Luzerne County Council set to vote on WoodBridge request to issue tax-exempt bonds

Luzerne County Council is set to vote next week on nonprofit WoodBridge Healthcare Inc.’s request to issue up to $180 million in tax-exempt bonds to purchase and upgrade Commonwealth Health medical facilities, including Wilkes-Barre General Hospital.

Lackawanna County Commissioners granted their approval Wednesday due to the project’s inclusion of the Regional Hospital of Scranton and Moses Taylor Hospital.

Counties are involved because the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 requires nonprofits seeking the issuance of tax-exempt financing to obtain approval from governmental entities where their facilities are located, WoodBridge legal counsel Laura Kurtz, of, Eckert Seamans, told Luzerne County Council at its Oct. 8 work session.

The county authorization is not an approval of the project itself or determination of whether it should be undertaken, Kurtz said.

Council’s proposed resolution also makes it clear the county is not pledging or obligating any funds for the project and won’t be liable for payments.

WoodBridge President Don Steigman attended county council’s work session to answer questions, prompting members to immediately inquire about the properties’ return to tax-exempt status.

Luzerne County taxing bodies are projected to collectively lose more than $1.9 million in real estate tax revenue annually with the purchase, including approximately $328,000 currently received by the county, records show. The opposite had occurred in 2009, when the properties were added to the tax rolls with Commonwealth Health’s purchase of the hospital network from the nonprofit Wyoming Valley Health Care System.

“This will be a pretty significant hit to our tax revenue,” council Chairman John Lombardo said during the work session.

Steigman told council nonprofit hospitals do not pay property taxes, and any revenue generated “will be poured back into the hospitals.”

Lombardo asked if WoodBridge would consider a payment in lieu of taxes.

Steigman said he is aware of such requests from taxing bodies.

“Unfortunately as you know we’re in the process of turning these hospitals around. We’re really at the infancy stage, and we’re really not in a position to do any payment in lieu of taxes at this point,” Steigman said.

While acknowledging tax revenue is important to governing bodies, Steigman said nonprofit status will help WoodBridge access grants, state and federal funds and “a lot of other funding sources that these hospitals greatly need,” he said.

He emphasized the importance of Wilkes-Barre General to the community.

“Once we’re back on our feet, that’s the time to talk some more about this,” he said of payments in lieu of taxes.

WoodBridge’s goal is to grow the hospitals in both counties, restore some of the services “that have been diminished” and retain jobs, he said.

Lombardo questioned if any current workers will lose their jobs. Steigman said WoodBridge committed to retain all employees in good standing and assume union contracts.

Council Vice Chairman Brian Thornton asked if WoodBridge will be seeking real estate tax exemption on all properties it is acquiring.

Paperwork submitted to council indicates 70 county properties are involved in the acquisition — 68 in Wilkes-Barre and two in Kingston — including some residential structures.

Kurtz said some of these properties will be excluded from the tax exemption request, prompting Thornton to seek a report on which ones before council votes on Oct. 22. Council’s meeting is at 6 p.m. in the county courthouse on River Street in Wilkes-Barre.

Some of the properties on the list presented to council have environmental issues or are not critical to the nonprofit use of the facilities, Kurtz added. Some have “zero value” because they are “in such a state of disrepair,” she said.

Thornton expressed concerns about blight.

Steigman said Commonwealth Health had “extensive holdings,” and an assessment will be performed.

“Our commitment will be to make sure they are handled appropriately once we understand what they are or are not being used for,” he told council.

Councilman Harry Haas said funding county government is council’s top concern and inquired about the possibility of partnerships, possibly related to inmate health care at the prison.

Steigman said WoodBridge will consider any partnerships.

Haas commended Steigman on his past experience and taking an interest in this area to make Wilkes-Barre General “as client-focused as possible.”

A WoodBridge bio of Steigman said he has more than three decades of experience in health care administration and “is a visionary leader renowned for his transformative impact on major health systems in Florida.”

“That’s sort of my niche — working with hospitals and helping them get back on track,” he said.

Lombardo said the importance of Wilkes-Barre General is not lost on him. His grandfather was a doctor with a residency at the facility and worked there many years, he said. An EMT, Lombardo said he met his girlfriend at the hospital five years ago and knows many people who work there.

“I truly love that we have a hospital like Wilkes-Barre General that has a great history in Wilkes-Barre,” Lombardo said.

Staff writer Bill O’Boyle contributed to this report.