had already loaned the University $2.2 million since 2010 for "operating expenses," none of which had been paid back despite multiple deadlines to do so.
On February 29, 2012---two days after making the $1.5 million bond payment---Dauphin County and Harrisburg University entered into a Second Additional Loan agreement which included the previous $2.2 million Dauphin County loans as well as a new Promissory Note for $1.5 million as reimbursement for the County's bond payment. The total $3.7 million loaned to the University all came from Dauphin County's Unrestricted Gaming Funds and is due in full (principle and 1/2% annual accrued interest) by December 31, 2019 in the hopes that Harrisburg University is on more stable financial footing by then.
The agreement does not require any payments on the total loan amount.---Tara Leo Auchey
Photo: Natalie Cake
Part 3 May 31, 2012.
COLLATERAL FOR DAUPHIN COUNTY'S $3.7 MILLION IN LOANS TO HARRISBURG UNIVERSITY--STUDENT TUITION.
In a January 2012 email exchange between Greenlee Partners' Clinton Cullison (who seems to be acting as liaison between the County) and the University, the University cites a projected tuition of $6,515,113 million for fiscal year 2011-2012.
However, it is unclear precisely how many students attend the University, which in return makes future projections uncertain. On the part of Dauphin County, the original April 2010 "bridge loan" of 2010 must have been based on good faith that the number of students would validate the lending and that increased enrollment would help guarantee a repayment.
UPDATE (6/4/12): As a result of inquiry (see Part 4 of this series), Dauphin County Commissioner obtained Harrisburg University's enrollment breakdown.
It is as follows: Total number of full-time Degree seeking students=336 undergraduate; 113 graduate.
Total number of Non-Degree seeking students=573.
These numbers reflect enrollment for the period July 1, 2011 through June 1, 2012.
---Tara Leo Auchey
Photos/Natalie Cake
Part 4 May 31, 2012.
DAUPHIN COUNTY COMMISSIONERS DISPLAY FRUSTRATION ABOUT THE HARRISBURG UNIVERSITY SITUATION.
In response to inquiry about obtaining information on student enrollment at Harrisburg University, Dauphin County Commissioners Jeff Haste and George Hartwick express their indignation at the defaulted Harrisburg University's loans the County gave the flailing institute. Hartwick states, "As one Commissioner, I'm not going to give future commitments of revenue to HU until they're able to meet the obligations and the promises that have been set forth thus far." Since 2010, it is Commissioner Haste who is highlighted as being the decision maker of how to proceed in the agreements to loan Harrisburg University a total of $3.7 million in Unrestricted Gaming Funds (as evidenced by a series of correspondence between the University and the County). In this video, Commissioner Haste defensively states, the "loans" could have been "grants," which would have meant the University would not have to pay back the money it asked for in order to confront its fiscal crisis.---Tara Leo Auchey
Photos/Natalie Cake
Part 5 May 31, 2015.
HOW DOES HARRISBURG UNIVERSITY CALCULATE ITS NUMBER OF STUDENTS.
In the midst of inquiry about enrollment at the University touts as its number of students, Dauphin County Commissioner Mike Pries asks for a point of clarification---is there insinuation the University is not presenting accurate information?---Tara Leo Auchey
Photos/Natalie Cake
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Published February 24, 2012.
On April 9th 2010 Harrisburg University (HU) entered into a loan agreement with Dauphin County Commissioners for the amount of $1 million, the money came from Unrestricted Casino Funds provided to the county by Hollywood Casino, the loan was to have been retired on December 31, 2010.
On October 21, 2010 HU asked for and was granted a six month extension until June 30,2011 to repay the loan, HU requested the ask in order to "provide a much needed safety net" HU would once again ask the County for second extension until December 31,2011 and an additional loan of $1.2 million.
We questioned Dauphin County Commissioners during Wednesday's commissioner meeting asking if the $2.2 million loan was paid off during 2011 or if a balance still remains, Friday afternoon County spokesperson Amy Richards forwarded this information from Solicitor Curcillo:
The Promissory Note of June 22, 2011, executed on August 29, 2011, was due and payable by Harrisburg University of Science and Technology on December 31, 2011.
"At this time, the County has not invoked its remedies under the terms of the note because County and University officials have met to discuss amending the terms. An agreement is expected to be presented soon to the Commissioners for their consideration and approval."
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Published August 25, 2011.
Our series on how Dauphin County uses it's local share gaming funds.
On April 9th 2010 Dauphin County entered into an agreement to loan the sum of $1,000,000 at an annual fixed rate of 1% (based on a 365 day year) to Harrisburg University as a "bridge financing loan" Harrisburg University requested the loan - "for necessary or appropriate activities related to the operation of Harrisburg University".
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Published February 25, 2009.
Harrisburg University Dedication.
Rick Reynolds of Reynolds Construction addresses an audience estimated at 700 people.
This project was different than most.
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Archive video 2008.
City councilman Dan Miller questions why the city and the parking authority would allow Harrisburg University to be granted a $600,000 per year subsidy for 30 or 40 years.
Once we questioned the university of the subsidy, they withdrew the plan.
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Harrisburg Parking Authority meeting May 7, 2008.
Attorney Andrew Giorgione gives a brief presentation of the proposed 75 year lease of the Harrisburg parking system, seated to his left is authority solicitor Jeff Foreman who would be indicted on July 10th in what is know as the "Bonusgate" investigation.
Notice how members of the authority were not even provided copies of the 175 page $215 million 75 year contract until after Giorgione began his presentation.