Harrisburg ended 2012 with a $13 million deficit that included about $2.8 million from 2011, said Fred Reddig, executive director of the state's Center for Local Government Services.
Reddig provided a financial update this morning at a recovery advisory committee meeting led by city receiver William Lynch.
The city's 2012 structural deficit was about $10.25 million, including about $9 million in missed general obligation debt service payments, Reddig said.
Harrisburg will borrow up to $4 million from its water and sewer fund to cover payroll and other general fund expenses through about mid-March, he said, referring to it as a line of credit, until tax revenues begin trickling into city coffers.
Efforts to issue a tax revenue anticipation note, or TRAN, to cover short-term cash flow needs have been unsuccessful, Reddig said.
Meanwhile, negotiations are wrapping up on the sale of the debt-ridden incinerator and lease of the city's parking system. Those deals are expected to be finalized by the end of the first quarter, Reddig said.
One of the biggest remaining hurdles — a long-term power purchase agreement with the state Department of General Services, which manages commonwealth facilities — is moving through a contract phase, he said. That agreement helps establish a final valuation for the incinerator, which has accumulated debt of $340 million.
The Lancaster County Solid Waste Management Authority is the would-be buyer of the waste-to-energy facility.
The power agreement with the state, which is expected to be about 20 years, would help ensure a tax-free bond issuance, which means a low interest rate and the highest possible valuation. That possible valuation has not been made public.
A long-term lease expects to be finalized on the parking system with an entity known as Harrisburg First. Tax-exempt financing is under consideration through the Pennsylvania Economic Development Financing Authority, or PEDFA, Reddig said.
Harrisburg First is led by Guggenheim Securities, a unit of privately held global financial services firm Guggenheim Partners, which is headquartered in Chicago and New York. It also includes Chicago-based parking operator Standard Parking Corp. and Boston-based real estate asset manager AEW Capital Management.