The proposed financial recovery plan for Harrisburg, Pa., lets major creditors off the hook, according to city Controller Dan Miller.
In a letter to the City Council, which is debating state-appointed receiver William Lynch’s “Harrisburg Strong” plan, Miller said residents and taxpayers shoulder a disproportionate burden.
“While it’s true that the city’s major creditors have agreed to accept an immediate partial payment of approximately $210 million of the nearly $300 million debt, the plan calls for additional distribution of future funds that will make the creditors whole,” said Miller, a Republican candidate for mayor after losing in the Democratic primary.
“As willing participants in the incinerator retrofit financing deal at the root of many of the city’s financial woes shouldn’t the plan require these creditors to make substantial concessions?”
The council has hired workout firm Alvarez & Marsal LLC to examine the plan.
Major creditors to the incinerator financing include bond insurer Assured Guaranty Municipal Corp. and Dauphin County. City guarantees to the financing have saddled Harrisburg with about $363 million of trash-burner debt that it cannot pay.
Miller also questioned financial assumptions behind a proposed 40-year lease of parking assets to Harrisburg First, a consortium of Guggenheim Securities, Piper Jaffray & Co., AEW Capital Management and Standard Parking Co.
Major creditors, the City Council and the Commonwealth Court of Pennsylvania, among other parties, must approve the plan.