Members of the
Porter County Council and Board of Commissioners are trying to reach a
consensus on how to invest the $157 million nest egg from the 2007 sale of
Porter Memorial Hospital, whether it should invest all or just some.
Both boards met
jointly on Wednesday to hear options stemming from new legislation that was
passed by the Indiana Legislature this year, which will take effect on July
1.
House Bill 1281,
authored by local State Rep. Ed Soliday, R-Valparaiso, gives the County the
ability to set up a charitable non-profit foundation made up of the
Commissioners and the Council or for the County Treasurer to work with a
registered investment advisor and establish a separate fund for all or some
of the capital asset to be deposited.
Any interest made
that exceeds 5 percent of the principal over a year will be added as part of
the principal, said Council attorney Scott McClure in his interpretation of
the law.
Money in the
special fund may be expended or transferred by the Council but the principal
can only be touched if unanimous approval is given by the Council and the
Commissioners, which mirrors the County’s local ordinance.
If the County opts
to establish the foundation, money can be invested in securities but the
maximum amount that can be invested in equity securities is 55 percent,
McClure said. That doesn’t mean though that the County is limited in how
much of the hospital sale money can be invested into the Foundation.
“One hundred
percent can go into option one or option two,” McClure said.
Council members,
particularly Jim Biggs, R-1st, and Sylvia Graham, D-at large, said they are
in favor of investing the entire principal. Biggs said the interest from the
Foundation investment would be needed to fill budget holes in the County’s
growing operational costs.
“I don’t see any
benefit to separate these moneys. They should be going to the same place at
the same time,” said Biggs.
Council President
Dan Whitten, D-at large, said he feels the principal should be protected at
all costs and hopes that as well as covering shortfalls for operations, the
investment can generate some funds for capital projects. The Council has
struggled to find any additional money in its coffers for projects such as a
new educational center at Sunset Hill Farm Park.
County Treasurer
Michelle Clancy said that $55 million of the principal is currently liquid
and there will be $91 million available at the end of the year while the
rest is tied up in other investments. Council member Mike Jessen, R-4th,
asked Clancy to provide the boards with a chart of where all the money from
the principal is currently and when it will be available.
McClure said he
believes it will not be until 2017 that the County will see any significant
return on investment. However, he said with what the County has in reserves,
it is likely to get through 2015 and 2016 without running into any major
financial problems.
Biggs said that if
the County finds itself in a bind before then, it could take out a short
term revenue bond to get through the tough period.
Council member
Jeremy Rivas, D-2nd asked the Commissioners present at the meeting -- Laura
Shurr Blaney, D-South, and Jeff Good, R-Center -- what their thoughts were
since both boards would need to sign off unanimously in order to move the
principal.
Blaney said the
Commissioners have been waiting to see what direction the Council wanted to
go.
Biggs said that the
Commissioners should help the Council manage the money.
More Council
members threw their support behind starting a foundation. Vice-President
Karen Conover, R-3rd, said she likes the idea of elected officials acting as
trustees of the foundation to keep local control.
The Council had
appointed members to an advisory committee in January in an attempt to start
a community foundation. Whitten said those committee members are still
available to advise the Council and Commissioners.
Because not
everyone was able to attend Wednesday’s meeting, -- Commissioner President
John Evans, R-North, and Council member Robert Poparad, D-at large were
absent -- no official vote was taken. The two boards set a meeting for July
2, one day after HB 1281 becomes law, to make a decision on what investment
option to pursue.
McClure will work
with Clancy and County Attorney Betty Knight on a request for proposals for
an investment advisor.
Animal Shelter
costs
Before adjourning,
Rivas asked the Commissioners to give a short update on where they are with
the plans for constructing a new animal shelter on Ind. 49, immediately
northwest of the Expo Center.
Blaney said the
plans are still developing due to a change in directors. Interim Director
Toni Bianchi intends to present a preliminary operations budget for the new
facility at the next regular meeting of the County Council.
Good said that
going from a 3,800 square foot facility to one that’s 10,000 needs to be
approached cautiously. Another topic to discuss would be what kind of
funding the local municipalities are willing to give to support the County
Shelter.
The Commissioners
approved a first reading on Tuesday to establish a fund to hold fees charged
for animal control services with contracts for the proposed fees going out
to all municipalities.
Conover, who works
for the City of Valparaiso, said she was alarmed by the yearly fee proposed
for the city, over $63,000.
Good and Biggs said
the County can discuss further what everyone’s fair share should be.