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

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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

Harrisburg Parking Deal Would Preserve Local Control Through CREDC And Increase City Revenue, Sources Say

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Control of Harrisburg‘s parking garages will remain local, and annual revenues into the city’s coffers will increase millions over current figures under the terms of the long-term lease of parking assets being negotiated by the city’s state-appointed receiver, according to multiple sources close to the deal who spoke on condition of anonymity because they aren’t authorized to speak on the record.

Leasing the assets directly to an outside for-profit operation, as had originally been planned, raised concerns within the city that parking rates could increase out-of-control to boost profits while the assets themselves could languish and degrade in the hands of a company with no long-term interest in the welfare of the city.

What’s more, according to multiple sources, the on-going financial plight of Harrisburg and fluctuations in the bond market made private bond financing less attractive to the companies originally interested in such a deal.

Although the basic structure of the parking deal has been previously reported, new details are emerging.

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

Agreement Reached To Sell Harrisburg Incinerator To Lancaster Authority

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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

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

Investors Come Forward With Harrisburg Incinerator And Parking Deals

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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.

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!

Harrisburg Authority Defaults On Incinerator Bond Payment!

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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!