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1LOCAL FINANCE BOARDWEDNESDAY, DECEMBER 14, 2016----------------------Held at the:Department of Community AffairsConference Room No. 129101 South Broad StreetTrenton, New JerseyJerseyShore Reporting517A Passaic AvenueSpring Lake, New Jersey 07762(732) 282 - XAPPLICATIONS:PAGEBergen County4-18Washington Township Fire District #1 18-23Kearny Town23-27Newark City27-37Ocean County37-45Paterson City45-55Passaic County Improvement Authority 55-61Kearny Municipal Utilities Authority 61-66Atlantic County Improvement Authority 66-69Monmouth County Improvement Authority 69-81Monmouth Beach Borough81-86Rahway Valley Sewerage Authority86-89Boonton Town90-98East Orange City98-109Asbury Park City109-114(Old Business)114-118211B E F O R E:2345678910111242TIMOTHY J. CUNNINGHAM, ChairmanMELANIE WALTER, Deputy Attorney GeneralIDIDA RODRIGUEZALAN AVERYTED LIGHTFRANCIS BLEEWILLIAM CLOSEDOMINICK DIROCCOEMMA SALAYPATRICIA PARKIN McNAMARA, Executive 202021212222232324242525MR. CUNNINGHAM: Good morning.Can you gentlemen please introduce yourselvesand those who aren't counsel, be sworn in.MR. NEALS: Julien Neals, CountyCounsel, acting County Administrator, BergenCounty.MR. FADER: Paul Fader with thefirm of Florio, Perrucci, Steinhardt & Fader. Iam counsel to the Bergen County ImprovementAuthority.MR. TEDESCO: I'm Jim Tedesco.I'm the Bergen County Executive. Thank you.MR. WIELKOTZ: Steve Wielkotz. Onthe Board for the County of Bergen. Ferraioli,Wielkotz, Cerullo & Cuva.MR. MARINIELLO: Dan MarinielloFinancial Advisor for the County of Bergen.(JAMES J. TEDESCO, III, STEVEN D.WIELKOTZ, DAN MARINIELLO, are duly swornby a Notary Public of the State of NewJersey and testifies under oath asfollows:)MR. CUNNINGHAM: Gentlemen,welcome. For the rest of the board's benefitthe division staff, myself included, did a1 (Pages 1 to 4)JerseyShore Reporting, LLC
ce call on this matter. But CountyExecutive, I don't know if you want to introducethe application to the Board, explain itsimportance to the county.MR. TEDESCO: Thank you. I justhave some brief opening remarks, Director, ifyou don't mind. Director Cunningham, members ofthe Local Finance Board, thank you for theopportunity to speak to you in support of thecounty's application to establish a hospitalauthority. With your permission, I'd like toprovide some background on Bergen RegionalMedical Center. As you may know, BergenRegional Medical Center is the largest hospitalin the State of New Jersey and the fourthlargest public hospital in the nation. Onehundred years ago, Bergen County opened thehospital then known as Bergen Pines CountyHospital to care for people with contagiousdiseases. Bergen County owned the land, thehospital license and directly managed thefacility all while its mission grew to includeserving the poor, elderly and those strugglingwith acute mental illness. About 20 years agoat a time when many public hospitals were712345678910111213141516171819202122232425in government, health care delivery, patientadvocacy, labor and philanthropic. Those theytold us identified the inability to exert thenecessary oversight of the operations of BRMCunder the current agreement as a paramountconcern. We sought to address this concern withthe help of Senator Loretta Weinberg, AssemblyWoman Valerie Huttle and the Governor's office,by modifying the legislative previouslyintroduced hospital authority legislation tofacilitate the type of oversight we are seeking.With this board's approval, we will have a newlegally established hospital authority empoweredto formally oversee BRMC with the appropriateknowledge and experience to support hospitalmanagement in the delivery of high qualitymedical care, a safe work environment for itscare providers and sound fiscal management onbehalf of the taxpayers. This will allow theBCIA to return to its primary mission offinancing the development of special projectsthroughout the county. As we cement apartnership with one of several qualifiedexperience medical management teams thatresponded to the counties RFP for the next ing or being sold to private entities,Bergen County determined that the directoperation of the hospital by county governmentdid not serve the interests of the hospital, itspatients and the taxpayers. Rather than mergeor sell, Bergen County sought a third way. Thehospital would become Bergen Regional MedicalCenter or BRMC, which the county retainedownership of the facility which would be managedby a third-party operator. To facilitate thislong-term operating agreement, Bergen Countytransferred the hospital operating license tothe Bergen County Improvement Authority or theBCIA. The BCIA entered into a lease operatingagreement with a third-party operator for a19-year period. This contract establishing BRMCwas, to put it bluntly, written in favor of anoperator at the expensiveness of necessary andthorough oversight by Bergen County