Bond issuance sought by Fitzgerald stands to cost county $266K in fees
It could cost Allegheny County about $266,000 in payments to attorneys, financial advisers and rating agencies to issue $247 million in bonds that Executive Rich Fitzgerald is seeking, according to a breakdown of fees the county provided to the Tribune-Review.
County Council is set to vote on the deal at Tuesday's meeting. The money would be used to refinance old debt at a lower interest rate and pay for bridge repairs, road work and other projects.
Fitzgerald asked council to approve $165 million to refinance old debt and $82 million to go toward infrastructure projects in 2015 and 2016.
“These issuance costs, while minimal, are the cost to allow the county to reap significant benefits,” said county Manager William D. McKain.
Fitzgerald and Warren Finkel, county budget and finance director, have said refinancing bonds issued in 2004 could save the county $13 million in interest payments. The county will spread out the savings over five years, records show.
To issue the bonds, the county would pay an estimated $266,310 to attorneys, financial advisers, rating agencies and other companies, according to a fee schedule. Rating agencies Standard & Poor's and Moody's could receive $137,500, the largest single expense.
Attorneys Linda Hackett at Clark Hill Thorp Reed, Glenn Mahone at Reed Smith and Jason DiMartini at PNC Capital Markets would split $50,000 in legal fees, county officials said. Charles Goodwin of BNY Mellon Capital Markets would receive a $37,500 financial adviser fee.
Downtown law firm Thorp Reed & Armstrong, which merged with Detroit-based firm Clark Hill in March 2013, made donations of $10,000 to Fitzgerald's campaign in 2012 and 2013 for a total of $20,000, according to campaign finance reports.
A five-member professional services review committee, not Fitzgerald alone, reviewed the financial adviser proposals and made a recommendation, according to a statement from Fitzgerald spokeswoman Amie Downs.
The amount of new debt issued will equal the amount of debt retired, keeping the county's debt level the same, Finkel told the Budget & Finance Committee, which voted unanimously on Wednesday to send the bond request to the full council for a vote.
The actual amount of debt issued could be less than the $247 million asked for by Fitzgerald, Finkel said. The amount depends on the bond market. In 2013, council approved $49.8 million, but the county issued $37.95 million. In 2012, council approved $193.8 million, but the county issued $167.6 million, Finkel said.
Aaron Aupperlee is a staff writer for Trib Total Media. He can be reached at 412-320-7986 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Controller recommends hiring to reduce 911 center overtime
- $5M Penn Avenue reconstruction project is ‘killing everything’
- Duquesne Club seeks permission from city to keep 4 rooftop bee hives
- Pirates rally planned for Market Square
- Allegheny County RAD increases budget by $2.5M for cultural, recreational programs
- Western Pa. towns eye fees to control stormwater runoff
- Threat at Sheraden school a ‘student hoax’
- Bethel Park police chief to retire in mid-October
- Man taken to hospital after being hit by car in Carrick
- Penn Hills school officials trying to correct transportation problems
- $21 million unfrozen for Pennsylvania school construction