June 14, 2014 10:51:33 PM
A change in investment strategy with its hospital sale fund has resulted in big gains for Lowndes County.
As of Thursday, the trust has realized a $1,750,000 gain on the $30 million principal since October when county supervisors split investment duties between two financial consultants -- Stephens Capital Management and Renasant Wealth Management.
As long as they chose to do so before July 1, supervisors have the option of withdrawing up to 3 percent of the money in the fund at the end of 2013. The fund balance at that time was $30,767,000. Three percent of that is $922,000. The amount of money in the fund has grown since the end of the year, but the rules governing withdrawals stipulate that only money in the fund at the end of 2013 is available for withdrawal.
Supervisors voted to withdraw the full $922,000 from the fund and discussed what the money would be used for during their regular meeting Friday.
The money taken from the fund will be set aside as a line item separate from the county's general budget and used for a general capital improvement project. It is likely that project will be the expansion of the county's Emergency 911 center. Located on the east end of the courthouse, the facility is in dire need of expansion and renovation, board president Harry Sanders said.
"It's like a dungeon down there," Sanders said. "The working conditions are terrible and they're under a lot of stress."
He added that expanding on what is already in place rather than relocating makes sense because there is room east of the facility for the expansion.
"That would be the cheapest way to do it without having to relocate all your fiber optics and all the things you've got," Sanders said. "That's something we need to look at. They're in desperate need of something."
Supervisor Leroy Brooks added that the expansion should include a larger conference room, which is often insufficient when city and county officials gather there for briefings on potential crises such as severe weather.
Sanders said he has asked county administrator Ralph Billingsley to work with a local architect on a plan for what could be done.
State legislation passed last year granted supervisors the authority to invest the hospital sale funds in mechanisms other than certificates of deposit, which had only accrued about $60,000 annually in interest on the $30 million principal in recent years.
While supervisors unanimously voted on withdrawing the interest, the idea was met with resistance from supervisor Bill Brigham, who said the total amount could fall under $30 million if money is withdrawn and a market adjustment occurs within a year.
"I know I'm the only one, but I don't want to take any of it," Brigham said. "You could have a 10 percent adjustment in this market and be down below $30 million just like that. I just think it ought to stay there."
Sanders said delaying taking money out until next year would also be a risk because if a market adjustment results in a loss between now and then and the trust falls below $30 million, it could not be touched again until there is more than that amount.
"Then we don't have the money to fund the (E-911) project," Sanders said. "If you take the money out now and set it out in a separate pie and there's a correction, you still have the money to do your project with. We as a fiduciary board are not here to horde money."
Nathan Gregory covers city and county government for The Dispatch.
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