and theBCIA. That agreement is set to expire or March15th, 2017. In 2015 the responsibility toresponsibly guide the future of the hospitalincluding the development of the next operatingagreement, I appointed a 15 member BRMC healthcare advisory committee which included perating agreement, the formal establishment ofthis hospital authority is a critical milestone.Your support today will help us secure thefuture of this hospital and the health andwelfare of so many who rely upon it. I want tothank you for giving me the opportunity to givesome history and some background and forallowing us to come here today to present ourapplication.MR. CUNNINGHAM: Thank you CountyExecutive. Gentlemen, anything to add to theapplication?MR. MARINIELLO: I would like justto stress the importance of what will happenhere with the hospital authority and thetimeliness for a couple of reasons. Number oneas the county executive said, right now we havethe improvement authority which is a five memberboard overseeing the hospital to some extentalso with the community oversight board. Thelegislation that was passed, again, it was donewith the work of the Governor's office, thelegislature and the Department of Healthfrankly, we had several meetings with them andput this together. What it does is give us2 (Pages 5 to 8)JerseyShore Reporting, LLC
us amount of oversight and put severaldifferent governmental entities involved. Andthe reason I say it, is on this new board willbe the county executive, there will be a sixmember public board, five appointed by thecounty executive. It requires a person withinformation or knowledge regarding finance andsome regarding operation management. It alsohas the requirement to the Governor itselfwhoever that may be, appoint the members as wellthat has a background as a physician. It putson there somebody from the hospital itselfplaced by that from the medical staff. So youget a perfectly working oversight and then youhave two members who are non-voting from theDepartment of Community Affairs. So you puttogether a tremendously strong oversightcommittee. Interestingly enough it adds morevariety to it. It adds that the Governor canappoint somebody to the managers side and put onthat board. And, again, a tremendous amount ofoversight. It also adds a couple of things wedon't have. It guarantees that the hospitalthat they work with remains a county hospital bylegal definition. That ensures that the improvements because of the long-term nature ofthat contract. We need to do it now andhopefully we can get a vote from you all todayin the positive, I think it's very importantbecause this ends, the existing lease ends March14th. So we really need to do, hopefully do, ishave this approval. The county executiveobviously is pushing it forward. TheFreeholders will take a vote and then it's goingto take some time to appoint people and get itrunning and we would really like to get itrunning by March 14th.MS. RODRIGUEZ: The proposal isfor the operations of the facility, is that whatyou're looking for?MR. FADER: A lease agreement andthen they would manage but it but exactly.MS. RODRIGUEZ: Management. Andthe primary care there is still the same?MR. TEDESCO: It's got threefunctions. It's got long-term care. It's thelargest long-term care facility in the State ofNew Jersey, 700 plus beds. It also handles themajority of all the mental illness care forNorthern New Jersey not just Bergen County. And1012345678910111213141516171819202122232425you get, cause a tremendous amount of fundingcomes in now is from the state. And if youdon't have that specific county hospitaldesignation, that number can go down and itwould have a tremendously negative impact on alot of people who are going there. So itprovides with tremendous oversight. It providesyou with other governmental entities involved ona day-to-day basis. Specifically says you'reallowed to get and look at any kinds of booksand records and it puts people with expertise onthe front line. And until this legislation waspassed, we didn't have all that and that'sreally extremely important. As another quicknote, it permits you to have a 20 year lease, upto 20 year lease, with two five year options.What's the importance of that? We can't do itnow, but if we're looking for a proposal to comein and we're in the middle of a RFP process andfrankly we've got seven very positive responses,where 19 years ago they got one. So you haveseven coming in. With this legislation inplacement, we go in to that negotiation, it'smore likely that a proposal will be able toprovide us more financing for it also has a detox, a detoxification componentwhich in today's environment with the opioid andheroin epidemic, we just don't have enough spaceto handle everything that's being sent there.And then there's an acute care piece also.MS. RODRIGUEZ: Right. Soundslike you're going to be the highest and greatestuse at that facility.MR. TEDESCO: The