A bird in the hand is worth two in a bush.
During Tuesday’s Board of Trustees of the Lowndes County Reserve and Trust Fund voted unanimously to transfer 80 percent of its balance of $32,098,138 from stocks and bonds to cash in order to preserve a gain of $1,607,107 it has earned through the first six months of 2016.
The move, which retired banker and District 2 Supervisor Bill Brigham has advocated, should mean the county can withdraw $962,944 at the beginning of 2017. Renasant Wealth Management and Stephens Capital Management, the two firms handling the fund, will now make the changes in the county’s portfolios based on Tuesday’s vote.
The decision to take a “time out” from the stocks and bonds markets comes in the wake of late dip in the stock market at the end of 2015, which allowed county to withdraw just $73,049 at the beginning of this year.
By state law, the county can withdraw up to 3 percent of gains on its investments each year. Since that law was passed in 2013, the county has withdrawn $2.8 million over three years while increasing the trust’s balance by more than $2 million as of the end of June.
The Board of Supervisors also acts as the Board of Trustees for the trust fund.
“I’ve been thinking about this the last couple of months,” Brigham said. “Two weeks ago, we saw a 1,000-point drop and now it’s back up again. Last year, we saw just the opposite. We were doing pretty well, then we had a drop at the end of the year that really prevented us doing what we wanted to do with those gains. The way I see it, if we go to cash with our investments now and nothing changes, we know we would have around $950,000 we could withdraw and still add $500,000 to our corpus.”
Board President Harry Sanders agreed.
“Normally, I would say when you are investing you should be in it for the long haul,” he said. “But we have about $900,000 in commitments to the E-911 building. By moving it over to cash now, we’ll be assured of having the money next year when we have to pay for that.”
County Administrator Ralph Billingsley said the county could move money back into stocks and bonds at any time.
“What the board is saying is that the likelihood that the stock market will go down from where it is now is greater than the market going up. It’s really just a time-out to protect the gains we’ve made during the first six months of the year.”
Roughly $6.4 million would remain stocks and bonds, based on the board’s decision, and the amount the county can withdraw could increase or decrease – albeit by small margins – based on how those markets perform through the end of the year.
Prior to the trust meeting, the supervisors held their regular Board of Supervisors meeting, quickly dispensing with a light agenda.
The board approved the purchase of new air-conditioners for the libraries at Caledonia and Crawford, not to exceed the estimated costs of roughly $9,000 for both units.
Billingsley also introduced Lance Bishop, the county’s new full-time informational technology director, to the board. Bishop comes to the county from Adams County, where he also served as IT director. His salary is $62,500. Previously, other county employees performed IT work as add-on duties, supplemented by contracted IT work the Golden Triangle Planning and Development District provided.
Finally, the board approved a request from Coroner Greg Merchant to update his radio system to that being implemented at the sheriff’s department at a cost of $12,860, contingent upon waiting until the new fiscal year in October to purchase the equipment.
The sheriff’s department upgrade will cost $178,500, of which $50,000 is already covered by a HomeLand Security grant this year. Future grants could also reduce the county’s cost for the upgrade.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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