Pa. Emergency Action Plan Ensures Services for Harrisburg

NEW YORK - Pennsylvania’s Department of Community and Economic Development on Thursday released an action plan for Harrisburg, as a follow-up to Gov. Tom Corbett’s Oct. 24 declaration of fiscal emergency in the capital city.

The plan, according to Secretary C. Alan Walker, builds on the cost-containment strategies and identifies priority initiatives from the Act 47 plan for distressed communities that address short-term problems the city faces. These measures will ensure necessary services continue; including police and firefighting, water and wastewater, trash collection, payroll, and pension and debt payments.

Three times the City Council has rejected an Act 47 plan, prompting state legislation enabling Corbett to appoint a receiver if necessary. The city has until Nov. 14 to suggest a recovery plan acceptable enough to ward off receivership. Corbett this week has been interviewing candidates for the receiver’s position.

“While the mayor, city council and stakeholders work to come to an agreement on a fiscal recovery plan, this emergency action plan will make sure basic services continue and the safety of the public is protected,” said Walker. “This action plan also puts into place specific cost-containment measures to maintain finances and ensure all essential obligations are met.”

Cost-containment measures include: a spending freeze for discretionary purchases; reduction or elimination of optional contracts for professional services or commodities; a hiring freeze and overtime restrictions; limitation on capital project expenditures during the period of fiscal emergency; and a review of grant and third-party funds that require cash or in-kind matches from the city’s general fund.

In addition, the decree eliminates the ability of the city to incur new debt, except for short-term borrowing for tax anticipation notes if the DCED deems it necessary.

The DCED established the following priority initiatives:

Review and increase use of payment in lieu of property tax, or PILOT agreements; increase operational efficiency and implement a new schedule for parking enforcement officers; increase parking ticket fees; eliminate bulk copy services in the duplication center and eliminate one position; improve residential and commercial waste and recycling collection; eliminate the park ranger corps; and improve compliance with the business privilege and mercantile tax; and increase business license fees.

Harrisburg is staring at $310 million in bond debt, mostly due to a costly incinerator retrofit project. Its City Council has filed a Chapter 9 bankruptcy petition that the state, major creditors and Mayor Linda Thompson oppose. Judge Mary France of the U.S. Bankruptcy Court for the Middle District of Pennsylvania in Harrisburg will rule Nov. 23 on the legitimacy of that filing.

The city also owes about $65 million in general obligation debt, and remained current with debt service in September after a 10-year lease extension with the Harrisburg Parking Authority provided $7.4 million in upfront payments.

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