Harrisburg’s MLK City Government Center
Harrisburg is getting closer to paying off its once-staggering debt load, following a milestone payment on Friday.
The city made an $8.4 million installment, its final payment, on general obligation bonds dating back 25 years.
This payment to the Debt Service Fund at the Bank of New York Mellon was the last of $125.6 million debt, including interest, on 1997 series D and F bonds initiated under the administration of former Harrisburg Mayor Steve Reed.
“I can’t say enough about the work done by our financial team to get the City of Harrisburg one step closer to being entirely debt free. This is a major, celebratory moment for all of us,” said Mayor Wanda Williams, in a statement.
Since 1998, the city spent money out of its annual general appropriations budget to pay off this debt. Without the debt payments, Harrisburg will have around $8 million additionally each year that does not need to go towards servicing that debt, according to the city. That money, the administration says, now can go towards city services.
“This is a great day for the City of Harrisburg,” said City Controller Charlie DeBrunner. “Rather than putting debt payments off any longer, and incurring any more interest, we’re proactively managing our outstanding debt. We are headed towards structural security in our budget for the first time in decades.”
Harrisburg still has about $20 million remaining in general obligation bond debt to pay off to bond insurer Ambac Assurance Corp. According to DeBrunner, the city’s goal is to pay off that debt by the end of the year.
“It is a goal for the entire city to enter 2023 without any debt,” he said. “We have a few additional items we need to take care of, but after today, we can finally start to see some real positive results for the city, and the cash flow is going to be phenomenal.”
According to Matt Maisel, the city communications director, at the end of July, the city had $40.7 million in reserve funds in the bank.
“This is the moment I’ve been waiting on since I was first elected to City Council and we started restructuring this debt,” Williams said. “People told us we’d never be able to get the city out of debt. To think we’re now in a surplus, this was always my goal for the people of Harrisburg.”
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