New Hanover will invest the remaining $350 million from NHRMC sale, apart from the $1.25 billion community endowment
Separate from the $1.25 billion that's being managed by the newly-formed community endowment, an additional $350 million from the hospital sale will provide about $3 million in earnings in the first year.
The county sold the New Hanover County Medical Center last year for $1.5 billion, with that pot of money going to an independent endowment. Another $350 million in cash reserves from the hospital went directly into the county’s coffers, and has been retained as a reserve fund.
Now, the county has set an investment policy to get that money working: $300 million is set aside for revenue stabilization, with another $50 million aimed at mental and behavioral health.
But those big chunks of money aren’t going to be spent — instead, Chief Financial Officer Lisa Wurtzbacher said the funds would be invested, with the profits going to each of those causes.
She added that the first year’s profits might come to $2.5 million for the revenue stabilization and $450,000 for the mental health funds.
“And every year hopefully, if interest rates continue to rise, then that amount would also go up,” she said.
No more than 20% of the money will be invested in any one place, and the county is limited to ten-year investments, and Wurtzbacher said that a longer time frame would lead to more profits. The county can only pull from the principal with a directive from the supermajority of the county commission (i.e. four out of five members).
“We are going to utilize a buy and hold strategy unless there's an emergency or directive from the supermajority of the board. that dictates the use of the corpus,” Wurtzbacher said. “The idea is that under normal circumstances, we would utilize the investment earnings on programs and needs. So this does allow us an opportunity to invest for longer periods of time to earn higher returns.”
The investment policy passed unanimously through the county commission, and the earnings can be spent on anything from budget shortfalls to natural disasters as soon as 2023.