Novak Consulting Group will release its finalized financial recovery plan for Harrisburg at 10 a.m. Friday.

It will post the plan, with adjusted recommendations for Pennsylvania's troubled capital city, at that time on the websites of Cincinnati-based Novak Consulting and the state Department of Community and Economic Development.

Harrisburg's City Council will hold a special legislative session at 6 p.m. July 19, when it is expected to vote on the plan, which was commissioned as part of the city's enrollment in the state's Act 47 program for municipalities in financial distress.

By state law, Harrisburg must act on the proposal by July 25.

On Monday, the council will hold a closed session with law firm Cravath, Swaine & Moore LLP to discuss a possible Chapter 9 bankruptcy filing. Cravath is representing the council pro bono.

The city of 47,000 residents is struggling under the weight of debt it guaranteed for an incinerator project that fell short of financial expectations.

Bonds outstanding on the incinerator total $220 million.

The city also owes a combined $75.5 million to Dauphin County, bond insurer Assured Guaranty Municipal Corp., and the incinerator's operator, the Harrisburg Authority.

The city enrolled in Act 47 last December.

Novak Consulting's preliminary report said Harrisburg could run out of money by the fourth quarter. It also said the structural deficit in the city's operating budget could rise from $3.5 million, or 6.3% of revenue, in the current fiscal year to $10.4 million, or 19.5% of revenue in 2015.

The consulting firm's president, Julia Novak, said that while the recovery plan includes adjustments to reflect some community concerns, most of the major fiscal initiatives remain.

At a recent public hearing before the City Council, she said the Act 47 committee is no longer recommending that Harrisburg lay off 27 police officers and 12 additional firefighters, as needed, should it adopt the recovery plan and still face a budget deficit.

The council had objected to such layoffs.

Novak, speaking by telephone on Wednesday, declined to offer specifics.

"We're just really focused on getting the plan out. I understand the emotions, I hear the emotions and I hear the frustrations," she said.

The plan essentially advises the city to sell or lease assets, such as the incinerator and its parking garages, and not file for bankruptcy.

The City Council two weeks ago voted 4 to 3 to authorize the city to prepare for such a filing.

The recovery plan team also includes the Pennsylvania Economy League, law firm Stevens & Lee PC, and former state House Speaker Robert O'Donnell.

Last week, the legislature passed a bill, signed by Gov. Tom Corbett, preventing distressed small-to-medium-sized third-class cities such as Harrisburg from filing bankruptcy, under the threat of losing all state aid.

"As bankruptcy recedes as a potential solution to Harrisburg's woes, we see a long and, to many residents, painful process before the city regains solvency," Janney Capital Markets said Wednesday.

The Act 47 committee is scheduled to meet with Mayor Linda Thompson at 11 a.m. Friday and review it with the City Council at a 3 p.m. private session.

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