Luzerne County approves Tenor Health PILOT and moves forward on bond financing; council seeks more buyer details

Luzerne County Council on its voting agenda adopted a payment-in-lieu-of-taxes (PILOT) agreement with Tenor Health Foundation Inc. and moved forward with a related bond financing package to support proposed hospital acquisitions and upgrades.

The PILOT resolution (agenda item 10) was described during discussion as an agreement that would provide the county a multiyear payment rather than property tax revenue from Tenor's tax-exempt facilities; an unnamed council member noted a proposed $850,000 commitment spread over four years and urged consideration of a graduated schedule so the county's tax base is not suddenly reduced. The council adopted the PILOT resolution by roll call.

Council then considered a resolution authorizing the Northeastern Pennsylvania Education Authority to issue tax-exempt revenue bonds in an amount not to exceed $47,000,000 and taxable revenue bonds not to exceed $25,000,000 to benefit the borrower identified in the resolution. Authority counsel Terry Moses, speaking for the borrower/solicitor, told the council that long-standing practice and federal rules restrict tax-exempt bond proceeds to capital uses: "bond money can only be used for bricks and mortar and infrastructure," he said, explaining the proceeds could pay for building construction or capital equipment (for example, a cath lab or MRI) but not payroll or general operating expenses.

Council members pressed counsel and staff for a clearer public breakdown of the $120,000,000 aggregate deal the project team had discussed in an earlier meeting, asking whether any portion of the bond amounts would serve facilities outside the Wilkes-Barre campus. Moses replied that the solicitor is not required to force the borrower to provide a public line-item breakdown and that typical bond documents bundle the purchase price, debt service and related costs into the borrowing amount. "Although I do know from doing these for 26 years that built into that amount is not just the purchase price of the hospital, but also the debt service and the other expenses," he said.

Council members said they wanted to hear a specific purchase price at the time of any negotiated sale; staff and counsel said they would circulate further information when available. The bond authorization motion passed on roll call after members asked and received the clarification that tax-exempt proceeds are limited to tangible capital expenditures.

The council's votes on the PILOT and the bond authorization mean the county has formally approved the local fiscal agreement and cleared the authority's path to issue the series of bonds described in the resolution; council discussion made clear that the county expects more detailed purchase-price disclosures from the borrowing parties before closing. No county appropriation was required at this meeting to adopt the bond-authorization resolution.

Next steps: county staff and authority counsel said they will circulate additional details about specific facilities covered by the bond proceeds and any negotiated purchase prices when those figures are available to disclose publicly.