Yudichak appears before Luzerne County Council urging infrastructure loan guarantee

State Sen. John Yudichak appeared before Luzerne County Council members remotely last week to personally seek their guarantee on a new infrastructure loan.

An estimated $55 million for county and municipal infrastructure projects is at stake, he said.

New state legislation customized solely for the county earmarks $3 million annually for 25 years from the casino-gambling Local Share Account (LSA) to repay debt required to secure the up-front infrastructure cash.

Financial institutions are seeking assurance the county would repay the debt if the Mohegan Sun Pocono casino in Plains Township unexpectedly closes down the road.

Yudichak, I-Swoyersville, told council members he is as frustrated as they are that lending institution attorneys want the county assurance for an improbable gaming industry shutdown.

“It is not going to happen, but that’s what lawyers do for a living,” he said, referring to a casino closure. “They want to make sure that every scenario is planned for.”

With 15 casinos that generated $4.83 billion in gross terminal gaming revenue last year, Pennsylvania is ranked as the second most profitable gaming state, just behind Nevada, Yudichak said.

Although individual casinos have closed across the country, no gaming state has ever pulled out of the casino business, he said. Pennsylvania would be compelled to attract another casino operator to Luzerne County if Mohegan Sun Pocono closed, he said.

Among casinos nationwide, Mohegan Sun Pocono is ranked 13th and has generated, on average, more than $10 million annually for the county LSA over the last ten years, he said. Under the new legislation, $3 million of that annual allocation would come off the top to cover the infrastructure program, while the rest would continue to fund local earmarks for a range of community purposes, he said.

Proceeding without a county guarantee would likely double the cost of the financing and cut in half the amount of funding available for infrastructure projects, Yudichak told council.

He’s also concerned a council rejection of the guarantee would prompt legislators to reconsider how the $3 million is allocated and “seriously puts in question whether the program will be received by Luzerne County.”

“Luzerne County needs to lock down this program,” he said.

Yudichak’s pitch largely focused on the county’s significant road and bridge repair and replacement needs, saying the current cost projection to address county-owned infrastructure is approximately $122 million — a figure that will increase due to inflation.

Nanticoke/West Nanticoke

He has been vocal about the need for the most expensive county-owned project — replacement of the Nanticoke/West Nanticoke Bridge over the Susquehanna River estimated to cost $40 million.

Built in 1919, the 1,922 foot span links Nanticoke and Plymouth Township and was last rehabilitated in 1987.

While Yudichak is viewing the bridge replacement as a need for economic development, he said the main concern is keeping a safe river crossing in that area for the public.

The bridge was downgraded to a 15-ton weight limit in May 2020 by the county and Pennsylvania Department of Transportation due to issues found in an inspection.

Components known as bearings are not fully moving with the bridge to help it expand and contract as vehicles cross, which puts more stress on other components, county Interim Operational Services Division Head Lawrence Plesh said. In addition, some of the pins that secure eye bars no longer meet the original design capacity due to rust and other conditions, he said.

With no deteriorated state-owned bridge nearby, the county cannot team up with the state in a bridge bundling project to drastically reduce the county’s expense as it has done for the county-owned Firefighters’ Memorial Bridge (Water Street) linking West Pittston and Pittston, Yudichak said.

The Water Street Bridge has been closed since August due to concerns over a bent eyebar, causing traffic on the nearby state-owned Spc. Dale J. Kridlo Bridge (Fort Jenkins) to increase from 12,000 vehicles to 20,000 per day. The state agreed to assume responsibility for the design and construction of a solution for both spans, with the county only required to contribute 5% toward the rehabilitation or replacement of the Water Street Bridge.

County officials had added the Nanticoke/West Nanticoke Bridge replacement to the Lackawanna/Luzerne Metropolitan Planning Organization, or MPO, Transportation Improvement Program to qualify for future federal and state highway and bridge fund allocations, but it has not yet advanced to funded status, Plesh said.

Yudichak told council $3.8 billion in projects already are on the current MPO project list in the two counties, and projects that go through this program generally take a decade to 12 years for construction to commence.

He estimated the cost of the Nanticoke/West Nanticoke Bridge could balloon to $64 million by 2034 with inflation.

Plesh said approximately $2.5 million would be needed to complete minor rehabilitation that may keep the span at the 15-ton weight limit for a few more years, but there are no funds earmarked for that work. The weight limit will drop further at some point if remediation is not completed, he said.

Council questions

Pennsylvania is expected to receive $11.3 billion in new highway funds and $1.6 billion in new bridge funding over the next five years from the federal Infrastructure Investment and Jobs Act, Yudichak said.

Councilman Brian Thornton said the county should receive approximately $200 million because there are 67 counties in the state. He questioned if the LSA infrastructure borrowing should be delayed as a result.

County Planning/Zoning Executive Director Matthew Jones asked council for permission to weigh in on the subject, saying he has no opinion on the LSA borrowing guarantee but wanted to ensure council is fully informed about what to expect from the new federal infrastructure funding.

His department has learned over the last few weeks that the lion’s share of funding from the federal bipartisan infrastructure package is going towards fixing federal- and state-owned roadways, he said Counties will be eligible to apply for a smaller portion of the funding, he said.

”I just want to flavor our expectations about what that bill might bring Luzerne County to help us with our network,” Jones said.

Thornton said he would be more favorable toward the LSA loan guarantee if there was a clause granting county council authority to approve or reject the projects that will be submitted for funding.

The legislation leaves the decision up to the county redevelopment authority, with final award approval by the Commonwealth Finance Authority — a state entity that already approves other LSA awards that are not part of this special program.

County council appoints the five citizens serving on the Redevelopment Authority board, with the seats currently filled by Nina DeCosmo, Scott Linde, John Pekarovsky, Stephen E. Phillips and Mark Rabo.

Councilman Tim McGinley concurred with Thornton, saying council should have some influence on project approvals.

“I think that’s very important. If we’re going to guarantee money — a great sum of money — I think it’s important that we have a say in how things are done,” McGinley said.

McGinley also said the county’s home rule government structure started in 2012 with $465 million in inherited debt that has been dramatically reduced and is slated to be paid off in 2030.

“So it’s real important that we get all the assurances and guarantees for the county so we don’t end up with a debt service that’s going to drive the budget through the roof,” he said.

Thornton said council has been told there is little risk of the county being forced to pay because “gambling is here to stay,” but the bank is “kind of holding out that it’s not guaranteed money.”

Councilman Gregory Wolovich Jr. asked Yudichak if the full $40 million for the Nanticoke/West Nanticoke Bridge would be requested from the $55 million LSA pot.

Yudichak said it would be up to the county to determine how much funding it wants to request and which infrastructure it wants to address. He encouraged council to submit a “robust application” to the redevelopment authority.

The senator thanked council for the invitation to speak and said he will work to obtain answers and resolutions to any remaining questions. It’s unclear if council will vote on the matter at its next regular meeting on June 14.

Yudichak’s presentation is posted as an attachment to council’s May 24 work session agenda at luzernecounty.org.