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Two bankrupt cities struggle to find the way out

Updated: Tuesday, July 23 2013, 04:34 PM CDT
Written by: Chris Papst

The recent bankruptcy filing in Detroit
is bringing focus back on Harrisburg, which is coming up on two years
since it filed for Chapter 9 protection in October of 2011, which was
later thrown out by a judge. 

As of now, Harrisburg’s
incinerator debt stands at $350 million.  When the city first filed for
bankruptcy is 2011 it was closer to $300 million, so Harrisburg is
sinking fast.   And now that the motor city filed for Chapter 9
protection, some say it’s time for Harrisburg to again do the same.

"I'm
so glad for Detroit taking the first step in a big way because it will
allow people in Harrisburg to have the courage to do the same thing,"
said Dan Miller, the City Controller.

From the beginning of
Harrisburg’s financial crisis, Miller, has been consistent, saying
bankruptcy is the best way out.  Now years later, Harrisburg is still
not paying its debt and every day that goes by without a specific
recovery plan, the city goes deeper into the hole. 

Added
Miller, "In order to restart Detroit, to restart Harrisburg you've got
to go through this process where you get rid of the debt, renegotiate
your contracts and you start going positive. That's exactly what
Harrisburg needs to do and the sooner we do it, the better."

But
others still want to give negotiations a chance.  CBS-21 reached out the
Receiver who only said he is optimistic an agreement can be reached
with creditors. 

"The receiver has been using the bankruptcy
hammer, much like we did a couple years back, to threaten the creditors.
To say, 'listen, bankruptcy’s going to be much worse off for you,"
stated Brad Koplinski.

City Council member Brad Koplinski, who
voted for bankruptcy, agrees.  He hopes to see an agreement in one to
two months.  But if one doesn’t come, bankruptcy must be considered. 

"We're
all struggling and we need a better partnership with the Commonwealth,
first of all, to make sure we have good options available to us so we
don't get into these difficult situations," concluded Koplinski.

The
obvious difference between Detroit and Harrisburg is that Detroit had a
prolonged decline while Harrisburg got mired in incinerator debt.  But
either way, they both can’t pay their bills. Two bankrupt cities struggle to find the way out


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