Harrisburg is a poster child for fiscal disaster.
It has more debt per capita than any city in the country. It’s been taken over by the state, which is forcing it to sell its most valuable assets to pay down creditors. Few doubt it eventually will have to file for bankruptcy.
So, who’s responsible for this complete train wreck?
Evidently, no one.
Not Stephen Reed, the mayor who controlled the city for 28 years.
Not Fred Clark, Reed’s principal ally on the Harrisburg Authority.
Not Dan Lispi, who oversaw the incinerator retrofit, the main cause of Harrisburg’s fiscal nightmare.
Not officials with the state Department of Community and Economic Development, which signed off on a long series of incinerator financings over many years.
Just ask them.
Last month, a state Senate committee did exactly that, giving the public a rare chance to hear from the players who originated, managed and plowed through one scheme after another to salvage a foundering trash burner.
That incinerator now has the city, which backed most of its debt, in hoc for some $340 million, more than twice what the facility is worth.
Indeed, it was a galling spectacle to witness the people who led the charge into Harrisburg’s financial crater dodge responsibility for it.
Adding to the surrealism of the event–Reed spent much of his appearance schooling senators on how to change state law to provide greater oversight of municipal bond issues.
He had a multi-point plan to strengthen the weak oversight that allowed his administration to drown Harrisburg in debt.
And he’d be happy to write it all up and act as an adviser, as well, he cheerfully told the Senate committee.
So, in the world of Steve Reed, who was to blame?
Well, the former mayor and his people got some really bad advice from people they trusted.
Numerous engineering reviews of the proposed design by Barlow Projects Inc. supported its ultimately flawed technology, Reed said.
Numerous reviews of the project’s finances by certified professionals affirmed that project costs were solid and that the incinerator’s revenues would pay for its debt, testified the former mayor.
Sure, Barlow never secured a performance bond to back the quality of its work, but nobody realized that at the time. If his administration had any flaws, it was to be too trusting, Reed implied.
And how about the many damning allegations in the Harrisburg Authority’s forensic audit of the incinerator mess?
Charges that numbers were cooked so debt would appear self-liquidating; bonds were issued so that fees could plug holes in the city budget; fees were diverted to buy artifacts; political allies were rewarded financially; City Council was lured into supporting more debt.
None of that happened–or it happened without the key players knowing. In some cases, important issues weren’t addressed at all, as Reed and his allies artfully dodged several of the senators’ tougher questions.
At the tail end of October, the Senate committee was slated to reconvene, with a new group of witnesses testifying.
Maybe they’re to blame.
