Harrisburg, the insolvent capital of Pennsylvania, will ask a judge today to endorse a plan to end the city’s fiscal crisis by settling with creditors owed about $362.5 million, Bloomberg News reported today. Commonwealth Court Judge Bonnie Leadbetter must find that the city’s plan isn’t arbitrary or capricious, a legal standard that should be easy to meet, said Mark Kaufman, the attorney for the state receiver who negotiated the settlement. The receiver, William B. Lynch, forged a plan that saved the city more money than if it had remained in bankruptcy court, Kaufman said. The council on Sept. 16 approved legislation needed to implement the recovery, including the sale of a waste-to-energy incinerator, the lease of the parking system, an extension until 2017 of an income-tax increase on residents and changes to two union contracts, according to Kirk Petroski, the city clerk. Harrisburg’s crisis stemmed from an overhaul and expansion of the incinerator, which doesn’t generate enough revenue to cover the debt. Governor Tom Corbett, a Republican, appointed Lynch under a state law that gave the receiver the authority to negotiate a settlement but not impose taxes or take other actions needed to implement the deal.
