Monroeville Finance Authority OKs $420M in bonds for UPMC projects
UPMC will pay for construction projects and refinance debt with up to $420 million in tax-exempt bonds the health care system will receive through the new Monroeville Finance Authority.
The five members of the finance authority unanimously approved the authority's first bond issuance at a meeting on Thursday night.
“We are very happy it got approved. We plan to proceed to take advantage of the interest rates as early as next week,” UPMC Treasurer Tal Heppenstall said of the bond market.
UPMC expects to borrow $400 million, which will be split between paying for new construction projects and refinancing debt on existing projects in Monroeville and Pittsburgh.
UPMC's $240 million hospital, UPMC East, opened in Monroeville in July.
About $45 million of the bond issuance will be used to reimburse UPMC for money it spent on UPMC East, Heppenstall said.
Monroeville officials say the municipality will create an additional revenue stream by issuing the bonds.
“This is, I believe, an excellent way of enhancing revenue with no impact on Monroeville taxpayers,” said authority Chairman Rich Lopiccolo.
If UPMC borrows $400 million, the bond issuance will generate $35,000 in upfront fees plus $100,000 for Monroeville annually for 30 years, including the first year of the agreement, Heppenstall said.
Some people disagree.
Four opponents, including two UPMC employees who complained that the nonprofit is getting tax breaks while not paying fair wages to its workers, spoke against the bond issuance during a public hearing before the vote.
Monroeville created the finance authority in April to issue tax-exempt bonds on the behalf of nonprofit organizations. That came at the behest of UPMC.
Tory Parrish is a staff writer for Trib Total Media. She can be reached at 412-380-5662 or email@example.com.