Pittsburgh council gives preliminary approval for $50 million in borrowing

Pittsburgh City Council on Wednesday advanced legislation that would authorize a $50 million bond issuance for capital improvements this year, but members voiced concerns about spending it in a timely fashion.

About $53 million is left over from bonds issued in 2017 and 2019, according to the city budget office.

“There are projects that we start and just sit there vacant for a year,” said Councilman Corey O’Connor. “I’ve got no problem taking out bonds and spending it. I’m going to vote for this. I think it’s great, but let’s make sure we actually do it. If we have to hire more people, let’s hire more people.”

Budget Director Kevin Pawlos attributed the backlog to many variables, including capital projects such as bridge and highway replacements that require federal matching funds. Those projects can take years to complete.

“We use this money as matches for federal projects or very long-term projects that have multiple phases to them,” he said. “Our capacity as a city to deliver projects certainly comes into play, but also the seasonality of the construction season is somewhat limited. All of those variables come into play.”

The new bonds will be used for such things as street paving, facility improvements and other improvements listed in the city’s 2020 capital budget.

It will cost the city $303,507 to borrow the money, including payments to attorneys, rating agencies, a bond underwriter and a municipal advisor.

Officials said they expect a 2.5% interest rate on the bonds payable over 20 years.

Council is expected to schedule a final vote for Tuesday.