RockTheCapital.org

Folks:

In August, 2009, the Central Dauphin School District published a Transportation Alert and reported outsourcing transportation would save taxpayer $775,000 annually. The District promised, “Detailed information regarding Durham Transportation Services will be coming in our district-wide community newsletter, entitled, ‘Working Together’ this fall.”

There was even a headline entitled, “What does this mean to you as a taxpayer?” The District failed to deliver the newsletter, but it’s time to answer the questions.

Legal costs. Rhoads & Sinon billed for 27.82 hours for outsourcing transportation in May, 2009, billed for 99.45 hours for outsourcing transportation in June, 2009, and billed for 205.73 hours for outsourcing transportation in July, 2009 for a subtotal of 330 hours or $59,400.

Rhoads & Sinon’s bill for outsourcing transportation from August, 2009 to January, 2010 was $145,786.89.

The dedicated legal cost to taxpayers to illegally outsource transportation from May, 2009 through January, 2010 was $205,186.89.

On June 2, 2010, the CDBDA filed a RTK request for Rhoads & Sinon legal fees from January to May, 2010. (Enclosure) After a preliminary review of the invoices, it appears the law firm tacked on an additional $74,735.91 in legal fees during this period.

Legal fees to break a midterm contract from May, 2009 to May, 2010 cost Central Dauphin taxpayers: $279,922.80.

Lease back fees: The District sold off its fleet under the cover of secrecy on October 21, 2009. The taxpayers fee for leasing its own vehicles back from Durham is $79,131.00 per month through June, 2010 or $395,655.

Total cost to taxpayers to outsource transportation from May, 2009 through June, 2010: - $675,577.80.*

vs.

District's projected taxpayer savings: + $775,000.

* Costs do not include billing invoices from Post & Schell.

Sincerely,

Eric Epstein, Business Manager Central Dauphin Bus Drivers Association

R & S final bill (PDF)

Fromt the Patriot News:

The saga of the Harrisburg Authority's long, winding and bankrupting road to transparency has taken another hit, prompting Harrisburg environmental attorney Bill Cluck to counter Mayor Linda Thompson's decision to nominate three new members instead of reinstalling the previous board.

On Monday, Thompson took advantage of a state Supreme Court decision to vacate the existing board and nominated the former chairman, J. Marc Kurowski, to stay on the board.

Three names submitted are new, including: Harry Witte, a professor at Widener University School of Law; Barton Fields, a former state official, city school board member and longtime Harrisburg area civil rights leader; and Cathy Hall, a 2008 council appointee to the authority who served through 2009.

Read more

From the Patriot News:

Wall Street gave Harrisburg a new title this week: one of America's seven junkiest cities.

A debt load of $288 million for a monstrously failed public project will do that to a small city, even if it's the capital of Pennsylvania; even when major players involved in the incinerator fiasco knew the project would make or break the city.

Effectively bankrupt, devoid of leadership or a plan and with a whopping $68 million owed this year, the city is being prodded to move forward by the Wall Street bondholders who think Harrisburg must play by the rules.

Read more

From the Patriot News:

When Dauphin County Commissioner Jeff Haste said during his annual State of the County address that the Harrisburg Authority had an additional $8 million available in its budget, then-authority Chairman James Ellison publicly scoffed, challenging the commissioner to show him where.

But a few weeks earlier, county officials already had.

In a letter dated Feb. 12, county legal firm Mette, Evans and Woodside outlined $8 million in savings in the authority’s 2010 budget and contended the group’s missed payments on incinerator debt over the previous year were “directly related to overstated and excessive [operating and other] expenses.”

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From the Patriot News:

The Harrisburg School District is in the red for $17 million this year, state Rep. Ron Buxton said Wednesday.

"When I heard that number, my immediate thought is how will the district make payroll for the rest of the year?'' said Buxton, the legislator whose district includes Harrisburg.

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From the Patriot News:

“There needs to be a forensic accounting of what happened,” said Harrisburg attorney Bill Cluck. “The Security and Exchange Commission should have been all over this. (An investigator) needs to come in and talk to everybody. Look at every document. Who said what? And once all that is gathered, we can find out the answer. But so far, that has never happened.”

The question has taken on new urgency. Harrisburg and the authority this year must make $68 million in incinerator debt payments — a figure that exceeds the city’s annual budget.

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From the Patriot News:

Mayor Thompson, we need to hear from you.

With $288 million in incinerator debt, the Harrisburg Authority apparently has enough money to make a $2 million payment due March 1. But another $4.6 million is due April 1, $1.5 million in May, $2.2 million in August — nearly $68 million by year’s end. If the city defaults, a ruinous lawsuit is a grave possibility.

Mayor Thompson, on Wednesday this newspaper happened to track down the fact that you were meeting with Gov. Ed Rendell about the crisis. Although the meeting was not public, Gov. Rendell welcomed our reporters and spoke freely about Harrisburg’s situation. You said little and then cut off questioning to leave.

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From the Patriot News:

For months, Harrisburg’s financial experts have warned that the city is headed for a financial meltdown.

That could happen as soon as March 1, when a $2 million debt payment for the Harrisburg Authority’s incinerator comes due.

Dauphin County won’t be there to back up the city this time. Or the next month, either. While the county guaranteed part of the $288 million owed by the city on the incinerator, the nearly $9 million in payments owed by May were guaranteed solely by the city.

Read More

From the Patriot News:

How bad is Harrisburg’s financial crisis? Consider this: The city’s financial rating has dropped twice since October, and currently sits at junk bond status, but that’s not the worst part. The city may not be able to meet payroll in two weeks and will very likely default on just over $2 million in debt payments due March 1. Even that’s not the worst part.

This year, the city owes an additional $66.7 million in debt payments — more than the entire annual city budget. Much of the problem stems from the Harrisburg Authority’s $288 million in incinerator debt, which Harrisburg has guaranteed. The crisis has already drawn national attention from CNN, Bloomberg News and The Wall Street Journal.

Mayor Linda Thompson’s original $65 million budget proposal called for raising property taxes by 20 percent and water bills by 40 percent. In the final hours of debate, Thompson also called for $68 million from the future sale of city assets to be earmarked toward this year's debt payments.

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From the Patriot News:

On Tuesday, Moody's dropped the city's bond rating. It was dropped from a watch list for a possible downgrade, and a negative outlook has been assigned.

"The final city payment on its outstanding 1995 (bond) is due on April 1, 2010,''  Moody's said. "The downgrade to B2 reflects the city's weak plan to address the significant guaranteed debt service obligations to the (Harrisburg Authority) in 2010, which may result in the city's non-payment.''

The city's bond rating was already junk, but the symbolism of this move is no less startling.

Read more