Monday, October 17, 2011

Harrisburg, Pennsylvania has Filed for Bankruptcy; or Has It?

In the annals of stupid government mismanagement, it is hard to beat the tale of the Harrisburg trash incinerator, a project so badly managed that it has led to a bankruptcy filing by the city council. The city lost a pile of money on their incinerator, built in the 1970s and operated until 2003. Instead of giving up, they decided to gut the building and install a completely new plant. They went with a new, small company that had never built anything so big, so inexperienced that they couldn't get a performance bond (insurance that they would really finish the project), a requirement that the city ended up waving, in defiance of every sort of normal procurement procedure. The small contractor was years late, never completely finished, and then declared bankruptcy, leaving the city with $125 million in bonds and no revenue stream to cover them. Bond Girl has the whole, sad story.

It gets even better, though, because when the city council filed for bankruptcy, the mayor refused to agree, and the two parties have hired lawyers and sued each other. According to the legal commentators at Bloomberg, the filing will probably be thrown out.

Which is why, you see, we need to get Washington off the backs of local communities and let them run their own affairs.

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