WILLMAR -- Investment funds at many Minnesota hospitals have been tanking along with the economy, but Rice Memorial Hospital's investments have mostly escaped a financial bloodbath.
The city-owned hospital's investments "actually look pretty good," Bill Fenske, the chief financial officer, told the hospital board's finance committee on Friday.
There have been some losses, to be sure. The hospital's investment fund stood at nearly $7.7 million at the end of 2007. By the end of March of this year, it had shrunk to $6 million.
But none of the funds are invested in stocks or corporate bonds, which has helped cushion Rice from the worst of the economy's effect.
In keeping with the city of Willmar's investment policy, Rice invests almost entirely in bank-issued and FDIC-insured certificates of deposit, Fenske said.
ADVERTISEMENT
"We're pretty much right in line with what the city does," he said.
One change Rice made last year was to switch its brokerage account from Wells Fargo to local broker JD Kreps.
Fenske said the securities obtained through Wells Fargo frequently contained call provisions, and as interest rates dropped, all these securities were called. Rice then had to reinvest at lower interest rates, which "really did hurt us," he said.
The hospital maintains a checking balance of around $3.7 million to cover day-to-day operating expenses. Any balances greater than this are turned over to longer-term investments, either at banks in Kandiyohi County or elsewhere, Fenske said.
