2/8/2007 Update:

Interesting story in today’s Journal. So they got the $52 million, but we won’t get to see what they do with it?

Hoboken owns hospital, but records ‘not public’

Thursday, February 08, 2007

HOBOKEN – Hoboken University Medical Center now is owned by the city through the state-sanctioned Hoboken Municipal Hospital Authority.

But anyone thinking that with taxpayers dollars at risk there are new requirements of transparency – the city is backing a $52 million bond, and the hospital is eligible for extra state and federal Disproportionate Hospital Share funding – he or she may be disappointed.

According to George Crimmins, a spokesman for the Hoboken Municipal Hospital Authority, the nonprofit Hudson Healthcare that now manages the hospital has no obligation under the Open Public Records Act to open its records to the public.

The HMHA’s oversight of the management company does not extend to nickel and dimeing each budget line item. It only is required to monitor certain financial reports and performance indicators under the management agreement.

That is what The Jersey Journal learned when it requested payroll records. When the Governor’s Office was asked about the legality of the arrangements, the newspaper was advised to seek advice from its legal counsel.

CHARLES HACK

1/30/2007 Update:

Listen to the song while you read. It’ll make more sense.

[audio:ForTheLoveOfMoney.mp3]

From NJ.com:

Hoboken takes over St. Mary Hospital tomorrow

St. Mary Hospital will officially become Hoboken University Medical Center tomorrow, when it is transferred from Bon Secours Health Systems to the city’s newly created municipal hospital authority.

The papers transferring ownership are being signed today and will take legal effect at midnight tomorrow.

The city agreed last year to take over the financially strapped hospital on Willow Avenue, which last year recorded cash losses of about $18 million. Hoboken created the autonomous Hoboken Municipal Hospital Authority to run the hospital and the city has backed $52 million in bonds for improvements and renovations as well as for working capital and a reserve fund.

Critics have objected to the city’s taxpayers being put on the hook for a hospital that has lost money for years, while defenders of the transfer counter that the value of the land is enough that the hospital could be sold and all debts paid off if necessary.

The hospital will be wholly owned by the HMHA. Officials involved in the transfer say other than a change in the sign at the front of the building, patients and employees will notice little difference this week.

Once the transfer happens, the hospital will be eligible for millions more in state and federal funds, officials say, and they hope planned improvements such as more private rooms, better meals, and a renovated emergency room and maternity ward are expected to lure new patients.

See the rest of the history below…

12/21/2006 Update:

Here’s the full update from a concerned citizen who attended the Local Finance Board meeting today.

Hoboken – you break it, you bought it.

That was the tone of the State Local Finance Board vote to allow the St. Mary Hospital deal to proceed as is.

breakingnews.jpgThe board admitted Hoboken is taking a risk if it moves forward with the takeover. It found that risk — while substantial (and according to the LFB staff, much greater than the Mayor claims) — is still not great enough to warrant the state to actually step in and stop the city. The LFB’s job is to stop municipalities from making bonding decisions that will bankrupt them. In this case the LFB found Hoboken has the capacity to raise taxes and borrow money to make up for the potential losses if the Hospital fails. That was the low burden the team pushing the St. Mary plan needed to get past in order to get LFB approval.

The vote followed over two hours of discussion about the Mayor’s decision to place the entire burden of the 52 million dollar bond for the hospital on the backs of city taxpayers, as opposed to floating the bonds without a city guarantee. Floating the bonds without a guarantee would cost the Municipal Hospital Authority more in interest over the term of the bond, but would hold harmless the taxpayers of Hoboken if the Hospital fails.

More below:

The Discussion Begins

The LFB heard first from the applicants. The Bond Counsel for Hoboken laid out a scenario in which the City would make a profit of up to 2 million dollars if it decided to close the hospital after a couple years and sell off the assets to pay off the 52 million dollar bond. He said if the hospital were to close, the city could get 30 million for the hospital grounds, 5 million for other buildings, 9 million from funds in reserve, and 10 million from the sale of the used hospital equipment.

