Chesterton Tribune

Abatement comes with conditions

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Here’s a look at the three conditions that the Porter County Council imposed Thursday as part of the 10-year tax abatement awarded to Porter Health System’s new hospital at U.S. 6 and Ind. 49.

Ambulance Service: Pending final contract negotiations, Porter Health System will agree to continue its countywide ambulance service after its current contract with the county expires in 2011.

The county pays the hospital an annual subsidy of $500,000 for running the service, which historically has been a money-loser. That subsidy used to be twice as much, but the hospital agreed to a funding cut after the Bethlehem Steel bankruptcy in 2001 caused massive funding shortfalls for the county and other local government. Before the hospital took over the ambulance service, the county ran its own EMS department that cost even more.

It remains to be seen just how much the county will pay Porter Health System under the new contract.

North Porter County Commissioner John Evans last week called on the hospital to continue the EMS service under the existing $500,000 subsidy. But on Thursday, Porter CEO Jonathan Nalli said an unforeseen event occurred after the current contract was put in place: The Valparaiso Fire Department began its own EMS service, which has compounded the hospital’s ambulance losses.

Nalli said Porter Hospital will commit to continue the ambulance service, but with the understanding that the subsidy should increase. He also requested that negotiations begin over that contract amount as soon as possible; a committee formed earlier this year that includes County Council member Laura Blaney, D-at large, is to begin those talks.

Abatement Fee: The county will charge Porter Hospital an annual tax abatement fee, as allowed by Indiana law, over the 10-year abatement period.

The fee, to be calculated annually by the county auditor, will be based on the difference between what the hospital will pay in property taxes with what it would have paid without the abatement. The rate of the fee was set at 10 percent, lower than the state maximum of 15 percent.

The fee is projected to generate a total of $800,000 over the life of the abatement, said hospital attorney James Crawford.

The abatement fee was proposed by County Council member Michael Bucko, D-4th, who called for the revenue to go toward the Porter County Advisory Redevelopment Commission, of which he is a member.

Bucko said the revenues should be used for improvements along the U.S. 6 corridor, directly enhancing the nearby businesses and establishing the new hospital as a “clear partner” with its Liberty Township neighbors. “I think there is a place for it, and it’s very appropriate,” said Bucko, who originally proposed a 15 percent fee. Crawford counterproposed a 10 percent fee, which the council accepted.

Worker Protection: A Project Labor Agreement (PLA) will also be required as part of the abatement.

PLAs, also known as pre-hire collective bargaining agreements, spell out the conditions between the contractor and the building trades.

Bucko proposed the PLA condition. He and other council members indicated that they want to see favorable terms for the labor workers building the hospital. But Crawford noted that PLAs can be mutually beneficial; for example, some PLAs include no-strike clauses.

Nalli said Porter hospital supports a PLA, but that it actually has little say in the matter. Such agreements, he said, are negotiated between the project manager and the building trades.

But, speaking from the floor, a representative of the Northwest Indiana Building Trades Association said it’s not uncommon for PLAs to be included as a condition of tax abatements, since the business receiving the abatement gives marching orders to its construction manager. The council agreed, and included the PLA as an abatement condition.



Posted 9/11/2009