HARRISBURG, Pa. To no one’s surprise, Harrisburg, Pa., will skip its fourth straight general obligation bond payment, state-appointed receiver William Lynch announced Wednesday.
“The decision to withhold payment was made to maintain sufficient cash-flow to provide vital and necessary services,” a Lynch spokesman said of the move, which affects two series of general obligation bonds and notes.
The missed payments, due Sept. 15, include $1.8 million due on the city’s Series 1997D general obligation refunding bonds and $1.7 million due on Series 1997F general obligation refunding notes.
Harrisburg also missed a GO payment in March and two last year, totaling $17 million.
Lynch two weeks ago filed a financial recovery plan aimed at erasing incinerator and structural debt and keeping Pennsylvania’s 49,000-population capital out of bankruptcy.
Under the plan, which the Commonwealth Court of Pennsylvania must approve, GO bond insurer Ambac Assurance Corp. agreed to let the city stretch out the unpaid $17 million at reasonable rates, but can back out of the deal if it doesn’t receive a $6 million payment expected from parking revenues by Dec. 15.
“I hope we cut the first check to them. Ambac didn’t do anything wrong this entire time,” councilman Brad Koplinski said in an interview downtown.