As Edmond begins to talk about the special election on October 11, a few questions are being asked about the ballot. Hopefully, in the next Mayor’s messages, I can give you some of the information you need to make an informed decision. The Edmond City Council wants you to understand these questions.
Specifically, Edmond residents are asking, “What is the hospital sale trust fund?” In short, it is Edmond’s savings account.
The history of the hospital sale trust fund dates back to the 1980’s. Edmond owned a community hospital, which we know today as OU Medical Center Edmond. A national company purchased the hospital from the city, and the hospital sale trust fund was created to hold the money received for this transaction. Today, the fund still holds more than 7 million dollars from the sale.
At the time, Edmond’s leadership did not want Edmond to be without a hospital. The funds were placed in this restricted account so that Edmond could repurchase the hospital, or could build another hospital if it was needed at a future date. Thirty years later, we see OU Medical Center Edmond thriving, and investing to bring other health care services to Edmond. We also have two large facilities, Integris Hospital and Mercy Wellness, currently being built in Edmond, and scheduled to open in the near future.
The documents creating the hospital sale trust fund require that these proceeds be invested in U.S. Treasuries, and any change in the use of the proceeds requires a vote of Edmond residents. During solid economic times, the fund has brought a good return on investment. However, in the last year – with the economy in a downturn – the fund earned only .4%. Unlike other city dollars which can be placed in investments earning a higher rate of return (as permitted by state law), this fund is restricted.
Bottom line, Edmond taxpayers expect their money to be invested soundly, and in a way to gain the most benefit for the community.
The October ballot asks citizens to permit this fund to be invested in other ways, consistent with state law and our own existing policies. It equalizes the methods and investments our city treasurer could consider for this fund, and would put it in line with other city funds.
One of the possibilities would be to loan ourselves a portion of these funds to jumpstart capital projects. In the case of the public safety center, it would permit us to “pay-as-we-go” on the project, saving us the fees of issuing bonds. By using a “pay-as-we-go” method, we would not increase the city’s bonded indebtedness, and would save at least $700,000.
Any money borrowed must be repaid on a timely basis.
Much like if you make a loan against your 401K, you pay yourself back the principal and the interest. In the case of the hospital sale trust fund, our city treasurer agrees that Edmond could get a higher rate of return (higher than .4% as was the case in 2010) but still borrow the money at a rate lower than what would be charged to repay bonds. And Edmond will be paying itself the interest – the interest will not be paid to an outside entity.
If you have questions, please contact your City Council representative. Regardless of your opinion, please educate yourself and remember to vote on October 11.