Pa Senate Local Government Committee Hearing on the Harrisburg Incinerator.

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By James Roxbury
Sunday March 30, 2014 at 11:52 am

"That is the genesis of all of this."--Stephen Reed.

On October 4, 2012, the PA Senate Local Government Committee held its first public hearing examining the massive debt of the Harrisburg Incinerator. Former City of Harrisburg Mayor testified during the proceedings. Below his testimony in front of the committee as well as video of the former Mayor talking to the press afterwards. A second public hearing was held on November 13, 2012 the videos posted below are from both hearing dates.

Committee Chairman John Eichelberger. Opening statement.

Minority Chair John Blake. Opening statement.

David Unkovic, former receiver for the city of Harrisburg. " The general assembly should ask the state Attorney General and the United States Attorney to conduct a criminal investigation of the Harrisburg incinerator financing."

Senate Testimony: Former Mayor of Harrisburg Steve Reed

(Part 1) Mayor Stephen Reed reads a prepared statement

(Part 2) Reed explains the CIT loan, the underestimated retrofit costs, and privatization of the Incinerator.

(Part 3) Special Projects Fund

Media Questions:

(Part 1) Reed and the Press

(Part 2) Reed and the Press

______________________________

Dauphin County Commissioner Jeff Haste.

Opening statement.

On the County receiving $1.9 in Guarantee Fees. PFM claimed it was not uncommon, the city had done it before.

A question of due diligence. The media at that time actually gave us kudos.

An alternative security package rather than a performance bond. My recollection on this were a number of folks, like Mr Giorgione on behalf of the city spoke about that. I believe there was a document from Rhoads and Sinon.

When did you learn the 2003 financing did not have a performance bond. Prior to the 2003 financing.

Were Mr. Dan Lispi and Mr. Andrew Giogione paid by the county. They were paid by the county. __________________________________

Thomas Mealey, former executive director of the Harrisburg Authority, Mealy resigned from from the position in fall of 2006.

Questions on the Special Projects Fund. Requests would come in from the mayor to fund certain projects, the board would consider those through board action would approve those expenditures, and the authority would produce the check to pay for the items.

How influential did you think the mayor was with the authority. I think he had a great deal of influence.

Why did you leave. I did not feel that the authority was going in the direction that was suitable to my beliefs. For the benefit of my health and well being, I chose to leave.

How did Barlow come to the authority, why no performance bond. Andrew Giorgione and Dan Lispi introduced Barlow. The lack of a performance bond was a point of contention among the professionals.

The CIT trial, guarantee fees and Barlow. It was not uncommon for the RRF bonds to have guarantee fees.

Questions about a potential conflict of interest with authority members.

J. Bruce Walter of Rhoads & Sinon sent you a June 26th 2003 letter about the conflict of interest, did you share this with member Fred Clark. Yes.

___________________________

Former Chairman of The Harrisburg Authority Fred Clark

Fred Clark "I'm a public servant.

Fred Clark offers (twice) to take a lie detector test related to the potential conflict of interest while serving duel roles as an authority board member while working for Reynolds construction.

The 2003 city council fund. I never spoke with Mr. Richard House (Hbg council president)

At any given time, on any given issue, you would have 5 or 6 different professionals presenting the rational as to why the authority should accept the recommendation of the executive director through the chairman of the board. :

At no time whole or in part was it ever shared by anyone directly or indirectly that what was being presented did not have a performance bond.:

Barlow's bid was 40 million dollars less

The CIT Loan - It would be legal, ethical, it would have the approval to vote on this without city councils approval. :

______________________________________

Former attorney to the Harrisburg Authority, Andrew Giorgione, Esquire of the law firm Buchanan Ingersoll & Rooney.

Part I: "The scope of my testimony."

Part II: The CIT deal

Part III: Sufficient forms of security

Part IV: "All of that structure, everything that was done, had nothing to do with the failure of this plan."

Part V: Very much comfortable with being in compliance with Pennsylvania law.

Part VI: "We don't know where all the money went."

Part VII: "It seemed reasonable at the time."

______________________________________

Bill Cluck, board member of The Harrisburg Authority.

Cluck testified as a residence of Harrisburg and not a represented of The Harrisburg Authority or it's three member board.

