Tuesday, November 24, 2009

The Verdict

Here's the bottom line. It's tight. They are hopeful on State aid next month.  They will implement audit findings, several impacting the financials sooner than later.  Plans are to cut spending by a million dollars a month, equivalent to 10% overall and the amount of the current deficit.  

Hospital administrators came over to some Hoboken citizens during a spontaneous post meeting discussion.  They wanted the exchange and a very good impromptu Q&A. They encouraged the public's attendance to their monthly meeting.  This was a positive sign.  As a result, we'll retract the Scarface bad guy reference. There's another reason and we'll explain more soon. 

Lots of questions revolving around the bonds and specifically what is the holder and any insurance.  The bondholder was said to be FSA.  Questions on wraparound insurance were not clear.  The Administration offered to have a bond expert available to answer these questions and also their attorney agreed to explain the two operating bond accounts and their amounts.  One capital account we believe is $9MM or thereabouts.  The other, a recovery account will be explained after the holiday.  City Hall does have all the documentation on the bonds.

There is some cause for optimism. One thing arose here as in the City Council meeting: this concept of State grants for hospitals and how its disbursed among several possible candidates.  The CEO Spiros Hatiras speaks of this as an obligation, something the State owes.  The hospital administration views this like Federal medicare payments.  We're not so sure this is actually the best designation since the State directs these monies on a rotating basis.  With so many hospitals crying for help, how does the State view Hoboken versus Jersey City or Newark, etc.?  One would guess less sympathetically as we are a "rich" community.  We don't have long to find out.

Might we strongly suggest, citizens contact Jon Corzine's office and ask that State assistance be provided to our hospital.  It takes a few minutes of your time:  (609) 292-6000.  Ask to speak to the Governor's aide.

There was some issue around obtaining financial records with manual deletions.  Councilwoman Beth Mason wanted to find out if this could be available without cost to the city.  The Hospital Administration stated the cost for doing so is $3,000.  Is this fair and reasonable considering Hoboken's existing bond obligations?  The Councilwoman did not agree.  Questions led to some conflict and more questions followed by a request to wrap up the questions.  Later Councilman David Mello asked some questions around the recent upgrades to the emergency room.  He also spoke on behalf of his colleague Beth Mason, suggesting the Administration allow her to ask any additional questions she had.  They agreed.

We'll have more in a short window.  Jimmy the K said he feels better.  For the moment Da Horsey will agree.

Photo: CEO Spiros Hatiras

Hospital Live Meeting Blog

We're on employee time. Spiros is the guy.  Mr. Patel and the hospital employees are standing behind him.

- Posted by Jhnnynewman, intrepid photographer via iPhone

Hospital Live Meeting Blog

$62MM in bonds is the number mentioned  and the true liability to Hoboken. Discussion of FSA is the insurer. Is there wrap around coverage? TBD.

Saying with reductions they should be able to operate through 2010.

Councilwoman Beth Mason is here in the standing room area in back.

- Posted by Jhnnynewman, intrepid photographer via iPhone

Hospital Live Meeting Blog

All reports now being approved as part of normal business. They are running through it with continuous votes.

400K grants notable - Metsch questioning. Slowed the voting.

Executive session looms.

People looking uncomfortable. It must be us taping with cameras.

- Posted by Jhnnynewman, intrepid photographer via iPhone

Hospital Live Meeting Blog

1.9MM loss for October. 13MM for the year!

Saying uninsured driving it due to people losing COBRA. CEO calls October not as bad.

Talking about $12MM recovery plan. Realistic? It's the exact operating gap.

Audit and corrective plan - now they will do one. Lot of other audit items not $$$ related. One on financial entries, PIP accounts, uncollectibles writeoffs to be changed. Goes into effect 2010.

- Posted by Jhnnynewman, intrepid photographer via iPhone

Live Blog Meeting at HUH

Six figure contract. They are approving. Not sure on details. We're taping. Councilman Mello is here along with Mayor Zimmer.

- Posted by Jhnnynewman, intrepid photographer via iPhone

Kevin Kramer - Hospital Authority Chairperson

Talking about the event with over 500 beers and wine. Glad he wasn't "under oath" as he underestimated the number before. Nervous laughter. We're not.

- Posted by Jhnnynewman, intrepid photographer via iPhone

HUH Live Blog

Executive Session will happen. Moved to the end. Nothing new here from the CEO. Other than his comment, "The blogs we read. Their going wild.".

Gee we've taken it easy. Haven't called for AG oversight. Yet.

Standing room only. Where is Revolt?

