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Councilman Dave Mello: Hospital saved but obstructionist damage is continuing

Dear Friends and Neighbors,
Let’s start with some truly wonderful news: Hoboken’s hospital has been sold; will remain open for business; and no longer must be kept afloat by the Hoboken taxpayer.
Yet, despite this fabulous news that the hospital sale has finally cleared, this past Monday Hoboken’s City Council met and voted negatively on a surprisingly divisive issue: should we approve relatively routine year-end budget line item transfers.  I’m very sorry to say that this line-item transfer vote failed with a 5-4 vote.  
Specifically, this vote was to approve line item budget transfers of approximately two percent of the City’s yearly budget.  Put simply, we’re at the end of Hoboken’s budget year, and some budget line items came in under budget, while others came in over budget.  However, the administration can’t legally just move this money across line items.  Instead, we on the City Council needed to approve these “line item transfers” with at least a 6-3 vote.  I, and four of my colleagues, voted in favor of the transfers; four of my colleagues – the “Council Minority” – did not.  One no vote came from a colleague who is also on the Council’s Revenue and Finance Committee with me, and had every opportunity to ask probing questions about these transfers, yet still voted no.  The result: the vote failed.
What does this all mean?  Well, there are now a number of budget items that can’t be paid, including:
  • Overtime pay accrued by our Hoboken fire department, which was hundreds of thousands of dollars above what was originally budgeted for in their salary and wages line item.
  • Legal fees owed to our bankruptcy attorney, Mr. Paul Hollander, who played a vital and significant role in saving Hoboken’s hospital and ridding we, the taxpayers, of a $52 million bond guarantee made in 2007.
In regards to these transfers, I had the following comments before we voted to approve or disapprove them at Monday’s meeting:
If the hospital bankruptcy had not been resolved, the sale of the hospital would not have gone through.  If the sale of the hospital had not gone through, the hospital would have closed its doors.  If the hospital closed its doors, the bond holders of over $50 million in bond debt would have “called the bond” and we, the Hoboken taxpayers, would have been on the hook for over $50 million.  This “bond call” would have resulted in a quick and back-breaking property tax increase across Hoboken.  All residents would have been affected to varying, extreme levels.
Our bankruptcy attorney, Mr. Paul Hollander, played a vital role in avoiding this imminent fate.  He cleared the way for the sale of the hospital and he negotiated a settlement that, in the words of the bankruptcy judge provided “extraordinary relief” to the Hoboken taxpayer because this judgement fully indemnified us, and precluded the creditors, who the hospital owed over $30 million to, from coming after the City of Hoboken for these debts owed (we were the deep pockets in this equation).  We, the Hoboken taxpayers, were protected by the efforts of Mr. Hollander.  He earned his pay, and it is money well spent and justly due.  More importantly, he can be paid out of funds already present in our budget.  Mr. Hollander should be paid.  He should be paid immediately.  Four of my Council colleagues don’t seem to think he should.
Sadly, this vote was just one of many recent votes where the “Council Minority” has been clearly obstructionist.  These obstructive votes amount to a chaotic “cutting off your nose to spite your face” financial policy where, unfortunately, it is the fiscal face of Hoboken residents that is being mutilated.
Please join me in fighting against further obstructionist tactics by some of our elected officials.  You can reach out to me via this email if you would like to help out in any way.
Thank you for your time and thank you for reading.
All my best,
David

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