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November 21st, 2011

Harrisburg’s concession proposal rejected

Bond insurer, county reject Hbg.’s concession proposal

The primary backers of Harrisburg’s incinerator debt have rejected the capital city’s proposal to forgive $100 million of the $310 million total.

Bond insurer Assured Guaranty Municipal Corp. and a spokeswoman for the Dauphin County commissioners today said the figure is not something either party will support, but they are open to continued negotiations.

The $100 million concession was suggested Monday at a negotiating session between city leaders and the state Department of Community and Economic Development as Harrisburg attempts to avert receivership.

In a letter today to Mayor Linda Thompson, AGM’s chief surveillance officer Holly Horn said this request further underscores the City Council’s “continuing unwillingness to negotiate in good faith.”

“There is absolutely no rationale for a $100M concession,” the letter said.

AGM said it will work with interested parties who seek viable and realistic solutions to the complex issues facing the city.

County spokesman Amy Richards Harinath said the county has made no commitment to contribute anything other than the concessions it made in connection with the Act 47 recovery plans. The council rejected plans crafted by a state-sponsored team and the mayor.

“The county is open to further discussions, but has serious reservations about the city’s commitment to sell or lease assets sufficient to provide funds necessary to pay its debts,” she said.

City leaders have agreed to sell the incinerator and lease the city’s parking garages.

Officials have until the end of the business day Nov. 14 to agree to a recovery plan to submit to DCED Secretary Alan Walker. If they cannot reach a consensus, Walker under an amended Act 47 law can petition the Commonwealth Court to appoint a receiver to implement a plan for the cash-strapped city.

Another discussion on a consent agreement for that possible plan will take place at 7 p.m. today in the council’s chambers.

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