By Bill Keisling and Robert Field
Lancaster County officials are obviously feeling the heat for the Lancaster County Solid Waste Management Authority’s (LCSWMA) decision to purchase the long-troubled Harrisburg incinerator for somewhere between $125 to $150 million.
In recent days, lancasteronline.com has published not one, but two articles defending the decision.
According to a report in the Intelligencer Journal New Era, Lancaster County Commissioners Chair Scott Martin stated: “The authority, he said, is paying the market value for that facility and for their hauling system up there.”
“It’s a good deal for our authority, for the citizens of Lancaster and for the citizens of Dauphin County,” county commissioner Dennis Stuckey told the newspaper on Wednesday.
But simple facts don’t bear this out. Harrisburg incinerator is only worth a fraction of what LCSWMA is paying for it.
This acknowledgement comes from no less that Jim Warner, CEO of LCSWMA.
On July 22, 2011, Warner told his own board that he and his team had valued the incinerator at no more than $45 million, but that the original $45 million sale price of the incinerator had swollen to $124 at the behest of Dauphin County commissioners, who needed to bail out themselves and bond insurer AGM.
“The next step is to enter into acquisition negotiations with the Harrisburg Authority,” LCSWMA minutes record Warner saying. “This was already done with (Dauphin) County and that is how the $124 million offer was determined. The Harrisburg Authority is not pleased that the County negotiated a sale price for their asset. The County did this to attempt to enhance the value and to try to develop a plan with the debt guarantor in Act 47. I hope that when negotiations progress with the Harrisburg Authority, they will also conclude that the $124 million is a fair offer. The entire extra value, the additional $79 million (difference between $45 and $124 million), is due to the guarantees from the City of Harrisburg and/or guarantees and contributions from the Commonwealth of PA that are not quite in place yet. LCSWMA’s offer is contingent on these factors.”
Need more convincing that this is a raw deal, with funny numbers?
At Monday’s hearing, Harrisburg receiver office lawyer Steve Goldfield told Harrisburg city council, “There’s no way you can call the incinerator an asset. It’s only worth $30 to $40 million tops.”
The extra $100 million paid for this facility is not only bailing out Dauphin County’s commissioners and the bond insurer for bad decisions of the past. It is also part of the plan that forces Harrisburg residents to pay tipping fees up to nine times that of out of state residents, Warner told city council.
If the long trouble plagued and environmentally challenged Incinerator goes the way of the Convention Center Project, tipping fees in Lancaster County will also need to be greatly increased.
Are Martin and Stuckey embracing the deal because they believes it is good for Lancaster or are they doing so out of political allegiance to Tom Corbett? The Govenor is pulling out all stops to prevent bond investors from suffering big losses should Harrisbug’s debt be adjudicated by a federal bankruptcy court.
