The Harrisburg City Council is seeking a legal consultant that would offer advice to officials on a potential bankruptcy filing or entering into Pennsylvania’s distressed communities program, known as Act 47.
Law firms have until Oct. 19 to respond to the council’s request for proposals. Selected firms will appear before the council during a public meeting during the week of Oct. 25.
The City Council is looking for firms that have considerable experience with municipal bankruptcy, Act 47, receivership, and municipal finance, according to the RFP.
Some council members believe the city should consider a possible Chapter 9 filing or operating under the Act 47 program because it has $282 million of incinerator debt that it cannot repay.
Mayor Linda Thompson is also addressing a $4.3 million deficit for the remainder of 2010.
On Oct. 1, Thompson announced that she applied to the state’s Department of Community and Economic Development to enter into Act 47.
The department and the city will hold a public hearing on the issue on Oct. 20. The department then has 30 days to weigh in on Harrisburg’s application.
City Council member Brad Koplinski said he believes the council needs outside legal advice regarding Harrisburg’s options.
“Despite the administration’s declaration last week that the city is filing an application for the commonwealth’s Act 47 program, many of my colleagues and I are still advocating that City Council retain legal counsel to consider the benefits and burdens to our city of filing for municipal bankruptcy under Chapter 9,” Koplinski said in a statement.
“It is a tool to help municipalities, one that may have distinct benefits for Harrisburg,” he said.
“To not take a prudent look at municipal bankruptcy as an option would be foolish.”
