CC Series Chapter Ten Revised: The County Bond Guaranty

By Christiaan Hart-Nibbrig:

After their latest legal victory in late 2002, convention center sponsors now looked to move the project forward without impediment in 2003.

But they would have to do so without one of their most helpful hands in Harrisburg.

The previous March, Rep. John Barley abruptly resigned from office, effectively immediately.  Barley had become enmeshed in several controversies, many of which were indefatigably ‘covered’ and stoked by Ron Harper, Jr.

It is fair to say that Harper’s relentless coverage, which included staking out Barley’s home, and posting unflattering stories about Barley’s personal life on his website, played a significant part in driving the powerful lawmaker out of office.  (Barley’s official indiscretions were not connected to the convention center project.)

John Barley’s 100th District seat was taken in a special election by Gibson C. Armstrong, son of Sen. Gibson E. ‘Gib’ Armstrong.  The younger Armstrong was a political novice, and would not have close to the influence of his father, nor to the power broker he was replacing in the House.

The Republicans in the state legislature would also have to deal with a Democrat Governor, Edward G. Rendell, the savvy former Philadelphia mayor who was elected in the November, 2002, general election.

The convention center project still had not received the $15 million in ‘matching funds’ as reward for the Lancaster delegation’s support of former Republican Gov. Tom Ridge’s Stadium Bill.  Although Rendell was a key supporter of the Stadium Bill, it was not assured that he would follow through with Ridge’s promised $15 million.

The convention center fight now returned to Lancaster County, where the commissioners would soon consider another measure deepening its financial involvement in the convention center project.

In order to build a publicly financed convention center in downtown Lancaster, estimated in 2003 to cost $55 million, money had to be borrowed. Few pay attention to the arcane world of municipal bond finance, yet this is the mechanism used to finance many of the capital projects built in the United States.

In the case of the Lancaster convention center, the LCCCA would need to “float” or “issue” or offer the bonds for sale. A bank would buy the LCCCA bond issue, and re-market the bond to investors.

To maximize the amount of money borrowed, and obtain lower interest rates for what is essentially a loan, bond payments are often guaranteed by some level of government. The interest rates of government-backed bonds are lower because of the backing government’s usually good credit rating.

If the public authority floating the bond is unable to make its payments, then the taxpayers of the governmental body that backed or guaranteed the bond are responsible for the bond debt.

In 2003, Lancaster County had a desirable “AAA” credit rating, making it an attractive guarantor of a bond issue.

The possibility that the County of Lancaster would guarantee an LCCCA-issued bond was first raised publicly in April, 2003, by Lancaster city businessman, Chris Kunzler, III.

Chris Kunzler was the CEO of Kunzler & Co., a large, Lancaster-based meat processing business.  Kunzler was neither a hotelier, nor connected to the sponsors.  The hot dog manufacturer, in other words, didn’t have a ‘dog in the fight.’

In an April 20th letter to the editor of the Lancaster Sunday News, Kunzler warned against a county bond guaranty for the convention center:

The convention center alone is expected to cost $55 million, with $15 million supposedly   coming from the state. The hotel tax is generating approximately $3 million a year. This $3  million in tax revenue will not come close to servicing the debt on a $40-million bond issue.      Let’s not forget the ongoing operating losses of the convention center and the money being spent to promote it. Who will guarantee this bond?  And when the project fails, where will the funding come from then? Taxes? Who will be responsible for the losses — the     community, with additional taxes?”

Kunzler’s comments had an immediate impact on the convention center debate.  His letter was published about one month before the Lancaster County primary elections for county commissioner.

It would become one of the most memorable commissioners’ races in the history of Lancaster County.

The 2003 campaign for Lancaster County Commissioner actually began in late 2002.

In December, eight of the nine final candidates announced their intentions to run in the May, 2003, primary.

Two of the sitting county commissioners, Paul Thibault, the Republican chairman of the Lancaster County Board of Commissioners, and Ron Ford, the board’s lone Democrat, indicated they would not seek re-election in 2003.

Both Ford and Thibault voted for the hotel room and excise taxes to finance the convention center and promote tourism in 1999, with Thibault playing a leading role in their passage.

The third county commissioner, Republican Howard “Pete” Shaub, Jr., intended to run again.  Shaub was first elected commissioner in 1999, replacing Terry Kauffman.  Kauffman, a strong supporter of  the convention center project, voted with his colleagues to enact the room and excise taxes.  He did not run for third term in 1999.

By mid-January, 2003, nine candidates for County Commissioner – six Republicans and three Democrats – filed the paperwork with the county board of elections to enter the May 20th primary. .

In addition to Shaub, the Republicans included:  James Huber, the former four-term County Commissioner; Richard ‘Dick’ Shellenberger, a restaurant owner; Dennis Stuckey, the County Controller; Steve McDonald, County Recorder of Deeds; and Scott Martin, County Youth Intervention Director.

