April 5, 2013 11:28:10 AM
Nathan Gregory - [email protected]
Mississippi Gov. Phil Bryant has signed a bill into law authorizing the Lowndes County Board of Supervisors to establish a reserve fund that would allow it to invest the $30 million received from the 2001 sale of the county hospital in instruments other than money market accounts that are backed by United States treasuries and serve as trustees of the fund.
The establishment of the Lowndes County Reserve and Trust fund gives supervisors the ability to manage principal and interest incomes and divide them into two components: a corpus component and an earnings component.
The corpus component consists of the initial deposit and subsequent deposits from the annual income earned from the investment of the fund. It is designed to accrue interest income and will not be used. The earnings component will be a percentage of the annual interest trustees can move into the county's general fund. Up to 85 percent of that component can be transferred to the general fund each year.
Senate Bill 2702, introduced by Terry Brown, R-Columbus, was a companion bill to House Bills 899, 900 and 1092, introduced by Gary Chism, R-Columbus, and House Bills 997 and 998, introduced by Jeff Smith, R-Columbus. All five House bills died in committee, Chism said, because they were similar to the one bill Brown introduced in the Senate.
The county could previously only place the money from the hospital sale in a certificate of deposit. The 5.2 percent interest the county initially drew from the money dwindled to 0.19 percent before the bill's passage.
The bill was patterned after similar legislation previously written for Lafayette County.
District 1 Supervisor and board president Harry Sanders, who was instrumental in the hospital sale to the Baptist Hospital group, said the board asked legislators to pursue the funding mechanism for Lowndes County after reviewing the Lafayette County bill.
"We could use that money for school bonds, county bonds and federal bonds but we had to get special legislation to do that," Sanders said. "We could buy city of Columbus bonds whereas we couldn't before. We could probably even invest in Grade A corporate bonds."
Nathan Gregory covers city and county government for The Dispatch.