WILLMAR -- An investment policy for the Cushman Rice trust fund was approved 4-1 Wednesday by the Rice Memorial Hospital board of directors.
The trust fund helps pay hospital bills for eligible needy patients who have no insurance and don't qualify for any other kind of assistance.
Dr. Robert Kruger was the lone board member who voted against adopting the policy; Doug Allen, Steve Cederstrom, John Lindstrom and board president Verna Kelly voted in favor.
Kruger said he'd like to see a higher yield for the fund.
The fund's annual report for 2005 listed a return of 2.7 percent on its portfolio; the benchmark was 3.7 percent. Over the past 10 years, the portfolio has netted a return of 7.9 percent; the 10-year benchmark is 8.6 percent.
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The investment policy adopted Wednesday lays out the strategy for how the city-owned hospital wants the Rice trust fund to grow and how the fund's assets should be allocated.
"The objective is to earn more than we're paying out so we can keep up with inflation," said Carol Hruby, assistant vice president of Bremer Investment Management and Trust in Marshall, which administers the fund.
The trust fund was established in the 1930s in the will of Cushman Rice, the turn-of-the-century soldier of fortune from Willmar whose family money was bequeathed to found Rice Memorial Hospital.
Its beginning market value on Jan. 1, 2005, was $2,247,820. It ended the year at $2,254,359. Net earnings on the account last year were $66,635.
Hruby and Bremer Investment senior vice president Janet Vandendriessche reported Wednesday that the fund's performance last year was hurt by current interest rates and a downturn in the stock market.
There are signs that this will improve, Vandendriessche said.
"We're looking for a better year than 2005."
According to the annual report, the Rice trust fund gave grants to 53 people in 2005, totaling $52,481 toward paying these individuals' bills for care at Rice Memorial Hospital.
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"Currently we're getting plenty of applications. The amount of people applying exceeds the money available, so we're spending all the money," Hruby said.
Grant recipients must meet certain financial qualifications. In most cases they can't earn more than 150 percent of the federal poverty guideline.
The trust fund paid $16,800 last year for administrative expenses and fees, which include retaining an independent contractor who reviews each grant application to ensure the paperwork is complete and the applicant qualifies for the program.
Although it's an expense, it has helped make the grant decision process more independent from Rice Hospital, said Marilee Vogel, interim chief financial officer and associate administrator for compliance and financial resources.
"It's nice to have that outside look," she said.
It also helps reduce the paperwork burden on the hospital's business staff, she said.
For most of its 80-year history, the trust fund has been under the oversight of the city of Willmar.
This is the second year that the city hospital's board of directors has been in charge of monitoring and determining strategy for the fund.
