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by Vault Consulting Editors | March 03, 2011


The consulting team leading the turnaround effort for the city of Harrisburg, Pennsylvania addressed community concerns for the first time last week, presenting their strategy to save the city from bankruptcy and restore order to the capital's financial house. Attendees were largely dissatisfied with the report from the Novak Consulting Group, the lead consultancy on the project, calling the firm's presentation "amateurish" and demanding more "aggressive" tactics from the Novak consultants.

The editorial board at PennLive, central Pennsylvania's "most popular news and information site," was particularly vocal in its condemnation of the roadmap to salvation unveiled by the Novak Consulting Group. "Their opening presentation was amateurish," the publication said in an editorial. "They didn’t have handouts of their slides, and they made factual errors." Members of the audience had to correct several inaccuracies, PennLive said.

"Even more worrisome," the editorial reads, "is that the consultants spent most of their time discussing the city’s 'structural deficit,'" a $5 million shortage in this year's annual budget, while ignoring the elephant in the room—$282 million in accumulated debt that looks set to usher Harrisburg into Chapter 9.

The lead consultants don't understand "the gravity of the situation," PennLive said. Residents of the beleaguered state capital did their best to give the Novak consultants a proper education, though. "City resident after resident came to the microphone Monday to explain Harrisburg’s situation and offer advice on how to solve it," the editors report. "They sent a clear message: Residents are engaged and will not settle for a solution that merely calls for residents to bear all the costs."

As you may be aware, Consult THIS has been following the Harrisburg turnaround effort closely (see here and here) since the state turned to strategy consultants in a last-ditch attempt to salvage its immediate future. The Novak Consulting Group, a small public sector and strategy outfit that claims a wealth of experience with municipal governments, ultimately won the contract despite competition from several larger consultancies.

So here we are: not a very good start to life in Harrisburg for the Novak Consulting Group. In fact, I'm not sure it could be going much worse at this point. Harrisburg residents are outraged at the Group's seemingly lackadaisical approach to the urgent challenge presented by hundreds of millions in debt. Public discourse has already turned against the firm. Comments on PennLive's discussion forum were overwhelmingly critical:

"The consultants are proving to be inadequate in solving this problem"; "I personally thought my state tax dollars were going towards some sort of expertise with these Act 47 consultants"; the consulting team is "not even a bandaid. The editors and citizens know it when they see it."

And to make matters worse, news publications across the world continue to follow Harrisburg's every misstep, framing it more as an example of what not to do than as an example of the private sector's ability to improve its public counterpart.

Would the city have been better of going for a more established firm with more resources at its disposal? Maybe they've already resigned themselves to that idea; Alvarez & Marsal has reportedly joined the fray as some sort of outside advisor. That said, there should be no question that the Novak Group consultants deserve patience. Rome wasn't built in a day, and it appears that Harrisburg won't be rebuilt too quickly either.

Consult THIS will continue to monitor the situation in Harrisburg as the state-appointed consultants try to spark a new renaissance in the once-proud city.

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