BROOKINGS – The Brookings City Council gave approval for the Brookings Health System to move ahead with gathering information to set up an investment authority.
The council gave unanimous approval, 6-0. Councilor Holly Tilton Byrne was absent.
“Currently, all city funds are aggregated to include city, Brookings Municipal Utilities and Brookings Health System and invested by the city finance director,” according to an attachment to the agenda available on the city’s website.
The newly-created board, consisting of BHS board members and CEO Jason Merkley, would be authorized to exclusively invest BHS funds, added the attachment.
Merkley told the council Tuesday’s discussion was just to authorize the hospital to move forward. He expected to come back to the council in September to seek further approval.
Merkley explained rates and returns and said the hospital was thinking about finances 20-25 years down the road.
Councilor Dan Hansen asked about the process of investing the funds. Merkley said they would look into the request for proposal (RFP) process and getting an investment manager.
The purpose is to earn more interest from a higher rate, said City Manager Jeff Weldon.
State law places restrictions on the investment authority of public funds whereby such investment options are generally more conservative, according to the attachment. It’s set up that way for governments because of the perceived level of risk, Weldon said.
The investment board, a non-profit corporation, could make investments outside these state restrictions, according to the attachment. Weldon asked Merkley what the hospital will be able to do.
Mutual funds to stocks and bonds, Merkley answered. He wants to be able to do all the things other health systems do. Yes, they would take on risk, but they plan to wisely invest funds and get returns that others are getting, he said. He’s heard of one adviser working with a hospital who was able to get a roughly 15 percent return.
“If we can do other things to help operations and get better returns it will just help us in the long run,” Merkley said.
In other business:
• Mayor Keith Corbett accepted the “Excellence in Conservation” award for the city from the South Dakota Natural Resources Conservation Service. The award was presented to the City of Brookings for being a partner as a Conservation District in the Big Sioux River Watershed Project;
• Council approved a temporary malt license and wine license for Whiskey Creek for Aug. 4 at the SDSU Research Park for a pre-party event for the Alan Jackson concert;
• Council approved a preliminary plat for lots and blocks in the Arbor Hill Addition. The zoning district was changed from agricultural to include mostly single-family homes with some twin homes.
Contact Jodelle Greiner at [email protected]