When Margaret and I arrived at the Harrisburg incinerator, they were auctioning artifacts from the Wild West, including Native American art, Winchester rifles, and many others. You might wonder why Margaret and I were visiting an incinerator in Harrisburg. You might also wonder what Wild West artifacts have to do with this.
Harrisburg made the news in 2011 by going bankrupt, a symbol of the economic distress that terrified the country. In the national media, the blame got placed on Harrisburg’s incinerator and on complicated financing procedures that had put Harrisburg more than $360 million in the hole, (and that’s just the debt for the incinerator: the city-wide debt is more than $600 million).
The original incinerator was completed in 1972, although it frequently broke down and was only operating at 25% capacity. During the mid-1980s the incinerator had a brief period of functionality, but the ’90s brought a host of problems, including the loss of a large portion of waste contracts. Then federal emissions regulations seemed to put the nails in the coffin. The incinerator shut down in 2003 and was $104 million in debt.
In 2000, city officials began investigating a retrofit for the incinerator, and by 2003 they were close to a deal. They chose Barlow Projects, Inc. to do the job (without a competitive bid), despite the shockingly low price tag (more than 30% lower than the nearest bidder), and the fact that the company had never taken on a job anywhere near this big.
The job went way over budget. Delays occurred. The city had counted on income from the incinerator in its 2006 budget; but, while the incinerator was scheduled to be completed by the first day of the year, the project wasn’t close to being done until spring. Even then, it wasn’t operating at full capacity and it wasn’t bringing in the expected revenue.
Harrisburg pretty much collapsed financially, defaulting on payments, owing $68 million in debt payments in 2010, and running a $15 million dollar annual deficit by August of 2012. The State tried to force a set of fiscal measures on the city, but the council refused because it would have raised taxes after they had already been hiked by 17%. The City Council voted to file for bankruptcy, and then the State took over. The solution at this point seems to be taking the incinerator, several parking garages and whatever else they can get their hands on and selling it to the Amish.
The most interesting figure in this story is not actually the incinerator. Steven Reed, the former Harrisburg mayor, who held the office for 28 years, is an interesting man. Credited with reviving the ailing Harrisburg economy of the ’80s, he also carries the fame of spending at least $8.3 million on Wild West artifacts (which were being auctioned off to cover costs) when we visited, and presiding over the incinerator retrofit now credited with bankrupting the city.
You can’t put Harrisburg’s bankruptcy down to one item. The lack of a performance bond, Barlow Projects’ size, bad choices in contractors, money spent on Wild West artifacts, city-county politics, city-state politics. Whichever of these factors bears the most blame, the lesson I see is that incinerators are big undertakings. If you are going to build one, you want to make sure you have all your bases covered and several backup plans. Given the massive amount of capital investment required, and the difficulty of burning garbage, a city can end up on the hook for a whole lot.