State Senator John Yudichak appeared remotely before members of the Luzerne County Board last week to personally request 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 just for the county earmarks $3 million per year for 25 years from the casino’s Local Sharing Account (LSA) to pay off the debt needed to secure the initial infrastructure money.
Financial institutions are seeking to ensure 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 was as frustrated as they were that lending institution lawyers want county insurance for an unlikely gambling industry shutdown.
“It’s not going to happen, but that’s what lawyers do for a living,” he said, referring to a casino closing. “They want to make sure every scenario is planned.”
With 15 casinos that generated $4.83 billion in gross terminal gaming revenue last year, Pennsylvania is ranked as the second most profitable gambling state, just behind Nevada, Yudichak said.
Although individual casinos have closed across the country, no gambling state has ever pulled out of the casino business, he said. Pennsylvania would be forced 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 per year for the county LSA for the past ten years, he said. Under the new legislation, $3 million of that annual allocation would be deducted to cover the infrastructure program, while the rest would continue to fund local allotments for various community purposes, he said.
Proceeding without a county guarantee would likely double the cost of financing and halve the amount of financing available for infrastructure projects, Yudichak told the council.
He also fears that a rejection of the guarantee by the board will cause lawmakers to reconsider how the $3 million is allocated and “bring serious question to whether the program will be received by Luzerne County.”
“Luzerne County needs to lock down this program,” he said.
Yudichak’s speech 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 which will increase due to inflation.
He expressed the need for the most expensive project owned by the county – the replacement of the Nanticoke/West Nanticoke Bridge over the Susquehanna River, estimated at $40 million.
Built in 1919, the 1,922-foot span connects Nanticoke and Plymouth Township and was last rehabilitated in 1987.
While Yudichak sees the replacement of the bridge as a necessity for economic development, he said the primary concern is maintaining a safe river crossing in this area for the public.
The bridge was downgraded to a 15-ton weight limit in May 2020 by the county and the Pennsylvania Department of Transportation due to issues discovered during an inspection.
Components known as bearings don’t fully move with the bridge to help it expand and contract as vehicles pass through, putting more stress on other components, said Lawrence Plesh, Chief of the County’s Interim Operational Services Division. Also, some of the pins that secure the eye bars no longer meet original design capability due to rust and other conditions, he said.
With no deteriorating state-owned bridge nearby, the county cannot team up with the state on a bridge consolidation project to dramatically reduce county spending like it did for the memorial bridge. County-owned Fire Department (Water Street) linking West Pittston and Pittston. , Yudichak said.
The Water Street Bridge has been closed since August due to concerns about a bent eyebar causing traffic on the nearby state-owned Spc. The Dale J. Kridlo Bridge (Fort Jenkins) will increase from 12,000 vehicles to 20,000 per day. The state agreed to take responsibility for the design and construction of a solution for both spans, with the county only required to contribute 5% towards the rehabilitation or replacement of the Water Street Bridge.
County officials had added the Nanticoke/West Nanticoke Bridge replacement to the Lackawanna/Lucerne Metropolitan Planning Organization, or MPO, Transportation Improvement Program to qualify for future highway and bridge funding allocations. federal and state, but it hasn’t yet reached funded status, Plesh said.
Yudichak told the council $3.8 billion in projects are already on the current list of DFO projects in both counties, and projects that go through this program typically take a decade to 12 years for construction to begin.
He estimated that the cost of the Nanticoke/West Nanticoke Bridge could reach $64 million by 2034 with inflation.
Plesh said about $2.5 million would be needed to complete a minor rehabilitation that could keep the span at the 15-tonne weight limit for a few more years, but no funds are earmarked for that work. The weight limit will drop further at some point if the sanitation is not completed, he said.
Pennsylvania set to receive $11.3 billion in new highway funding 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 about $200 million because there are 67 counties in the state. He wondered if LSA infrastructure borrowing should be delayed accordingly.
The county’s executive director of planning and zoning, Matthew Jones, asked the council for permission to speak on the subject, saying he had no opinion on the LSA loan guarantee, but that he wanted to ensure that the board was fully informed of what to expect from the new federal infrastructure funding.
His department has learned in recent weeks that the lion’s share of federal bipartisan infrastructure package funding goes to repairing federal and state roads, he said counties will be eligible to apply for a smaller portion funding, he said.
“I just want to flavor our expectations of what this bill could bring to Luzerne County to help us with our network,” Jones said.
Thornton said he would be more in favor of the LSA loan guarantee if there was a clause giving the county council the power to approve or reject projects that will be submitted for funding.
The legislation leaves the decision 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 scheme.
The County Council appoints the five citizens to serve on the Redevelopment Authority’s board of directors, with the seats currently held by Nina DeCosmo, Scott Linde, John Pekarovsky, Stephen E. Phillips and Mark Rabo.
Councilor Tim McGinley agreed with Thornton, saying the council should have some influence over project approvals.
“I think it’s very important. If we’re going to secure money – a big amount 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 self-government structure began in 2012 with an inherited debt of $465 million that had been significantly reduced and is expected to be paid off in 2030.
“So it’s very important that we get all the assurances and guarantees for the county so that we don’t end up with a debt service that’s going to blow the budget,” he said.
Thornton said the board was told there was little risk the county would be forced to pay because “the game is here to stay”, but the bank “sort of argues that it’s not of guaranteed money”.
Advisor Gregory Wolovich Jr. asked Yudichak if the $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 what infrastructure it wants to tackle. He encouraged the council to submit a “strong application” to the redevelopment authority.
The senator thanked the council for the invitation to speak and said he will work to get answers and resolutions to all remaining questions. It’s unclear whether the board will vote on the matter at its next regular meeting on June 14.
Yudichak’s presentation is posted as an attachment to the agenda for the May 24 board meeting at alfalfacounty.org.