Chesterton Tribune

 

 

Adams says Foundation would see 5 percent return on hospital money investment

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By JEFF SCHULTZ

The future may shine a little brighter for Porter County Government with an additional $5 million a year in its coffers.

Commissioner Nancy Adams, R-Center, announced at the end of Tuesday’s meeting that the Board of Commissioners had confirmed with the Porter County Community Foundation that it could provide the County with a guaranteed return of 5 percent on a $100 million investment of hospital sale principal money in an endowment fund.

Currently, the County is making less than 1 percent on the $159 million in proceeds from the sale of the county hospital.

“That is a phenomenal improvement,” Adams said.

The Commissioners last June proposed County officials look into the possibility of placing a portion of the hospital sale money into a protected endowment with the Community Foundation with the hopes of generating more interest revenue.

The matter was discussed a few times during the fall budget hearings, but was met with some skepticism by Council members due to the fact that the money would be locked away in the Foundation endowment and the County would not be able to access the principal if needed.

But Adams mentioned that the County could create its own endowment fund that could be set up in a way that officials could access the principal and still be able to have the benefit of the higher interest.

She said County Council President Dan Whitten, D-At Large, has asked for a joint meeting with the Commissioners in early February to discuss the options. No official date has been set.

Adams urged action be taken quickly, saying that “each day we wait, the County loses out on nearly $14,000 in revenues” or over $400,000 each month.

The $5 million from the endowment would boost the revenues needed to operate county government which has seen funding gaps widen each year due to the effect of the property tax caps. The Council received its budget estimate from the Department of Local Government Finance at the start of this year showing a deficit of nearly $2.8 million, although the Council’s budget specialist Vicki Urbanik believes it to be closer to $1.5 million according to her figures.

Adams said that with the endowment, the County could close that gap in a matter of months. Also, raising $5 million in interest from the endowment would ease the pressure to raise the County income tax, she said.

“We are anxious to meet with (the Council) for a thoughtful, thorough and decisive discussion on the implementation of this plan,” she said.

The County Council and the Commissioners must agree in order to re-invest the principal.

 

 

Posted 1/22/2014