The Democrats fielded: Bill Saylor, a former television newsman; Jon Price, a township supervisor in  Clay Township in the Northern part of the county; and Molly Henderson, a college professor and former Lancaster City public health official.

Both Saylor and Henderson were from the Millersville area, in the south-central part of the county.

Only Shellenberger was endorsed by the Republican Party.  The Democrats endorsed all three candidates. This was the first indication the race wouldn’t follow strict convention.

Pete Shaub was not endorsed by his own party at the Republican committee endorsement convention in February, 2003, as he had been four years earlier. In 1999, Shaub had been the top vote getter of all of the candidates, beating his running mate, incumbent Paul Thibault, by almost 1,000 votes.

Shaub, 48, was a fit, charismatic, nattily dressed, former marine, employed as a construction executive. He also worked as an auctioneer for the family’s auction business.

Shaub had never held elected office prior to becoming commissioner, though he was Republican committeeman and a state committeeman. Like former Rep. John Barley and Sen. Gib Armstrong, Pete Shaub hailed from the southern portion of Lancaster County.

I consider Pete Shaub to be a friend” said Barley in 1999, endorsing Shaub.

Barley’s endorsement wasn’t sought this time.

In his first four years in office, the combative Shaub often clashed with Thibault, and was getting a reputation of something of a tightly-wound, unpredictable official. One night, with his teenage daughter and one of her friends, he was stopped by park rangers at a county park after the park was closed. Shaub’s explanation: they were conducting a Bible study.  The incident made the newspapers.

Dick Shellenberger was a genial 57 year-old restaurant owner with no electoral experience.  Shellenberger, a GOP committeeman from the Manheim Central area of the county, belonged to, and was very involved in, the Cavalry Church, a large and well-known house of worship in Lancaster County.  Sen. Gib Armstrong was also a member of Cavalry Church.

Shellenberger, pleasant and gracious, was a social and fiscal conservative typical to the mainstream of Lancaster County. Tall, with a straight back and a politician’s haircut, Shellenberger looked good in a suit. A farm boy growing up, Shellenberger worked in management in restaurants for decades, and recently owned a local eatery with his wife, Pam.

Shellenberger was something of the darling of the party in 2003. He raised the most money and got the most votes for endorsement.  In fact, he was the only candidate endorsed by the county GOP committee.  Shellenberger even drew the top spot on the ballot for the May primary, a random draw. His campaign events were accompanied by songs such as “This Land is your Land,” and “God Bless America.”  Everyone seemed to like ‘Dick.’

Dennis Stuckey, 50, was the County Controller in 2003. Bland, corpulent, with little personal affect, Stuckey generated little enthusiasm in the party. He was supported, however, by GOP leaders like Lancaster Mayor Charlie Smithgall and lame duck Commissioner Paul R. Thibault, two of the convention center’s most ardent advocates.

James Huber, the 68 year-old former four-time commissioner (1987-1995), was attempting a quixotic (and unendorsed) comeback. This was Huber’s second comeback attempt, and his bid was looked upon as a long shot.

Steve McDonald, 39, the county Recorder of Deeds, was also a social conservative in the crowded field. Blow-dried, with a year-round tan, McDonald’s bid, like Huber’s, was considered unlikely.

The last Republican commissioner candidate was Scott Martin, 30, a full-time director in the county’s Youth Intervention Center. A former football player in the Arena League (and very briefly affiliated with the NFL’s New York Giants), Martin was considered a somewhat farfetched candidate. In March of 2003, Martin had to explain the embarrassing revelation that he was actually a registered Democrat. He called it a “mistake,” and denied he was, gasp, a Democrat.

For the three Democrats, vying for the minority seat on the three-person commissioners’ board, Molly Henderson, 49, was a local Millersville product. Henderson, a state and local Democrat committeewoman, formerly headed the city’s Environmental Health and Protection Unit in the Smithgall administration. Henderson, who held a doctorate in Public Health from Temple University, though without electoral experience, was a confident and energetic candidate, and an effective, articulate campaigner.

In addition to the Lancaster Democratic Committee endorsement, Henderson was also supported by convention center supporter, fellow Democrat, Rep. Mike Sturla.

Bill Saylor, tall and still handsome at 74, was a former WGAL-TV on-air newsman,.  Saylor was running for commissioner for the third time. In 1999, he lost to Ron Ford, by fewer than 200 votes.

Finally, there was Jon Price, a 33 year-old Clay Township supervisor. Price was from a politically active and well-known local family, but was seen as the dark horse in the three-person field.

Prior to the primary, with the exception of  longshot James Huber, the positions of the candidates on the convention center issue can only be described as uniform and positive, if somewhat vague.

Below are the candidates’ printed responses to a May 1st Lancaster New Era question:

SHAUB: “Lancaster County should support the downtown convention center and hotel.”

