OKTIBBEHA COUNTY – A resolution passed by supervisors Monday clears the way for the board to use at least a portion of profits from the OCH Regional Medical Center rather than investing those dollars in the county’s reserve and trust fund.
During its June 22 meeting, the board resolved all funds from the hospital sale would enter the trust after the remaining legal liabilities were settled.
Monday’s resolution, however, amends that decision, allowing the board to instead hold up to $13 million from the sale that is currently reserved for legal liabilities back from the trust.
“The issue is that the county has needs all the time, and it is not logical to have to go back into the pool to pull money out for immediate needs,” District 5 Supervisor Joe Williams, who proposed the resolution, told The Dispatch on Tuesday. “… The goal is to let that endowment grow and not have to withdraw money from it.”
The trust was created to house net proceeds from the sale of the former OCH Regional Medical Center, which was purchased by Baptist Memorial Health Care last year. Net proceeds will likely be between $55 to $68 million, but the final number is still in flux due to ongoing legal battles.
As of the June 22 meeting, the trust holds $55 million. The board intends to select an adviser for the trust by Oct. 6. In the interim, the fund is following the county’s typical investment strategy, County Administrator Wayne Carpenter told The Dispatch.
Even if the $55 million is all the county invests from the sale proceeds into the trust, that meets the 80% minimum established through state legislation.
The roughly $13 million Monday’s resolution concerns is split into different pots all serving different purposes, Carpenter said.
Of the total, $5 million is being held in escrow, where it will remain five years as stipulated by the sales contract the county signed with Baptist. There is another $2.6 million being held in a tort claims fund.
Roughly $650,000 is held in a variety of funds that cover liability insurance for doctors employed at OCH. After five years, half of what’s left in each of those funds will go to the county with the other half paid back to the doctors, Board Attorney Rob Roberson told The Dispatch.
Carpenter estimated there is also currently about $5 million left over in the account that held all the profits from the sale prior to the transfer, funds the county is holding to cover any unforeseen legal liabilities. That account is the hardest to estimate as it sees the most fluctuation, he said.
“We (have) still got money coming in, … (and) we’ve got unforeseen liabilities that keep jumping up,” Carpenter said.
Williams told The Dispatch he believes these fluctuations could mean that in five years, the leftover funds could be heavily reduced or completely depleted. During the meeting, Williams emphasized the resolution, which passed 4-1, doesn’t mean any leftover proceeds will not be added to the trust. It simply leaves the board with the option to spend it, he said.
District 3 Supervisor Orlando Trainer, who seconded the motion, also highlighted the long time frame as a reason not to commit to adding any leftover funds to the trust.
“I’m thinking of it as not hamstring(ing) a future board because of what we see now,” Trainer said. “Because what’s going to happen in the future is going to be different. … I think we just need to keep our options open.”
District 4 Supervisor Pattie Little, the sole dissenting vote on Monday, voiced her discontent with resolution at the meeting, noting the board’s earlier decision to invest all proceeds.
“I personally feel like since we publicly said we were going to put all the funds from the sale of the hospital, that I could not vote for (this resolution),” Little said.
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