Chesterton Tribune

 

 

Council to tap CEDIT for operating funds as county faces big deficit

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By JEFF SCHULTZ

The Porter County Council on Thursday got a clearer picture of what it’s up against in this budget season Š finding a way to balance a $46 million estimated general fund with an incoming revenue source of roughly $38 million.

Council members determined the solution likely lies in drawing from other sources of revenue than the general fund property tax levy, such as the county economic development income tax (CEDIT) and possibly the interest generated from the proceeds of the sale of Porter Hospital.

During a joint discussion with all three County Commissioners to tackle the issues before going into budget second readings next week, Council member Dan Whitten, D-At Large, said that the funding challenges the county is dealing with need to be looked at not only for what 2014 will bring, but what it will mean for 2015 and 2016 as well.

“It’s shortsighted if we don’t talk a multi-year outlook on these things,” said Whitten.

The “things” Whitten speaks of involve increased staffing for the county jail, adequately funding the self-insured county employee health plan, balancing E-911, and addressing drainage issues around the county.

As the property tax levy for the general fund is predicted to continue to decline, Whitten said he thinks the Council will need to ask the Commissioners for use of CEDIT funds to keep operations going in 2014.

The Commissioners at their Sept. 3 meeting said they will offer the Council $2 million from CEDIT to go toward jail medical services and E-911 budgets, but Whitten said the Council may have to ask for more than that.

“I think we are going to need it all to operate county government,” Whitten said.

According to the Council’s budget and financial specialist Vicki Urbanik, the County will receive $320,288 more in CEDIT next year than in 2013.

Commissioner President John Evans, R-North, said he is willing to allow use of CEDIT funds for multiple years to cover the jail funding but the Commissioners rely on CEDIT funding to handle their own projects.

Officials are mulling items that could be shifted out of the general fund to be paid by other means, like the subsidies to the county service organizations including Porter-Starke Services and the Council on Aging, which were funded with hospital interest dollars this year.

Council member Jim Polerak, R-4th, questioned the approach saying it would be difficult to move those items back into the general fund.

More talk pointed to the opportunity to create a three-year plan using reserve funds to fund operations, but at least one Council member, Jim Biggs, R-1st, objected to the notion of relying on reserve funds for recurring costs since the reserve funds might be depleted after the three years.

“It sets a dangerous precedent,” he said.

Biggs said that if the Council would get more use of CEDIT money, the Council should see that Commissioners be given the funding they need to do their jobs.

As for using the $10 million available in hospital interest funds to keep some budgets running in the black, County Auditor Bob Wichlinski said the funds did not even generate $1 million this year due to a minimal interest rate.

The Commissioners a few months ago floated the idea of putting some or all of the $160 million in hospital sale proceeds into an endowment fund that would likely give the county a higher return on investment.

Evans made a push Thursday to pursue the idea of an investment that would guarantee a better return and be available if the county needed funds in an emergency situation.

Evans also suggested considering use of the .25 of CEDIT currently used for homestead credits, switching it for the use by county government since the homestead amounts will inevitably hit the tax caps.

Urbanik said she believes that to do so would require a change in law but, if made possible, the County would stand to collect an additional $3.53 million in CEDIT each year.

Insurance plans

Meanwhile, Mike Anton of Anton Insurance ran some calculations on the projected costs for health coverage next year and said that the County may see a price tag of $9.1 million.

Insurance costs are expected to rise by 5 percent in 2014, but the number can be reduced by enrolling more employees into the wellness programs offered by Care Express, owned by Porter Regional Hospital. Anton said 55 percent of employees currently participate in at least one wellness program.

The County could also see some savings if more employees decided to enroll in the high-deductible health savings account option.

The Council passed a budget last year that allotted $5.9 million for employee insurance, which is expected to be depleted by year’s end. The Commissioners will be asking the Council for an additional appropriation of $2 million but it is unknown where the money could be drawn from as Wichlinski pointed out there is no extra in the general fund.

Jail staffing

Next, Porter County Sheriff Dave Lain discussed some of the issues at the jail and said he still intends to ask the Council’s approval to hire more jail officers to open the third pod.

Lain said a study done by the National Institute of Corrections recommends hiring a minimum of 16 officers, but he is asking for just nine. The third pod would open up 109 beds to accommodate the number of inmates, which fluctuates each week, Lain said, with over 470 this past weekend.

The cost for each jailer would be about $50,000 per year.

Evans said the Commissioners recently funded an effort by the County Corrections Board that would take roughly 30 lower-level offenders out of prison and put them in monitoring programs offered through Porter County PACT. He also advocated work release programs.

Evans said there is enough money in the jail refinance bond to open the physical aspects of the third pod.

Both the Sheriff’s budgets including the jail and the Commissioner budgets have scheduled second readings for their budgets on Tuesday night by the Council.

Funding gap challenge

Urbanik said she anticipates the County’s levy to be around $30 million this year since the spring tax draws came to about $15 million and there is a second installment in the fall. She said the county is expected to receive $6 million to $8 million of revenue from miscellaneous sources such as the excise tax.

Wichlinski said a $38 million budget will be equal to the same budget as passed for 2013 but Evans was quick to mention that did not include the $2 million extra needed for health funding.

Biggs said cuts will likely need to come from operations but when asked by Council President Bob Poparad, D-At Large, where the cuts should be made, Biggs did not make any suggestions.

Council member Jeremy Rivas, D-2nd, asked of the Commissioners what they see as a solution. Evans and fellow Commissioner Laura Shurr Blaney, D-South, said they think they can increase the income tax revenue by implementing the County Jobs Cabinet plan which has been sitting on shelf since it was proposed late last year.

Council member Karen Conover, R-3rd, gave her endorsement of getting the proposal underway.

“That is key to growing our tax base,” she said.

Evans said he would like to hold a meeting to revive the jobs plan and further discuss an endowment for the hospital sale money.

 

 

Posted 9/13/2013