Harrisburg Receiver Granted Extension To Develop Financial Plan

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The newly appointed state receiver for Harrisburg, David Unkovic has been given an extension by Commonwealth Court to develop a plan to bring Harrisburg back from the brink of financial ruin.  The Harrisburg Authority’s failed retrofit of the city’s incinerator plunged the state capital $317 million dollars in debt. 

Harrisburg entered Act 47 as a first step to recovery.  The Harrisburg City Council and Harrisburg Mayor Linda Thompson have been at odds with the Act 47 team and each other.  Failure to follow the Act 47 team’s suggestions or come up with their own plan, the Governor of Pennsylvania appointed a receiver to take control of the city’s finances and come up with a plan to untangle Harrisburg from the incinerator debt.

The deadline has been extended from January 2nd until February 6th.  We applaud the wisdom of this decision.  Allowing sufficient time for the receiver to formulate the best possible plan is a “no-brainer”.  Harrisburg didn’t get into this situation over night and rushing to get out could make things worse.

Dauphin County Authorizes TD Bank To Purse Legal Action Against Harrisburg

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Dauphin County has authorized TD Bank to purse legal action against Harrisburg to force the city to pay $35 million in bond notes.   

Dauphin County is now responsible for the incinerator payments, due Dec. 1, since Harrisburg missed the Aug. 15 deadline.  

Shortly before the deadline, the city and the Harrisburg Authority notified TD Bank that neither could pay the $35 million. The authority or the city was required to transfer $23.9 million to one bond debt-service account and $10.8 million to another, as per a 2007 city guaranty agreement.  

The county has had to make $3.5 million in incinerator bond payments for the authority and city since May 2009.  

Harrisburg will know shortly whether it will have to file for Chapter 9 bankruptcy.  The city might not have to file bankruptcy IF the other stakeholders are willing to accept a loss.  Otherwise, Harrisburg has no other choice.