Harrisburg, Pennsylvania, Council Told to Consider Bankruptcy

[The Northerner]

April 27 (Bloomberg) -- Harrisburg, Pennsylvania, which has missed $6 million in debt payments since Jan. 1, should consider seeking Chapter 9 bankruptcy protection, City Controller Dan Miller told a three-hour special committee hearing.

Miller, the first of four people to testify last night in an “informational session” on insolvency convened by Gloria Martin-Roberts, council president, said bankruptcy may offer Harrisburg relief from $68 million in debt-service payments this year tied to a waste-to-energy incinerator project. Martin- Roberts opposes a bankruptcy filing.

Harrisburg, the capital of Pennsylvania, the sixth-most populous U.S. state, has guaranteed payments on $282 million in bonds on the incinerator, run by the Harrisburg Authority. The payments on the bonds and on a working-capital loan this year add up to four times the amount the city collects in property taxes each year, budget documents show.

“It’s not good,” Miller said at the start of the hearing before a silent audience of about 20 that included city officials and union members. “Nobody wants to do it, but it’s there for a reason,” he said. “Maybe for the purpose of helping cities that are in the situation we are in now.”

The city this month skipped a $637,500 payment due on a loan to Fairfield, New Jersey-based Covanta Holding Corp., operator of the incinerator.

Read more: http://www.bloomberg.com/apps/news?pid=20601109&sid=ab6OQc35weDI&pos=14

[Lost4words]

1. must be just a bump in the recovery or something. nt

[LynneSin]

2. After what Stephen Reed did to the city I can't blame them

I grew up outside of Harrisburg and to be honest, for the most part Reed did a good job turning Harrisburg around from being a cesspool. City Island was a place no one dared venture and now it's a lovely place with a Minor League Baseball team.

There were no term limits with the mayor job (btw Reed is a democrat) but the last years in office Reed went on some serious spending spree wanting to build some Old West Museum in the city and spending all this money on Old West artifacts. Why who knows, but the museum never happened and it put Harrisburg in some serious debt. Perhaps terms limits aren't a bad idea afterall.

So filing bankrupcy might be the best thing the city can do to get out of this mess and turn the city around.

BTW Reed lost in the primaries.