Chesterton Tribune

 

 

County mulls investment options for $157 million hospital sale principle

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By JEFF SCHULTZ

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.

 

Posted 6/5/2015

 
 
 
 

 

 

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