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A Resolution of the County of Allegheny, Commonwealth of Pennsylvania, establishing a “bond embargo” as County policy regarding bond issuances requiring the approval of Allegheny County Council for the benefit of UPMC.
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WHEREAS, UPMC is a nonprofit provider of healthcare services, and the largest employer in the Pittsburgh region; and
WHEREAS, UPMC has historically maintained that it is steadfastly committed to giving back to and reinvesting in the community, and it continues in these representations; and
WHEREAS, on October 16, 2009, UPMC announced it will begin moving its clinical operations of UPMC Braddock Hospital to other UPMC facilities, and the 123-bed facility will close completely by the end of January 2010; and
WHEREAS, almost exactly one year ago, on October 21, 2008, Allegheny County Council voted to approve a $650 million bond issuance through the Allegheny County Hospital Development Authority solely for the benefit of UPMC, in large part to enable UPMC to refinance prior bond issuances and saving UPMC debt service costs estimated to be in the millions of dollars; and
WHEREAS, just over one year ago, on May 20, 2008, Allegheny County Council voted to approve a $350 million bond issuance through the Allegheny County Hospital Development Authority solely for the benefit of UPMC, also in large part to enable UPMC to refinance prior bond issuances and saving UPMC debt service costs estimated to be in the millions of dollars; and
WHEREAS, repeatedly during the discussions of these bills approving a total of $1 billion in bond issuances specifically for the benefit of UPMC, representatives of UPMC specifically averred that UPMC remained financially sound and would be able to fully meet its obligations under the refinancing plans, and at no point was the prospect of closing hospitals raised as a potential financial necessity for UPMC; and
WHEREAS, about 670 people work at UPMC Braddock, which sees about 25,000 patients a year in the emergency room alone; and
WHEREAS, operating as a non-profit charges UPMC with a unique role and responsibility to serve society and individual communities, and provides UPMC with advantages, such as tax-exempt status, to compensate it for its service to the community; and
WHEREAS, it is accordingly the judgment of Council that any future bond issuances for the benefit of UPMC be evaluated according to a stricter standard, and should be premised upon UPMC not acting in a fashion that is detrimental to the communities that it serves shortly after enjoying the benefit of extensive debt refinancing made possible by an assembly that is elected specifically for the purpose of safeguarding the health, safety, and well-being of the residents of those communities, premised in part upon representations of UPMC's financial vitality;
The Council of the County of Allegheny hereby resolves as follows:
Section 1.
The Allegheny County hereby establishes that no bond issuance of the County, any County Authority, including, but not limited to the Allegheny County Hospital Authority, or any other component of the County government and sought for the benefit of UPMC shall be approved or considered by the Council unless and until UPMC specifically covenants with the County to:
A. Establish a PILOT arrangement with the County for the benefit of the County or one or more of its component units; and
B. Negotiate an agreement with the County that is satisfactory to County Council to address the concerns of the County, the residents of Braddock and the residents within UPMC Braddock's primary patient service area concerning the fate of the hospital and the hospital facilities and site.
C. Breach of any of the covenants required under the terms of this section shall constitute an event of default on any bonds issued pursuant to the terms of this resolution.
Section 2. Severability. If any provision of this Resolution shall be determined to be unlawful, invalid, void or unenforceable, then that provision shall be considered severable from the remaining provisions of this Resolution which shall be in full force and effect.
Section 3. Repealer. Any Resolution or Ordinance or part thereof conflicting with the provisions of this Resolution is hereby repealed so far as the same affects this Resolution.
PRIMARY SPONSOR: COUNCIL MEMBER McCULLOUGH
CO-SPONSOR: