WILKES-BARRE — The City Council at Thursday’s regular meeting approved up to $180 million to the nonprofit Woodbridge Healthcare for the purchase and capital improvements of Commonwealth Health hospitals in Wilkes-Barre and Scranton. Approved revenue bonds.
The tax-exempt bond was approved on a 5-1 vote, with Council Vice President Tony Brooks voting against it.
The bonds will be issued by the Wilkes-Barre Fiscal Authority, which was approved at its last meeting.
Wilkes-Barre Mayor George Brown said the city is not responsible for repaying the bonds, but merely acts as a conduit for them.
Attorney Laura Kurtz, bond counselor for the City of Woodbridge, explained during the work session, and during Thursday’s meeting, City Manager Charlie McCormick said that the City Council is required to vote on bonds under the federal Tax Fairness and Fiscal Responsibility Act. It was revealed that there is. , which requires local governments to approve the use of tax-exempt bond proceeds for facilities under their jurisdiction.
Because the authority to issue the bonds was incorporated by the city, the City Council also granted approval under the City Powers Act.
The nonprofit organization, founded in May, announced on July 30 that Commonwealth Health and its three major hospitals (Wilkes-Barre General Hospital, Scranton Regional Hospital, and Moses Taylor Hospital in Scranton) will receive a $100 million announced that it would be acquired for $20 million.
Woodbridge is a sister organization to Stonebridge Healthcare, which specializes in rescuing distressed hospitals, but the two are separate organizations, Steigman said during a work session, causing apparent confusion. He suggested that Stonebridge would soon disband.
The sale agreement includes Commonwealth Health’s ambulatory surgery center, emergency department, imaging center, laboratory, outpatient rehabilitation, sleep care center, walk-in clinic, wound care center and physician network, according to previous Times Leader reporting. This includes the acquisition of
At least $30 million will go toward capital improvements, Woodbridge said.
In addition to retaining Commonwealth Health’s current staff (approximately 4,000 employees across three facilities) and adhering to current union agreements, Woodbridge will resume services at decommissioned facilities. However, it is unclear exactly what services will be resumed.
Wilkes-Barre General ceased providing inpatient labor and delivery services in July 2023.
Lackawanna County Voting
Because two of the facilities are in Scranton, the Lackawanna County Commission must also approve the bond. That meeting is scheduled for October 16th.
If Lackawanna County votes against the bond, it’s unclear how that would affect the sale of the entire Commonwealth Medical Facility. Woodbridge President Don Steegman attended Thursday’s meeting but left before the Times Leader could ask questions about that aspect of the sale.
If Lackawanna County approves the bond, Steigman indicated during Tuesday’s work session that Woodbridge plans to complete the sale by the end of the month.
Woodbridge’s Board of Directors is comprised of hospital executives with decades of experience in the healthcare field, some of whom have particular experience in hospital mergers and acquisitions.
As explained in the work session, Mr. Steigman previously served as president and chief operating officer of Jackson Health System in Florida, where he oversaw the operations of seven hospitals and brought extensive experience in financial restructuring. I have it.
Brooks votes no.
Council Vice President Tony Brooks explained why he voted against the bond.
Brooks referenced a recent Times Leader article published in August that discussed the 1.9 million in real estate tax revenue Luzerne County would lose if Woodbridge acquired Commonwealth Health.
The article explains that just because an organization is a nonprofit doesn’t automatically give it tax-exempt status.
Decisions on exemptions are based primarily on standards set by the state Supreme Court in a lawsuit brought against the state by the Hospital Utilization Project, now called HUP Testing, officials said. Ta.
While reading off a list of exemption obligations, Brooks said Wilkes-Barre stands to lose $774,583 in real estate tax revenue, which Woodbridge said he could not do, so the sale would free the government “to some degree.” “I don’t think the burden will be alleviated,” he said. Contribute to the city’s pilot program.
Other exempt obligations include: furthering charitable causes; Donate or provide a significant portion of the Services free of charge. benefit a substantial and unspecified class of people who are the legitimate targets of philanthropy; It operates without any personal profit motive.
“But we are hopeful for the future,” Brooks said. “(Stigman) has said on the public record that he intends to talk to the mayor about the pilot next year. I’m looking forward to Wednesday’s budget speech to see how it actually happens, at least this year.” But next year? I’m very worried about next year. ”
Councilmember Jessica McCray also explained why she ultimately decided to vote to approve the bond. She said she was hesitant about the decision, but voted in favor because she was concerned the hospital would close if the sale didn’t go through.
“We hope that everything you’ve told us is what you’re going to do,” McCray told Steigman. “And I hope that when we speak next year, you will be able to contribute to the pilot program.”
The mayor also addressed the sale, reiterating that the city could make up for lost property taxes with transfer fees and permit fees.
The mayor also said the city’s income tax revenue would also likely increase if Woodbridge reinstates certain services and hires more employees.
“The federal government has essentially been splitting and shutting down services for an extended period of time, and we expect they will continue to do so,” Brown said.
public comment
Several residents spoke out against the bond, and at least one resident said he was in favor of the bond.
City resident John Suchowski questions how much Woodbridge pays its executives and whether the organization will deliver on its promise to expand services. It seems so.
“It just doesn’t pass the smell test. I understand where this city is coming from and trying to save the hospital. We want to provide more services, but more There is no guarantee that they will provide that service. Are they obligated to do so?” Suchoski asked.
He also wanted to know what happens to the revenue coming into the hospital.
Stiegman mentioned some of his concerns.
“We have access to other grants, foundations and other sources of income that we don’t have as a for-profit hospital,” the president explained.
Steigman added: “Every dollar earned through the business is invested in the operation of the facility or returned to capital expenditures, whereas investor-owned organizations have obligations to their shareholders. ” he continued.
He also said that because Woodbridge is a nonprofit organization, it is required by law to pay salaries within fair market value.
