Critics aside, UPMC gets bond issue

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Despite three personal pleas to delay a vote, a state authority yesterday approved a billion-dollar bond issue for the University of Pittsburgh Medical Center.

The Pennsylvania Higher Educational Facilities Authority board voted 8-1 in favor of the $1.175 billion debt package, which would enable UPMC to refinance outstanding bonds and lower its borrowing costs.

Allegheny County Councilman Charles P. McCullough, filmmaker Tony Buba, and Braddock resident Bishop Baldwin drove to the authority's Cumberland County headquarters at 6 a.m. yesterday and asked the board to delay its vote. They had to turn around for home before the vote occurred.

"I thought we did a decent presentation," said Mr. Buba, who grew up in Braddock and now lives in Braddock Hills.

The trio is among 10 people who have sued the county to block last month's approval of a similar bond issue by the county's Hospital Development Authority.

UPMC has also received approval for a bond issue in the same amount by County Council.

Mr. McCullough wants to link any debt package floated by a public authority to the hospital system keeping UPMC Braddock open for a time. He requested that the state board delay its vote for 18 months.

In his legal challenge, Mr. McCullough said a bond issue must benefit the "health, safety and welfare" of county residents. He argues that this bond issue would enhance UPMC's cash flow and make it easier to construct a new hospital in Monroeville.

That project, in conjunction with the planned Jan. 31 closure of UPMC Braddock, does not necessarily benefit county residents, said Mr. McCullough, R-Upper St. Clair, who is both the lawyer and one of the plaintiffs in the county suit.

Residents and critics claim UPMC is closing the Braddock facility because it is in a poor community while the new complex would be in wealthier Monroeville.

Yesterday's only no vote came from Helen Norton, a Democratic caucus employee who is the proxy on the board for state Rep. Bryan R. Lentz, D-Delaware.

"It was my understanding that there was a group that requested a delay in the vote in order to sort out a dispute surrounding Braddock hospital, and I thought a delay is never an unreasonable request if it'll lead to a resolution of misconceptions or misunderstandings or a dispute," Mr. Lentz said.

By securing the approval, UPMC now has the option of floating the low-interest, tax-exempt bonds either through the state or through the county. Whichever entity UPMC chooses will reap the reward of annual fees.

The county currently earns about $135,000 a year from fees off the outstanding debt that UPMC wants to refinance. That amount could jump by another $40,000 if UPMC selects the county to float the new bonds.

The hospital system decided to seek state approval as a contingency plan in case its efforts to issue bonds through the county authority hit a snag, such as a lawsuit.

Mr. McCullough said he plans to assemble another contingent to speak at a Jan. 26 public hearing by the state authority before its final approval is sent to Gov. Ed Rendell.

"We'll continue to evaluate whether this is a full and fair process, but I will advise my clients that we might need to sue the state authority on this issue as well," Mr. McCullough said.

Mr. McCullough noted that all of the board members -- including the governor and Auditor General Jack Wagner -- sent proxies to vote on their behalf. He disliked both that and the language of the resolution the board approved.

"... We were dealing with a stacked deck, bureaucrats filling in for their bosses. The resolution before them didn't say anything about the public good of this bond issue," Mr. McCullough said.


Karamagi Rujumba contributed. Jonathan D. Silver can be reached at 412-263-1962.


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