The city of Harrisburg in Pennsylvania currently stands at the verge of economic failure, according to consulting firm Management Partners. Harrisburgs mayor Linda Thompson says the city has an immediate need of $3.8 million. This figure is set to grow to $164 million in five years time. A major element of this amount is because of the $288 million amount on due the city guaranteed on the Harrisburg Authoritys incinerator. The city has yet to pay $68.7 million in amount outstnding-service settlement this year.
To address the location, the city will embark on a concerted drive to avoid the liquidation courts. Management Partners has laid out 21 steps of action the city needs to take. Among them are selling off some of the citys chattels, negotiating with the company that runs the Harrisburg Authority incinerator to either sell or lease it in the long term and reviewing labor agreements with the unions. The city also has had to deal with other parties such as Dauphin County. One action step the Harrisburg city authorities are in the process doing is reviewing its emergency monetary arrangement with Dauphin in in a row for the county to fulfill its monetary obligation to make amount on due-service guarantee refund.
In addition to these steps the city will implement some other potential deficit reducing measures. Some of the actions they could take include doubling the parking tax, a 20% enhance in water and sewer divests, increasing sanitation fees and parking infringement fines by 100%, raising property taxes by 117 percent next year and selling the citys parking garages. The citys employees are also required to take 5 days no pay leave a year each.
For now, Management Partners has not recommended that the city apply to the state to be declared fiscal distressed under Act 47 of Pennsylvania state. Act 47 states that financial distressed cities in Pennsylvania need to put forward to the states oversight although it still may receive funds. This is typically the final step before formally filing for liquidation. It appears an Act 47 declaration may become a reality by the middle of this year.
Various city officials have differing opinions about economic failure. City controller Dan Miller is one of the proponents for the idea of applying for insolvency sooner rather than later. He feels that impoverishment protection would stave off creditors and save some of the citys chattels. yet, Mayor Thompson feels otherwise. insolvency is not one of her immediate alternatives.
Dauphin County, meanwhile is happy that the city is considering selling its belongings. This was something the County had proposed in the past.
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