Former Harrisburg Official Slams $86M Premium For City From Incinerator Sale

Map of Pennsylvania highlighting Dauphin County (Photo credit: Wikipedia)

HARRISBURG, PA – The capital city will pay an $86 million premium for garbage disposal under the proposed terms of sale for its incinerator, a former local official warns.

Those numbers are based, in part, on the city’s disposal rate starting next year at $190 per ton, former Harrisburg Public Works Director Ernie Hoch said.

Hoch sent a letter and supporting spreadsheet to City Council on Sunday afternoon lobbying them to vote against the transaction, then forwarded copies to other contacts including PennLive and City Controller and mayoral candidate Dan Miller, who sent his own cautionary correspondence last week.

Hoch noted the rates and tonnage minimums for the city and Dauphin County are based not on service costs, but the Lancaster Solid Waste Management Authority’s anticipated debt obligations related to its acquisition of the facility.

Read more:  http://www.pennlive.com/midstate/index.ssf/2013/09/former_harrisburg_official_sla.html#incart_m-rpt-2

Cleaning Up Steve Reed’s Mess: Harrisburg’s Debt Plan Expected To Be Filed Today

Map of Pennsylvania highlighting Dauphin County (Photo credit: Wikipedia)

Cleaning up former Mayor Steve Reed’s mess is going to take more than just a solution to his incinerator debt.

Harrisburg‘s state-appointed Receiver has said he hopes to file sometime today his plan to eliminate the city’s bad debt through the sale of the incinerator and a long-term lease of parking assets.

While the more than $360 million in unpayable debt at the incinerator is the root of why the city is in receivership, whatever plan is put forward has to account for much more than that.

Why?

Read more: http://www.pennlive.com/midstate/index.ssf/2013/08/harrisburg_debt_plan_cleaning.html#incart_m-rpt-2

Agreement Reached To Sell Harrisburg Incinerator To Lancaster Authority

Map of Pennsylvania highlighting Dauphin County (Photo credit: Wikipedia)

An agreement has been reached that will allow the Lancaster County Solid Waste Management Authority to purchase the long-troubled Harrisburg incinerator, officials said Wednesday.

Details about the plan — including the sale price — were not disclosed.

At a press conference, Harrisburg Mayor Linda Thompson touted the agreement, months in the making, as a key to bailing out the financially beleaguered city.  “This is the turning point we’ve all been waiting for,” she said.

Read more: http://lancasteronline.com/article/local/875044_Agreement-reached–to-sell-Harrisburg-incinerator-to-Lancaster-authority.html#ixzz2ZzKfEDjE

PENNVEST Approves $28M For Harrisburg Sinkhole, Water Treatment Projects

Map of Pennsylvania highlighting Dauphin County (Photo credit: Wikipedia)

HARRISBURG – Nearly $28 million in loans was approved Tuesday morning to fund sinkhole repairs and water treatment upgrades in the capital city.

The Pennsylvania Infrastructure Investment Authority board unanimously approved financing applications from the city and The Harrisburg Authority at its meeting Tuesday.

The Harrisburg Authority is getting $26.9 million; the city, $900,000.

The city’s loan is conditional on transferring ownership of infrastructure to The Harrisburg Authority.

Read more:  http://www.pennlive.com/midstate/index.ssf/2013/07/pennvest_approves_28m_for_harr.html#incart_river_default

SEC Case Against Harrisburg Falls Short For Exempting Finance Pros, Some Say

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

HARRISBURG, PA – No one answered the phone or the door at former Mayor Steve Reed’s home Tuesday nearly 24 hours after the U.S. Securities and Exchange Commission announced a settlement with Pennsylvania’s capital city over fraud charges rooted in activity during his administration.

Some public finance and securities experts saw the settlement – dubbed “toothless” by one – as a warning to municipalities that consequences await them if investors are misled by false or incomplete financial statements from local governments.

Others, however, criticized SEC for failing to hold the city’s hired advisers to account.

