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Harrisburg Agrees to Sell Assets to Avert Pennsylvania Takeover

Nov. 7 (Bloomberg) -- Harrisburg’s leaders agreed to sell municipal assets as part of a plan to keep Pennsylvania’s bankrupt capital from becoming the first city put under a receiver through the state’s law to manage fiscal crises.

During a meeting today mandated by the law, Mayor Linda Thompson and five of seven City Council members said they support selling a debt-laden municipal incinerator and leasing the community’s parking facilities. An agreement on asset sales was conditioned on the receipt of regular progress reports from a forensic audit of the trash-to-energy plant’s financing, which tipped the community into insolvency.

Negotiations continued late today between the mayor and council on what steps to take and submit to the state for its approval. If the city doesn’t set a plan of action by Nov. 14, it may be put under a state-appointed receiver empowered to implement measures without the council’s consent.

Four council members voted to seek bankruptcy court protection for the city last month. The Chapter 9 filing that resulted faces challenges from the mayor, the state, unions, bond insurers and other parties.

To contact the reporter on this story: Romy Varghese in Harrisburg at rvarghese8@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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