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UPMC rushes bid for Monroeville finance authority, critics say

| Monday, April 9, 2012

Some Monroeville residents and council members say the municipality is moving too quickly on a UPMC request to establish a finance authority that could issue low-interest bonds on behalf of nonprofits.

They take issue with the public hearing on the proposal and council vote occurring on the same day, Tuesday.

Councilman Bernhard Erb, who sponsored the legislation to establish the authority, noted that the hearing was advertised 30 days in advance.

UPMC, which will open its $240 million UPMC East in Monroeville in July, asked the municipality to form an authority to issue low-interest bonds for its project, Councilwoman Lois Drumheller said. The authority also would be able to issue tax-exempt bonds for other nonprofits and would generate revenue for the municipality based on fees, Erb said.

UPMC did not return calls for comment.

In addition to the timing of the vote, some residents question whether the authority would have the power of eminent domain and whether the municipality could become liable for any debts.

Last week, UPMC bond counsel Sara Davis Buss answered council questions on topics such as residency rules for authority board members, officials said. Drumheller and Councilwoman Diane Allison said they disagreed with some of the answers they received. Buss could not be reached for comment.

Drumheller said she worries that the state law on municipal authorities says board members must be a taxpayer or maintain a business in the municipality or in a municipality into which a bond-funded project would extend, so potential authority board members might not be Monroeville residents.

Erb said finance authorities do not take on responsibility for a debt and cannot take property by eminent domain.

After denying UPMC's request for $335 million in bonds last year to refinance debt and pay for ongoing construction projects, the county is reconsidering issuing at least $130 million in bonds. Regardless, Erb said Monroeville should go forward with establishing its finance authority because of the potential to generate revenue on fees from future projects.

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