The Harrisburg, Pa., City Council Tuesday held off on authorizing up to $4 million to issue tax and revenue anticipation notes, while it approved a $78 million budget.
The council chose not to bring the tax and revenue anticipation notes, or Trans, to a vote. The deal would have marked a return to the debt markets for Pennsylvania's distressed capital.
The Tran deal may be revived should the city need stop-gap funding before tax receipts come in, but the City Council would have to approve it in a separate ordinance.
Harrisburg's cash flow, however, has improved considerably, officials say, and the city might not need to issue the Trans.
The city expects to make payments this week necessary to remain current on outstanding debt, including payments to SunTrust Banks on an equipment leasing deal, and the Pennsylvania Infrastructure Bank, a state-operated program that provides low-interest loans to help fund transportation projects within the commonwealth.
This will bring the city's accounts payable down to roughly $1.1 million, much of which is payable to the city treasurer for health care expenses. Last February that amount was $4.8 million.
After making these payments and payroll, the city will still have an estimated $2.1 million in cash available, compared with $176,000 in February 2013.
The council Tuesday cut the proposed salaries of several members of Mayor Eric Papenfuse's cabinet. It eliminated the position of sustainability director, which Papenfuse had sought to create.
It marked the first public battle between Papenfuse and the council. Papenfuse, who succeeded Linda Thompson last month, accused the council of "pure grandstanding and part of the old Harrisburg."
Harrisburg, while implementing its financial recovery plan, is still under state receivership. Receiver William Lynch must sign off on any budget.
Earlier Tuesday, the city and its firefighters union agreed on concessions that Papenfuse called necessary to balance the budget.
Harrisburg has petitioned the Commonwealth Court of Pennsylvania to exit receivership. The court in September signed off on the so-called Harrisburg Strong recovery plan, aims to keep the 49,000-population city out of bankruptcy.
The city in December closed on two bond deals essential to the plan. They were 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.
Overall the plan erased $600 million of debt.
Should Harrisburg emerge from receivership, it would remain under state oversight through the distressed communities program known commonly as Act 47.
