Harrisburg, PA’s next bond payment of $3.3 million is due on September 15. A bill they may miss according to The Wall Street Journal absent a $7.5 million payment from the city authority that runs parking facilities. With $1 million cash on hand, Harrisburg’s other big ticket item is $3 million in monthly payroll expenses. The city owes its fiscal problems to a $221 million incinerator project (five times the size of the general fund budget) that has saddled Harrisburg with an enormous amount of debt.
Bloomberg reports that the city council is now deciding on a rescue plan. Harrisburg avoided defaulting on its GO debt last year with state aid. The plan to stabilize the long-term finances of the city includes selling the incinerator and other assets, job cuts, renegotiation of labor agreements and the imposition a commuter tax. To date, the city council has rejected Mayor Linda Thompson’s plan. She will again ask the council’s approval on August 31.
In the meantime, hearings will be held. Creditors want to be paid back and the incinerator turned over to a receiver. The incinerator has received two bids to date.