NEW ALBANY — The question where to invest the proceeds from the sale of Floyd Memorial Hospital and Health Services to Baptist Health was answered Tuesday at a special meeting between the Floyd County Council and Commissioners. But a much larger question, how much of that money should be spent each year and immediately from the $75 million the county will receive Sept. 30, still needs an answer.
The county's two governing bodies unanimously decided to put the $75 million, or most of it, that the county will receive at closing into a community foundation. The main reason was to keep the money protected from outside interests or lawsuits.
An ordinance will be drafted and signed at another special meeting, at 4 p.m. on July 28. At that time request for proposals will be issued allowing community foundations — including the Community Foundation of Southern Indiana — to make bids for the $75 million.
Council members and the three commissioners have three options on what to do with the money. They can put it into a community foundation, where the principal will be protected, they can create a county foundation, or they can put the money into a trust until they decide what to do with it. However, the third option would not protect the money from lawsuits or spend-happy politicians.
"We are selling a huge asset of the county," said Commissioner Mark Seabrook. "I don't want us down the road to not have any money left and no hospital. Who knows what 20 years will bring."
Keeping the principal secured was the consensus of the group.
"I don't like that," Councilman Matt Oakley said about having the money in a trust where it could be easily accessed. "It could be used for trade for this project, or that special project. I don't want the principal to be subject to the whims of a board."
Council President Brad Striegel agreed.
"None of the options are ideal," he said. "But if we are going to err, we can err on the side of taxpayers."
Now that the two boards have agreed to invest the money into a community foundation, the real debate will begin next week. How much of the money will be spent each year from the interest and from the estimated $5.6 million the county will receive, beginning in January, for 10 years to complete the sale?
Most agreed that $10 million would likely be needed for infrastructure needs throughout the county.
Commissioner Steve Bush handed out his plan to the board prior to the meeting. He would like to spend $10 million up front, and put the rest of the $65 million into a community foundation. The money would go toward sheriff and road department vehicles, jail renovations and paving. He said he would like to see the majority used on infrastructure needs that have been neglected.
Interest from the investment will likely be built into the annual county budget. But there is no guarantee how much that will be each year.
Seabrook said he would like to see some of the county's debt paid off which would free up money in the county's other budgets.
The members will come up with their own plans on how much should be spent immediately and each year. A consensus has to made by Sept. 28, two days before closing.
The two bodies, along with the Floyd Memorial Board of Trustees, voted June 28 to sell the hospital to Baptist Health for $150 million. The county receives $75 million at closing and an estimated $5.6 million for 10 years.
Like Bush, Commissioner Chuck Freiberger said the county has "big infrastructure problems" that need to be fixed.
Councilman Jim Wathen said he would like to see up to $14 million spent to improve infrastructure and fix other problems to make Floyd County more desirable for businesses. He said the county will continue to have yearly deficit issues unless more income is generated.