DANVILLE — The Geisinger Authority will issue up to $1.2 billion in 2019 bonds to refinance previously issued bonds and pay for projects such as improvements to urgent care and intensive care facilities and the emergency department at Geisinger Medical Center, as well as other projects throughout the health system.
The authority members approved the new issuance at their luncheon meeting on Wednesday afternoon at the Pine Barn Inn.
Attorney Bill Rhodes of authority bond counsel Ballard Spahr, of Philadelphia, went over the issuance resolution before the vote and said only about $200 million to $300 million is new money for projects, while the remainder of the funds will go toward refinancing earlier bond issues.
The issue cannot exceed $1.2 billion and the term cannot exceed 30 years, Rhodes noted. He said there is no risk to the authority or its members. Geisinger is responsible for making payments on the issues.
The Montour County-appointed authority's approval was needed for the issue. The county commissioners approved Geisinger's request for nearly $1 billion in funding related to building projects in Pennsylvania and New Jersey, including $535 million in Montour and Northumberland counties, at a July 9 hearing under the Tax Equity and Fiscal Responsibility Act (TEFRA). The commissioners in Northumberland County and other counties affected also approved the request.
Rhodes said the authority approved a higher amount because the TEFRA notice only relates to new money.
Geisinger President and Chief Executive Officer Dr. Jaewon Ryu, who attended the meeting and addressed the authority, said there were no specific allocations for the new money just yet.
"We're still trying to figure out the details of that," he said.
During her presentation at the meeting, Kate Mullally, Geisinger associate vice president of workplace design, said there currently are 265 active construction or renovation projects, or projects closing out, throughout the health system. Fifty-six of those projects are in the Danville area.
Geisinger's Vice President of Treasury and Financial Systems Tim Fitzgerald said that despite the $7 billion in gross revenues, after donations, "All of the hospitals have large capital expenditures."
He said the health system also has $1.8 billion in debt, and the revenue does not include capital expenses for equipment and buildings.
In addition to projects in the Danville area, including the Mill Street and Montour Street locations in Danville and along Woodbine Lane and Justin Drive in Mahoning Township, projects also are on the drawing board for Geisinger sites in Columbia, Centre, Lackawanna, Luzerne, Lycoming and Mifflin counties in Pennsylvania, as well as two New Jersey locations.
Authority member Bob Davies also proposed the authority request a list of fees from its bond counsel and what tasks the firm performed for each fee, as well as approve set fees for the bond counsel when approving the firm at the beginning of the year.