Firelands to issue $80M in revenue bonds
2/23/2002SANDUSKY - Firelands Regional Medical Center intends to borrow $80 million this spring to refinance debt and prepare for expansion of its main hospital and renovation to its south campus building, an executive said yesterday.
Dan Moncher, executive vice president and chief financial officer, said the hospital plans to go to the financial markets in April to issue $80 million in hospital revenue bonds.
"We want to take advantage of the low interest rates out there," Mr. Moncher said.
The hospital met with the Erie County commissioners Thursday to outline the plan and to ask them to serve as the issuing authority. The hospital will meet with the commissioners again on Thursday to seek approval, he said.
"Yesterday's meeting intention was to give them a heads up on what we planned to do," Mr. Moncher said.
In 1985, Sandusky Memorial and Good Samaritan Hospital merged to form Firelands Community Hospital. Last year, Firelands merged with the city's third hospital, Providence, to create Firelands Regional Medical Center.
Mr. Moncher said $25 million from the bonds would be set aside for construction and renovation projects planned during the next three years.
Plans call for moving 40 beds from the former Providence hospital, which is used as Firelands' south campus, to the main facility. The move will entail construction at the main campus, "where we have run into capacity issues" to accommodate the additional beds, he said.
The hospital projects a need for 300 beds, although its state limit is 510 registered beds.
The former Providence facility will be used for subacute and long-term care and some financing and accounting offices, Mr. Moncher said.
Firelands will use $30 million to repay bonds that were issued in 1992. The refinancing at lower interest rates is expected to save between $3 million and $5 million annually, he said.
Additionally, the hospital will "repay itself" $22 million that it took out of its general fund to pay for capital projects it undertook during the past three years. The balance of the money will be spent on costs associated with the bond issue, Mr. Moncher said.
Firelands, with 1,650 employees, had 11,075 admissions last year and served 368,263 outpatients.