Peduto proposes formal debt policy for Pittsburgh
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Pittsburgh City Councilman Bill Peduto today introduced legislation spelling out when the city can incur debt and how to manage it.
State overseers have been pressing the city to adopt a written debt policy.
Mr. Peduto's legislation would give council the authority to hire a financial advisor to vet proposed bond deals.
It would allow the city to incur debt when future revenue is estimated to be sufficient to meet debt payments, when other financing options aren't feasible and when state or federal authorities require a capital project "with no other funding option available."
The proposed policy states the city's preference for fixed-rate debt, while still allowing projects with variable rates. It would urge the city to pursue derivatives "with extreme caution and only after due diligence has been transparently taken."
The proposal also states the city's preference for a competitive bidding process, but allows negotiated sales and private placement in certain cases.
The legislation also speaks to conflicts of interest. Under the policy, officials and employees "involved in the debt issuance process shall refrain from personal business activity that could conflict with proper execution of the debt program, or which could impair their ability to make impartial debt issuance decisions."
First Published November 1, 2011 12:00 pm
