Allegheny County Council tonight plans to consider proposals regarding UPMC's access to county-backed bonds and the health care giant's tax-exempt status.
UMPC officials are asking County Council for help securing a $1.175 billion bond refinancing. The county created its Hospital Development Authority to give local hospitals access to government-backed bonds and help them expand.
UPMC received $1 billion in bonds through the authority in 2008 alone, in part to help refinance passed bonds.
Several elected officials have discussed withholding access to that money as leverage against UPMC's plan to close its Braddock hospital next month. However, the hospital system could just go to another government body to secure the same financing, and Allegheny County would lose $176,000 in annual fees it would receive under the proposal, county officials said.
"That's the comment of a political prostitute. Let them go somewhere else. For the crummy fees we get from them ... in no way should we subsidize what I consider to be monopolistic behavior," said Councilman Charles McCullough, R-Upper St. Clair. "Once we make a stand, I think there's a hell of a lot of pressure on everyone else to do it. This would force (UPMC) to be fair."
McCullough is sponsoring separate measures to block UPMC's access to county-backed bonds and to challenge UPMC's nonprofit, tax-exempt status.
Court challenges against UPMC are not promising, local lawyers and Allegheny County Executive Dan Onorato have said. Onorato is sponsoring UPMC's bond request and is still pushing for a cooperative approach, but will consider McCullough's proposals if council passes them, his spokesman Kevin Evanto said.
"We're open to applying pressure on them in other ways," Evanto said. "We are limited in our ability to do much when it comes to their decision. But that's not going to stop us from pursing any angle that we can."
McCullough's hard-line strategy will likely not work, said two city lawyers with expertise in nonprofit and government law. To challenge the hospital system's nonprofit status, the county would have to show UPMC isn't charitable, and UPMC probably provides enough community care to make that impossible under the law, said nonprofit lawyer Jack Owen and former county solicitor Ira Weiss.
When Weiss was county solicitor in the 1980s, his challenges to the status of several local nonprofits helped the county get millions in payments in lieu of taxes, he and McCullough said. However, the state has since enacted new nonprofit laws .
"In my opinion, all this County Council activity is a lot of arm waving with little chance of a result," Weiss said.