mental healthaspect and addiction services is becoming, whilethe long-term care piece is the largest, themost activity that's taking place there now ison the addiction side. And just for anotherpiece, my vision there is and I met with the VAto have the VA designate that facility as achoice facility and then also as a designatedfacility for medical care for our veterans. Wehave a veterans home that has hundreds ofveterans directly across the street from thatfacility and they're not allowed to go there.And that, just to me, does not make sense when Ihave the largest hospital in the State of NewJersey there. And so we have talked to theVeterans Administration, we're hoping that theywill be receptive along with our congressional3 (Pages 9 to 12)JerseyShore Reporting, LLC
1312345678910111213141516171819202122232425leaders to help us put that piece, thatcomponent into the facility also. Because whenyou look at our veterans, many of them have theconditions that we treat there which are mentalillness, which have some mental illnesscomponents, PTSD, a drug addition, alcoholaddition. So that facility will provide themwithin walking distance for some but for insteadof them driving all the way down to East Orange,they can get their care right in their homecounty. We have over 36,000 veterans in Bergencounty.MR. CUNNINGHAM: When we did theconference call on this matter, I guess wefocused on three topics and two of them I thinkyou hit pretty squarely. Number one is the factthat there is a 15 member panel that had expertsin health care and various hospitals that maderecommendations to include this recommendation.And at the division level, we certainly didn'twant to substitute our judgment for people thathave health care experience. Secondly, wetalked about why the new board would be betterthan the old board going through the improvementauthority and I think that was already 25it's been a fair and open process. The statecomptrollers office, we spent months with them.We meet with the Department of Health. Youknow, we started doing on a monthly basis, nowit's pretty much biweekly because they have toldus how important this is. So, yes, this is atremendous amount of oversight and that's abenefit and that's what the county executivewanted.MR. CUNNINGHAM: So just tomemorialize in the record under 30:9-23-20 thepowers and duties of the authority undersubsection C it discusses the contract beingeffected with prior written consent of the localfinance board along with commissioner of healthand senior services.MR. DIROCCO: Mr. Chairman, Ithink you touched on this but, so the actiontoday obviously is this, the authority which maybe created and the management aspect would beput in place. But all the other health-relatedrequirements for the hospital still reside withthe Department of Health or other entities,correct? So in other words, CN requirements,anything else that needs to go through more1412345678910111213141516171819202122232425by Mr. Fader in terms of the fact that thehospital authority talks about specificexpertise and state involvement. And the thirdaspect that we focused on during the conferencecall, was the submission of an initial budgetwhich is contemplated by law and that wasprovided to us yesterday and we have that and Ibelieve we've distributed to the board members.The other point I just wanted to make, it's ourunderstanding that you know today's action wouldset up the authority, but the hospital authoritylaw would require the contract to come back infront of the local finance board before it'sexecuted. So we would see this applicant againbefore the board and we would see the actualcontract to be entered in to. Am I correct inthat?MR. FADER: Yeah, I think you are.but should you should also be aware thatobviously for a long-term contact like that andthe volume of it, would go through the statecomptroller as well. Which we did, franklywith, the RFP, we did RFQ and then RFP, spent alot of time with the comptrollers office.Really one of the great things about this th specific approvals needs to go beforeanother board for their review, is that correct?MR. TEDESCO: Yes. Right now thelicense is held by the Bergen County ImprovementAuthority and we have been meeting with theDepartment of Health. What would happen, whichis why we need the authority created before weenter. Because we have the ability now totransfer the license and the Department ofHealth has indicated to us and we have aspecific health care attorney that's workingwith us that we don't have to go through thesame process, they just have to approve themanager of it. So we'd be able to transfer thelicense with the Department of Health, they, toget to your point, the board of health is gonnahave to say yes we agree with this entity thatthey have the ability to manage and manage itproperly. So we get to this excellent point, soyou have the comptrollers office, the localfinance board, the Department of CommunityAffairs and the Department of Health, you know,all have to review and say this works. Andwe're confident they will because we're workingdirectly with them.4 (Pages 13 to 16)JerseyShore Reporting, LLC
