Monroeville Finance Authority approves tax-exempt bond for UPMC
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The newly formed Monroeville Finance Authority Thursday night unanimously approved a $420 million tax-exempt bond issue for UPMC.
The municipality will receive about $135,000 at the closing of the bond issue and $100,000 a year for the 30-year life of the bond.
Sara Davis Buss, an attorney representing UPMC, said $210 million will go to refinance currently outstanding 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 recently opened UPMC East hospital.
The 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 Bruce Dice, the municipality's solicitor. Monroeville council passed a resolution creating the authority in April.
On Tuesday, 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 Councilwomen Diane Allison and Lois Drumheller dissenting. Ms. Allison said she was concerned about passing the resolution before the Monroeville Finance Authority voted, but Ms. Buss assured the authority that council's vote on Tuesday was not unusual.
A handful of speakers addressed the finance authority during the Thursday meeting and encouraged the five-member board to vote against the bond issue.
Two UPMC employees, both making 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."
First Published July 12, 2012 11:31 pm