At the outset of the first of a two part series, “A burning question remains: Will county’s deal for Harrisburg’s incinerator go through?” states:
“[Jim] Warner, executive director of the authority, said Moody’s was clueless. ‘There is no doubt the bond industry has this bias against anything regarding the Harrisburg plant,’ Warner told a financial reporter. Yes, he said, the plant had problems in the past. But now it’s running well and turning a profit.’
“So forget Moody’s, the authority would go ahead with the deal.
“It almost would be foolish not to.”
WATCHDOG: “So forget Moody’s, the authority would go ahead with the deal. It almost would be foolish not to.” Who is talking? Jim Warner? A “financial reporter”? The staff reporter? Or is the ambiguity purposely created by the editor lest Warner not be happy with the coverage?
The article continues on a ‘jump page’, but the reader only encounters Warner’s views at the outset and the balance of the article basically expands upon what Warner has to say, albeit it informative.
There we are told “The trash authority will get a well-run facility that’s all but guaranteed to make money. LCSWMA assumes none of the debt and could see its revenues, and the amount of trash it’s capable of processing, increase by 50 percent.” Again, who is talking? Warner? The reporter? Some unmentioned third party? The issue isn’t whether the facility will be “well run” but whether its innovated and flawed design will continue to lead to breakdowns that have caused hundreds of millions of dollars of losses over the past two decades.
And of course “LCSWMA assumes none of the debt” run up by the Harrisburg Authority but it will have $120 million plus multi-millions more for modifications and expansions at risk, much of it borrowed.
There is one paragraph in the article of merit and certainly alarming: “[Harrisburg] Officials talked about selling the incinerator but weren’t sure what it was worth. One appraisal reported that, for a private company, the plant would cost more to operate than it would generate in revenue — the appraised value was zero. But if purchased by a governmental entity that could require communities to supply garbage, it could be worth as much as $159.5 million.”
Lastly, significantly missing is mention of the failure of the authority to obtain a third party feasibility report from a national expert on incinerators, which is what NewsLanc has been urging since the outset.
Let’s hope that the second in the series is more objective. Perhaps it will even begin to deal with the issues raised by Bill Keisling at NewsLanc and which his ongoing series in fleshing out in detail.
Meanwhile, we are pleased that at least this colossal gamble with Lancaster community funds has gotten the attention of the Lancaster Newspapers and thus the general public.
The incinerator will make money if: 1) the state promises to buy electricity from the plant at a rate and amount that is profitable; and 2) the state permits LCSWMA to cut environmental corners, such as ash disposal at the site. As such, the incinerator’s profitability is propped up by the state of Pennsylvania using artificial means.
What’s apparent is that the state and Harrisburg need LCSWMA’s credit worthiness to borrow money to bail out the capitol city.