Plan to pay off Harrisburg debt relies on funding from American Rescue Plan Act

Harrisburg, Pa – The use of pandemic relief funds is being disputed in Harrisburg where city council supports paying off city debt, and current Mayor Papenfuse has previously voiced his support of guaranteed universal income for residents.

Papenfuse now says that it would be best for the city to refinance its decades-old municipal debt.

A city council meeting was held Tuesday night where City Council Vice President Ben Allatt, who is also the finance chair, said funds from the American Rescue Plan Act will likely be used to reimburse the city for qualified COVID-related expenses, thus freeing up money in the city’s general fund balance.

Allatt detailed the plan to pay off $24.6 million in debt with money from general fund balance. Critics argue that this is essentially funneling the federal relief money from the general fund to pay off the city debt which dates back to the 1990’s.

Harrisburg must maintain an acceptable cash reserve of at least 17%. With tax revenues likely to be significantly reduced for 2021, is it unlikely that the city would be able to pay off the debt and maintain the cash reserves without padding the general fund with federal relief.

Some of the federal pandemic relief money has already been received, according to Councilman Westburn Majors. He questioned the mayor’s use of COVID relief funds during the council meeting, saying, “We still have not had a conversation with the administration about use of some of the monies that have come in.” Harrisburg is expecting to receive just under $50 million in American Rescue Plan Act funds.

City Council President Wanda Williams, who is the Democrat nominee for mayor, said she supports paying off the debt, and spoke out at Tuesday night’s city council meeting condemning the financial practices of Papenfuse’s administration. She also pointedly clarified recent reporting of theBurg regarding proposed debt financing legislation.

“I can’t speak for the mayor or the administration on their behalf or speak to what their agenda is. I can only speak to what I see,” Councilman Ben Allatt told The Epoch Times following the council meeting. Mayor Papenfuse was not in attendance, and hasn’t returned requests for comment.

When reached for comment, Republican mayoral nominee Timothy Rowbottom suggested Papenfuse had an agenda for the debt refinancing plan, allegedly to direct money and contracts to the associates of his supporters.

Rowbottom called for a FOIA request to provide transparency regarding the use of Federal pandemic relief funds in Harrisburg and accountability for the debt repayment. “It needs to completely be made available to all city residents under the Freedom of Information Act concerning financial records.”

He also called into question the political motives of the mayor regarding the debt refinancing and suggested the plan was not beneficial to the city. “It would be in the best interests of the residents to be debt-free and to bring new accountability to the allocation of these funds.”