It won’t be the windfall the county enjoyed last year, but the Lowndes County Reserve and Trust Fund should again turn a profit the county can put to use for 2016 projects.
Lowndes County supervisors, who also serve as the board for the $30 million trust fund established when the county sold its hospital in 2001, met for a regular trustees meeting Monday.
The board was given an update on its investments from its two investment groups — Stephens Capital Management and Renasant Wealth Management.
As of Monday, the two groups showed a 1.5 percent return on its 2015 fund balance of $30,491,031 left after the county withdrew $942,000 in dividends in February. That translates into $465,816 the county could take from the fund.
Since 2013, when the state legislature approved a measure that allowed the county to diversify its investments through stocks and bonds, the original trust fund has produced a total growth of almost $3.2 million since the board entrusted the two investment firms with $15 million each in October 2013.
In February, supervisors pulled $942,000 in dividends from the trust fund the county’s new E911 Center, which is still under construction.
Under the terms of the law, the board can withdraw up to 3 percent of the profits gained as of Dec. 31 each year. Any profits above 3 percent are automatically added to the fund and cannot be withdrawn. Likewise, any profits not withdrawn remain as part of the principle and serves as the baseline for the next year.
As of Friday, in addition to the $2,732,000 withdrawn in 2014 and 2015, the trust fund has grown its principle by almost $1 million. The trust fund balance Monday was $30,958,847.
Advisors from both firms said their portfolios should continue to grow at a modest rate, although it won’t approach the 5-plus percent return the county saw in 2014.
Both firms said the current balance could fluctuate between now and the end of the year, especially if the Federal Reserve raises interest rates when it meets Dec. 16.
“I don’t think that will be much of a shake-up,” said Todd Golden of Renasant. “It’s something that has been expected for a long time and is probably overdue, in my opinion.”
The trust fund board will likely meet again early next year, at which point it can make the decision on how much of the dividends, if any, it wishes to remove.
“Up until now, and as long as I’m a supervisor and have any say in it, we’re just going to use that money for long-term, capital improvements,” Board President Harry Sanders said. “This year, we don’t have any new projects, but we might want to use some of that money if there is a shortfall for the E911 Center. We could use some money to renovate the Waters Building or to tear down the Annex. But that’s something we’ll discuss when we know exactly what is available and what we want to do with the Waters Building and Annex. By the first of the year, we’ll have an idea of what we need and, of course, what’s available.”
County Administrator Ralph Billingsley said the board has been careful of how it uses the funds.
“Not only have the investments allowed us to do some major capital improvement projects, but we’ve been able to grow the fund balance and that’s important,” Billingsley said. “As that balance continues to grow, it will give future boards more buying power. In 20 or 30 years, the trust fund may have grown from $30 million to $40 or $50 million and that’s important because the cost of building will be higher then. The bigger the balance, the more you earn from your investments. It’s turned out to be a great asset for the county.”
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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