Hoboken Municipal Hospital Authority OKs contract for legal counsel to review finances, appoints new board chairs

March 24, 2010 - Jersey Journal

A resolution authorizing the contractual hiring of a special legal counsel to conduct a legal analysis of Hoboken University Medical Center’s finances squeaked through the board of directors on Wednesday night by a vote of 5-4. The Hoboken Municipal Hospital Authority held the monthly meeting in the hospital’s Assumption Hall.

The resolution was drafted and championed by Toni Tomarazzo, a commissioner who was appointed board chair by five votes early in the evening. The legal counsel, ideally a New Jersey-licensed lawyer with health care expertise, will be expected to oversee accounts payable, fiscal oversight and other hospital issues, Tomarazzo said. She said professional help is necessary for guiding the hospital along.

Mayor Dawn Zimmer, who was in attendance to voice her opinion on the resolution, pushed for immediate strategies to privatize the hospital in light of insurmountable debt for past services, which she referred to as “delinquencies.”

“Hoboken should not be in the hospital business for the long term,” Zimmer said.

She said the resolution is a step in the right direction, but much more needs to be done.

“Unfortunately, the hospital is falling short of its own revenue projections contained in the proposed fiscal 2010 budget,” Zimmer said. “Based on current trends, it seems likely that the hospital will not break even in 2010 unless significant cuts in expenses are made immediately.”

In ardent disagreement, HUMC CEO Spiros Hatiras called the mayor out on allegations that the hospital won’t break even in 2010

“Mayor, you’re dead wrong about the finances,” Hatiras said. “We’re absolutely going to break even. We’re going to do better than [that].”

The draft budget, which Hatiras presented at the February budget workshop meeting open to the public, listed total operating revenue at $137 million and total operating expenses at $134 million. The hospital showed a $3.6 million surplus for 2010 and a loss of $8.7 million in 2009.

He said the credit for budget turnaround goes to the hospital’s employees not to the administration, which has been distant.

Mark Maurer/Hoboken NowAt the Hoboken Municipal Hospital Authority meeting Wednesday night, HUMC CEO Spiros Hatiras (center) told Mayor Dawn Zimmer that was "dead wrong" for suggesting that the hospital will not break even this year.
 
The hospital will receive a comprehensive report – unrelated to the legal counsel – in 60 days regarding its financial stability, Hatiras said. There are currently two sets of consultants reviewing the hospital’s money situation – auditors and a state doing a report that costs $200,000 – and both are required by law.

Kevin Kramer, who voted against the resolution, considered it “overkill and premature” to hire a third firm and suggested a salary cap on the counsel’s fee.

Despite the fact that the 2010 fiscal-budget has yet to be introduced or approved, George Crimmins budgeted a tentative $150,000 for the contract of a legal counsel.

Since the resolution passed, the compliance committee will now meet with various firms and narrow the search to two attorneys, of which the board of commissioners will select one for the position.

Tomarazzo’s appointment to board chair occurred as a result of a kind of musical chairs of the chair spots at the meeting. Kramer stepped down as chairman to devote time to the impending birth of his son, but he will retain a less demanding role on the board as commissioner.

Therefore, the board selected Tomarazzo, also a securities attorney and Hoboken Revolt steering committee member, to replace him. Since there was also a vacancy in the vice chair slot, the board selected Commissioner Norman Wilson to fill that space.

Addressing rumors that the hospital might be getting sold to a private management firm, Commissioner Alred Fayemi and Tomarazzo denied such a possibility.

Anxiety about the city-owned hospital’s potential closing stemmed, most publicly, from a state report done by a transition team in January that reported that HUMC will shut down in a few months due to financial instability. Hatiras and the hospital administration rebutted the allegation soon after.

In the meeting’s public portion, George Doumar, director of engineering at the hospital, expressed concerns that little progress has been made since the entire staff took 10 percent salary cuts three months ago.

“You have a lot of people in this place that gave in willingly,” Doumar said. “We’re three months into that and everyone’s still here.”

Lois Davis, a hospital employee for 37 years, was fed up with talk of the hospital being on its final legs.

“At this point, it’s time to stop bickering,” Davis said. “Give us a chance.”