LFB Professional Staff experts disputed those figures as too optimistic, saying the city would be more likely to be up to 10 million dollars in debt if it were to close the hospital in a couple years and sell off the assets. The staff testified to the board that it is “important not to downplay the risks” of this plan for St. Mary. They also noted the Governor was moving ahead with a statewide review of all hospitals, with an eye on suggesting some should close down, and that St. Mary would still be part of that study no matter how Hoboken moves forward with its takeover. It is possible Hoboken could back the 52 million dollar bond today, only to get a state recommendation to close the Hospital in a year or two.

After the staff testimony, LFB chairperson Susan Jacobucci acknowledged receipt of the letter entitled “Eyes Wide Open” authored by Helen Manogue and the board members of the Quality of Life Coalition. It was not read aloud, but was included in the record.

The Public’s Turn At Bat

The Board then allowed the public to make statements. They recognized Ricky Mason, who immediately said he was not there to oppose the plan to save St. Mary hospital, but to make the case why he and other City Taxpayers should not shoulder the entire burden of the 52 million dollar bond should the hospital plan fail. Both he and his wife Beth repeatedly indicated they were not in favor of shutting down the hospital, and only wanted to ensure that the proper work was done to ensure this was the best plan to save it.

Ricky is a bankruptcy attorney with a national reputation who has worked on turnaround plans for two decades. Two of those plans included major healthcare corporations that went into bankruptcy. He encouraged the LFB to consider a business plan to keep St. Mary open that would not risk the city’s treasury. He went point by point through the business plan offered by the city, poking holes in many of its claims. Ricky said if everything goes right in the plan and the hospital survives, the best the city could hope for is to break even each year. If not, city taxpayers would have to pick up the slack for St. Mary’s annual operating deficits.

What about the employees?

Ricky also pointed out liabilities in the event of a shutdown were left out of the business plan. For instance, who will pay the severance, pension, and health insurance obligations for the 1000 people who work at St. Mary if the city closes it down? Not Bon Secours. The workers are represented by unions and have contracts that will be up for negotiation. Are they aware the bond issue is structured to make the City of Hoboken the first to be paid in the event the hospital shuts down? That would mean no severance for the union workers, at least according to the way it is now structured.

Ricky summarized his opening statement by saying his solution is to avoid a direct city guarantee of the bonds. Instead, sell the bonds on the open market and let investors determine take the risk, instead of the taxpayers. That was his main point. Take the burden away from the taxpayers and put it on the bond investors and management team at the hospital to successfully turn the hospital around.

Beth Mason then spoke of the need for “transparency” by the City, Hospital Authority, and State in making these decisions. Getting documents related to this huge undertaking has been very difficult. There has been an effort made locally to keep key information from the public.

The Mayor’s Backup Plan: High-Rise Towers

Next, Mayor David Roberts responded to the risks described by the LFB Staff and Ricky Mason. His solution: If the hospital fails, the city can simply up-zone the property to boost its value before sale. Essentially his plan is to run the hospital for as long as possible, and in the event it runs deficits, the city will simply close it down, up-zone the property for high-rise towers in the heart of Hoboken where the Hospital stands, and be done with it.

To be fair, the Mayor indicated this is not the result he wants to see, but it is his most viable backup plan. He said he wants to see the hospital open for many years to come, but in the event the plan fails, the city could simply move to allow high-rise zoning at 4th and Willow. He did not discuss the catastrophic damage such a move would do to the zoning of the rest of the low-rise interior of the city, and how developers would then be clamoring for their own variances to build high-rises in the heart of Hoboken.

The Bon Secours Threat: Shutdown in 30 days

St. Mary CEO John Shea said “the last thing Hoboken needs is another condo,” but that if the LFB didn’t vote to allow the city plan to move forward, his bosses at Bon Secours would file a “Chapter 7” bankruptcy petition, which would lead to St. Mary being closed within 30 days. Bon Secours would then seek to sell the property to a developer for condos itself.

The Weehawken Connection

Weehawken Mayor Richard Turner is a member of the LFB, and he did his best to advocate for the hospital plan. After all, many of his residents use the hospital, and since the Hudson County Improvement Authority is not backing the bonds, Weehawken won’t have to pay a cent for Hoboken’s largesse. His argument was essentially that Hoboken is a city with a net valuation of 5.7 billion dollars, which could always borrow more money to save it from the St. Mary deficits, even though it would likely mean tax increases. In other states, Turner would have had to recuse himself. He has several conflicts as the Mayor of Hoboken’s neighbor to the North. For one, he is negotiating to establish a joint municipal garage facility in Hoboken (according to Councilman Chris Campos) and is dictating the specifications for Hoboken’s “NoHo Redevelopment Zone” to Mayor Roberts (according to Community Development Director Fred Bado.) One could argue he may be looking to receive favorable consideration in exchange for the consideration he offered to Roberts today.

