Slow down Bernie…….Lessons Learned from a local government buying a failing not-for-profit hospital

July 22, 2019

“I will be very soon introducing legislation in the Senate to establish a $20 billion emergency trust fund to help states and local communities purchase hospitals that are in financial distress,” Sanders said. “In my view, any time a hospital is put up for sale in America, the local community or the state must have the right to buy it first with emergency financial assistance.”

Bernie Sanders to propose $20 billion bailout fund for struggling hospitals, by Ryan Nobles, https://www.cnn.com/2019/07/15/politics/bernie-sanders-plan-for-hospital-fund/index.html

ASSIGNMENT: After reading about Hoboken, N.J., find and critique other NFP to local government ownership hospital conversions and local public hospitals on the edge of sustainability.

Prequels

Project Management. The hardest part of getting started….is getting started https://doctordidyouwashyourhands.com/2019/04/project-management-the-hardest-part-of-getting-started-is-getting-started/

PART 3. April 23, 2019. San Francisco General, a public hospital with San Francisco’s only trauma center, all commercial insurance is “out-of-network.”

PARTS 1-3. San Francisco General, a public hospital with San Francisco’s only trauma center, all commercial insurance is “out-of-network.”

Stop the name games! University hospitals and regional medical centers should live up to their billing *

Stop the name games! University hospitals and regional medical centers should live up to their billing *

Here’s what happened when the town of Hoboken, New Jersey “bought” a failing NFP hospital.

January 8, 1863

This facility was founded as St. Mary Hospital, which was opened on the 8 January 1863 in Hoboken as a community hospital by the Poor Sisters of St. Francis, a religious congregation founded in 1845 in Germany.

The hospital was opened during the American Civil War as a location to treat the returning wounded and was the second hospital ever to open in the State of New Jersey.

December 13, 2006

When the owner, the Bon Secours Health Care System, a Maryland company run by an order of Roman Catholic nuns, announced this spring that it planned to close the hospital, city officials, including the mayor, David Roberts, state legislators and the governor’s office pieced together an unusual plan to keep it afloat by having the city take it over and pumping in an infusion of public funds (with the City guaranteeing $52 million in bonds)

January 29, 2007

Bon Secours Health System put another struggling operation on the block last week.

The planned sale of its Michigan operations is the latest move in Bon Secours’ bid to improve finances and operations through divestiture after the system’s expansion earlier in the decade (Feb. 14, 2005, p. 6). Since 2004, Bon Secours has sold or announced plans to sell operations in Florida, New Jersey, Pennsylvania and Virginia, divestitures that boosted its cash by $70 million and cut its debt load by $192 million, according to Moody’s Investors Service.

Bon Secours agreed to sell its last New Jersey healthcare facility, 313-bed St. Mary Hospital in Hoboken to the Hoboken Hospital Authority in a deal expected to close by Jan. 31.

February 7, 2007

In a ceremonial handing over of keys today, the ownership of St. Mary Hospital in Hoboken was transferred from the private Bon Secours New Jersey Health System (BSNJHS) to the City of Hoboken. To reflect a new beginning for the 144-year-old hospital, it was given a new name: Hoboken University Medical Center

April, 2007

The hospital was acquired debt-free and the agreement provided for a $13 million cash payment from Bon Secours. Concurrent with the agreement’s negotiations, the Hoboken Municipal Hospital Authority worked toward the issuance of two series of bonds totaling $51,635,000. The bonds were guaranteed by the City of Hoboken and sold in February after the asset transfer agreement was executed.

But residents here who are skeptical of the proposal say it is also missing other important pieces of information. Among their concerns are these:

¶How will Hoboken pay off the bonds if the hospital fails and the city’s real estate market continues to soften?

¶How will the city fill the hospital’s budget gap if the anticipated federal aid does not materialize?

¶Who will cover the high pension and severance costs if the hospital has to be closed…?

Governance/ Management Structure:

Hoboken Municipal Hospital Authority (HMHA) – the Governing Board

Hudson Healthcare Inc. (HHI) – legislatively mandated NFP management company

Hoboken University Medical Center (the Hospital)

July, 23, 2009

Hoboken Mayor Peter Cammarano has been arrested by the FBI as part of a wide-reaching investigation that is swooping up dozens of people, including other politicians and rabbis, according the WNBC-TV, Hudson County Now is reporting.

July 31, 2009

HOBOKEN — Hoboken has an acting mayor.

