In, Harrisburg, Pa: a city at war with itself, Reuters offers the latest on the PA capital's money woes:

For three days last summer, Mayor Linda Thompson joined religious leaders to pray for a "cooperative spirit" among city leaders, the business community and residents here in Pennsylvania's state capital.

The prayers have gone unanswered.

Looking for a way to resolve $300 million in debt, the city council defied Thompson and voted to file for bankruptcy this month. Not only did a majority of the council go against the mayor's wishes, but the council members also decided not to even tell her of their decision.

The situation comes as no surprise to many who live here. That's because in Harrisburg, a city of about 50,000, the balance sheet isn't the only thing out of whack.

Prayers notwithstanding, Thompson and Dan Miller, the city's top financial official, refuse to speak to one another, even as the city they lead continues hemorrhaging money. Thompson characterized Miller as a "political opportunist who will stop at nothing to accomplish his self-centered ambitions." Miller, who plans to challenge Thompson for mayor in 2013, said he considers Thompson "paranoid," "not well educated" and "a phony."

His words seem kind compared with those offered by four former Thompson aides. They told the local newspaper that the mayor isn't fit to hold office.

I used to see Dan Miller every so often through family connections (he even did my taxes for a few years) so I'm hardly unbiased. But he never seemed all that political or opportunistic to me. Most Harrisburg workers vamoose to the suburban counties at 5PM, but Dan actually lives in the city, where he runs a prosperous accounting practice. Over the years I heard that Dan was going to run for city office, then that he won, then that he was thinking about running for Mayor. I also heard that the city was in tough financial straits, but I had no idea it was this bad.

The story is simple enough - along with the usual city problems, the city blew it big time on this incinerator project. They went with a low bidder that didn't really have the experience. He couldn't get a performance bond, but they went ahead with him anyway. So when the plant failed miserably, they had no recourse but to sue the contractor. His assets weren't even close, and he went bankrupt, too. So they're out all that money, and they lost even more trying to operate the incinerator. Attempts to raise cash by taxing commuters were spectacularly unpopular in the surrounding counties.

The real disagreement is that the investors - those brilliant people that put their money into an unbonded project - want the state to take over the city, so that it can sell off the city's remaining assets - some profitable parking garages and City Island park - to bail them out. Dan and four of the seven councilmen think that would be a big mistake for the city, and have sought the protection of bankruptcy instead. Whether their filing will be allowed without the Mayor's cooperation is yet to be determined. The Reuters article seems to indicate that Governor Corbett sides with the takeover camp.