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Harrisburg's Act 47 blueprint calls for sale, lease of city assets

By - Last modified: June 14, 2011 at 8:41 AM

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Selling Harrisburg's beleaguered incinerator and selling or leasing the city's parking garages were among the many suggestions that a state-appointed Act 47 team delivered last night to City Council.

Before a packed house in City Council chambers, the team presented an overview to the council on how it recommends the city get out from under its heavy debt burden, which stems largely from a failed 2004 retrofit of its incinerator.

In the plan, which has been five months in the making, it has been recommended the incinerator be sold to the Lancaster County Solid Waste Management Authority. There was no specific mention to another party regarding the sale or lease of the parking garages.

The Lancaster County authority has previously pledged $124 million to buy the troubled incinerator, which has buried the city in $310 million in debt.

New York City developer Jacob Frydman has put up a lease offer for 99 years for $140 million, but only if the city agrees to lease him the parking garages for 75 years at $215 million.

To offset the loss in revenue, the plan calls for a $2 million annual payment from Dauphin County in gambling revenue and a 0.8-mill property tax increase equal to about $50 for the average city property owner.

If revenues still do not meet what's needed to balance the budget, the city could look to eliminate 41 positions among the public works, police and fire departments, as well as two that provide direct support to the mayor and the City Council, the plan said.

The Act 47 team, led by Julia Novak of The Novak Consulting Group, based in Cincinnati, reported a structural deficit in Harrisburg's operating budget of $3.4 million this year.

The team has estimated the city will be out of cash and unable to pay bills or make payroll by the fourth quarter of this year. With no action on the plan, that debt is projected to grow to more than $10 million by 2015, Novak said.

To address the structural deficit, the team is recommending the elimination of 19 full-time positions, including five through shift schedule changes in the fire service.

Increasing fees for services and reopening negotiations with the city unions also is needed to deal with the structural deficit, Novak said. In addition, she said pay freezes should be instituted, as well as benefit restructuring and reduced overtime pay.

The council did not ask any questions at last night's special meeting. The public was given the option to comment, but no one took that opportunity to speak.

Another special legislative session has been scheduled for 6 p.m. Tuesday, June 21 in council chambers. A public hearing will be held at 5:30 p.m. Tuesday, June 28 in the auditorium of John Harris High School, 2451 Market St.

All written comments on the plan should be submitted to Novak, 210 Glenmary Ave., Cincinnati, OH 45201, or by email at Act47PlanInput@thenovakconsultinggroup.com.

The council and the mayor must agree to the plan, or a revised version of it.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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