SHELLENBERGER: “The hotel tax provides revenue for our visitors bureau, which in turn, if used wisely, will attract more tourists to the county.”

HUBER: “The county should strongly support downtown revitalization with resources and manpower, but should not provide subsidies to finance private business and industry to compete against existing private enterprise. The county should not support a tax on a business group to finance their competition.”

STUCKEY:  “Businesses that have made a commitment to the downtown area are to be commended along with those involved in this particular project. All participants need to be vigilant with the costs, but support should continue. Yes, the tax should be supported.”

MCDONALD:  “The center should move ahead. The hotel tax is a key tool in that support.”

MARTIN: “The county should support the convention center project and the hotel tax.  This project will be the cornerstone of downtown revitalization, and a thriving area of activity for generations to come.

SAYLOR: “The worst thing possible would be for the convention center to be built then fail.”

HENDERSON: “The community accepted this project years ago. Dozens of revitalization projects —public and private — are based upon its completion.”

PRICE: “I believe the downtown convention center/hotel complex will provide vital employment opportunities and will be a key component of the continued downtown revitalization of Lancaster City.”

The weather on primary election day, May 20, 2003, was mild, with a temperature reaching the mid 70s. Election officials reported a voter turnout of 21 percent among the county’s registered Republicans and Democrats. A total of 49,630 ballots were cast on that day.

When the votes were counted, Dick Shellenberger had the collected the most, with 21,823.  Pete Shaub garnered 15,465, for second place and his name as one of two Republicans on the November ballot. Shaub had more than 4,000 votes more than third-place finisher, Dennis Stuckey.  Huber and McDonald finished a distant fourth and fifth respectively.

For the Democrats, Henderson collected 6,272 votes, beating Saylor by almost 1,500 votes. Price came within 300 votes of Saylor.

At this point, it appeared the fall 2003 general election would follow script. Shellenberger and Shaub would be elected and form a Republican majority, and either Henderson or Saylor would join them as Board’s Democrat member.

But the script was about to be re-written.

Watching the primary campaign for Lancaster County Commissioner in the spring of 2003 was a courtly, 55 year-old lawyer named James N. “Jim” Clymer.

Jim Clymer was something of a renaissance man in fenced-in Lancaster County.  A former farmer, truck driver, and carpenter, Clymer was also a licensed, instrument-rated pilot.

Clymer was then, and for several years, the national Chairman of the Constitution Party. In 1994, he ran for Pennsylvania Lieutenant Governor on the U.S. Taxpayers Party ticket (which became the Constitution Party in 1999). In that election, Clymer siphoned about 16 percent of the overall turnout.

He also ran for another Pennsylvania state post as a Libertarian candidate for Auditor General in 1992, and again for Lieutenant General in 1998 with the U. S. Taxpayers. In the latter race, he garnered 10.5 percent of the vote.

Jim Clymer was born, raised, went to college, and married in Lancaster County. (He went to law school in Kansas.) A father of five, who served his church as a deacon, elder, and Sunday school teacher, Clymer was a quiet community pillar who knew the values of conservative Christian Lancaster County very, very well.

The senior and founding partner of a Constitution and religious freedom-based law practice, Clymer had a reputation for integrity and professional competence. With a direct, soft-spoken, gracious personal manner, Jim Clymer was also known as a good guy.

Clymer’s political ideology might be called ultra-conservative. Many Constitution Party members disaffectedly departed the Republican Party because it wasn’t conservative enough for them.

The Constitution Party’s platform includes abolishing the Internal Revenue Service and the U.S. Department of Education, withdrawal from the United Nations, and a non-negotiable, one hundred percent opposition to abortion and gay marriage.

While these values might not resonate in San Francisco, or even nearby Philadelphia, they do in Lancaster County, where they are in the middle of the mainstream. Taxing regular Pennsylvanians to pay for a convention center struck Jim Clymer as just plain wrong. And he was going to speak up about it.

One week after the primary, on May 28, 2003, Jim Clymer indicated to the Lancaster New Era that he was leaning toward running a third-party campaign for commissioner, saying his conservative principles were more in line with Lancaster County voters than either Democrat candidate.

I decided to run for commissioner because none of the other candidates were willing to take a position against the convention center,” Clymer said.

Weeks later, Clymer filed papers to run for Lancaster County Commissioner. To get his name on the November ballot, Clymer was required to collect a minimum 1,500 signatures from registered voters attesting to his fitness to serve as a county commissioner.

By July 31, when Clymer turned in his signatures, he had almost 3,000 valid names, nearly double the necessary number. Jim Clymer was now going to have a voice in this election.

(One of the signatories on the Clymer petition was James Huber, the former county commissioner, who ran unendorsed, and lost, in the Republican primary. Huber was also a GOP committeeman for nearly three decades. After signing Clymer’s petition, Huber was stripped of his committee position.)

