NEW YORK - Harrisburg’s City Council passed a resolution Tuesday night requesting Mayor Linda Thompson to prepare for a bankruptcy filing, should Pennsylvania’s capital city not receive approval for a financial recovery plan proposed last week.
The 4-to-3 vote on a measure introduced by council member Brad Koplinski came six days after the city received a report that advised it to pursue asset and lease sales to pay down $220 million of incinerator-related debt rather than file for protection from creditors under Chapter 9 of the bankruptcy code.
“The 4-to-3 vote is typical for Harrisburg regarding the issues of this type of importance over the past 18 months,” Koplinski said in an interview Wednesday.
The measure authorizes Thompson to prepare paperwork, but does not authorize a filing.
Wanda Williams, Eugenia Smith, and Susan Brown-Wilson voted with Koplinski. Gloria Martin-Roberts, Kelly Summerford, and Patty Kim opposed the measure.
“There are different tracks that need to be considered, and we need to be in a position to authorize a [Chapter 9] filing if we realize that there’s only so much the recovery plan can do,” Koplinski said.
Martin-Roberts said the move sends the wrong message. “This does not send a message of cooperation. It says: 'We don’t trust the process,’ ” she said. “Some people on the council think that bankruptcy is utopia. It is not utopia. It is very messy.”
Harrisburg in December entered Act 47, a workout program for financially distressed Pennsylvania communities.
The council will hold a public hearing next Tuesday on the financial recovery plan, crafted by Novak Consulting Group of Cincinnati, after which the council and mayor have 25 days to act on the proposals.
The firm has until July 8 to amend its plan.
Novak’s report, written on behalf of the state Department of Community and Economic Development, said the city could run out of money in September.
Thompson, meanwhile, still opposes a bankruptcy filing. “The mayor thinks there are better options contained within the Act 47 recovery-plan structure itself to minimize the impact on city citizens and services, while sharing a maximum amount of economic pain with other stakeholders,” spokesman Robert Philbin said.
Meanwhile, legislation filed by Sen. Jeffrey Piccola, R-Halifax, calling for a state takeover of Harrisburg and other communities that don’t approve an Act 47 plan, could be up for a vote Wednesday before the Senate Community, Economic, and Recreational Development Committee.
If it clears, Senate floor action could follow.