The bonding counsel for the Hospital Authority and the Hospital’s CFO said Ricky’s proposal to avoid a city bond guarantee would cost the hospital too much money in additional interest payments. Considering the size of the hospital budget, and the impact the hospital’s failure would have on the taxpayers of Hoboken, the case was made it was a small price to pay to avoid the specter of a Hoboken tax increase, coupled with the up-zoning of the hospital property for high-rise towers.

The Board Votes On Its Findings

The Deputy Attorney General assigned to the LFB indicated that unlike with other matters, the LFB could only make findings, not actually “approve” or “disapprove” the Hospital financing. This is because of the nature of the recently enacted municipal hospital authority legislation targeted to Hoboken. The board could only consider the following:

  1. Assess the costs incurred are “reasonable”
  2. Assess if the terms would not impose an “unreasonable” burden on the municipality
  3. State if the terms of the management agreement were “reasonable”

Under those parameters, the LFB allowed the city to decide for itself how to proceed with this “leap of faith.” The LFB also attached stipulations, ordering the Hospital Authority to file Quarterly Reports with them to monitor their progress. They also want any changes to Harvey Holzberg’s management agreement sent to the LFB for consideration.

In a nutshell, the LFB’s vote to allow the plans to move forward are not in any way a “rousing endorsement” of the city’s plan, per se (as anyone in the room at the time or watching the videotape of the meeting could clearly see.) Instead the board and its staff indicated the city needs to know it is taking a substantial risk in this endeavor, and they will monitor the risk to ensure it will not get so bad as to lead Hoboken into bankruptcy. If the plan works, they agree it will be worth the risk.

After the vote, the Mayor publicly thanked the LFB, Harvey Holzberg and his team, Bon Secours, and even the Masons for their suggestions and input. Everyone in the room from the Mayor to the Masons agreed they want the plan to work. It is a question of how to do it with the least risk.

In this case the LFB handed it back to the local authority to make that decision on its own. It will be up to the City Council to make that call.

12/19/2006 Update:

BREAKING NEWS:
State schedules special meeting Thursday morning to consider hospital bond!

breakingnews.jpgThe New Jersey Local Finance Board has just scheduled a special meeting for THIS Thursday morning to consider whether or not to approve Hoboken Mayor David Roberts’ plan to put city taxpayers another $52,000,000.00 in debt. The Local Finance Board has to approve the unique and risky bonding plan before the Hoboken City Council can move forward with the takeover of St. Mary Hospital.

People concerned about the Roberts plan to take over the money-losing hospital were expected to state their case at the Local Finance Board’s next regular meeting on January 10th. Instead, the state pulled a “fast one” and scheduled a special meeting on short notice. If the political appointees on the Local Finance Board (including Weehawken Mayor Richard Turner) approve the deal, Mayor Roberts may call a special meeting of the City Council during the week between Christmas and New Years, when Hoboken is a ghost town.

The Mayor has the power to set the agenda of special emergency council meetings, and has shown in the past he is not above possibly adding several other controversial items to the agenda, such as the Southwest Redevelopment Plan. A lot of things could get pushed through while most of Hoboken is “Over the River and Through The Woods…” at Grandmother’s house eating leftover Christmas Goose.

The Local Finance Board meets at 9:30am on Thursday, December 21st at the Department of Community Affairs, Conference Room #129, 101 South Broad Street, in Trenton.

12/14/2006 Update:

Interesting related article about trouble-laden NJ hospitals in today’s Jersey Journal.

Interesting to note, was this quote:

he oversaw a merger with Christ Hospital that eventually dissolved, in large part due to Bon Secours’ failure to disclose its financial problems prior to the deal’s completion

Read the rest here.

BMC borrowing to pay its bills

Wednesday, December 13, 2006

By LISA SCHNEIDER

Bayonne Medical Center will end the year in the red – and was forced to borrow money to pay vendors and service providers just weeks before closing on its anticipated purchase of a Staten Island hospital.