A summary of the history of The Harrisburg Authority.

Nobody did a close analysis or adequate due diligence of Barlow, nobody looked at Barlow's history and financials.

Tom Mealy was the long time executive director of the authority, but he was an employee of the city of Harrisburg, so he was a part time executive director.

The Barlow proforma is a joke. I've been calling for a forensic audit forever, the first time I called for was 2005 before city council public works committee.

___________________________

"There's no single human being alive that knows more about the project than I do."--Dan Lispi

On October 4, 2012, the PA Senate Local Government Committee held its first public hearing examining the massive debt of the Harrisburg Incinerator. Former consultant to the Harrisburg Authority, Dan Lispi, testified during the proceedings.

Testimony:

(Part 1) Dan Lispi Testimony

(Part 2) Dan Lispi Testimony

__________________________

James Ellison, former chairman of The Harrisburg Authority, former solicitor for the Harrisburg School District.

An operation that was in disarray, the existing plan was 50 million dollars.

A conflict of interest.

James Ellison interview before Hbg city council April 16, 2007. I have a fiduciary obligation to the Authority.

Mr. Papenfuse was against the plan.

The 30 million dollar 2007 bond deal. At the end of the day, no one was happy.

_____________________________

November 13, 2012 PA Senate Local Government Committee hearing--Bruce Barnes of Milt Lopus Associates, former financial advisor to the Harrisburg Authority, testifies that he believes Dauphin County Commissioners are "heros" of the Harrisburg Incinerator debt crisis.

Finance Director for the City of Harrisburg 1980-1985.

Most of the decisions and recommendations were made by the mayor, and most of the recommendations were adopted by the board.

On the use of SWAP's related to the 2003 incinerator retrofit. "Some of the SWAP's were done, short term gain for long term pain."

Bruce Barnes can't recall how much he or his firm made from Authority SWAP's.

On the Forensic Audit preformed for the Harrisburg Authority. "It is in fact lacking."

SWAP's for the School District, SWAP's for The Harrisburg Authority, SWAP's for the Parking Authority.

My involvement is financing the project. The project financing was a very good financing. Six SWAP's in two years is unusual.

By 2007 the SWAP market had become flooded.

The self liquidating debt certificate for the city was poorly done.

The county (Dauphin County) has been a hero here.

________________________________________

James Losty of Royal Bank of Canada Capital Markets, underwriter for the 2003 Incinerator retrofit bonds, testified during the proceedings.

Videos:

Part I: The egregious errors of the Harrisburg Incinerator Forensic Audit Report

Part II: "Clearly the original financing of the 2003 retrofit project was not a contributor to the problems that exist today."

Part III: No conflict of interest

Part IV: "It actually coincides perfectly."

Part V: "The strength is the guarantors."

Part VI: "I'm not someone to shy from giving my opinion."

Part VII: "Very plain vanilla SWAPs."

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Attorney Carol Cocheres of the law firm Eckert Seamans testified during the proceedings. Cocheres was bond counsel to the underwriter RBC Capital for the 2003 Incinerator financing and bond counsel to the Harrisburg Authority for the 2007 financing.

Videos:

Part I: "We did not make any public policy decisions."

Part II: Self-liquidating debt

Part III: "All the public officials knew what the situation was."

Part IV: "It was understood that there was going to be a fix here."

Part V: "We presented it to DCED that there's been one continuous project really going back to 1993."

Part VI: "That's what caused this whole problem to blow up."

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Prominent author for the Harrisburg Incinerator Forensic Audit Report, Steven Goldfield, Esquire of Public Resources Advisory Group, testified during the proceedings.

Testimony:

Part 1: "An expert in municipal finance"

Part 2: "Various degrees of restructuring"

Part 3: "A legal way to create working capital"

Part 4: "No public official, I would bet, read any of it"

Part 5: Guarantee fees

Part 6: "You can't legislate good financial taste"

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David Unkovic, former receiver of the city of Harrisburg.

"Proposals for the General Assembly's consideration"

"They're incompatible with the way public officials and elected officials operate"

"The threat of bankruptcy is crucial to the negotiations that have to a happen to resolve the debt problem."