Receivership vacated, Lynch reflects on Harrisburg's progress
Exit state-appointed receivership: Check.
Exit Act 47: Check back later.
As of March 1, Harrisburg is no longer operating under a state of fiscal emergency. That ruling from Commonwealth Court cleared the deck for retired Air Force Maj. Gen. William Lynch to vacate his post as the city's receiver.
Navigating its way out of the state's Act 47 program for financially distressed municipalities will be the next task for the capital city. But there is a path under the "Harrisburg Strong Plan," which will continue to be implemented by Fred Reddig, the state's Act 47 administrator.
As he prepared to leave the office, Lynch reflected on his time as receiver. He started in May 2012.
Q: Other than the court-approved recovery plan, what were your biggest accomplishments as receiver?
A: It's not me. There is a world-class team here. The ones you see are Steve Goldfield and Mark Kaufman, but there is also Fred Reddig and a bunch of guys from the Office of General Counsel. And that's what made it work.
Any city obligation for the incinerator debt has gone away. The city's immediate threat of running out of money has gone away, although the cash flow is tenuous, but certainly no worse than other cities. And obviously the city has been able to agree on a plan of recovery.
It's like a flood or blizzard. The immediate threat has passed. We're no longer saving lives or evacuating people. The floodwaters have gone down and now we're in the recovery phase. And that's the phase where you clean up the mud and get the power back on, clear the roadways. (It's) less exciting, boring, everyday grunt work that has to be done.
At some point — it may be as little as three years, maybe more — the city will be through with that recovery phase. It will figure out how to make the parking deal pay off and work with the parties involved and have a stable, predictable source of income. And we can say the city is ready to exit from Act 47.
The next phase, which is not the city's responsibility, is mitigation. How do you prevent this from happening again? The state legislature is working on various things which they think might help.
Do you think Harrisburg can avoid state intervention beyond the scope of the plan? Why?
I know the legislature is working on measures that they hope will alleviate some of those problems. I think we both know that anything that comes out the other end will be a compromise and may not be as stringent as some of us would like.
However, I don't think you can legislate this kind of stuff. I think it's a people problem, not a math problem.
What was the biggest surprise for you?
I think I was surprised at how tremendously complex this is and how people have different points of view on things.
The parking deal was astoundingly complex. There were some 55 law firms involved and 12 feet of documents at closing. We had three simultaneous preclosings in three different cities — Philadelphia, Lancaster and here in Harrisburg — in preparation for the final closing the next day. Numerous wire transfers went back and forth.
And it worked.
When you took this job, did you think the office would be around this long?
I didn't think it would take this long. I didn't know what it was.
(But) this is just the end of a first phase.
What message should this — the receivership going away — send to business leaders?
The immediate crisis is over and that it's an opportunity to be part of a city that is poised for success. It's an opportunity to get in on the ground floor. The city is coming back strong.
I have great confidence in this mayor and city council. I also believe they understand they're the ones who have to do it.
What will you do now — enjoy retirement?
I promised my wife that three times now. She no longer believes me. My intention is to resume retirement and do a little traveling.
I like Harrisburg and I've told people I'm immediately available if anybody needs anything.
How will the office be remembered?
I think the biggest impact we've had is bringing people together. I think we somehow managed to listen to everybody, and the creditors as well. I think the turning point in this was when we made the decision to be positive and find what could be good for each of the parties in this plan, not perfect for everybody but not horrible for anybody either.
Q: Reflecting on the Office of the Receiver, what about Gen. William Lynch will stick with you?
A: I think his sense of humor and little things he would say that were like life lessons. “Just because there isn’t attribution it does not mean there won’t be retribution.”
I think the stories from over the years were great to hear and they often had lessons in them as well. He would tell me not to do something and then say, “Ask me how I know,” and then smile, telegraphing that he had already made the same mistake.
I think he genuinely believes that people are good at heart and (he) has a true respect for those who pick up the mantle of governance.
spokesman for the Pennsylvania Emergency Management Agency (who also served as Lynch’s spokesman during his time as receiver)