Harrisburg Leaders Believe Bankruptcy Is Inevitable For City

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Editor’s note:  How very sad that the capital city of this great Commonwealth has deteriorated to this extent!

The Patriot-News Editorial Board met Thursday with City Controller Dan Miller, Council President Wanda Williams and City Treasurer John Campbell.  Below is an excerpt of the conversation.

Q: Where do things stand in the city now?
Dan Miller: We’re going into bankruptcy.  The question is will we have the assets or won’t we have the assets [when we do].  Just because we adopt a plan, that’s not going to solve the problem.  I think [receiver] David Unkovic knows the same thing.

Wanda Williams: I had an opportunity to talk to Jefferson County, Ala., officials last weekend.  They tried to derive a plan there similar to Unkovic’s, but the people were up in arms and they said no, we are not going to allow you to sell our assets.  What you’re going to do is sell our assets and we’re going to be left with nothing, and we’ve been telling Unkovic that.  Where do you derive the revenue from after you sell all our assets?  Now Jefferson County has filed bankruptcy, and the judge is making that determination.  Their assets are safe for the time being. I see this as a ploy — Gov. Corbett has asked [Unkovic] to come in and do a plan, but in the interim, we’re going to be selling assets and filing for bankruptcy.

 Q: How significant was the city’s general obligation default on March 15?
Miller: I suspect we’re not paying any more debt for the rest of the year. I’m not the decision maker, but if you’re not going to pay it now, you’re not going to pay it anymore.  Unkovic is projecting a $9.5 million deficit.  I’m calculating $15 million.  We’re both acknowledging it’s a big deficit for this year.  Our general debt service is about $11 million a year.  Even if you sell the assets, it’s not going to impact the budget. We’re out of money.

Read more:http://www.pennlive.com/editorials/index.ssf/2012/03/harrisburg_leaders_believe_ban.html

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.

Harrisburg Under Control Of State Appointed Receiver

David Unkovic, most recently chief counsel of the state’s Department of Community and Economic Development, was named by Gov. Tom Corbett to lead Harrisburg quickly out of financial distress. He will be assisted by the Washington, D.C.-based law firm of McKenna Long & Aldridge.

At a press conference, Unkovic deflected concerns about his past, including 23 years at the firm of Saul Ewing, which represents Assured Guaranty, the largest insurer of Harrisburg incinerator bonds.  He’s also worked for other firms that have ties to the incinerator debacle, including Public Finance Management and RBC Capital Markets…

Read the rest of the story… http://www.theburgnews.com/Index.html