Economy
6:00 pm
Tue January 31, 2012

City Roads, Buildings to be Repaired with $80 Million Bond

Pittsburgh City Councilman Ricky Burgess said city residents can expect a higher level of capital investment this year, thanks to Council's unanimous approval Tuesday of an $80 million bond deal.

"You'll see more streets paved," said Burgess. "You'll see more public buildings repaired. You'll see more houses torn down, more lots cleaned. You'll start to see us invest in the city's infrastructure, which is decaying around us."

Burgess said the $80 million deal includes about $76 million in new debt and roughly $5 million in cost-savings via refinancing. The city paid about one percent in fees.

In a written statement, Mayor Luke Ravenstahl hailed the bond issue as a successful collaboration between Council and the administration.

"Together, we successfully improved the City's credit rating, resulting in a historic low interest rate on this bond issuance. In addition, we saved taxpayers millions by not having to buy insurance on this bond, once again due to our above average credit rating," wrote the Mayor.

The $80 million deal is the first new debt taken on by his administration.

Councilman Burgess, the Finance Chair, said the higher credit rating and low interest rates coalesced to make this deal special.

"This is probably the best borrowing we've ever done in the history of the city," said Burgess.

Burgess said the city will maintain its debt profile and stay on schedule as concerns annual debt service payments.

"It keeps the same debt cliff as we've had before," said Burgess. "Around 2018, we'll go from about $80 million in payments to about $40 million in payments [per year]."

The Finance Chair said he would like Pittsburgh to borrow an additional $240 million over the next decade, to further invest in the "bones" of the city.