Harrisburg Mayor Linda Thompson must overcome bad poll numbers in her re-election bid Tuesday as massive debt, the specter of bankruptcy and Securities and Exchange Commission serve as a backdrop to the Democratic primary in Pennsylvania’s capital city.

State receivership has diminished the power of the mayor in Harrisburg, a city that many perceive as a poster child for municipal distress nationally.

“I’m fighting for my career,” Thompson said at a local candidates night after a Susquehanna Polling and Research poll for a Harrisburg television station had only 13% of voters favoring her. City Controller Dan Miller and Midtown Scholar Bookstore owner Eric Papenfuse were in a dead heat at 30% apiece.

The poll, conducted May 9 and 10, also had about one-fourth of registered Democrats undecided. The fourth Democrat is community activist Lewis “Sharky” Butts.

No Republican is running. Tuesday’s winner will face independent Nevin Mindlin in the November general election. Mindlin lost to Thompson in November 2009.

Thompson said her incumbency leaves her better suited to continue discussions with major creditors about concessions and to implement an economic development plan she introduced last week, along with the formation of a business advisory council. Opponents say she has an acerbic personality that has divided City Hall and has pushed out talented people.

Miller said he favors a bankruptcy filing – which the other three oppose – as the best way to extract concessions from incinerator bond creditors. Financing overruns to an incinerator retrofit project is the biggest factor in  Harrisburg’s crippling debt of about $350 million.

“The only way we’re going to get real concessions and basically make finances work for the city of Harrisburg is with a single tool,” Miller said. “If we can get them without bankruptcy, great, but I think that’s unlikely. Bankruptcy is the tool that’s going to hammer it home and make those concessions real for those creditors and make Harrisburg whole.

“Every one else wants city assets to be sold to pay for the incinerator debt in what amounts to the rape of Harrisburg,” Miller added in the interview.

State-appointed receiver William Lynch is expected to announce within weeks the closing of a lease deal for the incinerator with the Lancaster Solid Waste Management Authority, and the sale of the city’s parking garage system. The sewer and wastewater system is also up for sale or lease. Revenue from those transactions could help Harrisburg avoid a Chapter 9 filing.

Papenfuse, who has advertised heavily on local television, said removing the cloud of bankruptcy would spur economic development. “There is a lot the mayor can do,” he told The Bond Buyer.

Asked why anyone would want to be mayor of Harrisburg, Papenfuse replied: “Well, because we’re all in. I’ve invested in a bookstore, I own my own home and have three young children, all born in Harrisburg. I’m completely invested in this city, and it’s been frustrating to witness the political in-fighting from the sidelines and not get involved. If you lived in Harrisburg, you’d feel compelled to get involved, too.”

Thompson didn’t return a message seeking comment.

Both Miller and Thompson criticized Susquehanna’s polling methods and pointed out that the firm had 28-year incumbent Stephen Reed defeating then-councilwoman Thompson by 15 points in 2009. Thompson defeated Reed en route to the mayor’s office. Susquehanna also wrongly predicted Mitt Romney would carry Pennsylvania in last fall’s presidential election.

Papenfuse, a former member of the Harrisburg Authority public works agency, said Susquehanna’s filing confirms his campaign’s polling: “It shows that Thompson’s way down and is not going to win.”

According to Miller, turnout may determine the outcome. “Last year, about 4,500 came out for an open-seat primary for state representative,” he said. “If we’re in that range, we’ll win. If the turnout doubles, we don’t know.”

The SEC two weeks ago charged Harrisburg with securities fraud, saying the city failed to make securities disclosures as its finances deteriorated. The commission’s settlement with the city included a promise by Harrisburg officials to report its finances more transparently, but no fines or prosecutions.

“Thompson had very little to do with that. It was mostly under Steve Reed’s watch, so I’m almost willing to give Thompson a pass,” Miller said. “The only thing Thompson didn’t do is submit audits.”

Meanwhile, Dauphin County District Attorney Ed Marsico on Monday charged Butts, whose poll numbers are down around 1%, with criminal mischief and criminal conspiracy – both misdemeanor counts of the second degree – for defacing Papenfuse’s campaign signs.

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