Harrisburg is debt free in 2023, the city making a final payment this week on a decades-long debt that totaled more than $125 million.
The announcement was made by Mayor Wanda Williams Thursday at a press conference. The final payment of $8,335,968.49 from the City of Harrisburg to Ambac Assurance Financial Group cleared a wire transfer earlier in the week, finalizing a series of debts to Ambac that dated 2012.
A press release by the City of Harrisburg’s Director of Communications Matt Maisel stated that the city defaulted on its Series D&F Bond payments in 2011, which were then paid by Ambac Assurance. City financial leaders paid off the bonds in September 2022, which cleared the city of more than $125.6 million in debt it had accrued in spending during prior administrations.
Mayor Williams said freeing the city of its debt payments ranked among the primary financial goals of her administration.
“Through all my years on City Council, to my time when I was campaigning for mayor, and through my first year in office, I have been focused on getting the city out of debt,” Williams said in a statement. “We are debt free in 2023 because we finally had the courage to do what’s best for the people of Harrisburg, and now we can turn the corner and start an exciting new chapter for our great city.”
The Ambac debt began in March 2012, and by December 2013 it had increased with interest to $18.7 million. The Thompson Administration made a $6 million payment to Ambac in December 2013, lowering the debt to $13 million.
Consistent payments of $11,069 were made by the Papenfuse Administration, along with four payments of $76,429 over the next eight years to Ambac. During that time, the Ambac debt grew from $13 million to $26.2 million in September 2021. Two months later, a $7.2 million payment was made to reduce the debt to $19 million.
City Treasurer Dan Miller said the debt had been both distressing and costly.
“Harrisburg’s excess funds have been available for years but earning almost nothing during times of historic low interest rates,” said Miller. “At the same time Ambac was charging us up to 6.5% interest. Some of us pleaded with the prior administration to pay down and pay off this debt.
“Unfortunately, they ignored our advice and it cost the city millions in interest. Finally, paying off this debt has been taken seriously. This is an important day. If it had only come sooner the benefits would have been far greater.”
City Council approved in December 2022 a $12 million payment from Williams’ Administration, with the final $8.3 million payment to come March 15. Finance Director Marita Kelley said paying off the debt represents a great accomplishment for Harrisburg.
“As the City moves forward,” said Kelley, “its financial picture becomes much more stable, and it promotes the overall fiscal health of the city.”
Maisel said the City of Harrisburg has historically spent money out of its annual general appropriations budget to help pay for debt payments. He added that residents can expect to see funds which had been used to pay off bonds to go towards city services, and that clearing the debt hurdle will create more money in Harrisburg’s general fund balance.
City Controller Charlie DeBrunner called Thursday an historic day for Harrisburg.
“It should have come a little quicker, but it’s here now, and that’s all that’s important,” DeBrunner said. “We’re out of debt. The future of the city is as bright as it’s ever been, and the mayor is doing a terrific job providing leadership on this.”