In 2010 the city had failed to honor its guarantees on The Harrisburg Authority (THA) debt. (THA is a component unit of the city.) In 2011 Harrisburg filed for bankruptcy; however, the bankruptcy petition was denied by the court. The State of Pennsylvania appointed a receiver for the City of Harrisburg in 2011 to help with the city's economic recovery. The following three paragraphs are taken from the mayor's transmittal letter in the 2012 CAFR report. Subsequent to the three paragraphs are two bar charts providing 10 years of information on General Fund balance and net position and a table providing 5 years of debt performance information. For perspective, 2009 was the year the City went from a 2008 statement of net position, where assets exceeded liabilities by $46,178,883, to a deficit in 2009 of $227,092,975. It was the year in which the contingent liability for The Harrisburg Authority Resource Recovery Facility debt guarantees of approximately $264 million would be recorded on the City's financial statements due to payment defaults on that debt.
As of December 31, 2012, the City's liabilities exceeded its assets by $277,261,834, representing a further decrease of net position of $28,092,042. As of December 31, 2012, the City's governmental funds (General Fund, Grant Programs, Debt Service and other Non-Business Type Funds) reported combined ending fund balances of ($76,414,768), a decrease of $23,421,231 from 2011.
The General Fund is the City's primary operating fund and the largest source of day-to-day service delivery. The Fund Balance of the General Fund decreased by $23,569,137 for the year ending December 31, 2012, from the prior year, primarily due to a significant drop-off in departmental earnings resulting from a $7 million decrease in administrative service charge revenue from the Water and Sewer Funds, higher expenditures incurred from a write-off of approximately $5 million of Incinerator amounts receivable from under guarantee agreements for principal and interest previously paid by the bond insurer, and an $11.2 million accrued liability associated with the settlement of reimbursable sewer related amounts owed to several suburban municipalities.

Required
a. Using your library's resources, locate Craig S. Maher, and Karl Nollenberger. "Revisiting Kenneth Brown's '10-Point Test'." Government Finance Review, October 2009, pp. 61-66. The City of Harrisburg has a population of between 47,000 and 50,000 people. Based on its size, assess the City of Harrisburg's debt performance relative to that of comparably sized cities.
b. Later in the mayor's 2012 transmittal letter she indicates that the city is confident of financial solvency and the city is working toward an economically bright future. Based on the limited information you have been provided, discuss your assessment of how financially solvent the city appears and its timeframe for achieving an economically bright future.

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General Fund 20,000,000 10,000,000 $(10,000,000) $30,000,000) $40,000,000) $(50,000,000) $(60,000,000) $(70,000,000) (80,000,000) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Fiscal Year Unrestricted Net Position by Component $10,000,000 $(15,000,000) (40,000,000) (65,000,000) (90,000,000) $(115,000,000) (140,000,000) (165,000,000) (190,000,000) (215,000,000) (240,000,000) $(265,000,000) (290,000,000) $(31 5,000,000) (340,000,000) $(365,000,000) Governmental Activities $(390,000,000) Business-Type Activities (415,000,000) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Fiscal Year