PA Senator Mike Folmer Presents Legislation Inspired by the City of Harrisburg’s Debt Crisis
As released by the office of PA Senator Mike Folmer (R-48):
Announces Legislation to Address Issues Surrounding City of Harrisburg, Incinerator Debt
HARRISBURG – Senator Mike Folmer today announced a legislative package to address issues that caused the financial problems of the City of Harrisburg, the Harrisburg Incinerator, and Dauphin County. The package stems from two recent Senate Local Government Committee hearings on debts incurred by the Harrisburg incinerator, and the January 2012 Harrisburg Authority Forensic Investigation Report. The report noted, “It is evident that most, if not all, of the parties involved with the [project] knew or should have known that, at a minimum, there was substantial risk that the [incinerator] would not generate revenue sufficient to service the debt being issued, but they proceeded with the retrofit projects and their financings anyway.”
“While the public committee hearing answered a number of questions as to how the staggering City debt was created, I want to ensure the flaws, weaknesses, and mistakes that caused these financial problems will not be replicated in other municipalities across the state,” said Folmer. I believe the citizens of Harrisburg, Dauphin County, and the Commonwealth deserve better answers as to why certain actions relating to the Incinerator were taken, and that the same mistakes will not be made in the future.”
The legislation would:
- Appoint a special prosecutor to thoroughly investigate the financial transactions of the Harrisburg Authority, the City of Harrisburg, and Dauphin County to determine if criminal proceedings are warranted;
- Amend the Municipal Authorities Act to ban the use of qualified interest rate management agreements (so called municipal “swaps”)
- Amend the Local Government Unit Debt Act to strengthen Department of Community & Economic Development oversight, require only legitimate “self-liquidating” projects be approved for municipal borrowings, and prevent certain risky practices;
- Amend the Local Government Unit Debt Act to add criminal penalties for filing false certifications that municipal debt is “self-liquidating;” and
- Amend the Sewer Rental Act to require justifications for sewer rates and charges and impose criminal penalties for violations.
Folmer added that as the General Assembly works to finalize the state budget for 2013 – 2014, he will seek state appropriations to finish or otherwise complement the forensic audit of the Harrisburg Authority – with subpoena power.
The legislation is currently being circulated for co-sponsorship and will soon be assigned a bill number and Senate Committee.