While BMC officials insist the deficit will not affect its deal to purchase St. Vincent’s Hospital, it raises questions about the hospital’s past management – especially since BMC’s former CEO, Robert Evans, abruptly resigned last month.

Despite Evans’s vow to stay at BMC until the end of the year, he left soon after announcing his intended resignation. Following him out the door was his wife, Carrie Fleishell, who served as BMC’s vice president of finance for the past six years, BMC officials confirmed yesterday.

In court papers filed in U.S. Bankruptcy Court in July, Evans said BMC was “fiscally sound.”

Evans and Fleishell did not immediately return messages left for them last night.

Paul Swibinski, a BMC spokesman, attributed the “unexpected budget shortfall” to a generally inclement financial climate for New Jersey hospitals.

“The disappointment is that we expected to finish in the black this year,” Swibinski said.

He added, “It’s very tough for hospitals operating in New Jersey to thrive in this business climate.”

Swibinski said the hospital does not anticipate any layoffs and that the acquisition of St. Vincent’s will continue as previously planned.

While Swibinski said BMC hopes to get money from the New Jersey Health Department, for now it plans to rely mainly on private funding.

Marilyn Riley, a spokeswoman for the New Jersey Health Department, confirmed that BMC recently submitted a request for an advance on its charity care funding. BMC receives about $3.9 million in charity care from the state each year, according to Health Department records.

Before the Health Department responds to the request, it needs to review additional information, including BMC’s plan for what it intends to do with the money, Riley said.

Some 40 percent of New Jersey hospitals ended last year with deficits, said Kerry McKean Kelly, a spokeswoman for the New Jersey Hospital Association. While this year’s final data from all hospitals is not yet available, she said, nothing indicates a reversal in that statewide trend.

The recent deficit has reminded some of Evans’ previous transactions as the chief financial officer of Bon Secours New Jersey hospitals.

In 2000, when Evans was still in that position, he oversaw a merger with Christ Hospital that eventually dissolved, in large part due to Bon Secours’ failure to disclose its financial problems prior to the deal’s completion, according to a 2004 article in The Jersey Journal.

BMC has appointed Eugene Greenan, a 25-year BMC employee, to be the hospital’s new CEO, effective immediately. Greenan, who previously served as the hospital’s executive vice president for corporate affairs, will step into the void left by Evans’ resignation to oversee the acquisition of St. Vincent’s and the partnership between the two hospitals.

12/13/2006 Update:

Now our hospital fiasco has essentially made the big headlines. Here’s today’s New York Times article sent in by a reader.

Also, here’s the link to the other article regarding how the Hoboken Reporter left some key points out to Beth Mason’s letter to the editor.

Rescue Plan for Hospital in Hoboken

By DAVID KOCIENIEWSKI

HOBOKEN, N.J., Dec. 11 — Over the last two decades, this city has transcended its blue-collar roots and become a cosmopolitan outpost of renovated brownstones, luxury condominiums and fashionable shops. Yet prosperity has skipped over the city’s only hospital — and also New Jersey’s oldest — St. Mary Hospital, which has lost nearly $100 million in the last five years.

Situated in an area that health care analysts say already has too many hospitals, St. Mary is usually unable to fill even half of its 328 beds and needs million of dollars in renovations. In the New Jersey Hospital Association’s recent analysis of the finances of 55 troubled hospitals in the state, St. Mary was found to be in the worst shape.

But as New Jersey looks for ways to close as many as two dozen of its financially troubled hospitals, St. Mary, which was founded in 1863, has escaped that threat, at least temporarily.

When the owner, the Bon Secours Health Care System, a Maryland company run by an order of Roman Catholic nuns, announced this spring that it planned to close the hospital, city officials, including the mayor, David Roberts, state legislators and the governor’s office pieced together an unusual plan to keep it afloat by having the city take it over and pumping in an infusion of public funds.

To head this new venture, officials have proposed a former board chairman of the University of Medicine and Dentistry of New Jersey, which is currently under federal supervision for defrauding Medicaid and squandering hundreds of millions of tax dollars in the past decade. The proposed leader, Harvey A. Holzberg, has never himself been accused of any wrongdoing at the state medical school.

