Tag Archives: default

Harrisburg prepares to file bankruptcy

After defaulting on its incinerator bonds and preparing to sell off pieces of itself, Harrisburg, PA, is preparing to file bankruptcy.

Laura Vecsey wrote in Pennlive 16 June 2011, Harrisburg City Council looks to introduce resolution that would allow bankruptcy paperwork to be prepared:

Harrisburg City Council member Brad Koplinski is seeking to introduce a resolution that will allow the council to prepare paper work that might become necessary should a majority of the council decide to file for Chapter 9 bankruptcy.

Koplinski said the urgency of being prepared escalated Thursday when state Sen. Jeffrey Piccola introduced legislation that called for a state takeover of Harrisburg should the distressed city fail to adopt the Act 47 plan it was presented Monday.

It seems Harrisburg applied for Act 47, which is apparently a state bankruptcy protection plan last October, but now: Continue reading

Incinerator forces Harrisburg to sell off parking lots

After defaulting on its incinerator bonds, Harrisburg, PA, gets even more desperate and starts selling off pieces of itself.

William Alden wrote in huffpo 15 June 2011, Harrisburg’s ‘Bad Deal’: City Forced To Pursue Parking System Lease Despite Fears:

The finances of Harrisburg, Pa., are so desperate that local officials are considering a deal they fear will ultimately make the city more miserable.

A state-appointed panel, charged with crafting a financial recovery plan for the city, announced this week that Harrisburg must pursue the sale of public assets to help resolve its fiscal crisis. The nearly-bankrupt state capital, weighed down by debt more than four times the size of its budget, “is not in control of its own destiny,” the state team said in a report.

Three years ago, confronted with a similar budget shortfall, the city considered leasing parking garages and meters in exchange for quick infusion of cash, but that deal was never approved. Last month, the offer resurfaced when New York-based developer LambdaStar expressed renewed interest. Some city leaders harbor a growing fear that Harrisburg will be forced into a deal that will bleed its coffers over the course of decades, after it surrenders valuable assets to a profit-driven company with the power to raise rates on a captive base of customers.

But those misgivings may not matter, as a budget crisis chokes Harrisburg into submission.

“This is a situation where Wall Street will get paid, and the little guys on Main Street, taxpayers, are going to get stuck holding the bag,” Harrisburg City Council Member Brad Koplinski said.

Couldn’t happen here, right? Our local governments would never hastily approve bonds that could force raising taxes or default, would they? Oh, right: they already did.

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Harrisburg defaulted on incinerator bonds

Last year Harrisburg, PA defaulted on bonds it issued to build an incinerator, according to Aaron Smith in CNNMoney, Harrisburg, Pa., defaulting on its bonds:
The capital city Pennsylvania is broke and will be skipping this month’s multi-million dollar bond payment.

On Sept. 15, Harrisburg, Pa., was scheduled to make a $3.29 million payment on the bonds it issued to build a trash plant. But, the cash-strapped city doesn’t have the dough.

“The city’s budget is in deficit,” said Chuck Ardo, spokesman for Harrisburg Mayor Linda Thompson. “We’re looking for ways to trim the budget just to keep services going.”

“Now the chickens have come home to roost,” the mayor said in a statement released Wednesday.

You remember, “Officials here decided seven years ago to borrow $125 million to rebuild and expand the city’s enormous trash incinerator….”

Well, that could never happen here, could it?

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