Here is a release about the hospital's finances from Dawn Zimmer, Candidate for Hoboken Mayor:
Zimmer Concerned About Moody's Report on Hospital
Councilwoman Dawn Zimmer called for immediate Council discussion of the hospital's finances given the most recent Moody's report (April 21, 2009) on a partial bond financing which said: "Moody's believes while the city is not currently providing the hospital an operating subsidy, the hospital's poor operations and the city's debt guarantee, make the city vulnerable to such requests in the future."
Such discussion should be scheduled for the May 6th council meeting and informed by a written response to the Moody's report from senior Hospital officials delivered to the council as soon as possible and in-person testimony at the meeting itself.
Zimmer said: "Recent news on the spiraling flu epidemic means we all need to work together immediately to make sure that a plan for the long term financial viability of hospital services in Hoboken is in place. While many would like to see the hospital continue as a free-standing public entity, we must also explore options such as spinning the hospital off from the City and merger with a strong regional medical center."
Critical of Hoboken's financial history and narrow financial reserves Moody's "...believes the State of New Jersey's takeover has stabilized the financial situation in the near term."
The Council needs to be fully briefed about the hospital’s bottom line and financial forecast for the next three years directly from the hospital's independent auditors. We were told the hospital lost $4 million last year only to learn that this apparently did not include non-cash items such as depreciation and inter-company loans. The actual loss was $11.1 million, and the hospital had only 7.6 days of cash on the balance sheet.
Putting put this refinancing in context requires on-going, full disclosure of the hospitals immediate financial situation and forecast. For example, without a more complete financial disclosure it is impossible to understand whether paying interest only for 17 years on these new taxable (rather than tax-exempt) bonds is a good decision and the implications for the rest of the $52 million city bond guarantee.
Hoboken based bond trader and veteran City Hall watch dog Scott Siegel is concerned that deferring principal payments is "just kicking the can down the road" for our grandchildren to pay and mirrors the Roberts administration pattern of one-time fiscal shenanigans to bury the City's structural deficit, and now perhaps the hospital's structural deficit as well. Zimmer said: "City Hall and Hoboken taxpayers are the hospital's ultimate "banker" and constant oversight of the hospital's operations, finances and quality is imperative." ◦