Some critics contend the officials intervened because Hoboken is home to Gov. Jon S. Corzine, Senator Robert Menendez and the Senate majority leader, Bernard F. Kenny Jr. And Assemblywoman Joan M. Quigley of Hudson County, one of the hospital’s administrators, sits on the powerful Budget and Appropriations Committee.

But supporters say a city takeover is a prudent solution because converting the hospital to a publicly run entity will make it eligible for tens of millions of dollars in additional state and federal funds. The plan also asks the City of Hoboken to guarantee $52 million in bonds to upgrade the hospital, a proposal that is awaiting review by the state’s Local Finance Board and is scheduled for a vote by the City Council this month.

Although that figure would double Hoboken’s current debt, Ms. Quigley said the risk to the city was limited. Even if the hospital were to fail, the land, which the Bon Secours nuns are selling to Hoboken for $1, is valued at more than $30 million.

She and other hospital supporters say it is essential that St. Mary be saved because Hoboken is often clogged by traffic from the Holland Tunnel, and it can take city residents half an hour or more to drive to the Jersey City Medical Center, the next-closest emergency room.

“This community needs a hospital,” Ms. Quigley said. “And when no one else was willing to meet that obligation, Mayor Roberts came up with an innovative way to do it.”

But some Hoboken residents, concerned that the venture is an expensive gamble that could threaten the fiscal viability of the city, have called for less costly alternatives, like keeping the emergency care unit open but converting the rest of the hospital into clinics or housing for the elderly.

Moreover, they say that St. Mary’s $130 million annual budget is more than the city and school budget combined, and that if the city were one day forced to repay the bonds, Hoboken’s already steep property taxes could shoot even higher.

“Public hospitals are failing all over the country and Hoboken has no experience running a hospital,” said Tony Soares, a former City Council president. “It’s nice to try and save jobs and to have an emergency room still in the community. But I don’t want to live in a bankrupt city.”

Still, thousands of residents have rallied to save St. Mary, which provides 1,000 jobs, convenient health care and civic pride. Mayor Roberts says it is “unimaginable” that his bustling community would be without a hospital.

Because of the city’s status as a transportation hub just a PATH train stop from Manhattan, Mr. Roberts says the hospital has the potential to be a prestigious health care center and an economic powerhouse.

“This can be one of the premier health care facilities in the state,” said Mr. Holzberg, the man chosen to lead the new hospital, and who helped lead a similar turnaround at Robert Wood Johnson University Hospital in New Brunswick.

Mr. Holzberg said he planned to overhaul the emergency room at St. Mary, renovate the hospital to provide more semiprivate rooms, and improve the food to attract more patients. He has also proposed strengthening ties with teaching hospitals in the area — a sentiment that made him propose changing the name to Hoboken University Hospital even though there is no Hoboken University.

In a detailed business plan describing the aspirations for St. Mary, three pages are devoted to Mr. Holzberg’s successes at Robert Wood Johnson, but there is no mention of his more recent experience at the troubled University of Medicine and Dentistry of New Jersey, where he was a board member from 1997 to 2003, serving as chairman for a year.

He said it was unfair to hold him accountable for the financial mismanagement there. “I was the on the board, not the C.E.O.,” Mr. Holzberg said. “And I was never accused of anything improper. Nothing.”

But residents here who are skeptical of the proposal say it is also missing other important pieces of information. Among their concerns are these:

¶How will Hoboken pay off the bonds if the hospital fails and the city’s real estate market continues to soften?

¶How will the city fill the hospital’s budget gap if the anticipated federal aid does not materialize?

¶Who will cover the high pension and severance costs if the hospital has to be closed, and how much will Mr. Holzberg be paid to manage the hospital?

“We’re making this major long-term commitment, but there are so many unanswered questions,” said Michael Lenz, Hoboken’s former chief financial officer, who is opposed to the takeover.

As the bailout plan for St. Mary inches forward, Wall Street bond analysts and other New Jersey communities where hospitals are endangered are watching closely.

Mr. Corzine signed a bill in June authorizing Hoboken and other cities to form authorities to run their own hospitals, after Ms. Quigley cast the deciding vote in favor of his controversial budget plan in the Assembly committee, though the two say those two issues were unrelated. Mr. Corzine also says his residency in Hoboken did not sway him and that he supports the city’s takeover of St. Mary on its own merits.

