Luzerne County providing loan instead of outright monetary award for West Hazleton bridge project

Luzerne County Council decided Tuesday to loan $425,000 to West Hazleton to complete a bridge project instead of providing more federal American Rescue Plan funding.

The $425,000 loan funding will come from interest the county has accrued on $6 million in community development funds that had been set aside in case the U.S. Department of Housing and Urban Development, or HUD, follows through with a $6 million penalty threatened a decade ago over a lack of development at the former Hotel Sterling site in Wilkes-Barre.

A loan was pursued for West Hazleton, in part, because some officials were concerned an additional American Rescue earmark for the borough’s bridge project would open the door for other American Rescue recipients to seek more funding due to increases in their project costs.

Council had earmarked $850,000 in American Rescue funds toward rehabilitation of the Jaycee Drive Bridge over Black Creek in West Hazleton in May.

West Hazleton officials recently asked council to provide an additional $675,000 because initial excavation revealed the south bridge abutment cannot be saved due to reinforcing bars that are “totally corroded.” The borough indicated it did not have additional funds to proceed with the project.

The Pennsylvania Department of Transportation subsequently said it would provide an additional $250,000 in discretionary funding toward the increased bridge costs if the county earmarks the remaining $425,000, officials said.

A special council meeting had to be held because the additional state funding hinged on the county guaranteeing the remaining $425,000, officials said.

Initially, county council was set to vote Tuesday on a $425,000 American Rescue award conditioned on the borough’s agreement to seek grants and repay the county if any grants are received.

Before the meeting, the administration presented council with the new option to instead use the community development interest to provide a loan.

County Councilman Gregory S. Wolovich Jr. made the proposal, and it passed unanimously.

The resolution said loan terms would be negotiated between the county and borough and that the county manager is authorized to execute a note, collateral agreement or any other loan documents necessary to secure the loan.

Closure of the bridge due to deterioration has forced detours through a residential neighborhood and limited access to 50 businesses employing 2,500, creating concerns if there is a fire or chemical spill, borough officials have said.

County Councilman Brian Thornton said he wholeheartedly supports the bridge project but would not have voted for the original proposal to provide additional American Rescue funding. He said the county has about $3 million plus interest remaining that may be needed for unbudgeted emergency county government expenses.

Thornton also asked how the payment for the south abutment will be calculated and whether the project can be rebid. Doli Construction, based in Chalfont, was awarded the bridge contract.

Dominic Yannuzzi, of bridge design consultant Alfred Benesch & Company, told Thornton the project cannot be rebid because the contractor already has started work and would have to be paid for services to date, which could end up further increasing the overall project cost.

Yannuzzi said the contractor will be paid for the additional work based on the pre-award unit prices it had submitted during bidding.

Regarding the source of the loan, county Manager Romilda Crocamo said the full $6 million set aside for the potential Sterling site penalty is still intact.

Some have argued the county should not touch the $6 million unless HUD drops the threatened penalty, but the federal agency has not communicated any willingness to do so to date, officials have said.

Others have said using the set-aside funds on a proposed hotel/convention center project at the Sterling site would be the best way to clear up the disagreement with HUD because that project would address HUD’s original complaint that no development has occurred there.