The Pennsylvania agency overseeing Harrisburg’s financial recovery has petitioned a state court to extend the term of city receiver William Lynch for two more years.
Lynch’s term is scheduled to end Dec. 1. Gov. Tom Corbett appointed Lynch, a retired Air Force general, in May 2012 after predecessor David Unkovic quit abruptly.
Department of Community and Economic Development Secretary C. Alan Walker filed the motion Monday with the Commonwealth Court of Pennsylvania, which two months ago approved Lynch’s “Harrisburg Strong” recovery plan that calls for eliminating $600 million of debt and aims to keep Pennsylvania’s capital city out of bankruptcy.
The receivership team and city and regional officials are putting the finishing touches on the plan, which centers around the sale of the city’s incinerator -- which by itself accounts for roughly $365 million of bond financing the city cannot pay -- to the Lancaster County Solid Waste Management Authority and a 40-year lease of parking assets to Harrisburg First, a consortium that includes Guggenheim Securities, Piper Jaffray & Co., Standard Parking Corp. and Trimont Real Estate Advisors.
“Though much progress has been made during the receivership -- most notably the confirmation of the Harrisburg Strong plan -- the city remains in a state of fiscal emergency,” Walker said in his petition.
Lynch’s team hopes to price the bonds for both transactions by the second week of December. The Harrisburg Parking Authority is expected to vote on final approval of the parking deal next week.
According to Walker’s petition, remaining initiatives to the recovery plan after the bond pricing include union negotiations, and operational water and sewer authority transition.
Commonwealth Court Justice Bonnie Brigance Leadbetter, who approved the recovery plan on Sept. 19, last week authorized Lynch to sign plan documents that city controller Dan Miller has not signed. Miller, who ran unsuccessfully for mayor in the Democratic primary and as a Republican in the general election, has been a frequent critic of the plan.
“Delays by the city controller in executing documents necessary to the [implementation] of the plan have occurred and any further such delays could threaten the timely consummation and jeopardize the ultimate success of the plan,” Leadbetter wrote.
Pricing the bonds by mid-December is essential, according to Lynch’s advisors, because Harrisburg could face another cash-flow crisis during the winter. They also want to price the bonds before interest rates rise.
Democrat Eric Papenfuse will become mayor on Jan. 1. Incumbent Linda Thompson finished third in the Democratic primary.