It isn’t as much as it might have been, but the return on the investments made by the Lowndes County Board of Supervisors in the county’s $30-plus-million hospital trust fund will still add close to $1 million to the county’s general fund this year.
The principle comes from the 2006 sale of the county-owned hospital to Baptist Health Services.
Since Oct. 7, 2013, when state law changed to allow counties to invest trust fund money in stocks and bonds, Lowndes County has annually withdrawn gains from those investments.
The amount that can be withdrawn is based on the value of the portfolio as of Dec. 31 of each year.
Last year, however, supervisors moved to protect their earnings in July, converting 80 percent of those funds to cash to avoid a possible fall in stock value by the end of the year.
“We ended up with around $975,000 we can withdraw this year,” said county administrator Ralph Billingsley. “As it turned out, if we had kept the money in the market, we probably could have withdrawn more, but we didn’t want to take that chance.”
The move to convert most of the funds to cash was made on the recommendation of District 2 Supervisor Bill Brigham, a retired banker. The supervisors, who also serve as the Hospital Trust Board of Trustees, passed the proposal unanimously, and the two firms that handle the portfolio — Renasant Wealth Management and Stephens Capital Management — made the changes in July.
The decision to take a “time out” from the stocks and bonds markets came after a late dip in the stock market at the end of 2015, when the county could withdraw just $73,049 at the beginning of 2016.
In July when supervisors voted to convert to cash, the Dow Jones Industrial Average was in the 18,000-point range, and supervisors feared it might be more inclined to fall than rise. As it turned out, the market continued to grow, eclipsing the 20,000-point mark. The Dow average at the close on trading on Dec. 31, 2016 was 19,762.
“Looking back, we might have gotten out (of the market) too early,” Board President Harry Sanders said. “But we wanted to be sure we had money to pay off the E911 Center, so it was better to be safe than sorry. We still had a really good return on our investment, so I think the board made a good decision, especially when you remember what happened last year.”
Sanders said the money will allow the county to reimburse its general fund for the cost overruns for the E911 Center.
The county had budged $1.6 million for the new center, but the final bill was just short of $2 million because the county voted to replace the antiquated E911 phone and computer system, which was not in the original budget. The new systems cost the county $541,000.
Sanders said the remainder of the money will go into the county’s general fund.
“We really haven’t talked about what that money might be used for,” Sanders said.
With the expected withdrawal, the county will have withdrawn $3.8 million in profits while growing the initial $30-million fund to $31,575,000.
“All of that money has been used for big capital improvement projects,” Billingsley said. “‘We’re not using it for operations, to fill potholes are give out raises. I assume the supervisors will stay with that approach.”
Billingsley and Sanders said no meeting of the Hospital Trust Board has been scheduled, which would be required to for the county to withdraw profits.
“It’s something we’ll probably talk about at our next supervisors meeting on Jan. 13,” Sanders said.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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