The Receiver’s latest Status Report on the City of Harrisburg’s financial distress and progress

As mandated by the Commonwealth Court, the Office of the Receiver of Harrisburg must submit periodic reports to the Court outlining the status of the implementation of the Receiver’s Financial Recovery Plan. The last report was filed on December 21, 2012.

On March 28, 2013, Receiver William Lynch filed the first status report of the new year. The highlights:

  • The City has not drawn on the $4 million sewer and water transfer court-approved in January. The temporary borrowing was intended to help the City get through any first quarter. However, it was not needed.
  • Overdue payables averages to be $4-5 million, most are over 60 days and some over 120 days. The largest is medical and health insurance liabilities. As real estate tax and earned income tax returns come in, the Receiver expects to chip away at the oldest of the bills owed.
  • Projected revenues for 2013 are $51,4235,650. Projected expenditures are $58,421,881. Anticipated deficit=$6,989,232.
  • The 2011 audit is expected by mid-May, and the Receiver expects the audits will be up to date bylate 2013.
  • A fleet analysis has been completed and it is recommended 36 vehicles are eliminated, which will decrease insurance and maintenance costs by $25,380 and receive an estimated $18,000 in salvage.
  • An RFP has been issued to outsource the City’s sanitation operation.
  • The Receiver reports that progress has been made with all three unions. Contracted salary increases were not implemented in 2013.
  • The incinerator (Lancaster County Solid Waste Management Authority) and parking monetizations (Harrisburg First) negotiations continue.
      • Incinerator: A Term Sheet is set and currently, arrangements are being made to sell electricity generated by the Incinerator to the State for 20 years. An Asset Purchase Agreement has been drafted.
      • Parking: An Exclusive Negotiation Agreement exists until April 5th. A Term Sheet is being drafted contingent on parking arrangements with the State, labor negotiations, and the bond issuance. An engineer study of the parking is almost complete and a revenue study is being conducted.
  • Based on the direction of the Federal Department of Justice, Environmental Protection Agency, and the PA Department of Environmental Protection, the creation of a water and sewer operating authority that will include the City and the “suburban municipalities.” This will enable funding of a mandatory sewer treatment facility estimated to cost at least $50 million.
      • A Term Sheet has been drafted. The Harrisburg Authority is paying for legal counsel and an engineering consultant to represent the City in these matters.
  • The Receiver is working on a resolution to the suburban municipality sewer system overcharges

Read the report: