Harrisburg Mayor Linda Thompson was pretty clear about this– If you were part of Harrisburg's incinerator debt debacle, you can't help clean up the mess. It turns out, one firm that's been involved from the start is still very much in play and continues to get paid for its work.
Public Financial Management, or PFM, was there in 2007, guiding the Harrisburg Authority when it took out loans for the incinerator. Just this week, PFM advised the Harrisburg Parking Authority when it borrowed money to keep the city afloat through the end of the year.
PFM, with a branch office in Harrisburg, got paid $142,410 for its work related to incinerator financing. It's a multi-million dollar a loan the city and Harrisburg Authority can't repay.
“It was PFM that was pushing that entire deal,” Harrisburg City Controller Dan Miller said.
Perhaps PFM would be barred from helping to solve the city's debt crisis. That's the impression we got from Mayor Thompson's fiscal recovery plan, which states that “all parties involved in the RRF (incinerator) during the 2003 and or 2007 bond transactions not be permitted to participate in any restructuring/construction of debt or involving transactions related to the Mayor's Act 47 Recovery Plan.”
“It's a great idea to keep these advisors out of any kind of deals going forward, but it's unfortunate that we're not doing it,” Miller said.
This week, PFM advised the Harrisburg Parking Authority when it got an emergency $7.4 million loan for the city. That cash transfer was part of Thompson's recovery plan.
“Contained within the projected sources and uses of funds as presented under the debt solution portion of this Recovery Plan is a deposit to a City escrow account for $6 million in the first year…Due to the immediate nature of the City's cash shortage, the escrow may be comprised of funds advanced to the City prior to the actual sale of lease of assets. The City has had conversations with HPA regarding the potential for financing assistance prior to the disposition of assets,” the document reads.
So another payday for PFM is coming for its recent work. Should the firm have been hired again, given the history?
“We have no hard evidence or any evidence to indicate PFM did anything wrong, and it would be highly inappropriate for us to assume because they helped at one point or another,” Parking Authority board member Corky Goldstein said.
The Harrisburg Authority, owner of the trash incinerator, got outside help to investigate who or what contributed to the $310 million incinerator debt. The results aren't in yet.
“If it should come back, the forensic audit, that they had done anything at all inappropriate, the board would sit down and reconsider them as our financial advisors,” Goldstein said.
PFM did not return a call from abc27 News on Friday, and Mayor Thompson's office did not respond to our request for comment.