Pittsburgh looking to borrow $62M for capital projects in 2019

Pittsburgh is poised to borrow $62 million for capital improvements in 2019.

City Council on Wednesday gave preliminary authorization for the issuance of bonds to pay for such things as street paving, facility improvements and equipment.

Members also approved the hiring of Clark Hill, a Downtown law firm, to serve as bond council for a maximum fee of $36,125.

Councilwoman Darlene Harris of Spring Hill voted against the proposal, saying the city is taking on too much debt. Councilwoman Deb Gross of Highland Park abstained, saying she wanted more time to consider the borrowing.

Officials said they expect the bonds, payable over 20 years, to be issued at a 3.5 percent interest rate. The money would be used exclusively to help fund the city’s $133 million capital budget. The remaining money is coming from a city surplus and grants from the federal and state government.

“Without this borrowing, we will not have a capital budget,” said Councilman Ricky Burgess of North Point Breeze.

Harris said that Pittsburgh has borrowed $200 million over the past five years, including $40 million for the purchase of a building at 412 Blvd. of the Allies to house offices of the city, Urban Redevelopment Authority and the Housing Authority of the City of Pittsburgh. The city and authorities are sharing the cost of bond repayment.

“I don’t think that’s sensible spending,” Harris said, noting that debt was a major reason that the city went into state financial oversight in 2006.

State officials last year declared Pittsburgh financially sound and released it from oversight.

Pittsburgh’s annual debt repayment totaled about $74 million in 2018 and will drop to about $52 million in 2019 after the bonds are issued, according to city operating budgets and officials.

The 2019 capital budget includes $20.2 million for street paving in 2019, $22.4 million in facility improvements and about $60 million in construction projects.

Bob Bauder is a Tribune-Review staff writer. You can contact Bob at 412-765-2312, bbauder@tribweb.com or via Twitter @bobbauder.