What most people anticipated would be a traditional two-way contest between Democrats Bill Saylor and Molly Henderson, was now a three-way battle that included Jim Clymer for the third Commissioner’s seat.

The issue that sharply distinguished Jim Clymer from the other candidates was his complete and unequivocal opposition to the convention center. Not only was the project dependent on taxpayer dollars for support, but he contended it was a bad idea as a basic business proposition. The issue was the centerpiece of his campaign.

“In business, you don’t just go out and start a new project without looking at what’s happening in other places. Convention centers are failing all over the place. What does this city have that will make a difference? We don’t even have air service,” Clymer said during the campaign.

Although Clymer was buttoned-down and mild of manner, he was smart and no pushover. Clymer  acquired considerable campaign savvy with his multiple state bids. He was also closely aligned locally with a unique and valuable campaign weapon: Ron Harper, Jr.

In 2003, Harper and Clymer were friends who shared many of the same social and political views. Like Clymer, Harper and was a born and raised Lancastrian. Both were born-again Christians; both married, fathers of five.

And on the convention center issue, Clymer and Harper’s positions were identical – the project was ‘big government’ at its worst. The ce nter should not be built on the backs of the taxpayers . . . and it should be stopped.

Although not an official member of the Clymer campaign staff, it is clear Ron Harper was more than a typical backer of the candidate.

“Ron was a very active supporter of my campaign,”said Clymer after the election. “And his website [] was very helpful in raising some important issues, particularly concerning the convention center.”

Democrat candidate Molly Henderson was the first of the candidates to address, and oppose, the idea of the county guaranteeing the convention center bond. “I am very much in favor of the convention center,” Henderson said in candidates’ debate. “But I do not support the county backing of the bond. The convention center must be self-supporting.”

Shellenberger echoed Henderson. “I am behind the convention center, however, I am opposed to the county insuring the bond.” Shellenberger said.

In late September, Clymer even proposed a county-wide referendum to allow the voters decide on the issue of a county-backed guaranty.

“With this bond issue, the taxpayers of Lancaster County are basically being asked to use their wallets as an insurance policy in case the convention center tanks,” Clymer was quoted in the Intelligencer Journal. “It would seem to me that if the taxpayers are going to be asked to use their money and their children’s money to guarantee a $40 million ‘investment’ for which they will not see a return, they should at least have the right to say whether they want to do it.”

By the fall of 2003, the design and cost for the convention center were not finalized; no true feasibility study had been performed; not a spade of dirt had been turned; and the legitimacy of  Jim Clymer’s one-issue candidacy showed that many people throughout the county were strongly opposed to the project.

During the fall campaign, four of the five candidates – Shaub, Shellenberger, Henderson, Clymer –  were ‘on the record’ opposing any county guarantee of a LCCCA-issued bond to construct the convention center.

Only Democrat, Bill Saylor, was non-committal on the bond guaranty, although he still supported the room tax.

In September, the LCCCA quietly awarded a no-bid contract to Pittsburgh-based bond underwriter, Arthurs Lestrange, to handle the $40 million convention center construction bond issue.
Arthurs Lestrange had two questionable connections to Lancaster and the convention center project.  One was that the firm in 2003 had contributed $2,500 to the campaign of Republican commissioner, Pete Shaub, according to campaign finance documents.

The other was that Arthurs Lestrange had hired poorly regarded former state Rep. John Barley as a consultant after Barley’s resignation.  Barley accompanied two Arthurs Lestrange representatives to meet with Commissioners Thibault and Shaub prior to the firm being hired by the LCCCA.

As the November election approached, County Commissioner Paul Thibault, may have been concerned that the next board would not approve the $40 million construction bond guaranty he supported.

During the fall campaign, the county guaranty had been discussed intensely in candidate debates and in the newspapers (both dailies supported the bond guaranty). But the sitting Commissioners – Thibault, Shaub, Ford — had not officially deliberated on the matter.

On October 16, 2003 — without a formal request from the LCCCA — Thibault and the Commissioners’ board voted to hire bond counsel to explore a county guaranty.

Only six days later, on October 22nd, the Commissioners held a public meeting to discuss the county bond guaranty.

“Something doesn’t smell well in Denmark,” said Jim Clymer at the crowded meeting.  Clymer raised the question of how the board could hire counsel unless it had — outside of public view — discussed the official action privately.

“It seems a little strange to me that the commissioners would take up and act where there has been no formal public action of the county pertaining to the bond issue,” Clymer said. “It certainly seems like something was going on outside of the bounds of the Sunshine Act.

One week later, on October 29, 2003, in the form of County Ordinance 73, the Lancaster County Board of Commissioners, in a 2-1 vote (Shaub voted against) passed the bond guaranty.

It was less than a week before the election.