Still, many critics of the plan say Mr. Corzine placed the future of the hospital above his call for fiscal prudence because he lives here.

“Why rush into this risky, expensive proposal?” said Beth Mason, a Hoboken resident. “Why not make it a model of fiscal responsibility? We should take the time to give the city a plan that’s workable, that meets our community’s need and that doesn’t threaten to destroy our finances.”

11/15/2006 Update:

Eric Kurta, the current President of the People for Open Government, was kind enough to scan a copy of the Briefing Book given to the City Council by the Hoboken Hospital Authority. Thanks, Eric!

Nicely bound and easy to read. What are your observations?

CLICK HERE TO READ THE PDF.

11/14/2006 Update:

Here’s a recap of the hot button topic at yesterday’s City Council Meeting.

The taxpayers of Hoboken are one step closer to being on the hook for $52,000,000.00 in bonds for St. Mary Hospital. The City Council voted 8-0 to allow the bond issue to move to a second reading, public hearing, and final vote, but not before the Roberts-controlled City Council changed the meeting’s rules to allow the special interests at St. Mary to speak out in favor of the borrowing before the vote.

As predicted here on Hoboken411, Assemblywoman/St. Mary Hospital Vice President Joan Quigley rounded up several dozen hospital employees to pressure the City Council to allow the bond to move ahead. Although Mayor David Roberts is personally pushing for this borrowing, he was not at the standing-room only meeting (over 90 people). He avoids any meeting where he could be cross-examined by the public.

At the 6pm caucus, the meeting room was full of Hospital Employees, the incoming hospital management team, and several lawyers, including the bonding counsel who stands to make beaucoup bucks by handling this. The fix was clearly in.

For more on this story:

City Council President Richard DelBoccio indicated council members attended several meetings with the Mayor and the Hospital officials in an attempt to get answers to the questions raised at the last meeting. The only advice they are getting on the Hospital issue is coming from the people who have the most to gain from it. The employees, the attorneys who are cashing in on mega-fees to handle this, financial “consultants” like George Crimmins brought in to massage the proposals, and of course Bon Secours, which very much wants to dump it’s properties here, and move on from the 118 million dollar operating loss it incurred running St. Mary for the last several years.

The “experts” tried to convince the City Council that the city is not putting taxpayers on the hook, because much of the bond would fund the short-term operation of the hospital (which would be reimbursed at some point) and other portions would go into a contingency fund and would only be used in an emergency. Of course, what constitutes an “emergency” is anybody’s guess at this point. The rest would be “secured” by the city’s ability to sell the hospital after they closed it, for around 25 to 30 million dollars (in theory.)

Council members admitted this whole thing was a “leap of faith”, but clearly they were ready to take that leap, with the taxpayers on the hook for it if it all goes horribly wrong.

Normal procedure for the “First Reading” of a proposed ordinance (like this bond) is to allow no public comment until the “Second Reading” and “Public Hearing.” People can talk about anything they want in the “Public Portion” at the end, but are not allowed to speak on “First Reading” items prior to the Council’s vote… unless of course the council knows it’s a done deal how the vote will go, and they want a maximum circus effect to intimidate anyone who dares ask any questions. The council took the highly unusual step of suspending the rules to allow the hospital employee dog-and-pony show to step up to the microphone and tell the council to move ahead.

Many of the employees in the room don’t even live in Hoboken. Normally the city council insists people give their name and home address before they speak. Many pro-hospital people were allowed to just come up when called, because if they gave their addresses it would be clear they did not pay taxes in Hoboken. Others were allowed to give the hospital address instead of their own. Sure, they sent up a few employees to give the usual “I was born at St. Mary…” speech.

The only council members who attempted to ask some smart questions were Michael Russo and Nino Giacchi. When Terry LaBruno, Ruben Ramos, and Chris Campos got their turns to speak, they just gave political rah-rah speeches to fire up the employees in the audience. They even learned a new word: “Quagmire”. Peter Cammarano and Michael Cricco also made sure to ingratiate themselves to the crowd, instead of delving deeper into some of the issues that other members of the public got up to ask about. Terry Castellano was not at the meeting.