City Council President Dawn Zimmer was sworn in Friday after Peter Cammarano III resigned in the wake of federal corruption charges.

September 2009

New Mayor (Mayor Zimmer) inherited..

Licensed for 364 beds; operating 150 ; Average Daily Census of 125; with appropriate Average Length of Stay ADS would be about 100

$52 million dollar City bond guarantee with $10 million already converted to taxable bonds and squandered on operations

$23 million operating loss in 2008 but hidden in delayed certified audit until September of 2009

The Hoboken Hospital Authority Board had abdicated its oversight responsibility to the legislatively-required Management Company and the CEO was making $800,000 a year.

$52 million dollar City bond guarantee with $10 million already converted to taxable bonds and squandered on operations

$23 million operating loss in 2008 but hidden in delayed certified audit until September of 2009

The Hoboken Hospital Authority Board had abdicated its oversight responsibility to the legislatively-required Management Company and the CEO was making $800,000 a year.

Finance Committee does not keep minutes.

Quality Committee is chaired by a practicing M.D. Commissioner who gets referrals from other physicians (really a “Hospital” Committee not an “Authority” Committee) – using out-of-date metrics

The HMHA Board does not get the Management Company Audit and there seem to be no Management Company Committee Board and/ or Committee minutes

The Authority “reports” to the Management Company! (ratifies everything it is asked to ratify)

September, 2009

The Ordinance establishing the Hoboken Municipal Hospital Authority names the Mayor as the Class I ex officio Authority member and permits the Mayor to name a designee.

I am appointing Jonathan M. Metsch, Dr.P.H., as the Mayor’s designee to the Authority, effective immediately.

I have instructed Dr Metsch to focus on my immediate expectations for the Hospital Authority, which are:

– Complete transparency on financial results using generally accepted hospital industry accounting standards, without any annual city subsidy.

– Ability to services the $50 million+ in city guaranteed bonds using these funds for capital projects only, and not for recurring operating expenses.

– Designation by the State of New Jersey as an Essential Safety-Net Hospital.

– High scores on external evidenced-based hospital quality Report Cards and patient satisfaction surveys.

– A strategic plan developed with strong community input to identify the appropriate scope of clinical programs.

– Ongoing successful recruitment of new members to the medical staff, and

– Increasing use of the hospital by Hoboken residents.

The new “mantra”

“City ownership was always meant to be a ‘bridging’ strategy, not a permanent remedy.”

Mayor’s Zimmer’s Corrective Action Plan

Appointed 5 new Authority Boards members

– a former hospital system CEO

– an EVP compliance/ regulatory lawyer at a major investment bank

– a University of Chicago finance MBA with bond underwriting experience

– a Managing Director of a Health Care Investment Banking firm

– and a respected City Hall “watchdog

then elected a new Chairman. All new members live and own property in Hoboken!

The Finance Committee was the only Board Committee and did not keep minutes. Added an Audit & Compliance Committee and a Strategic Planning and Government Affairs Committee.

The Board had been refused access to the Management Company’s annual certified audit. The Management Company and Hospital Authority audits are now done together by the same firm under the supervision of the new Finance Committee chairperson.

Suspended further approvals of major capital projects to conserve the remaining $9,000,000 of capital funds, until projects are properly analyzed and approved or perhaps to pay down the bond principal to reduce the City’s guarantee obligations.

Financial Uncertainties (with virtually no “cash on hand”)

1. ’09 audit result of $15 million loss is the same as ‘08 (after $9 million ’08 revenue adjustment is taken out)

2. Charity Care funding needs to keep pace with Charity Care volume (and still pays less than 70 cents on the dollar compared to costs)

3. Hospital Relief Fund money has to be actually awarded to the Hospital by the State

4. Proposed Medicare cuts ($800,000 impact) need not to happen

5. Hospital Stabilization Fund money of at least $5,000,000 needs to be granted

6. DSH needs to be in the State budget to get the federal match

7. Better managed care rates need to be negotiated but this is unlikely until current contracts expire

8. Additional volume from ER needs to have positive impact on payer mix (more private admissions) and higher acuity, combined with much lower length-of-stay on all admissions

9. Good results from Medicare and Medicaid audits (no take-backs)

10. Challenge to meet payroll and payroll taxes when negative cash flow occurs several times in current sixteen week cash flow projection

