A $20 million bond that the former Blue Mountain Health System asked Carbon County to be the guarantor for five years ago is now paid in full, officials said.

On Thursday, Commissioners’ Chairman Wayne Nothstein said that he received a phone call from John Nespoli, president of St. Luke’s Health Network’s Lehighton campus, before the meeting advising him that the hospital was closing on its new bond for the construction of the new hospital in Franklin Township.

Also included, Nothstein said, was the bond Carbon County signed on behalf of the then Blue Mountain Health System in November 2015. The health system was later purchased by St. Luke’s.

Nothstein said that Nespoli said the $20 million bond will be paid off and that the county will no longer have that liability on the record.

“That is great news for Carbon County and the hospital authority,” Nothstein said, noting that everything should be settled except for the closing paperwork.

The $20 million loan was used by the health system to fully fund the hospital’s Gnaden Huetten campus’ frozen pension fund, which was underfunded by approximately $16 million at that time. The pension covered approximately 600 Gnaden Huetten hospital employees who had been vested prior to Gnaden Huetten and Palmerton hospitals merging to become Blue Mountain Health System.

In August 2018, Carbon County’s credit rating almost suffered following St. Luke’s acquisition of Blue Mountain Health System because of a bad reporting item.

At that time, the commissioners amended an agreement with Zelenkofske Axelrod LLC for additional financial consulting services because of the bond issue.

The problem came down to the rating agency Standard & Poor’s wanting proof and an explanation as to who would be responsible for the debt that Carbon loaned on Blue Mountain Health System’s behalf in 2015.

The answer was St. Luke’s.