Latest DWH Update

ACT 47

See DWH Meetings & Notices about DCED public meetings.

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LAWSUITS

There are now at least 7 different lawsuits pending against the City over Incinerator debt. The Harrisburg Authority is a co-defendant in at least 5 of those cases. THA also has a few separate cases still pending and many unpaid vendors.

The Dauphin County Commissioners appear to be determined to keep pushing for judgments against the City. The County has brought 4 of these lawsuits and reports state that they are helping to pay (with our money) for some of the other cases.

Hearings on demands for Court Orders requiring the City to turn over ALL HBG TAX REVENUESare approaching. One was set for this coming week, but has been postponed as the City’s new legal counsel gets up to speed. Another hearing is now scheduled in a different case with a different Judge for March 15 and 17.

Word is DCED filed formal motions this past week to Intervene in the 2 largest cases. We do not know what impact that will have on the cases.

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NO CONCESSIONS

The Bondholders, their insurance company (AGM) and their attorneys have made NO KNOWN Concessions to date. They still want every dime. If that happens without any changes in existing state or federal laws, everyone in all of Central Pennsylvania will suffer the consequences for years to come.

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ACCOUNTABILITY

Zero. None to date. However, a forensic audit of Incinerator issues has begun at THA.

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VALUE OF INCINERATOR

Zero. Zero. ZERO!! That is the Fair Market Value. While reports claim that the Incinerator is now running at a profit, those claims DON’T COUNT the cost of debt payments. This year that DEBT SERVICE PAYMENT is estimated to be more than double the projected revenues!!

Perhaps worse, the cost to rebuild the facility – the replacement cost – is estimated to be almost $100 million LESS than the principal owed on the debt. That’s like having a $60K loan on a new $40K car. It’s going to wear out long before the debt is paid.

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NEW YORK LEGAL HELP

Cravath, Swaine & Moore are trying to help, with free legal services to City Council and bringing in free world class Financial Advisors to help them. Their report may be issued within a month to theirclient – City Council, but it is not known if it will be a privileged legal opinion or a public document. We will have to wait and see.

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HOW TAXPAYERS ARE BEING PLAYED

A twofold scenario keeps popping up at a possible solution. (1) Lease of garages and meters (Gross $200+ million – NET $100 million) and (2) Sale of the Incinerator (Gross $100+ million). It would mean one thing. TAXPAYERS will bear the entire burden of this fiasco – and NOT the bankers, lawyers, appraisers, engineers, financial advisors, public officials, lobbyists or former officials who brewed this toxic stew. Our public assets will be transferred in full to pay everything, and it will still not relieve us of the whole debt. We will lose future revenue streams, so taxes must go up dramatically and, at the same time, the cost to park and get trash picked up will skyrocket. Chicagodid the garage deal (paid huge fees) – much bigger than our system – just a few years ago. Today, they too are functionally bankrupt. NO MATTER HOW IT’S PACKAGED, this 2-part option will fall on taxpayers alone and let everyone else off the hook.

REMEMBER, Without accountability, there can be no solution.

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CHAPTER 9 BANKRUPTCY

More than ever, it looks inevitable, though some hope still looms.

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WHAT’S NEXT?

Get ready to fight the fight. Over the next few months, Courts will start to issue orders to City officials, recommendations will be made by the people the State hired, bankruptcy counsel will issue recommendations and low bidders will try to take our assets for a song. Be ready. We may need you in a courtroom. We may need you at public hearings. We may need you to be heard outside private meetings. We may need you to speak to your state legislatures. We may just need you to show up to make sure that public officials hear, consult and adhere to the collective will of their TAXPAYERS.

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MEMBERSHIP

We have more than 130 members now. We need everybody. Why? We, the taxpayers need to lead ourselves out of this mess. We need a strong united voice, so Judges, Elected Officials, Bondholders and State Officials all hear us. Sign up new members today. Go to debtwatchharrisburg.com. Join us!

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