Let's not rush St. Mary deal

Let's not rush St. Mary deal

December 15, 2006
Letters to the Editor
Jersey Journal
The first reality check in the struggle to save St. Mary Hospital is at hand. It is the ordinance now before the City Council which, if approved, will put the full faith and credit of the City of Hoboken in a guarantee of a $52 million bond issue in support of the hospital. The language in the ordinance is astoundingly clear: "the City shall be unconditionally and irrevocably obligated to pay the principal of and interest on the (bond) and the City shall be unconditionally and irrevocably obligated to levy ad valorem taxes upon all the taxable property within the City for the payment thereof." (Ordinance for The Hoboken Municipal Hospital Authority Bonding, Section 1)

City Council President Richard DelBoccio quite rightly pulled the ordinance from the Dec. 6 council agenda in order to have time to obtain a review of and opinion on the bond issue from the state Local Finance Review Board. This would be, to our knowledge, the first independent look at the structure of the bond issue. We fear, however, that unless Mr. DelBoccio receives the support of a majority of the council members that pressure will be applied to move quickly and the bond issue will be back on the City Council agenda on Wednesday Dec.20. It should not happen.

Why the rush? Cannot Hoboken be given more time to examine the issue and to get responses to unanswered questions? Why couldn't the bond issue be supported by a lien on the hospital property itself rather than with the city's guarantee? Why must there be a guarantee at all? A bond advisor present at one of the Hospital Authority Board meetings noted under questioning that it is possible a bond issue could be financed without a guarantee. The effect would be about a 2.5 percent increase in the bond rate (from 5 to 7.5 percent) and a longer time to process the issue. But, it could be done.

The Hospital Authority's Business Plan notes that St. Mary is not sufficiently compensated for care given to the underinsured and the uninsured that use the ER and the Family Health Center. Reimbursement comes from federal funds called Disproportionate Share (DSH). St. Mary provides care for approximately 32,000 ER patients a year with one-third coming in under Medicaid and over one-third uninsured, leaving less than one-third paying full cost.

The hospital provides a "safety net" for patients from Union City, Weehawken, West New York, North Bergen as well as Hoboken. Isn't there some way that these other cities could be tapped to pay a portion of their residents' care? Even though the hospital will receive $15.8 million in improved DSH funds, those will be "reduced or eliminated" in about three years (Hospital Plan). Could the Hudson County Improvement Authority be a source for assistance in spreading out the unreimbursed care? If a bond guarantee is absolutely necessary, could the HCIA provide at least a portion of the guarantee, thereby sharing some of the costs with other municipalities?

We all want the hospital to survive. We all want to be supportive. The Hoboken Quality of Life Coalition urges that the council keep the bond ordinance off its agenda until the Local Finance Review Board has delivered its review and comments. The QLC puts forth questions as a way to possibly open the way to revisit plans that have been made in haste to meet a Jan. 1, 2007 deadline (imposed by Bon Secours?). In the rush to meet this deadline the City Council has not even seen the terms of the contract that will be offered to Harvey Holzberg to operate the hospital, nor has it seen the details of the agreement for the city to take ownership of the hospital. These are two critical pieces.

The council is faced with a momentous and far reaching decision. Please give Hoboken a break so that the council may make decisions based on knowledge, not pressure. We have to make certain that Hoboken's eyes are wide open.


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