Sign up for one of our email newsletters.
Updated 1 hour ago
Pittsburgh is preparing to borrow $60 million for capital improvements in 2017 and 2018.
Pittsburgh City Council was set to introduce legislation Tuesday to seek a 20-year bond issuance, but Finance Director Paul Leger said he asked for a delay because of a language change in the bill.
The change permits retroactive payment for capital expenditures that have been made this year, he said.
Leger said his office plans to resubmit the bill to council during its March 2 meeting.
The money will be split with $30 million per year going into capital budgets in 2017 and 2018.
Bonds will fund about 40 percent of the $74.2 million capital budget approved for this year with the remaining money coming from the city's general fund ($12 million), community development block grants ($12.5 million) and other sources including grants from the state and federal government and foundations ($19.7 million).
“Starting in 2019 we should start issuing $50 million a year in bonds,” Leger said. “We think that's the standard amount we need to do the basic capital work in the city. By that time we will have knocked off $40 million a year in annual debt service (payments), so we can afford it.”
Pittsburgh uses capital funding for street paving, typically the largest expenditure, equipment purchases and maintenance of buildings and grounds. In 2017, the city has earmarked $14.9 million for paving, $12.4 million for facility improvements and $5 million for purchase of equipment including fire trucks.
Debt payments in 2017 will total $87 million, according to the general fund budget.
Pittsburgh borrowed $50 million in 2014 with $25 million per year going for capital improvements in 2015 and 2016. The interest rate on the 18-year debt is 3.2 percent.
Leger said the city won't know the interest rate for new bonds until it borrows the money, likely in April. He said bond interest rates are currently in the 3 percent range.
Pittsburgh would pay consultants an estimated $389,500 in fees as part of the deal, including payments to two Downtown law firms: $43,500 to Clark Hill as bond counsel and $30,000 to Buchanan Ingersol as counsel for PNC, the bond underwriter. The city is paying PNC $150,000.
Our editors found this article on this site using Google and regenerated it for our readers.