There were several members of the taxpaying public (outnumbered by insider supporters at a 5:1 ratio) who stood up to inquire about the hidden and secret details of the hospital deal. They asked logical questions regarding the financing, the business plan, protection for the taxpayers, appraised value estimates and the lack of response involving OPRA requests. Many of the workers just loudly sighed when these questions were asked. LaBruno and Ramos were seen quietly trying to get DelBoccio to cut dissenters off. Despite their efforts the council president allowed all members of the public get their chance to speak without interruption.

Other notable points: They more than doubled the real estate appraisal fee from $7,000 to $15,000 for the three St. Mary properties (They’re going to approve the bond before the final values come in). And questions were raised regarding the parking garage, which isn’t factored into this equation. While the council tried to put their best foot forward to indicate their support for the future success of this hospital, why is it that most of us think this project will fail miserably and select people will get rich in the process?

The public will get another chance to speak during the second reading and public hearing on Wednesday, December 6th.

11/6/2006 Update:

More information, plus see the updated budget that was difficult to obtain.

Although the Hoboken Municipal Hospital Authority followed the state’s Sunshine Law for one meeting on Oct 25, it failed to do so for its first meeting which was held on hour prior. The noticed meeting scheduled to start at 7 was to be a regular board meeting. However a budget meeting, camouflaged as a “caucus meeting” was held at 6 pm and did not follow the Sunshine law. Only 24 hours notice was provided, not the required 48, and only one newspaper was noticed not two as required- leaving out the Star Ledger and Hoboken Reporter. The leadership and management of the Board surely knew more than 24 hours in advance that a budget presentation was anticipated. Just to get the presentation together and approved to present to the board would take longer.

Due to pressure from the audience who were kept out of the 6 pm meeting (for those few who showed up early) the Board Chairman sought to release the summary of the presentation (Click for the original one-page budget), but was not willing to make the presentation again during the regular meeting at 7.

Dropping into City Hall on October 27, an astute reader was able to obtain a more detailed budget. (Click for Updated Budget for Hospital)

Read the rest about the rejected $52 million dollar bond ordinance below.

11/2/2006 Update:

ST. MARY HOSPITAL TAKEOVER BOND REJECTION

denied.jpgThe “Save St. Mary” parade hit a huge Hoboken speed “hump” at last night’s City Council meeting. In a rush to “save” the hospital, few solid details were ever released. All we heard was that city taxpayers would not be put on the hook if the hospital fails. Last night Mayor David Roberts asked the council to put city taxpayers on the hook for $52,000,000.00!

As Council members arrived for their caucus, they were handed “updated” agendas that included a new bonding ordinance. It would unconditionally “Authorize the Guaranty by the City of Hoboken of Bonds, Notes, or other obligations of the Hoboken Municipal Hospital Authority in an amount not to exceed 52 Million Dollars.”

Several council members were outraged that such a huge thing could be dropped in their laps at the last minute when they have heard nothing from the hospital board since they were appointed. Among the reasons why they balked:

Originally they were told bonding would be secured not by city taxpayers, but by the value of the Hospital Property that Bon Secours was “giving free and clear” to the city just to get out from under its money hemorrhaging hospital.

The reality learned last night: not only is there no final agreement by Bon Secours to hand over St. Mary to Hoboken, but Bon Secours may be playing hardball on several issues…

Remember how the Mayor and his people were saying “If we have to close the hospital, we can always sell the land for development?” It turns out Bon Secours may not be willing to just turn over its development rights to the property. In fact, Bon Secours may only be turning over the St. Mary building and its contents over to Hoboken, and may hold ownership of the land it sits on. That puts the taxpayers on the hook for keeping the hospital open, and limits the ability for the Hospital Authority to borrow money against its assets.

Mayor Roberts’ pointmen on this are City Attorney Joseph Sherman and “Financial Consultant” George Crimmins. Crimmins and Sherman said the $52 million bond was “necessary” to allow free cashflow in the first three months of 2007, and to fund capital improvements, including a new emergency room. Members of the council said they were told any bonding would be done against the hospital assets (including the land) and that the taxpayers were not supposed to be put in jeopardy like this.