11. State could cut Medicaid rates in final ’10 budget negotiations

12. Navigant Report about hospital needs in Hudson County to be neutral

13. No big surprises from PWC operational audit

14. Vendor “payment plans” could become strangulating ($25 million in AP issue must be resolved)

15. Viable contingency plans that can be implemented immediately in $5 million chunks

16. Inappropriate co-mingling of funds and use of one-time money for operations must be avoided

17. Union negotiations cannot increase deficit

Administration’s Hospital Goals

A. Ensuring that Hoboken University Medical Center (HUMC) remains open as a full service, acute care hospital providing access to quality medical care for all Hoboken residents

B. Respecting the commitment of the Hospital’s medical staff to the Hospital over the recent challenging years

C. Maintaining the 1000 jobs of our valued hospital staff

D. Addressing the Commissioner of Health and Senior Services regionalization objectives of reducing excess capacity and Hudson County hospitals’ reliance on extraordinary State financial subsidies

E. Relieving the City of Hoboken from the financial obligation of the bond guarantee.

Governor-elect Christie transition team report –

“On December 22, 2009, the Corzine Administration announced $40 million in Health Care Stabilization awards to 9 hospitals,” the memo says.” … at least one hospital, Hoboken University Medical Center, will close in the next few months even given this grant funding. We view this as a misuse of limited state resources for health care stabilization.”

July 30, 2010

In another step toward privatization, the Hoboken Municipal Hospital Authority unanimously approved a Request for Proposal Wednesday night to solicit plans for the potential transfer of the hospital from city sponsorship, the mayor’s office said.

“Mayor Zimmer inherited a complex set of legacy hospital issues and has aggressively addressed them,” said Authority Chairperson Toni Tomarazzo in a press release. “The Mayor developed a consensus around privatization as a shared vision for maintaining access to hospital care, and making quality metrics as important as financial performance.”

RFP requirements:

A party interested in acquiring the Hospital must provide the Authority with a written proposal (“Proposal”) which includes the following:

A. Proposed use of the Hospital facilities, including level of service;

B. Proposed transaction structure, including price and form of payment;

C. Proposed distribution or allocation of funds;

D. Proposed liabilities to be assumed by acquirer;

E. Planned capital investment programs;

F. Required financing for the proposed transaction;

G. Status of financing;

H. Identity of acquirer;

I. Prior health care experience of principals;

J. Proposed capital structure of acquirer;

K. Prior acquisitions or investments in the health care industry;

L. Time table for due diligence, execution of a letter of intent, and execution of an asset purchase agreement;

M. Conditions to completion of transaction, required approvals and permits; and

N. Identity of financial advisor and legal counsel for acquirer.

August, 2010

1. In every administration there is a DHSS “liaison” with the Governor’s Office. That is probably Deputy Commissioner O’Dowd. Assistant Commissioner Conroy’s role seems to be expanding; he reports to DC O’Dowd

2. Deputy Commissioner (Dr.) Susan Walsh is on the Public Health side so it is a little surprising to see her involved with the Navigant Project. COS Gabrielle Charette handles some policy issues and has the Commissioner’s ear

3. Might be good just to assume that “O’Dowd, Walsh and Charette comprise the Commissioner’s Policy Team. Typically O’Dowd’s slot is the #2 even though Walsh has the same DC title

4. Other key health policy “front office” players we need to get to know:

A. Wayne Hasenbalg, Deputy Chief of Staff for Policy and Planning.

B. Robert Schwaneberg, (health) Policy Advisor – reports to Wayne Hasenbalg

C. Lou Getting, Cabinet Secretary – formerly VP, Administration at UMDNJ

D. Claudia Marchese, Assistant Counsel – deals with health care legislation

E. Deputy Attorney General Jay A. Ganzman – handles NFPs in AG’s office (e.g., Meadowlands’ sale)

F. State Health Planning Board – Ms. Judy O’Leary Donlen RN (reviews CN for “change of ownership)

G Mark Hopkins is likely to be replaced as head of HCFFA when they get around to it. Steve Fillebrown, now the #2, provides continuity and has been there at least 20 years

H. DCA Commissioner Lori Grifa & Marc Pfeiffer, Division of Local Government Services

I. Lt Governor’s role in economic development??

October 8, 2010

Mayor Z –

“Deals” get done when key critical elements are in alignment – when there is a “window of opportunity”

Right now we have this alignment for selling the hospital, on or close to our goals and terms. Here’s why:

– You have made excellent appointments to the Hospital Authority Board. The Authority has taken back its authority from the Management Company.

– Your relationship with the Governor, and our relationship with the Department of Health are very good.

