Harrisburg and its firefighters union have agreed on concessions that will enable Pennsylvania's distressed capital to balance its budget.

Mayor Eric Papenfuse and the Capital City Paid Firefighter's Association IAFF Local 428 made the joint announcement Tuesday at City Hall.

Papenfuse said the concessions will enable Harrisburg to save $1.6 million as it petitions to exit state receivership.

"Those savings were within the budget that was proposed. It was basically a $1.6 million savings with a question mark. And now we can remove that question mark," the mayor told reporters.

The union voted 38-15 last week to approve a contract extension through 2017 that features no pay hike for 2013 and 2014, then raises of 1%, 1% and 2%. The existing contract, through 2016, had called for annual 3% increases.

Last month the union, which represents 63 firefighters, rejected the concession package.

"We've come a long way in a short period of time," said Papenfuse, who appeared at the press conference with acting fire chief Brian Enterline and union leaders. Papenfuse had met individually with firefighters to stress the need for collaboration.

"This is no panacea by any stretch of the imagination, but it's a starting point for the rebuilding and recovery of the city," said Enterline.

The other public-sector unions had agreed to concessions as part of the so-called Harrisburg Strong recovery plan, which aims to keep the 49,000-population city out of bankruptcy and which the Commonwealth Court of Pennsylvania approved in September.

Harrisburg has petitioned the court to exit receivership. It would remain under state oversight through the distressed communities program known commonly as Act 47.

The plan hinged upon the sale of the incinerator to the Lancaster County Solid Waste Management Authority and a long-term lease of parking assets from the city and the Harrisburg Parking Authority to the Pennsylvania Economic Development Financing Authority, both of which closed in late December.

According to Enterline, the accord marks the recovery of what he called a "botched process" of contract talks dating to 2010.

"We're trying to rebuild some trust," Enterline said. "Nobody anticipates a Kumbaya moment at this point."

The City Council must approve the measure, which it will consider when legal documents are in order.

It is scheduled to meet Tuesday night to consider Papenfuse's amended $52 million budget proposal, which includes $2 million of tax and revenue anticipation notes in mid-February, if the city needs to issue them to cover a cash-flow shortfall. Metro Bank would offer the Trans.

The notes would mark a return to the debt markets for Pennsylvania's distressed capital.

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