Pittsburgh City Council voted Wednesday to approve issuing nearly $68 million in bonds to pay for capital projects this year.
The measure will fund projects that City Council has already approved in Mayor Ed Gainey’s 2023 capital budget, Jennifer Gula, the city’s finance director, said.
This year’s operating budget, which council also approved last month, incorporates the debt and associated interest payments, said Patrick Cornell, the deputy director of the Office of Management and Budget.
The city will pay about $5.9 million a year to pay off the debt, City Council Budget Director Peter McDevitt said. The exact figure has not yet been determined, because the interest rate is not set until the bonds are sold, he said.
“We are in a very good financial position and we want to stay there,” Councilman Bruce Kraus said during a discussion on the measure last week. “There are times when it is responsible to borrow, and this is a time in which it is responsible to borrow.”
Officials said they anticipate the interest on the 20-year, tax-exempt bonds to be under 4 percent.
Councilwoman Deb Gross said the city is performing a “balancing act” to ensure they’re fiscally responsible and not incurring too much debt, while also funding much-needed capital improvements and large-scale projects the city needs.
During a council meeting last week, she pointed out that the city’s existing debt total stands at around $450 million.
Gula said the city issues such bonds each year to fund capital projects that have at least a five-year lifespan.
During the 2023 budget process, officials said much of the city’s existing debt — some of which it incurred while it was deemed financially distressed under the state’s Act 47 program — is set to be paid off by the end of 2026.
Related:
• Pittsburgh budget process begins with overview of city's financial position• Mayor Ed Gainey releases preliminary 2023 Pittsburgh budget with no tax increase
• Pittsburgh City Council approves $800M budgets for next year
