Harrisburg Receiver: Decision Made to Sustain Essential Services; Cites Resolve to Move Forward with Recovery Plan

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Pennsylvania Department of Community & Economic Development

Mar 09, 2012, 01:11 ET

HARRISBURG, Pa., March 9, 2012 /PRNewswire-USNewswire/ -- David Unkovic, the Receiver for the City of Harrisburg, announced today that the city will not be making its March 15 debt service payments on two series of general obligation bonds and notes.

The decision to withhold payment was made to maintain sufficient cash-flow to provide vital and necessary services.

"My first priority as Receiver is to ensure that vital and necessary services such as police and fire are maintained within Harrisburg during the state of fiscal emergency," Unkovic said. "The city will not be making these payments to ensure sufficient cash flow so the citizens of Harrisburg continue to receive essential services. The failure to make these payments does not diminish my resolve to move forward with the initiatives under the Recovery Plan."

The payments which will not be made include $2,735,000 due on the city's General Obligation Refunding Bonds, Series D of 1997 and $2,530,000 due on the city's General Obligation Refunding Notes, Series F of 1997. The payment of principal and interest on such bonds and notes is insured by Ambac Assurance Corporation.

"The problems the city faces did not develop overnight and I am working hard to address these problems while maintaining the core functions of Harrisburg's city government," Unkovic said. "This action will enable the city to continue operating and providing services while taking important steps to recover fiscal stability."

On Feb. 6, the Receiver filed his Recovery Plan for the city with Pennsylvania's Commonwealth Court under the Municipalities Financial Recovery Act, known as Act 47. The Commonwealth Court held a hearing on March 1 to review the Recovery Plan, but has not yet acted on the plan.

For more information on City of Harrisburg or the Receiver, including important documents and an updated timeline visit www.pa.gov/harrisburgreceiver or call 717-231-5558.

Contact: Office of the Receiver; 717-231-5558

SOURCE Pennsylvania Department of Community & Economic Development