TimesLeader.com

Credit crisis hits Harrisburg incinerator

The Associated Press

HARRISBURG — City officials may have to order another round of steep trash fee increases on property owners, because the worldwide credit crunch has stymied a plan to refinance some of the debt tied to the city’s incinerator.

Mayor Stephen R. Reed said he believes financial markets eventually will recover and allow a restructuring plan to go forward. Under the plan, refinancing some of the estimated $300 million in debt tied to the incinerator would lower debt payments and bring the incinerator’s revenue in line with its costs.

But with refinancing so difficult right now, City Councilwoman Patty Kim said boosting trash-collection fees is one of the few choices left to help the incinerator cover its debt payments.

The plant’s current operations are on track to pile up a $13 million deficit by the end of 2009, said Public Financial Management, a consultant to the Harrisburg Authority, which owns the incinerator.

Kim said a second straight year of fee increases could hurt families and drive out landlords.

The incinerator in south Harrisburg was operating with just two of three burners and losing about $1 million a month when a botched $80 million renovation was halted in 2006.

Monthly trash rates in the city rose $14.50 to $32.32 in January. Residents elsewhere in Dauphin County, which is served by the incinerator, saw an average increase of about $1.30 a month, Harrisburg officials said.

The higher fees are backing a $55.5 million city-and-county plan to fix the plant and cover its deficit through 2008.