Harrisburg’s City Council will hold a special meeting at 6 p.m. Monday with Mayor Linda Thompson and Pennsylvania officials to discuss recently enacted legislation authorizing a state takeover of the city.
The meeting will start at 6 p.m. in council chambers and include officials from the Department of Community and Economic Development.
Gov. Tom Corbett last week declared a state of fiscal emergency in the capital city, where three times the City Council has rejected a financial recovery plan proposed under the state’s Act 47 program for distressed communities. Under the new law, Harrisburg has 30 days to craft a plan.
According to Thompson, whom the council has rebuffed three times — all by 4-to-3 votes — the council must blink. “I’m not bringing any plan to the table. I brought my plan to the table,” she said.
Mark Schwartz, the Bryn Mawr, Pa., lawyer representing the City Council, said there is little chance that any of the objecting council members could switch their vote to yes, meaning acceptance of the state takeover.
“The mayor just wants them to rubber-stamp Act 47,” said Schwartz, a former bond and investment banker.
Thompson and City Council members Brad Koplinski, Eugenia Smith, Wanda Williams and Susan Brown-Wilson have been at loggerheads all summer and fall over how to achieve financial recovery. The four are aligned politically with Comptroller Dan Miller, who plans to run for mayor in 2013.
The City Council filed for Chapter 9 protection on Oct. 11. Thompson, the state, and Dauphin County have contested the filing. Judge Mary France of the U.S. Bankruptcy Court for the Middle District of Pennsylvania in Harrisburg is scheduled to rule on the validity of the bankruptcy filing on Nov. 23. Schwartz, meanwhile, is expected to contest the state takeover.
Schwartz, to whom Thompson referred at a news conference as “this so-called attorney,” has offered to meet with the mayor’s lawyers from Tucker Arensberg PC of Pittsburgh, but to no avail. “I think we could reach a solution if we could come together,” he said.
Thompson’s council opponents have pushed for a commuter tax as part of any recovery plan, but the new law amends Act 47 to prohibit such a tax. Sen. Jeffrey Piccola and Rep. Glen Grell, who represent suburban commuters in that region, pushed for the provision.
Harrisburg is saddled with $310 million of debt, mostly due to a costly incinerator retrofit project. According to bankruptcy papers, the city has skipped $65 million in bond payments. The county has a lawsuit pending over the missed payments, as does the Harrisburg Authority, which operates the incinerator, and bond insurer Assured Guaranty Municipal Corp.
Shannon Williams, interim executive director of the authority, said Wednesday that two more companies, including a renewable energy outfit from Canada, have expressed interest in buying the incinerator. They would join the Lancaster County Solid Waste Management Authority and another unknown bidder as interested suitors. Lancaster has offered an estimated $124 million for the trash burner.
“We’re working with them in terms of whether they want to proceed,” Williams said at a meeting Wednesday.
Schwartz, meanwhile, said the governor is shortchanging poor cities such as Harrisburg while favoring special interests.
He cited Corbett’s recent announcement of $11.5 million in grants to Philadelphia-based investment bank and Penn Mutual subsidiary Janney Montgomery Scott, for a new headquarters. Corbett said the move was necessary to keep about 550 jobs in Philadelphia. “It’s a national competition” for companies and jobs, the Republican Corbett said at a recent press conference.
“So what is Harrisburg to do?,” Schwartz asked. “It should change its name. How about Merrill Lynch, Lehman Brothers, or Bear Stearns? Those names might be available. Then reapply to the governor for aid and get your money.”