Among the other tidbits learned in the council’s debate:

  • The negotiations to transfer the hospital to the city are NOT complete, and several representations made to the public about the handover of assets have not been secured in a deal with Bon Secours.
  • Bon Secours wants $6 million in cash from the city for two of it’s hospital-related buildings (hardly “Free and Clear”)
  • The 26 million dollars that supposedly was coming from state and federal sources is not yet in the hands of the Hospital Authority, and no answer was given when council members asked about that money.
  • The appraised value of the hospital is $30 million, well below the $52 million the Mayor wants to borrow.
  • If the city fails to keep the hospital open, Bon Secours wants its piece of the liquidation of assets, and may also hold development rights to the land. (again, not “free and clear” as promoted by Roberts)
  • The hospital has a 130 million dollar budget, but nobody on the city council has been given any specifics about it.

Councilmen Michael Russo, Nino Giacchi, and Peter Cammarano were particularly annoyed about how the bond was dropped in their laps. They led the wave of criticism, joined by Michael Cricco and Richard DelBoccio. Terry Labruno made a half-hearted attempt to defend the Mayor (as usual) but With 5 votes against it even Chris Campos had to call the move “overwhelming.” Once it was clear the votes would not be there for the bond, Councilman-at-Large Ruben Ramos (who sponsored the bond on Roberts’ behalf) agreed to “remove” the item from the agenda. The Mayor could call a special meeting to bring it up again, or wait until the next council meeting in two weeks to reconsider it.

Prediction: Watch for Roberts to try and rustle up a posse of St. Mary Hospital workers to intimidate the Council into passing the bond at the next meeting.

10/27/2006:
Here’s a field report regarding this past Wednesdays meeting regarding St. Mary Hospital. These meetings are held Wednesdays when the City Council does not meet.

Harvey Holzberg told Hoboken residents at the Quality of Life Coalition meeting, that he could not discuss the hospital budget but that questions about the budget would be answered at the hospital board meeting. The meetings would be at 7pm at the hospital.

stmaryclassified.pngThe ad in the paper stated that the meeting would be at 7pm. Joan Quigley’s office said that the meeting would be at 7pm. Nevertheless, the meeting started at 6pm for the purpose of discussing the budget without the public present. When this typical Hudson County trick was exposed, they protested, of course! They claim that there was “another” ad in the paper. Yet the one provided with the agenda said that the meeting was at 7 and there was no mention of a caucus starting at 6pm. Later, Joan Quigley mentioned that she only found out about the 6pm start time earlier the same day! A copy of a notice tacked on the front door of the hospital was provided at the meeting. (see this PDF file for more)

It seems that there is a lot of information about the hospital management structure, which uses an outside corporation to employ the management team of Holzberg et al, that some would rather have hidden. Also, information about bonding, the actual operating budget, and about the difficult negotiations with Bon Secour, with regard to acquiring the real estate, is being discussed in secret. (closed session later that evening, and/or during the early start time.)

Too bad that more citizens did not attend the meeting this evening. Only 6 people were present, no press, no city council members in attendance. Someone should tell the governor’s office about how this is shaping up. With the Jersey City Medical Center wallowing in red ink and scandal, it seems that St. Mary is just another pork barrel being opened.

Other items: the board chose Hoboken University Medical Center as their new name (there is no “Hoboken University”, but that sure sounds classy). The management of the hospital is being delegated to Hudson Health Care Management Group. The only apparent reason for this is to hide the hospital operating expenses. A copy of the proposed budget, which was wrestled out of one board members hands, shows various sources of income but only one large expense of $123 million – to this new entity. I guess they get to “hide” how they spend their money! (see this PDF file for more)

The business and finance office is being relocated to the ground floor of the parking garage. Will they pay rent and that way the City can roll back that parking increase? New emergency room is to be built on the parking lot where a hospital building once stood. A new obstetrics unit is a big thing. Overall there will be 212 rooms, about half are private – all with their own showers – which is not now always the case.

Bonding discussions were held during the 6pm “public caucus” which no one knew about except the board itself! Not much to report about since no one was privy to the conversations.

It has been emphasized that the land has not yet been acquired. The budget reflects organizational expenses at over $300,000. Will this be paid by the tax payers regardless of whether the deal goes through or not?

The next meeting is Nov. 8 – possibly at 6pm – or maybe at the advertised time of 7pm. Please try to attend. More people need to speak their mind at these meetings. The hospital budget, your hospital’s budget, is twice the size of the City’s budget!

Hoboken NJ

Technorati Tags: ,