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Redevelopment Authority approves conduit financing resolution for Scranton Catholic School System
Summary
The Redevelopment Authority of Lackawanna County voted to approve Resolution 11 50-25, authorizing conduit, tax-exempt financing for the Scranton Catholic School System; the authority will have no repayment obligation and further approvals and a public hearing are required before closing.
The Redevelopment Authority of Lackawanna County approved Resolution 11 50-25 on a voice vote during a rescheduled regular meeting, authorizing the authority to act as a conduit issuer to enable tax-exempt financing for projects of the Scranton Catholic School System.
Attorney Brian Kosolinski of Stevens & Lee told the authority the structure mirrors a recent county transaction and places no financial obligation on the authority. “There’s no obligation on the authority. There’s no payments ever to be made,” Kosolinski said. He said the arrangement allows the diocese and school system to obtain a tax-exempt loan through an issuer and that “once we put it in place, you’ll never hear about it again probably.”
The authority’s approval authorizes steps to move the transaction toward closing but does not complete lending or borrowing. Kosolinski and staff said additional approvals are required, including approval by the Lackawanna County commissioners, identification of specific projects across multiple counties, lender selection by the diocese and a public hearing to satisfy statutory notice requirements. Kosolinski said staff would prepare closing documents and that the authority would not administer funds or make payments on the borrowing.
Board members present expressed support for the transaction and for recruiting similar conduit deals. One board member described the authority’s ability to serve as an issuer for bank-qualified loans — deals for which an issuer must issue less than $10,000,000 in a calendar year — as an important service for local borrowers. Kosolinski noted that some issuers that handle larger deals (he cited a recent $40,000,000 University of Scranton transaction as an example) cannot take bank-qualified loans in the same year, which increases demand for additional local issuers.
The resolution passed on a voice vote; the meeting record does not name the mover or the seconder. Authority staff said they will set the public hearing and circulate draft documents to the members in advance of closing.
