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Near-bankrupt city replaces treasurer accused of theft with bankrupt accountant

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I get credit after filing personal bankruptcy?”

 

City council members in cash-strapped Harrisburg, Pennsylvania knew what was on the line when they considered five applicants to replace the city’s previous treasurer, who resigned in August after being accused of stealing $8,500 from the Historic Harrisburg Association.

Harrisburg PA Charlotte Mecklenburg Bankruptcy Lawyer North Carolina Debt AttorneyCouncil members failed to ask accountant Timothy R. East—the candidate they chose—whether he had ever gone bankrupt, and East did not tell members he filed for Chapter 13 bankruptcy in June 2011. A federal court dismissed East’s bankruptcy last year after he fell short on required payments, but the court reinstated bankruptcy protection in January after East caught up on his obligations.

Harrisburg’s treasurer must be bonded, and city officials are waiting to hear back from insurance companies who may be leery of taking a chance on a treasurer who has already declared personal bankruptcy. A bond is an insurance policy the city takes out to insure itself against potential losses caused by the treasurer.

The previous treasurer—John Campbell—was executive director of a charity that was supposed to raise funds to replace the city’s broken light poles. Campbell stole the money to pay for medical and college expenses, according to the Dauphin County District Attorney.

That could not have come at a worse time for the City of Harrisburg. Aside from broken light poles, the city was and is having trouble paying its bills and keeping up with providing essential services for citizens. Some have compared it to bankrupt Detroit, Michigan, which is cutting off water to citizens who cannot foot their own bills.

Harrisburg, like other cash-strapped municipalities across the United States, narrowly avoided bankruptcy in 2013, eventually agreeing to a settlement to refinance hundreds of millions of dollars of debt that the city could not repay. Presumably, the city’s new treasurer will shepherd it through rough times.

The treasurer has some big shoes to fill. According to the city’s website, the treasurer is responsible for collecting, safekeeping and investing city revenue. The treasurer collects all fees, fines and taxes, and is also responsible for collecting school district taxes.

Harrisburg’s new treasurer will have a heavy task in dealing with the city’s property owners. According to the Patriot News, uncollected taxes from some 1,300 Harrisburg property owners total $13 million. Some of those property owners still have not paid their 2012 taxes. Delinquent taxpayers are withholding $9 million from the Harrisburg School District, according to a tax sale list the city released in August.

Additional amounts are owed to the city and to Dauphin County. Bruce Weber, Harrisburg’s finance director, said the city needs the money. “We don’t have the money we need to do what we need to do,” he said. “So every dollar helps.”

Aside from collecting city revenue, the treasurer is responsible for investing city funds “utilizing several money management techniques to optimize interest earnings while ensuring the safety of funds.” The treasurer also watches the financial market to capitalize on “maximized yield investment strategies,” disburses city payroll, coordinates funds transfers, monitors city bank accounts and reconciles the city’s ledger.

East told council members in a September 29 interview that he understood cash management, tax collection and proper system controls.

If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with the best advice for your particular situation.

 

 

About the Author

Bryan 1Bryan Stone is a Partner with Arnold & Smith, PLLC, where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

A native of Macon, Georgia, Mr. Stone attended the University of Georgia, where he earned a BBA in Banking and Finance, and Wake Forest University School of Law, where he obtained his law degree.

Following law school, Mr. Stone relocated to Charlotte, where he currently serves as Chair of “Bravo!” – a young professionals organization associated with Opera Carolina – and founded the University of Georgia Alumni Association of Charlotte.

In his spare time, Mr. Stone enjoys perfecting his barbeque skills for the annual “Q-City BBQ Championship” and playing softball in the Mecklenburg County Bar softball league.

 

 

Sources:

http://www.pennlive.com/midstate/index.ssf/2014/10/harrisburg_city_treasurer_bank.html

http://harrisburgpa.gov/city-treasurer/

http://www.pennlive.com/midstate/index.ssf/2014/08/property_tax_delinquency_withh.html

http://www.nytimes.com/2013/07/25/us/harrisburg-sees-path-to-restructuring-debts-without-bankruptcy-filing.html?_r=0

http://www.pacourts.us/assets/files/setting-651/file-3053.pdf?cb=8e8741

http://www.wgal.com/news/former-harrisburg-treasurer-surrenders-on-theft-charges/27773632

 

 

Image Credit:

http://commons.wikimedia.org/wiki/Category:Harrisburg,_Pennsylvania#mediaviewer/File:Harrisburgh_StateStreet.jpg

“Harrisburg, State Street” by Andreas Faessler

 

 

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