Funds leftover from hospital sale
WORTHINGTON -- Of the money received for the sale of the hospital in early 2008, the city of Worthington has nearly $10 million remaining.
"Somebody mentioned it earlier about what we would consider an asset that some of these funds have been expended on," Worthington Mayor Alan Oberloh said at Friday morning's special meeting. "I think we've only talked about a few of the bigger picture things that people can touch and feel, like the fire hall and aquatics center. When you look at the ARMER (Allied Radio Matrix for Emergency Response) System, The fuel system, the tennis courts, the assistance we did with the hockey association, the college retention pond -- those are all things, had we not sold the hospital, we would have not been able to do without raising our levy."
The principal sale amount from Sanford was $21 million. The number included $12 million upfront with the rest coming in installments -- plus interest.
That total amount, plus other interest earned to date, brought the total amount to $22,515,000 in the Worthington Regional Hospital Legacy fund.
In a Worthington Regional Hospital impact fund, a total of $5,436,000 was deposited.
"Legacy funds are intended to be endowment-type funds," City Administrator Craig Clark said. "They would be long-term capital improvements where we were replacing one capital asset in the hospital and transferring it to another. The impact funds were ones that we knew there were current needs in the community, and we wanted to go out and make an impact."
Of the legacy funds, $12,615,010 has been spent, leaving a remaining balance of $9,899,990.
In the impact funds, $3,892,131 has been spent and committed, leaving a total of $1,543,869.
"The legacy also was the $21 million the hospital sold for, the impact was expected to be in the $2 or $2.5 million and came in closer to five," council member Mike Woll said. "But that was cash on hand, accounts receivable. So it was part of the sale, but it wasn't part of the set-on price. We kind of viewed it as dollars we could make an immediate impact with."
Of the total spent from the legacy funds, numerous projects have been funded.
The bigger amounts have gone to the aquatic center ($4.5 million), the fire hall ($4.5 million) and the senior center ($1 million). Other expenditures include a commercial land pay-off to Worthington Public Utilities of $1 million. Future commitments include $1.4 million to the project on U.S. 59 North.
"When you go to the bathroom and the slang for that is the money down your leg, I don't think we have," Oberloh said. "I think we have done some great things for this community with the sale of the hospital. I think we need to do a better job of getting the message out. We're criticized on numerous occasions of just spending it."
From the impact fund, money has been spent on things like Worthington Rediscover ($300,000), parks projects ($250,000), tennis courts ($235,000) and two separate levy equalizations. Money also went to the hockey association, airport fuel system and the CAD/ARMER system.
"I think the only real thing we have that you would say that is money that has been spent and we won't recoup is the 2009-'10 levy equalization," council member Ron Wood said.
In 2009, the city used $173,795 and in 2010, $264,390 was used to offset being forced to raise taxes or cut spending. The dollars were spent in large part to offset local government aid funds promised but not received from the state.
"I told others here that's the only place I've really had heartburn of all the things," Oberloh said. "I don't think we should have done it, but we did it to be frugal because at the late hours of the year we had no choice."
The council talked about what to do with some of the other money. Council member Ron Wood talked about investing some of the money -- something he said should have been done before.
"There should have been X amount of dollars that we set aside a long time ago that was to be drawing interest," Wood said. "It was a couple million dollars that we said we were going to set aside as an endowment.
"Right now, by not putting the $2 million in, we've probably lost $200,000 or $300,000," Wood said. "We've lost so much money by being so ultra-conservative, now we get close to the edge, I think it's going to be another year before the rates are going to climb, at least from what the Feds said is their goal... On our $10 million, we're probably not making anything."
There was talk about future plans with the money, including working on improving Lake Okabena.
"Until there is a unified front, there is no reason for us to spend money," Oberloh said. "They are going to spend some dollars to get a professional study down on what the issues are on the lake and what's causing some of the problems."
Another item brought up was funding a sports complex. Oberloh spoke against using hospital sale funds for that project.
"Go back to the legislature as unified community, we have the school behind us and we have the community behind us, and we ask for local option sales tax for a sports complex," Oberloh said. "I am not the least bit interested in spending down these dollars at this point. Would I agree for $50,000 or $100,000 out of this to be used for a study? Yeah, I probably would. This is one of those deals I don't think the sales of the hospital should do that. It's an amenity, and I think everybody should pay for it."