Harrisburg is expected to end the year with enough money in the bank to pay off its accumulated debt, according to a key city official.
Appearing before city council this week, Comptroller Charlie DeBrunner told council members his office forecast a fund balance of $ 34 million by the end of the year, which may be enough to pay off the bonds. the city, he said.
“I think it’s pretty clear that we can if this holds up,” DeBrunner said. “We’re not in administration, so we can only see what’s happened, not what’s going to happen. We don’t have the crystal ball that the finance people and the mayor have.
In contrast, Mayor Eric Papenfuse has repeatedly stated that the city does not have enough savings to pay off around $ 25 million in debt, pay the city’s current expenses and maintain an adequate reserve fund of 11 to $ 13 million. He also said that with a healthy fund balance, the city would regain a credit rating and be able to re-enter the bond markets for the first time since defaulting on its debt ten years ago.
For months, Papenfuse criticized the city council for refusing to act on its bond refinancing plan, introduced in early June, which would significantly reduce the city’s general bond interest rate, which currently stands at 6, 75%.
Board chair Wanda Williams and other board members said they wanted to use the city’s savings to pay off the debt all at once, rather than refinance it.
DeBrunner told council members this week that by paying off the debt sooner, the city could save about $ 14 in accrued interest over an expected 10-year repayment period.
The Intergovernmental Cooperation Authority, a body established by the Commonwealth to help oversee Harrisburg’s finances, urged the administration and council to come together to resolve their differences over financial data and to reach agreement on the way to be continued. At the end of last month, the two sides had yet to meet.
Papenfuse said he welcomed alternatives to his refinancing plan, but the council has not formally introduced legislation to pay off the debt in part or in full.
“I am open to ideas,” he previously told TheBurg. “I didn’t see anything from them.
Papenfuse said this week that, had the council acted in June, the refinancing could have already been completed, with the interest rate cut in half to the financial benefit of the city.
DeBrunner said another bond payment is slated for January, so the council could wait until then to see exactly how much savings the city has before making a decision on whether or not to repay the debt.
The good news is. . . we have nothing to do until we know it, ”he said. “We don’t have to pay any money until January 2022, so we’ll know exactly what we have then.”
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