Ravenstahl drops bond refinancing proposal
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At the request of the city finance department, Pittsburgh City Council today dropped a proposed bond refinancing that officials had hoped would generate more than $3 million for capital projects in a lean budget year.
Council was poised to advance the refinancing today.
However, city finance director Scott Kunka said that investors wanted higher interest rates than he anticipated -- or decided to pass on the offer -- when the bonds were shopped on the open market Tuesday. He blamed uncertainty surrounding the national debt ceiling and concerns about the funding of the city's own pension fund.
"The pricing of the transaction did not meet our standards," Mr. Kunka said.
In December, council pledged more than $735 million in parking tax revenue to the pension fund in a bid to save it from state takeover. The state won't say until fall whether council's bid succeeded.
Council and Mayor Luke Ravenstahl's office have disagreed this year on how much money is available for capital projects. Mr. Ravenstahl's office has said that financial maneuvering related to the pension bailout created an especially lean budget year, with less money than usual available for paving, house demolition and other initiatives.
Officials had hoped that refinancing $97 million in bonds would free up more than $3 million for capital projects.
First Published July 27, 2011 11:53 am