- Posted by Jhnnynewman, intrepid photographer via iPhone

CEO S Hatoras

Says there is a plan B and C. Says City Council discussions were out of context. HUH? Last Monday there was no contingency.

Cut expenses a million a month. 10 percent reduction overall. No employee reductions.

- Posted by Jhnnynewman, intrepid photographer via iPhone

Onsite Now

We're here with Jimmy the K awaiting the appearance of everyone including the big green vegetable. Some people are here now, almost all hospital employees.

- Posted by Jhnnynewman, intrepid photographer via iPhone

HUMC Live Blog

We'll probably do a bit of live blogging from Assumption Hall at the hospital.  Internet is limited but we'll get something up.  For those attending or considering doing so, from the main entrance to the hospital it's right down the middle and left on the main floor, follow the signs.  Mayor Dawn Zimmer will be in attendance.

Horse Sense: The Cloward-Piven Reverse Auction

Tonight we begin the wondrous journey in our reverse auction for the hospital.  What is a reverse auction?  Thought maybe it was the sole creation of a horse's overactive imagination.  As it turns out, according to Wikipedia that's not true. It's real, it exists and like a Cloward-Piven strategy, it serves a higher purpose.  Namely maximize your "investment" while the ship is sinking and as in this case, you deploy a plan overwhelming the system.

Tonight, we begin the process of studying the big dance.  We have two clocks, one a fast timer set to go kaboom maybe as soon as December and another delayed into 2010 should the Governor come up with a stay of execution.  Which Governor?  That's a good question too.  We thought if Gov. Corzine ever hoped to stay in the powerful limelight of government employment, he'd find a way to cough up about $6-7MM and depart to the minted Senate seat Sen. Lautenberg would abdicate on his behalf.  But pulling a Toricelli required Sen. President Richard Codey to assume the reigns of the Governor's job on a temporary basis to complete the stunt.  As it turns out, the Hudson Reporter did a story, "The Lautenberg Problem" - suggesting there's no desire on Codey's part to go out into the sunset leaving a black cloud over his legacy.  

So is Gov. Corzine more or less inclined to clean up the mess in his own backyard now?  Can't say but we do know that Governor-elect Christie made very frank remarks that change is coming in New Jersey, stating no one should expect to be lining up at the trough much longer and to expect not only pain, but "continued pain."  Sadly, NJ is facing an $8 billion dollar deficit, and the truth is this state acted irresponsibly in the good times and is now one of the most ill prepared to face these uncertain ones.  How'd we get here? To sum it up, "What's in it for me?"  That's been New Jersey's modus operandi for a long time.

We're guessing Mayor Zimmer feels compelled to stave off the disaster and from where she sits, one can guess that's almost a natural reaction.  She's pretty much admitted that she gets pumped up for the challenge when approaching a hill.  We remember that feeling.  Back in our East Village days, we'd ride uptown and do loops in Central Park even when the weather was around 90.  Lots of open roadway on those overheated days and when you go, you just go.  There's an open question though if that's the best tact here.  Based on some of the comments from the the readers, the choices are already bleak.  With conjecture the bonds with interest now total $65MM and potential employee liabilities added, we're looking at a price tag approaching $100MM.  Our horse sense on this was all told this would land up being in the range of $80MM.  Every time you scratch a bit under the surface though, it gets worse.  And the deterioration and the bad news looks to be accelerating as you delve more into the details.

Although we did not obtain an official position from the mayor's office at press time, we did interview Councilman Mike Lenz last week and asked his view on what happens to the city if the hospital fails next year.  The Councilman offered the stark reality, "Hoboken entered into this, perhaps unwisely.  Hoboken will pick up the slack whatever it is.  I think that it's very possible we are at a substantial risk of financial pain."

We probed a bit further as Mike's financial background is one of the strengths often discussed in his appointment for the 4th Ward seat looking for any additional insights he might bring, "I don't (exactly) know.  We don't have any good solutions here.  People talk like closing the hospital means that somehow, we don't have the $52 million obligation.  We have the obligation.  The option to to close the hospital with no obligation does not exist," he added.

We'll see what comes out of tonight's meeting.  It would not surprise us one bit to see our readers have already spelled out what's about to occur.  We don't expect our local officials to wave any magic wands here.  They've been hoodwinked as much as we were with the performance art presented at the last City Council meeting by the people from HUH: Hoboken University Hospital. 

See ya tonight.

Talking Ed Note: We did contact the mayor's office seeking a position on the hospital's situation but we didn't provide enough lead time before publishing.  We'll look to revisit sometime after the holiday.  

Related: The jolly green giant has some links with more history for those with a strong stomach.