Article Comment 

Supes withdraw $1 million-plus from hospital trust fund

 

 

Ralph Billingsley

Ralph Billingsley

 

Leroy Brooks

Leroy Brooks

 

Harry Sanders

Harry Sanders

 

 

Slim Smith

 

 

Lowndes County supervisors voted unanimously to withdraw $1,009,186 in profits from its hospital trust fund, its largest withdrawal in the five years since a state law allowing funds to be invested in the stock market. 

 

"As of Dec. 31, 2017, our total investment was $33,639,000," County Administrator Ralph Billingsley told the supervisors Monday. The supervisors represent the county as its trust fund board of directors. "By law, we can withdraw up to 3 percent of the profits as long as doing so doesn't reduce the corpus, so we can withdraw $1,009,000 today. That's my recommendation." 

 

The board quickly agreed, passing a proposal to direct the two firms that handle the hospital trust fund -- Renasant Wealth Management and Stephens Capital Management -- to make the withdrawal this week. 

 

By law, withdrawals can be made based on the market value of the fund on the last day of the calendar year. 

 

In 2017, the county saw its investment improve by $2,099,316, a return of 6.66 percent. Withdrawing the maximum amount of 3 percent means the corpus, or principle, of the account will increase from $31,540,206 to $32,630,336 after this week's withdrawal, an increase of $1,090,130. 

 

Profits taken from the trust fund can be used only for capital expenditures. 

 

The performance of the trust fund emphasizes that timing is the critical factor in investing, Billingsley noted. 

 

Billingsley said the fund was up by $400,000 before last week, but those earnings were wiped out with recent stock market dips. 

 

Starting Friday and continuing Monday, the Dow Jones lost more than 1,800 points, but was by 300 points as of 9 a.m. today. 

 

"We've experienced this with our trust fund before," Billingsley noted. 

 

At the end of 2016, the fund produced enough profits to withdraw just $73,050 after a December slump in the market. 

 

Mindful of that, the following year the board voted to convert most of its investments to cash in June 2017. 

 

"As it turned out, the market didn't fall like we thought it might do then, but we had some projects we needed the money for so we converted to cash to protect those earnings," Billingsley said. 

 

The board was able to withdraw $975,470 at the end of the 2017, although Billingsley said, as it turned out, the fund would have earned another $200,000 to $300,000 if the board had not converted to cash. 

 

"At that time, it was a risk the board felt it didn't want to take," he said. 

 

In past years, the county has used the profits from the fund to renovate county owned buildings, improve the soccer complex in downtown Columbus and build a new E-911 Center. 

 

With the money generated this year, the county could complete the horse park pavilion ($500,000) and pay for a planned community center in the Concorde Community ($325,000). 

 

The county could also wind up banking most of this year's profits, however. 

 

Supervisors have requested funds for the completion of the horse park be provided by the state through its bond program, which will be determined at the end of the legislative session in April. 

 

"What happens if we get that bond money for the horse park?" District 5 supervisor Leroy Brooks asked. 

 

"If that happened, we would just put the money in our account for this," Board President Harry Sanders said. "None of this money will go into the general fund. We have a separate account, so we could put the money in that account to use when we need it for capital improvements." 

 

Sanders said after the meeting that some of the money could be used to make improvements at the county jail. 

 

In five years, the County has withdrawn $3,923,706 in trust fund profits.

 

Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]

 

 

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