“Reed ran the city, (current Mayor Linda) Thompson (is running) the city,” said Mark Schwartz, a former bond lawyer who previously represented Harrisburg City Council on its ultimately rejected bankruptcy petition. “There is a ‘buck stops there’ liability for (city leaders), but the people who do the work are bond lawyers.  These are bonds that never should have been issued.  Reed cannot issue bonds on his own.  Professionals were abysmal in terms of fulfilling their responsibilities to investors and they have gotten off scot-free.  They’ve made millions.”

Read more:  http://www.pennlive.com/midstate/index.ssf/2013/05/fsec_case_against_harrisburg_l.html#incart_m-rpt-1

Harrisburg Receiver Granted Extension To Develop Financial Plan

Image via Wikipedia

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

Harrisburg Moving Closer To State Financial Takeover

The Pennsylvania House of Representatives voted 185 – 9 in favor of a bill that will allow a state-appointed receiver to take control of Harrisburg’s finances.

It is also very liked this bill will overwhelmingly pass in the PA State Senate!

Harrisburg is a financially distressed community under ACT 47.  City Council has refused to comply with recommendations made by the Act 47 team and the mayor’s proposal was also vetoed.

PA State Senator Jeff Piccola is leading the charge for a state takeover.  Harrisburg is hundreds of millions of dollars in debt from a failed incinerator retrofit.

Governor Corbett is expected to sign the bill when it reaches his desk.

Investors Come Forward With Harrisburg Incinerator And Parking Deals

Image via Wikipedia

A new player has entered the “who wants the Harrisburg incinerator” sweepstakes while the Lancaster County Solid Waste Authority ups their ante.

New York investor Jacob Frydman has offered a deal that includes leasing the incinerator and the city’s parking system.  Frydman and company are mainly interested in the parking system.  They are offering a deal that would net Harrisburg $240 million.  Of course this means parking rates and trash rates will instantly increase as somebody has to shoulder the debt and the investor needs to show a profit.

The Lancaster County Solid Waste Authority has upped their offer to $124 million and would increase tipping fees for county residents while reducing fees for city residents, who pay much more.  The goal would be to have city and county residents paying the same for trash service in twenty years.  Lancaster has no interest in the parking system.

The Act 47 team will also have a plan for the incinerator debt as well.  They may suggest an entirely different scenario than either of these two proposals.

Law Firm Advises Harrisburg City Council Not To Pursue Bankruptcy

Image via Wikipedia

Cravath, Swaine & Moore has advised Harrisburg City Council, via a two hundred page document, not to pursue bankruptcy at this time.  Rather the city should stay the course with Act 47 and try to negotiate with stakeholders.

Harrisburg entered Act 47 after the city amassed a $288 million debt from retrofitting its incinerator.  This has nearly bankrupted Pennsylvania’s capital city and put a strain on Dauphin County as well.  The county became involved when Harrisburg City and Authority were unable to make a loan payment last year and were on the verge of default.

Harrisburg Authority Plays Tooth Fairy To City

Image via Wikipedia

The Harrisburg Authority has unanimously approved a payment to financially distressed Harrisburg City in the amount of $3.8 million dollars! 

The Authority, you may remember from earlier posts, created the $288 million dollar debt on the incinerator which has all but sent the capital city of Pennsylvania to the poor-house.  By some stroke of luck or Divine Intervention, the Authority has funds a-plenty in its water division.  The Authority is assuring the public that their “gift” to Harrisburg will not raise water rates for 2011, exhaust reserves or threaten capital projects

Seems only fitting that the Authority comes up with the money.  This infusion of capital reduces the city’s year-end deficit to a more manageable $1 million dollars. 

The $3.8 million dollars will be used toward city payroll and a big stack of unpaid bills!

Kudos to The Authority for doing the right thing by the citizens of Harrisburg!

