Monroeville authority OKs $420 million in bonds for UPMC
July 14, 2012 8:00 AM
UPMC East hospital opened this month in Monroeville.
By Annie Siebert Pittsburgh Post-Gazette
The newly formed Monroeville Finance Authority unanimously approved a $420 million tax-exempt bond issue for UPMC, but some still have ethical concerns over the authority and the "fast-tracked" process leading up to the vote, which occurred during the authority's first public meeting.
Prior to approving the bond issue Thursday night, the five appointed members of the Monroeville Finance Authority, all Monroeville residents, voted on officer posts: Rich Lopiccolo will serve as chairman; Gary Pugliano, vice chairman; Virginia Finnegan, treasurer; Debbie Balcik, secretary; and Tom Weikel, assistant secretary treasurer.
Ms. Balcik is a registered nurse who works as director of clinical operational informatics at UPMC Mercy. She said she disclosed her affiliation with UPMC on her application to the finance authority but said nothing about it at the Thursday meeting.
She said she received legal advice indicating it was ethically acceptable for her to vote but said she did not discuss the matter with the municipality's solicitor, Bruce E. Dice. She would not say who gave her the legal advice.
"I will not disclose that," she said.
Mr. Dice could not be reached for comment Friday.
Barry Kauffman, executive director of Common Cause Pennsylvania, said Ms. Balcik should have announced during the meeting that she is a UPMC employee and requested a ruling from the authority's chairman or the solicitor as to whether she could vote under state ethics laws. Ideally, Mr. Kauffman said, she would have abstained from the vote.
"At least in a generic sense, she stands to benefit" from UPMC securing the bond issue, he said. "If UPMC is healthy, so is she."
On Tuesday, Monroeville council approved a "health and welfare" resolution that allowed the Monroeville Finance Authority to issue the bonds to UPMC. The approval of both council and the finance authority was necessary for UPMC to secure the bonds.
Council approved the resolution 5-2, with council members Diane Allison and Lois Drumheller dissenting. Ms. Allison said she was concerned about passing the resolution before the Monroeville Finance Authority voted, but Sara Davis Buss, an attorney representing UPMC, assured the authority that council's vote on Tuesday was not unusual.
Ms. Drumheller said she had concerns about the "fast-tracked" process and UPMC's role in writing the legislation for the bonds. After receiving the initial draft of council's resolution, UPMC returned a slightly edited resolution to the municipality, she said.
UPMC was "very rapid in changing that language, and I thought it was very brazen," she said, adding that it reminded her of legislation authored by the American Legislative Exchange Council, a conservative policy group.
"I didn't appreciate how that happened," she said. "We could've done the same thing through a conversation. That might not be a big deal to anybody, but it is to me."
The Monroeville Finance Authority was created "to pick up the ball" after the 2011 negotiations between UPMC and an Allegheny County finance authority fell through, said Bob Zunich, an attorney with the law firm of Mr. Dice.
Monroeville council passed an ordinance creating the finance authority in April.
Since then, UPMC has been working with the municipality to lock down the bond issue and take advantage of historically low interest rates. In March, UPMC applied to Wisconsin's Public Finance Authority to float $210 million in bonds for capital projects. Ms. Buss said the Wisconsin application would serve as a backup in case the Monroeville bond issue fell through.
The municipality will receive fees for its role in helping UPMC secure the bond. Monroeville will see about $135,000 at the closing of the bond issue and $100,000 a year for the 30-year life of the bond.
Ms. Buss said $210 million will go to refinance current debt at a lower interest rate and another $210 million will go toward "new capital projects" in Pittsburgh and Monroeville, some of which are facilities that already exist, including the $250 million UPMC East hospital, which opened July 2.
A handful of speakers addressed the finance authority during the Thursday meeting and encouraged the members to vote against the bond issue.
Two UPMC employees, who both said they make less than $13 an hour, questioned raises for UPMC executives and said the nonprofit hospital system needs to do more to help the community and its workers.
"UPMC acts like a for-profit," said Leslie Poston, a UPMC employee. "Why shouldn't they be taxed like one?"
Mayor Greg Erosenko, however, encouraged the authority to approve the bond issue.
He said UPMC won't be the only nonprofit to seek a bond issue from the authority, so the municipality stands to gain more revenue in fees on bond issues if other nonprofits come knocking.
"This really benefits Monroeville very well," he said. "It will help our tax base."
Correction/Clarification: (Published July 20, 2012) Virginia Finnegan, a member of the Monroeville Finance Authority, is married to Jack Finnegan, a former member of the West Penn Allegheny Health System board and a current board member of Forbes Regional Hospital. That information was not included in a story last week on the authority's approval July 12 of a $420 million tax-exempt bond issue for UPMC. WPAHS and UPMC are rivals in the local health-care industry. Mrs. Finnegan voted to approve the bond issue. Monroeville Councilwoman Lois Drumheller, who is a UPMC employee, voted July 10 against a resolution to allow the finance authority to consider the bond issue. ￂﾠￂﾠￂﾠneigh_east
Annie Siebert: firstname.lastname@example.org or 412-263-1613. Twitter: @AnnieSiebert. Jonathan D. Silver contributed. First Published July 14, 2012 4:00 AM