Pa. court gets new plan to fix Harrisburg finances
HARRISBURG — The state-appointed financial overseer of Pennsylvania's debt-laden capital city has a new plan to resurrect Harrisburg's finances and asked a state court on Monday to approve it.
Harrisburg receiver William Lynch submitted the approximately 350-page plan to Commonwealth Court in a bid to relieve hundreds of millions of dollars of debt and erase persistent budget shortfalls in the struggling city.
City officials suggested that lenders would walk away with less than they had sought, while the city would be required to sell the city's municipal trash incinerator whose debt dragged the city to the brink of bankruptcy and hand over its parking garages and lots to a state economic development agency.
That state agency could then issue tax-free bonds to help pay down the debt more cheaply.
In the Harrisburg Strong Plan, the receiver's office said it would wipe out the city's incinerator debt — estimated at about $350 million and increasing $1 million per month. It said the proposal can be implemented because virtually all key parties have agreed to its terms.
“What the receiver asks this court to confirm is a plan that can and will be put in place if the financial transactions that are to fund the Strong Plan can be consummated without interference,” the document submitted to court said.
Harrisburg had piled $100 million in debt onto the incinerator by 2003 when City Council approved an expensive retrofit of the aging and polluting facility as an alternative to shutting it down. However, the retrofit went awry and took much longer and became much more expensive than originally forecast.
Harrisburg city residents pay among the highest trash-disposal rates in the nation, while the facility can't generate nearly enough money to pay the debt.
A spokesman for the receiver's office declined to provide an estimate of how much lenders might lose.
Four City Council members had sought unsuccessfully to win federal bankruptcy protection in 2011 after they objected to suggestions that the city should be forced to pay the entire debt without sacrifices by lenders.
“I and my colleagues have consistently pushed for a global solution with shared pain,” said one of the four, Brad Koplinski. “While I am cautiously optimistic, I believe that is what we have here.”
A spokeswoman for one of the city's biggest creditors, Dauphin County, said it is difficult to say whether the county will have to accept less than what it is seeking, and some details still need to be worked out.
Another major creditor, bond insurer Assured Guaranty Municipal Corp. of New York, did not address the question in a statement.
One lender, CIT Capital USA Inc., sought more than $37 million, but would receive $21.5 million from the sale of the incinerator, the receiver's plan said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Donora-Webster Bridge plunges into Mon River after 106 years
- ‘We are’ chant now a permanent fixture on Penn State campus
- Pa. could ease restrictions on fireworks, reaping big bang in taxes
- Presque Isle Downs cancels thoroughbred races because of running deer
- 2 from Western Pennsylvania charged with insurance fraud
- Pa. spared earthquakes from deep-shale drilling
- ‘Cadillac’ tax on health benefits adds hurdle to Pa. teacher contract talks
- Police: Green laser illuminates cockpit, injures pilots flying out of Pittsburgh
- In video, Philadelphia transit officer shoves man with toddler
- Lehigh Valley woman pleads guilty in knife-throwing death