Harrisburg City And Authority Move Forward In Debt Crisis

Some positive and forward momentum was made last night when the Harrisburg Authority added a needed sixth member to make a quorum.  The Authority has not had a quorum since May!  Evidently Mayor Linda Thompson finally got her nominee approved after several months of lobbying.

Harrisburg City Council also approved making a one-time $3.3 million dollar payment on the incinerator debt via a budget transfer.  Where did this money suddenly come from you ask?  Ed Rendell, governor deluxe, basically gave Harrisburg money they would be receiving throughout the year in a lump sum.  As you recall, the two bank accounts the debt payment was to come from had less than $2.00 between them.

There is still much division between Mayor Thompson and council on how to proceed with a long-term incinerator debt strategy.  Harrisburg owes $288 million dollars!

Also Scott Balice Strategies is tapped to be hired with state funds to help Harrisburg out of their current financial black hole.  Everyone on council is not on board with this decision and the City Controller said he will not sign off on paying Scott Balice Strategies until council votes in favor of the hire.

One member of council tried to make a motion to hire a bankruptcy lawyer to investigate filing for Chapter 9.  However, the councilor was told his motion was inappropriate as it was at the end of the meeting.  The meeting was quickly adjourned.

Sounds like Harrisburg isn’t out of the woods yet!

Dauphin County Authorizes TD Bank To Purse Legal Action Against Harrisburg

Image via Wikipedia

 

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.  

Harrisburg Authority Defaults On Incinerator Bond Payment!

Image via Wikipedia

This is very bad news!  The City of Harrisburg and the Harrisburg Authority have defaulted on a $35 million dollar bond payment for the incinerator.  Dauphin County is now on the hook for $35 million dollars by December 1st.

The payment was to come from two accounts.  One account had .49 cents in it and the second account contained .84 cents.  I have more change in my pocket!

I reported earlier that the city controller had come up with a plan for debt repayment on the incinerator, however, I would think this is NOT part of the plan to repay the debt.  Unless defaulting on the loan is the only way to transfer the responsibility to the county, which was part of the plan, I believe.

Harrisburg City Controller Reveals Incinerator Debt Recovery Plan

Harrisburg Controller, Dan Miller revealed his plan this morning (as promised) for Harrisburg to avoid bankruptcy from the incinerator debacle.

The major points are:

1. Turn over control of the incinerator to Dauphin County thereby giving Dauphin County the $5.5 million dollars needed to apply toward the incinerator debt from the operating profits.
2. The City of Harrisburg would apply its annual profits from city parking garages and surface lots, approximately $4.5 million dollars, to the incinerator debt.
3. Negotiate lower interest rates from bond holders with the promise that the principal will be paid.
4. Dauphin County Commissioners would raise the tipping fees for non-city residents who pay LESS than city residents (what’s wrong with this picture?).
5. Future revenue could also be gained from increased incinerator use and higher parking rates.
6. The painful part will be the city would have to make up the $4.5 million dollars they are no longer getting from the parking authority (can anyone say spending cuts?).

Sounds like this plan has a chance of working and if it can avoid Harrisburg’s bankruptcy, I say full speed ahead.  Hopefully all interested parties will do what is right and put politics aside at this time!

Harrisburg Controller Riding To City’s Rescue?

Harrisburg Controller, Dan Miller has come up with a plan that will keep our capital city from going bankrupt trying to pay the $68 million dollar debt on the Authority’s incinerator.  https://roysrants.wordpress.com/2010/06/10/harrisburg-is-running-out-of-time-to-solve-run-away-debt-crunch/

Details are unavailable at this time, however, the plan will need cooperation from all parties.  Those parties being the City of Harrisburg, the Harrisburg Authority, Dauphin County and the note holders.  The plan will not require selling Ed’s mansion or raising taxes.

Let us hope that Dan as a rabbit in his hat!  Allowing Harrisburg to go bankrupt would be a huge black eye for Pennsylvania. 

Miller will hold a press conference on Wednesday at 10 am to announce the details of the plan.

We hope for the best possible outcome in this matter!