You never quite know what next year’s county budgets will look like until
the final minute. The Porter County Council closed the books this budget
season with nine new jailers hired, $1,000 across-the-board raises and a
deficit of more than $500,000 for 2014.
In a final vote Tuesday, the Council voted 5-2 approving a general fund
budget of $38,538,570. The two members voting against were Jim Biggs, R-1st,
and Jim Polarek, R-4th.
According to County Auditor Bob Wichlinski, the “conservative estimate” for
revenue the County is expected to receive is in the neighborhood of $38
million, meaning the County Council may face a deficit next year.
Going into the meeting, the budget sat in the red by $1.5 million, not
including raises for employees or salaries for the new hires at the Porter
The Board of Commissioners approached the Council with suggestions based on
a proposal made last week by Council members Karen Conover, R-3rd, Sylvia
Graham, D-At Large, and President Bob Poparad, D-At Large, along with
Commissioner Laura Blaney, D-South, that aimed to use leftover county
economic development tax funds and included $1,500 employee pay raises.
Commissioner President John Evans, R-North, said he and his board were also
willing to allow the Council members to slash their health insurance line
from $7 million to $4.5 million to give them “the number they need to
balance,” but it is likely the Commissioners will come back in the middle of
next year to ask for more insurance funding.
The Commissioners already plan to ask the Council at their next meeting for
$3 million in additionals to cover the shortfall in the insurance for this
year, Evans said.
An initial motion made by Conover to approve salary increases of $1,500 for
all General Fund employees, excluding elected officials, was rejected by a
2-5 vote. Dissenting were Poparad, Biggs, Polarek and Council members Jeremy
Rivas, D-2nd, and Dan Whitten, D-At Large. Favoring the motion were Council
members Graham and Conover.
Biggs said he is against approving the budget with raises because it would
mean taking on additional recurring costs while there is a deficit,
especially since the Council members voluntarily cut their own salaries by
$1,000 to help close the funding gap. “I think it insults the process,” he
Biggs said deepening the debt by shelling out raises will add pressure to
cut personnel or increase taxes.
Evans said employees deserve the extra pay since their out of pocket costs
for health insurance will increase next year.
Whitten said he is a proponent of giving employees salary hikes but he
wished to hear all options the Council has to balance the budget.
Invest for the future
Meanwhile, the Commissioners laid out suggestions of ways the County could
invest and grow its existing revenues, particularly the interest accumulated
from the sale of the Porter Memorial county hospital.
Blaney said that from discussions with the Porter County Community
Foundation, putting part of the $159 million of the hospital sale proceeds
into an endowment fund will provide an interest rate of at least five
percent, meaning if the County puts in $100 million it could generate $5
million annually, which is more than what the County is receiving now,
roughly $1 million per year.
“Most importantly, moving the money into the endowment the clock starts
ticking right away and we start making some money,” Blaney said.
However, she said that locking the money into an endowment fund will prevent
County officials from being able to touch it. She also spoke of a small
percentage that would be paid back to the Foundation for managing the money.
Currently, the County has the power to spend the sale principal with
unanimous votes from both the Council and the Commissioners.
Graham said she likes the idea and said “you have to invest money in order
to make money.”
“It will be there for Porter County, 50 years from now, 100 years from now,”
Whitten said he’s cautious about locking the money up and said he thinks
more information is needed from the Foundation.
“We are talking about a lot of money and we are having this sprung on us,”
he said. “I just don’t want to make the wrong decision. We should look at
all options and determine what’s best for the taxpayer.”
Biggs echoed Whitten’s comments saying the Council needs to be “crystal
clear” on what placing the money into an endowment would mean and what will
“I’m hearing it’s irrevocable. That makes me nervous,” he said.
Poparad said he will see about scheduling a meeting next week to have
Foundation Director Barb Young answer questions.
Polarek said he would like to hear from the Indiana Attorney General’s
office if the County can legally proceed with this. Evans said his board has
already checked with a law firm in Indianapolis who affirmed they would have
the statutory ability.
Evans also talked about creating a “bond bank” with the hospital proceeds to
loan money to other governments in the County.
“We could have had a lot more money than we do now. We need to get the
investments going,” Evans said.
Commissioner Nancy Adams, R-Center, said the Commissioners’ move to create a
stormwater management board will also ease the funding crisis by initiating
an equitable fee for drainage projects countywide, similar to what cities
and towns have already. The new board will be able to bond for projects and
free up more funds that could be used for the County’s general fund.
The discussion involved some heated exchanges between the Council and
Commissioners when a few members talked about using what is sitting
unallocated in the Commissioners’ CEDIT funds, which is about $7 million
according to Wichlinski, for funding the operations of County government in
2014 and beyond.
“I think we are going to need it all,” Whitten said. “We are going to have
to put all the cards on the table and see what comes of it.”
The Commissioners offered the Council $2 million in CEDIT over the next
three years for medical costs at the jail and for Enhanced 911, but have
held on to other funds for various projects.
Other members such as Graham and Poparad also surmised that further CEDIT
funds will need to be considered now that the County will come close to
hitting the property tax caps.
Biggs criticized the Commissioners’ management of the funds and Evans fired
back saying the Indiana Statehouse voted 97-0 this year affirming that the
board of commissioners is the body which develops CEDIT projects and it is
the Council which appropriates the money.
“It’s a system of checks and balances,” Evans said.
Conover defended the Commissioners saying they have been “conservative,”
which is why there is a large amount of unallocated CEDIT.
Rivas said the County should look for ways they can ease CEDIT spending such
as leasing the Memorial Opera House. He was told however by the
Commissioners that improvements to the facility have been paid out of CCD
Whitten acknowledged that even though the County is in need of more revenue,
the Commissioners have a duty to provide services and protect the quality of
Factoring out the $2.5 million for insurance, the Council’s budget and
financial specialist Vicki Urbanik said the budget totaled $37.6 million.
Conover tried another motion adding the amount for the nine jailers and
$1,000 in raises for all current county employees, not elected officials,
which prevailed 5-2 at a budget figure of $38.5 million.
Approving were Rivas, Poparad, Graham, Whitten and Conover and dissenting
were Biggs and Polarek.
The Council unanimously approved all non-general budgets except for CEDIT
funds where Biggs and Polarek dissented again.
Among the budgets approved 7-0 was use of $2.02 million in hospital interest
money. The breakdown includes $1 million for E-911, $50,000 for Opportunity
Enterprises, $600,000 for Family and Youth Services Bureau, and $370,000 for
the Council on Aging and Community Services.
To get its maximum levy, the Council had moved $700,000 of the subsidy to
Opportunity Enterprises into the general fund budget.
Opening date for third pod
Later during the Council’s regular meeting, following the final reading,
Sheriff David Lain thanked the Council for approving the new jailers for the
jails’ third pod and said he anticipates the pod will be ready by Jan 1.
This will ease the overcrowding conditions at PCJ which the Council had been
told by several agencies put the County at risk for lawsuits.
“The addition of the jailers will go a long way and protect the County from
unspeakable chaos,” Lain told the Council.