– A new round of hospital mergers has started (Newton joining Atlantic; SOCH and Bayshore joining Meridian….. probably more to follow)

– For-Profits are welcome now in NJ (e.g. Bayonne, Meadowlands, Hackensack/Pascack) giving us a broader spectrum of possible “buyers”

– Jersey City Medical Center is no longer a major teaching hospital, rather it is now a large community hospital with a a few important regional services (trauma, cardiac surgery)

– Christ Hospital is struggling now more than H.U.M.C. (admissions are way down and doctors are leaving)

– “Buyers” see 30 million Americans getting insurance

Windows” close and here’s what could happen to us –

– “Time is our greatest enemy” and moving too slowly may cause interested parties to drop out (as they focus on other opportunities, or their financing expires)

– Christ could do a deal before we do or be force merged into Jersey City Medical Center by the State

– We fail to produce a timely 2090 Audited Financial Statement and potential buyers cannot finish their due diligence

– The State stops giving the hospital cash advances and it misses a payroll

– The Navigant Report could be made public – word is it calls for closing Christ or Hoboken

– The Management Company has a Trenton lobbyist, we don’t – they know more than we do

So we need to move thoughtfully, with transparency, and quickly –

– There can be no confusion that the Authority owns the hospital and is the seller

– The Management Company’s role in the sale must be clearly defined by the Authority, in writing (and monitored)

– We need to talk directly to the medical staff leadership, e.g. pick the right physicians for the RFP Committee

April 21, 2011

After months of private negotiations the Hoboken Municipal Hospital Authority unanimously approved a contract with HUMC Holdco LLC on Wednesday night, to sell the Hoboken University Medical Center for $90 million.

The proposed sale would relieve the city of its nearly $52 million bond obligation on the hospital.

Why?

“Re-Privatizing” the Hospital will bring it stability, access to capital, and the ability to compete in the hospital marketplace without dependency on state subsidies and cash advances.

It will also relieve the City of the bond guarantee, freeing up bond capacity for other necessary and immediate infrastructure improvements.

This Essential Safety-Net Hospital management transformation initiative – hospital sustainability through privatization – will be a “self-sufficiency” model for replication elsewhere in New Jersey.

Summary of APA between Authority, as Seller, and HUMC Holdco, as Purchaser
The Authority is selling the assets of HUMC.

The Purchaser is paying for the assets by:

(a) assuming post-closing obligations under certain contracts and assuming Medicare and Medicaid obligations,

(b) defeasing the bonds guaranteed by the City of Hoboken,

(d) paying $8 million for HUMC’s accounts receivable,

(e) paying up to $4 million for tail insurance,

(f) paying up to $2.5 million for pension withdrawal liabilities related to the two union pension funds, and

(g) paying the Authority 50% of the EMR funds, up to $1.9 million, received after the closing.

Purchaser will

(a) offer employment to no less than 75% of the employees and will assume 75% of the outstanding amount of accrued vacation and sick time, and

(b) assume 80% of the accrued vacation and sick time of senior management and 80% of the severance payments related to senior management up to a cap of $677,000. Purchaser will not assume any pension obligations.

In order for the sale to close:

(a) Purchaser must obtain a certificate of need (the application has been filed),

(b) Seller must obtain the settlement and release of at least 90% of the aggregate dollar amount of all unsecured creditors’ claims, and (c) the Hoboken Parking Utility must enter into a new parking agreement with the Purchaser

Seller agrees to use its best efforts and assist Purchaser:

to obtain a property tax abatement, payment in lieu of taxes, reduced assessment or similar arrangement

to have the entity that is the Public Service Dispatch Point for 911 calls in Hoboken be the Purchaser

to obtain a transit hub tax credit

to receive DSH payments after the closing.

(No liability will result to Seller if Purchaser is unable to obtain any of these items)

Purchaser will not seek indemnification from the City of Hoboken.

Purchaser agrees:

to continue to operate the Hospital as a general acute care facility and to maintain the clinics operated by the Hospital for at least 7 years

that it may make available, in its discretion, up to $20.9 million for working capital and capital expenditures for the Hospital

to use its commercially reasonable best efforts to negotiate in-network hospital agreements with various health insurers, including Horizon Blue Cross

to negotiate in good faith to enter into agreements prior to closing with the City of Hoboken, the Hoboken Board of Education, the Hoboken Housing Authority and HUMC so that the employees will be able to use HUMC as though it were in-network

to negotiate in good faith with existing unions at the Hospital

The significance of this plan

“Re-Privatizing” the Hospital will bring it stability, access to capital, and the ability to compete in the hospital marketplace without dependency on state subsidies and cash advances.

