By Bill Keisling and Robert Field
Moody’s Investment Service threatened to significantly downgrade the Lancaster County Solid Waste Management Authority’s credit rating if it acquires the long trouble plagued and environmentally compromised Harrisburg Incinerator.
Below are the problems facing LCSWMA and our proposed alternative:
1) LCSWMA’s original evaluation and offer was $45 million but now its outlay would come about $150 million, not because of economic factors but at the demand of Dauphin County. There apparently is no third party expert feasibility study to determine price.
2) LCSWMA is gambling its entire net worth of approximately $150 million in the acquisition costs. Moreover, LCSWMA’s total annual cash flow of approximately $6 million could readily be absorbed by a continuation of Incinerator losses. The Lancaster County public would have to make up any losses in higher trash removal prices.
3) The Harrisburg Incinerator has been plagued with break downs over the decades, the latest taking place just a year ago. LCSWMA cites the operator, Covanta, as stating the incinerator is in good condition. But Covanta stands to collect $20 million if the $150 million acquisition takes place. Also, no supportive third party engineering study has been made public.
4) For years the City of Harrisburg and later its Authority were illegally processing hazardous waste. The residue is stored in ‘mountains’ of ash on site.
The Harrisburg Patriot presciently wrote in 1989: “There is … no visible effort on the horizon likely to address the ash problem in the foreseeable future… Rather, city officials seem to be stalling for time, hoping for an act of God or a buyer to take the incinerator and its ash problems off its hands.” “The city, for all the money is has put into the incinerator operations, has permitted it to turn into a financial and environmental time bomb.”
5) In 2000, the regional EPA administrator wrote the state DEP that, “there is no doubt that (the Harrisburg incinerator) is one of, and perhaps, the most significant single source of dioxins/furans in the United States.”
6) Officials have made clear that subsequent owners would be liable for any environmental cleanup required of the site now and in the future.
So what would be a sensible arrangement?
The current deal seems to be an attempt to bail out the City of Harrisburg’s and Dauphin County’s $350 million in Incinerator debt at the expense of Lancaster, rather than a normal business proposition based on sound economic considerations.
It would be far less risky to enter into a forty year lease, perhaps with an initial payment of $50 million, and split profits evenly between the Harrisburg and Lancaster Authorities.
The Harrisburg Authority could raise funds towards paying off its debt by pledging the lease as collateral for a bond sale. The Lancaster Authority would not risk choking on a $150 million ‘turkey.’
The lease should include adjoining vacant ground, but not any area currently containing potentially hazardous ash heaps.
Negotiations should be placed on hold, all engineering and feasibility reports should be published (if they indeed exist), and the public should be given the opportunity to attend briefings, ask questions, and have its voice heard.
