LGC offers insight into bylaws for proposed $1.25 billion community foundation from sale of NHRMC

LGC offers insight into bylaws for proposed $1.25 billion community foundation from sale of NHRMC
The Foundation, as proposed, would, more likely than not, be considered a local government and would therefore be subject to state laws regarding investment of the funds.

NEW HANOVER COUNTY, N.C. (WECT) - After review of the proposed partnership agreement between New Hanover Regional Medical Center (NHRMC) and Novant Health, the Local Government Commission (LGC) to the county found the wording of the bylaws determines the proceeds of the sale would still be subject to state laws about investments.

New Hanover County wants the bylaws to exempt the foundation from investment oversight so that the community foundation, which would potentially be established using the $1.25 billion proceeds from the hospital sale, could be operated as a non-profit.

Following a discussion between county staff and LGC staff Friday, LGC staff offered the following opinion:

The foundation—as proposed in the September 2 memo (see below) and “Use of Proceeds” document that was Exhibit D in the Letter of Intent—would possibly be considered an agency of New Hanover County and therefore subject to NCGS 159-30.

Because they found facts that would exempt the foundation from investment oversight and also found facts that would subject it to investment oversight, LGC staff concluded:

Our review of the entirety of the details in the documents provided leads us to the conclusion that the Foundation, as proposed, would, more likely than not, be considered a local government for purposes of NCGS 159-30.

To date, the NC Treasurer and Commission have not offered an opinion on this matter and the county has ten more days before the final vote by the County Commission to further review and refine the foundation’s bylaws to ensure the foundation will not operate as an agency of the county.

New Hanover County Commissioners discussed several items related to the creation of the foundation, tentatively named the New Hanover Community Endowment, INC, earlier this week.

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