1712345678910111213141516171819202122232425MR. DIROCCO: Thank you.MR. FADER: The other piece ofthis is, once we have a vote today, I can takeit then to the Freeholder board. So before Ican get the Freeholder board to move we neededto have all of you allow that. So there's othersteps that still need to be put in place, butthis is that first step so.MS. RODRIGUEZ: Today is toestablish the authority?MR. FADER: Yes.MR. CUNNINGHAM: Any otherquestions from the board? So hearing none, I'llmake a motion to approve the application infront of us creating the Bergen County HospitalAuthority. I would ask for a second from one ofmy colleagues.MS. RODRIGUEZ: I second.MR. CUNNINGHAM: Ms. Rodriguez.Second. Roll call, please.MS. McNAMARA: Mr. Cunningham?MR. CUNNINGHAM: Yes.MS. McNAMARA: Mr. Avery?MR. AVERY: Yes.MS. McNAMARA: Ms. 425in by a Notary Public of the State of NewJersey and testifies as follows:)MR. CUNNINGHAM: So gentlemen,this is a difficult application for the boardand we're going to include both the 507,000proposed project financing and the 240,065financing. One was for the purchase of a newrescue vehicle, a Sneal Spartan Pumper and theother was for radio equipment. So as the boardknows, this is an application that we wouldrelatively see in a common fashion except forthe fact that in this instance, the district didnot come to the board prior to entering thecontract and you already have the vehicle andthe equipment. So can we talk a little bitabout the circumstances that caused that tohappen?MR. SUMEK: Yes sir. As I placedin some of my writings, the fire districtencountered a catastrophic event at theadministration level. The first onset was aproblem with our business administrator in 2015which was corrected, ultimately led to theretirement of the business administrator. Thesecond phase of it was the person in charge of1812345678910111213141516171819202122232425MS. RODRIGUEZ: Yes.MS. McNAMARA: Mr. Blee?MR. BLEE: Yes.MS. McNAMARA: Mr. Light?MR. LIGHT: Yes.MS. McNAMARA: Mr. Close?MR. CLOSE: Yes.MS. McNAMARA: Mr. Dirocco?MR. DIROCCO: Yes.MR. CUNNINGHAM: Thank you verymuch.The next is for Washington Township FireDistrict Number One. Would you gentlemen pleaseintroduce yourselves and those who aren't counsel,be sworn in.MR. STELLA: Frank Stella,Chairman of the Board of the Washington TownshipFire Department.MR. LONABAUGH: Jerry M.Lonabaugh, attorney for the Washington TownshipFire District.MR. SUMEK: Richard Sumek. I'mthe Chief of Staff for the Washington TownshipFire District.(Mr. Sumek, Mr. Stella, are e actual financial office at the time wasstruck with a severe case of cancer and passedaway. Third step was our district chief wastasked with all of this, applications, financeand day-to-day operations of the facilities andfailed to do so. He abruptly retired in thebeginning of the year. We have undergone underthe direction of Commissioner Stella, a thoroughregeneration of our fire administration. And byall ways and means, they're trying to uprightthe ship by processing past and futureapplications to local financial board. A newchief has been appointed. He's not availabletoday but he is in position, he's been servingfor approximately four months.MR. CUNNINGHAM: Let's talk aboutwhat went right. So in both cases the publicprocess was followed in the fact that there wasreferendum question.MR. SUMEK: Yes sir.MR. CUNNINGHAM: The vote turn outwas actually fairly robust considering what wesee for fire district election. And in the caseof the truck, the referendum passed 338 to 117and indicates the equipment was 278 to 124. The5 (Pages 17 to 20)JerseyShore Reporting, LLC
2112345678910111213141516171819202122232425other thing I would say is that you did go outfor quotes for financing. Received tworesponses back at least on the truck MunicipalCapital Finance at 230 2.34 and one from publicfinance at 2.99 which aren't the worse rateswe're seeing, not necessarily the best rateswe're seeing but not necessarily too bad. Andthen you also went out for financing bids forthe equipment as well. But only received, Iguess, well you received two bids there as well,2.85 and 2.99. And in both cases you went withthe lowes of the financing responses, right?MR. SUMEK: Correct.MR. CUNNINGHAM: The cost ofissuance on both applications is certainlyreasonable, 2500 in both cases. So thequestion before the board now is if we were totake a vote on these matters and hypothetically,voted no
12 provide some background on Bergen Regional 13 Medical Center. As you may know, Bergen 14 Regional Medical Center is the largest hospital 15 in the State of New Jersey and the fourth 16 largest public hospital in the nation. One 17 hundred years ago, Bergen County opened the 18 ho
