Chesterton Tribune

 

 

Council attempting to overcome critical budget challenges in 2014

Back To Front Page

By JEFF SCHULTZ

Porter County Council President Dan Whitten, D-At Large, laid out the task at hand for his colleagues Š find a way to get around the $5 million deficit they are heading toward this year.

And, while they are at it, try to come up with a plan to curtail the $8 million deficit facing them in 2015.

“We’re in the red,” Whitten said. “The days of hoarding funds under mattresses are over. We have to find a way to move forward.”

The Council learned from the state at the beginning of this year that the budget they approved for 2014 has a deficit of $2.8 million.

On top of that, Whitten said the County needs to come up with another $2.5 million in 2014 to catch up with employee health insurance costs.

For next year, the County needs to close a deficit at the Enhanced 911 Center and find another $2 million to cover declining revenues due to property tax caps.

What could be worse, Whitten said, is potentially an additional $2.25 million lost if Governor Mike Pence’s elimination of the business personal property tax is passed.

“That would be devastating for us,” he said.

Whitten pointed out the County used over $2 million from the hospital interest funds this year to pay subsidies to social services and E-911 which are usually paid out of the general fund budget. Around $7.9 million remains in the interest fund, he said, and that may be needed to keep the County’s operating fund solvent.

The same goes for county income tax funds, Whitten said, of which the Council has appropriated more than $2 million made available by the County Commissioners to aid E-911 and the jail’s new medical service contract.

“We’re still stuck with that hole we have to plug for next year,” said Whitten, who also spoke out against using TIF areas to divert property tax money from the general fund.

Council member Jim Biggs, R-1st, said he appreciates Whitten taking the initiative as he has frequently tried to draw attention to the County’s “bleak” financial circumstances.

“I applaud your homework, Dan. It’s long overdue,” said Biggs.

Resolution

The Council took a step in trying to ward off the governor’s tax cut by passing a resolution voicing its opposition.

Judging that an annual loss of $2.25 million would cripple the County’s ability to provide services to its citizens, and that the tax burden would shift from businesses to residents, the Council made three requests: that the governor reconsider his proposal to phase out the personal property tax, that the Indiana Assembly reject the tax cut, or that if a phase out is implemented then a sufficient method of replacing lost revenues be made with it.

Agreeing with the resolution were all seven members of the Council.

Council attorney Scott McClure said a Porter County would take a 13 percent hit on the whole, or $25 million total, including municipalities and the county.

Other public boards in the county, including the Duneland School Board, have passed similar resolutions.

Hospital sale endowment

One action the County “absolutely 100 percent has to do” to get control of its budgets is to take a portion of the $159 million Porter Memorial Hospital sale proceeds and place it into a charitable endowment fund, Whitten said.

The Commissioners said last week they received a proposal from the Porter County Community Foundation for a guaranteed annual return on investment of five percent, much higher than what County Government sees from its investments in U.S. Treasury bonds, and called upon the Council to schedule a joint meeting for discussion.

Getting all seven Council members and three Commissioners was not possible in February due to scheduling conflicts, but the Council did tentatively schedule the meeting for March 12 at 5 p.m. Unanimous support is needed from both boards in order to access or invest the sale proceeds under an internal rule agreed to by the Council and Commissioners and in Porter County Code.

Also attending that meeting will be the representatives of the County Community Foundation and the Hall Render law firm, which recently delivered a report on what investment options the County had in regards to hospital sale proceeds.

The report concludes that the County has three preferred options to gain a higher yield of interest Š creating a new foundation and transferring proceeds into that foundation to be controlled by the Council members; transferring the proceeds to the existing Porter County Community Foundation under contract agreement; or directly investing the funds in Indiana municipal securities.

Commissioner Nancy Adams, R-Center, last week said if $100 million is invested $5 million in returns from the endowment could go to the general fund, more than $400,000 each month.

“Our circumstances clearly dictate we do this, the sooner the better,” Biggs said.

Hospital tax abatement

Meanwhile, Council member Jeremy Rivas, D-2nd, inquired when the discussion of Porter Regional Hospital’s property tax abatement could take place, as it was originally planned to be discussed Tuesday.

McClure said he and the County Auditor’s attorney are still gathering information from the hospital. He expects the matter will be ready for discussion by the Council’s next regular meeting in February.

Whitten said he preferred to wait until all the information is at the Council’s disposal.

“I don’t want to hear a lot of ‘I don’t know’ and ‘we’re still working on that,’ I want direct, forward answers,” he said.

Council member Jim Polarek, R-4th, asked that the hospital report on how many new employees it has hired as it was a criteria of the ten-year abatement. McClure advised that the response to that question “won’t be simple as that” as the answer has “many layers.”

More ways to save

Whitten said he is hopeful the County will find solutions to its current budget hurdles, but it may require some difficult cuts from within.

Generating more revenue and continuing to make leaner budgets are the two most pressing matters the Council is facing, Whitten said. That may mean cuts to personnel in some departments, he added.

“They will need to cut or we will do the cutting for them,” he said.

Polarek said the Council during the recent budget session cut wherever they could in the budgets and the only place left to cut from would be personnel.

County Council member Karen Conover, R-3rd, said a letter should be sent out asking department heads to only use whatever is essential in their budget.

“Just because you have your funds appropriated doesn’t mean you should use them,” she said.

Whitten also called on the Commissioners to attend Council meetings so they can be part of the budget discussions.

 

 

Posted 1/29/2014