It will also relieve the City of the bond guarantee, freeing up bond capacity for other necessary and immediate infrastructure improvements.

June 26, 2011

‘If this sale doesn’t go through…the hospital will close.’ – Mayor Dawn Zimmer

“Hoboken University Medical Center is bleeding money and if this sale to HUMC Holdco (Bayonne) does not go through, the hospital will close,” Zimmer said. “We will lose our hospital and the vital services it provides our community, and the taxpayers will be obligated for a $52 million bond guarantee. For this reason, the sale to [HUMC Holdco] is crucial to saving our hospital and protecting our taxpayers.”

July 5, 2011

Hoboken University Medical Center stands to lose $11 million in federal funding under Gov. Chris Christie’s 2012 budget.
The State of New Jersey will cut the federal matching funds it allots the Medical Center, according to the State’s budget summary.
Once government owned, the summary cites the facility’s sale to a non-government agency — which no longer makes them eligible for the funds — as a reason for its discontinuing the aid.

July 12, 2011

Will hospital cancel insurance contracts?
Public documents provided to The Reporter reveal that the new buyers do not plan to keep any existing insurance contracts, as they are negotiating with insurance companies for new rates.
Some observers have been concerned because when Holdco took over Bayonne’s hospital, they canceled the hospital’s contracts with various insurance companies in order to negotiate better reimbursement rates. That caused some customers to have to pay out-of-network fees.
The potential owners have responded, “HUMC Opco, LLC has no intentions of assuming any of the existing managed care agreements. Their reimbursement rates are below industry standards and are not adequate to sustain the operations at HUMC.”

July, 29, 2011

State department staff tells state Health Planning Board to recommend sale of Hoboken’s hospital

A staff report from the Department of Health and Senior Services has recommended to the state Health Planning Board that they endorse the sale of Hoboken University Medical Center to HUMC Holdco, the same group that owns Bayonne Medical Center.
For the first year of ownership, the new owners would also be required to assume the contracts of the current Health Maintenance Organizations (HMO) and insurance contracts, according to the staff report.

The owners have said in their questions with the state that they wish to negotiate new contracts with insurance companies when they take over the hospital.

Buyer says proposed “stand-still” condition is a deal-breaker!

August 4, 2011

State Health Planning Board approves sale of Hoboken University Medical Center
The state Health Planning Board voted unanimously today in Trenton to approve the sale of Hoboken University Medical Center to HUMC Holdco, a company whose principals also own the Bayonne Medical Center.

Health Commissioner Mary O’Dowd, however, must approve the sale before it becomes official.

Staff Proposed Condition is deleted: For the first year of ownership, the new owners would also be required to assume the contracts of the current Health Maintenance Organizations (HMO) and insurance contracts, according to the staff report

August 4, 2011

Deep inside the 285-page budget was an $11 million earmark to help Hoboken complete a controversial sale of the city-owned Hoboken University Hospital, whose operator filed for bankruptcy protection on Monday.

The $11 million earmark shines a spotlight on Christie’s efforts at building alliances in the Democratic stronghold of Hudson County, whose turnout can often tilt elections. It also reveals the political underbelly of a divisive deal to once again keep the troubled hospital open.

August 4, 2011

Hoboken University Medical Center property has been sold by the prospective owner, HUMC Holdco, to Medical Properties Trust, the same real estate investment trust that purchased the Bayonne Medical Center property.

Medical Properties Trust, the real estate investment trust (REIT) that purchased the Bayonne Medical Center land, has now bought the Hoboken University Medical Center property from HUMC Holdco for $70 million, the company said on its website.

September 22, 2011

Hoboken University Medical Center may close as soon as Oct. 7 as the result of the Hoboken City Council last night, in a 5 to 4 vote, rejecting an ordinance that would have provided a $5.5 million bond to meet some of the hospital’s obligations to creditors.

The bond was key to a bankruptcy settlement that was considered pivotal to the sale of the hospital to the ownership group of the Bayonne Medical Center.

September 22, 2011

Gov. Chris Christie announced today that the state will put up $5 million – if necessary — to help save the Hoboken University Medical Center from possibly closing.

