October 13th, 2011
Econintersect: The mayor refused to sign the bankruptcy protection filing for the city of Harrisburg, PA, Wednesday (October 12, 2011), so a member of the City Council signed and the papers were filed. The action had been approved by a close vote of the City Council. The mayor, Linda Thompson, called the filing illegal since she had not signed. Thompson strongly opposed pursing the bankruptcy action. She said that she was working on implementing leases for parking facilities and meters, with a restructuring of the debt outside of bankruptcy. It appears that the mayor may contest the filing, so whether or not the city is bankrupt or not may take a while to sort out. Follow up:
Follow up:The elephant in the Harrisburg room is an incinerator project that was sold to the sity as a money maker, but has never been completed and has resulted in close to $300 million of debt. An article in the Washington Post (June 21, 2010) recounts the details of the incinerator fiasco and tells of a second multi-million dollar boondoggle that has added to the financial crisis.
Some details from the Washington Post (October 12, 2011):
Before voting to file for bankruptcy, a narrow majority of the City Council had voted twice to reject a state takeover plan. The council members said the plan would have brought only temporary debt relief while sparing creditors and forfeiting the city’s fiscal future.
“We would have to sell our revenue-generating assets — parking garages and meters — to pay off our creditors, who we believe have not made a significant contribution to a global solution,” said Brad Koplinski, the council member who introduced the bankruptcy measure.
Without those revenue sources, he added, “we would be structurally bankrupt and have to file for bankruptcy in three to five years anyway.”