So, it’s done.
More than 19 months after former receiver David Unkovic filed his financial recovery plan for Harrisburg, his successor, retired Gen. William Lynch, today announced a series of agreements to implement it.
All the loose ends aren’t quite tied up. However, to Lynch’s credit, the “Harrisburg Strong” plan, at first read, sounds impressive in both its completeness and its possibility.
In sum, the plan:
- sells the incinerator to the Lancaster County Solid Waste Management Authority for net proceeds of $126 million to $132 million.
- leases the city’s parking facilities for around $260 million.
- wipes out virtually all the city’s long-term debt, as well as its structural deficit.
- provides the city with ongoing revenue from the leased parking assets.
- funds the creation of three not-for-profit entities that would pay for infrastructure improvements, economic development initiatives and retired city worker healthcare.
- settles most litigation and claims against the city, particularly claims pertaining to the incinerator, with several creditors accepting much less than what they were seeking.
There are some negatives, too. The city’s 2 percent earned income tax would be retained, and the cost of street parking, already expensive, would increase further to $3 per hour.
Earlier today, I wrote a blog post criticizing Lynch for seeking to extend the “one-year” hike in the earned income tax credit by four more years. To me, this remains the greatest negative of the plan. Harrisburg residents have taken, by far, the brunt of the pain, with multiple increases in taxes and fees, which many simply cannot afford. I also buckle at the insincerity of selling the hike as a single-year event when it likely will be permanent.
Nonetheless, this plan appears comprehensive, creative and, at least at this point, workable. In sum, the plan offers Harrisburg a way out — a way out of misery, a way out from beneath a future of little hope. Will it all work out perfectly? Probably not, but it’s likely the best that we could expect. If, following Commonwealth Court approval, implementation goes reasonably well, the plan might just bring about a new era of confidence and investment in the city.
Notably, in his report, Lynch states that he will use “every measure available” to seek redress for possible wrongdoing in the incinerator debacle. He said that he believes that grounds may exist to pursue civil action against certain firms and people named in the Harrisburg Authority’s forensic audit, which examined in detail how the incinerator upgrade went awry — and who benefited from it.
Perhaps Harrisburg, eventually, will recover some money from this effort. Perhaps it won’t. It almost doesn’t matter. The people here will derive tremendous satisfaction just to see the self-dealers finally called to account for their actions, actions that effectively bankrupted this city, bringing it to the edge of calamity.
