Harrisburg Friday may select qualified financial advisers to participate in a request for proposal process, as Pennsylvania’s capital city looks towards addressing $282 million of outstanding incinerator debt that is in technical default.
City finance director Bob Kroboth said in an e-mail that the city received 16 responses to its request for qualifications for financial adviser. Officials are looking to set a short list of firms by this Friday, he said.
Those selected advisers would then be able to submit proposals as part of the city’s RFP process.
Harrisburg officials are looking to potentially sell or lease city assets and also refinance existing debt to help generate additional revenue and tackle $282 million of incinerator debt that it cannot repay at this time.
The city guarantees the incinerator bonds. Assured Guaranty Municipal Corp., the insurer of most of the debt, and co-guarantor Dauphin County, where Harrisburg is located, have been making payments to bondholders.
The next payment is due to investors Sept. 1.
Debt-service costs for 2010 total $32.7 million, including $13 million to replenish the debt-service reserve fund for payments made from it in 2009.
In addition, there is a $35 million working capital loan that Bear, Sterns & Co. extended in 2007 that is due to be repaid to JPMorgan in December.
In comparison, Harrisburg’s operating budget for fiscal 2010, which began Jan. 1, is $64.7 million. The city this year budgeted for debt service costs on its general obligation bonds but not on the incinerator debt.
Along with its search for an outside financial consultant, the city last week released an RFP for professional appraisal services to help it value some of its assets. Potential entities being considered include City Island, an island park in the Susquehanna River and the sports facilities there, the National Civil War Museum, and other assets.
The incinerator facility was not included in the list of assets in the RFP.
A June 29 amendment to the RFP removed certain entities from the list of potential assets, including parking facilities and water and sewer utility systems.
It added the Rev. Dr. Martin Luther King, Jr. City Government Center and the McCormick Public Safety Center to the list of assets that will be valued.
In other news, the City Council’s administration committee Tuesday evening interviewed four candidates for the Harrisburg Authority’s board.
The agency oversees the incinerator facility. The council could vote on the nominations at its next legislative session on July 13.
The authority currently does not have a board.
Last month, the Pennsylvania Supreme Court determined that it is the mayor that nominates board members to the Harrisburg Authority and not the City Council. That decision wiped out the current board and required Mayor Linda Thompson to nominate five members.