By Robert Field
“Harrisburg incinerator: Should it be desired or disdained?” is the second and much better installment of a two part series concerning the proposed acquisition of the long troubled Harrisburg incinerator by the Lancaster County Solid Waste Management Authority (LCSWMA.) It is thorough and informative.
But after all of the history is laid out and the complex transaction somewhat clarified, two basic questions remain unanswered and sadly unasked:
The first: Why would the residents of Lancaster County take on such a huge and risky investment to help bail out the City of Harrisburg, Dauphin County and the State? No benefits are described; no financial information given. Yet the project’s history and unknowns in the future suggests the risks can be immense.
The second: Who says the transaction makes financial sense for the LCSWMA and county residents? The information we receive is from Jim Warner, CEO of the LCSWMA. There has been no vetting of the deals feasibility by a reputable outside consultant with expertise in these matters.
Evidence given that the plant is no longer trouble plagued?
“The money ‘went to a significant retrofit process to complete construction of the facility, and that put us at a baseline starting point,” said Jim Klecko, vice president of regional business management for Covanta.
“Covanta wound up suing the City of Harrisburg, which still owes $21 million on the loan, Klecko said. Total incinerator-related debt now stands at a whopping $340 million.
“But as for the facility itself — Klecko said it’s in very good shape.”
‘We’ve routinely done normal maintenance, we’ve improved the operation almost annually,’ he said. ‘We brought that facility up from the ashes and turned it into a viable asset, with viable operations.”
Reassuring? But remember, if the deal goes through, Covanta will have a much better chance of collecting the $21 million owed to them. Plus they will presumably earn profitable fees as the operator. This is hardly testimony from a disinterested third party.
In taking on this risk and floating bonds to acquire the facility, Jim Warner is putting the community’s money at stake, not his. We don’t question that he believes the transaction has merit. If he is right, he will put another feather in his cap. (We suspect it would have to be a big cap.) If he is wrong …the public will be stuck with the bill. We have been there (taking sponsors at their word); we are doing that (subsidizing the Convention Center.)
A respected member of the Lancaster community once described Warner as an “arrogant bully”. We certainly got a similar impression during our brief phone conversation with him a couple of months ago. He’s been successful. It probably doesn’t register on him that he can make a mistake. Those who have been even more successful recognize that they have made mistakes and fear doing so again. So the best CEOs seek and treasure the views of outside experts even if they ultimately make an informed decision themselves. “Pride cometh before the fall.”
Please read “Harrisburg incinerator: Should it be desired or disdained?” Then ask yourself “Why? And says who?”