“It is completely unacceptable that the city council placed local politics ahead of the 1,300 employees at the Hoboken University Medical Center and the people in the community who rely on the critical services provided by this hospital. This Administration is not going to allow political bickering to put this hospital in jeopardy and potentially have a negative and irresponsible impact on the city’s finances, which is why the state will contribute the $5 million, if needed, to ensure the Hoboken University Medical Center deal closes and the hospital stays open.“

October 14, 2011

Zimmer says city layoffs will happen if council doesn’t approve parking agreement and bond refinancing

“It is important that every City Council member fully understand the ramifications of these matters for our city, its residents and its employees,” Zimmer said in the Oct. 14 memo. “If the Parking Agreement, requiring 5 votes, and the bond refinance, requiring 6 votes, are not passed, then unfortunately the city will be forced to begin implementing layoffs immediately.”

October 19, 2011

Hoboken City Council rejects refinancing parking garage bond

In a 5 to 4 vote, the Hoboken City Council voted down an ordinance to refinance the bonds on the Midtown garage, which is currently used in part for Hoboken University Medical Center employee parking

October 21, 2011

State Approves Hospital Sale

A certificate of need was issued on Friday afternoon. Transaction scheduled to be completed in next couple of days.

October 30, 2011

An agreement to allow the City Council Minority to designate an appointee to the new hospital board. This appointment shows the buyer’s commitment to increasing community participation in the future of the hospital and allows all residents to have a voice.

October 30, 2011

STATEMENT FROM MAYOR ZIMMER ON HOBOKEN UNIVERSITY MEDICAL CENTER

“Since my first day as mayor more than two years ago, the saving of our hospital has been my number one priority. The effort to save our hospital has been a long road, but today our community saved it together. I thank everyone who contacted Council Members and turned out to raise their voices – hospital and City employees, taxpayers and concerned citizens, and members of the Hoboken Municipal Hospital Authority. I thank all members of the City Council for doing the right thing for Hoboken – the majority members for their support all along and the minority members for being willing to reconsider and change their votes.

Today’s vote clears the way for saving Hoboken University Medical Center, the jobs of 1,200 employees, and averts a financial catastrophe for our City.”

November 4, 2011

The money just hit the account. Congratulations to all of you. The deal is closed, and the bonds are paid!

Mayor Z to JMM –

“Jonathan, you made this happen and whenever I talk about this success I will always thank you first!

(This never happened. Politically there was always someone else who had to be acknowledged.)

On November 4th there was going to be a closing

Either closing the sale
Or closing the doors (we didn’t have money to meet payroll that day)

November 5, 2011

Sighs of relief are heard in Hoboken as sale of hospital to owners of Bayonne Medical Center is completed, saving 1,200 jobs and freeing city from $52 million in bond debt
Hoboken University Medical Center officially has a new owner and the city is out of the hospital business.

City officials announced yesterday that HUMC Holdco LLC, the group which owns Bayonne Medical Center, completed the purchase of the Hoboken hospital, relieving the city of its $52 million bond debt.

“Today is a great day for all of Hoboken and New Jersey. Our state’s oldest hospital will remain open as a full-service acute care facility,” said Hoboken Mayor Dawn Zimmer.

October 29, 2012

Hospitals Evacuate Ahead of Hurricane Sandy

Ambulances lined the streets of Hoboken, N.J. in the relative calm before Hurricane Sandy last night as Hoboken University Medical Center evacuated patients in the predawn darkness.

The Hoboken hospital evacuated because of fears that surges from Sandy could breach Hoboken’s seawall, causing several feet of flooding. The Emergency Room and OB-GYN services for emergency deliveries remained open.

Imagine the consequences if the City still owned the hospital! It would have never reopened and the City would have been responsible for the $50 million bonds.

December 11, 2013
HOBOKEN ISSUED AA+ CREDIT RATING BY STANDARD & POORS – Expected to Result in Immediate Additional Cost Savings
The credit rating agency Standard & Poor’s has assigned a credit rating of AA+ to the City of Hoboken, a dramatic and unprecedented improvement from the City’s prior near junk bond rating. In assigning their second highest obtainable rating, S&P cited Hoboken’s “very strong economy,” “strong management,” “very strong budget flexibility,” “very strong liquidity,” “very strong debt and contingent liabilities profile,” and “good financial management practices.”
Under Mayor Zimmer’s Administration, the City has established and maintained a responsible surplus for the first time in years, maintained a low debt level, consolidated and restructured departmental operations, eliminated the use of one-time budget gimmicks, and privatized Hoboken University Medical Center in order to relieve the City of a $52 million hospital bond guarantee.