HOBOKEN - The City Council did not pass a refinancing bond for the midtown garage and a $2.8 million capital improvements bond on Wednesday night, a decision that Mayor Dawn Zimmer said before the vote would lead to layoffs in the city of Hoboken.
Despite an impassioned plea from Police Chief Anthony Falco, who spoke about not having proper storage space in police headquarters, a non-working phone system, as well as an inoperable heating and cooling system, the four members of the council minority voted against the capital improvement bond.
Falco said he was in support of all of the capital improvements on the ordinance.
A bond needs six votes to pass, and Mayor Dawn Zimmer has five allies on the council.
"I'm imploring this council to take [the needs] into consideration and set politics aside for once," Falco said. "Do what's right for my officers.
There's basic needs [that need to be met]."
Councilman Michael Russo said he wants the city to pay for the improvements through other ways other than bonding, such as a five year capital improvement plan in the budget, and voted no.
"Capital improvements are addressed through bonding," Councilman Peter Cunningham responded. "You don't pay cash out of your budget."
However, Councilwoman Theresa Castellano, who also voted against the bond, said that "just because you have a credit card for $20,000 doesn't mean you have to spend $20,000."
The city has a $365 million bonding capacity, assuming the hospital is sold, and has used $112 million of that total so far.
Councilwoman Beth Mason voted no because she said she didn't agree with all of the items on the list of improvements. Cunningham asked Mason to say which items she didn't approve of, but she said they could have that conversation later.
The ordinance failed by a 5-4 note.
The refinancing of a bond for the midtown garage to taxable status, which was advertised as saving the city $50,000, also failed on Wednesday night.
Since Hoboken University Medical Center is being sold to a for-profit entity, HUMC Holdco, the bonds associated with parts of the parking garage need to be changed to taxable status. Due to low financing rates, an attorney for the city said Hoboken would save $50,000. Since the vote failed by a 5-4 vote (six votes are needed), the city will now have to come up with approximately $4.5 million for Internal Revenue Service fees and other costs associated with not changing the bond, officials said.
"If you don't pass it, the $4.5 million payment would be necessary," said city attorney Melissa Longo before the vote. "Layoffs will come."
Castellano said it is "despicable" that the council was threatened that there would be layoffs, but Zimmer said earlier on Wednesday that the city would complete the layoffs to come up with the money.
The minority council members said they voted against the refinancing because many of them objected to a parking agreement for the new owners at the hospital. The new owners will have a 99 year agreement at the garage to purchase parking from the city, despite a 7 year guarantee that the building will remain a hospital. According to the documents, the agreement would remain in place even if the building is no longer a hospital, but the owners would pay market rate every month for the spots.
For much more on the meeting, keep reading HudsonReporter.com, and make sure to pick up a copy of The Hoboken Reporter this weekend. - Ray Smith