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County okays sale of bonds for Lykes

BROOKSVILLE _ The Hernando County Commission was willing to go a long way Tuesday - both literally and figuratively - to accomodate Lykes Health Systems Inc.'s request to borrow $57-million to help the financially strapped health conglomerate. All the way to the fourth floor of the county building, in fact.

Because the lawyer advising the county on the matter was in Tallahassee, commissioners decided to delay the vote until next week. "I don't see how we can do it without him," commission Chairman Henry Ledbetter said.

But after heavy lobbying by Brooksville lawyer Joe Mason and Lykes president Steve Wenzel, commissioners decided that a telephone call with their attorney, Keith Quinney, would be sufficient.

"This is a bit unusual," said Ledbetter as an official entourage took the elevator to County Administrator Chuck Hetrick's office to complete the call to Quinney so the commissioners could continue with the meeting.

The group included Ledbetter, fellow Commissioner June Ester, Hetrick, Mason, Wenzel and members of the news media.

After the brief call to Quinney, Ledbetter said he was satisfied that the county would not be liable if the company does not pay off the money it is borrowing.

The commission then unanimously approved the sale of up to $57-million in bonds. The vote Tuesday was the final formal approval needed from the commission, which had given tentative approval to the bond sale last year.

Because the bonds being issued to raise the money are tax-exempt, they required county approval. The money will be used to build Lykes' new Spring Hill hospital and refinance other debts.

The money will be borrowed at an average interest rate of about 10 percent, Wenzel said, about 1 1/2 points higher than the health company had wanted to pay.

"Whatever is happening in the outside world, we ride it," Wenzel said.

Quinney said he was not at the meeting Tuesday because of a misunderstanding with Smith, Barney, Harris, Upham & Co., the company Lykes hired to sell the bonds.

Quinney was told that Smith Barney would not have the necessary documents ready for the meeting Tuesday, so the lawyer recommended that the vote be delayed a week. But when the Lykes officials arrived at the commission meeting, they said they had the necessary information.

And after the arrival of more than 100 senior citizens the company had bused in from its community centers to demonstrate the support for the project, the commissioners decided to work on a compromise.

Wenzel said the formal vote had to be taken Tuesday if the official sale of the bonds is to take place in New York next week as scheduled.

Lykes is pinning its hope on the 66-bed Spring Hill hospital now under construction on Mariner Boulevard north of County Line Road.

Lykes Memorial Hospital lost $702,000 last year after writing off loans to its unprofitable affiliated companies. State regulators, in reviewing Lykes' recent history, said the hospital "is in a shaky financial situation."