We interrupt your regularly scheduled plans for partying to give you this update on the HUMC in Hoboken…

LETTER FROM MAYOR ZIMMER REGARDING HOBOKEN UNIVERSITY MEDICAL CENTER

Below is a letter from Mayor Dawn Zimmer to City Council members regarding Hoboken University Medical Center….

9/20/2011

"Dear Council members,

The negotiations to save HUMC (“Hospital”) have reached a critical juncture. For almost two years the Hoboken Municipal Hospital Authority ("HMHA") has been working diligently to find a strategic alternative to ensure the long term viability of the Hospital and preserve this vital safety net that serves the City of Hoboken and surrounding communities. Since 2007, the Hospital’s management company, Hudson Health Care Inc.("HHI"), incurred significant unsecured debts to vendors who provide  products and services. HHI failed to provide HMHA with timely and accurate information regarding the true fiscal condition of the Hospital.  In order to sell the Hospital and secure the future of health care services in Hoboken, retain over 1200 jobs and relieve the City of a bond guarantee of over $51 Million dollars, the Administration is putting forward tomorrow, on an emergency basis, a bond ordinance which is designed to put the City in a position to contribute funds to make a final offer to the HHI Creditors Committee so that HMHA and HHI can proceed with the sale of the Hospital. The City's contribution, while not required under any law or legislation, is intended to contribute toward the funding necessary to save the Hospital.

The maximum amount that I believe is appropriate for the City to contribute is up to $5 million, and that is the funding authority that will be included in the ordinance to be presented tomorrow. Even if the full amount of this authorization were offered to the HHI Creditors Committee, there can be no assurance that they will accept a settlement on terms that can be achieved with this contribution.  The members of the Creditors Committee, PSE&G, Sodexo, Cardinal, Metassets and the Hospital’s two unions, 1199J and JNESO, will have to decide if this contribution by the City is sufficient to approve the sale and settlement agreement or whether they would prefer to see the Hospital close.  If six City Council members disagree with my assessment and believe that the City’s contribution should be for a higher amount, then the Council should pass a resolution reflecting the will of the Council.

I know this is an unusual approach, but given the enormous importance of this matter to our residents and taxpayers, I believe it is my obligation to present this to the Council in this manner.

If either no bond ordinance receives six votes on first reading, or if the amount approved is ultimately not sufficient to reach an agreement then the hospital will be forced to close, most probably by the end of October.  

Under separate cover a cash flow analysis will be sent to you today so that you will fully understand that the hospital simply cannot survive unless a settlement is reached and the sale is completed.

The hearing in federal court has been rescheduled for this Thursday in order to give the Council time to vote on this most urgent matter.

Thank you,

Mayor Dawn Zimmer"

Link to memo: Memo-Zimmer-Council-9-20-11

Reader Note: Feel free to ignore this commentary if you don’t like politics but TheBoken’s editor feels this issue is so important to Hoboken’s future that this site should at least provide an informed context…

Editorial Statement: The privatization of Hoboken’s HUMC is a key component of Dawn Zimmer’s Mayoral Campaign in 2009 whether you voted for her or not. The HUMC has been losing money steadily since it was made into a quasi-governmental entity several years ago. The economics behind running a hospital the size of Hoboken’s are difficult given the choices that paying customers can make with proximity to New York City and other area hospitals. The entity HHI that was created by the previous Mayor was unable to restore the hospital to running in the black. It also appears that they did not disclose the depth of the financial distress to the Hospital Authority. HHI even hired a guy for $800,000 a year and his replacement Spiros Hatiras was also unable to make progress fiscally in the end before his contract was terminated recently.

Any politician that states they want a guarantee that the hospital will stay open forever is not dealing with a sense of economic reality or is grandstanding. While no one can guarantee that the HUMC will stay open forever Bayonne Medical did guarantee a 7 year commitment and was the winning bidder of a public RFP process. According to HUMC Authority Board Chair Toni Tomarazzo Bayonne was  the only bidder that met the criteria of the RFP and could show that they had the financing to do so. They also have a track record of turning around Bayonne Medical.

Despite allegations of fraud from a questionable source in this deal that assert that the HUMC withheld payments to force bankruptcy (laughable on their face because the hospital really was and is broke), this transaction represents the best chance to save the hospital in the short term and mid term and at least provide 75% of the jobs that were at the Hospital prior to the restructuring. Do people really want to see the Hospital close just to score a few political points against the Mayor? It just doesn’t make sense.  Would the unions really want 0% of their jobs? The tax implications for failure to get this deal done will have a significant effect on Real Estate if this deal does not get done.

Now , back to partying people! Enjoy Hoboken and prosper but do hope that at least we have an emergency room when this is all said and done. Saturday night drinkers need a place to get stitched up when they fall down drunk from time to time.