Chesterton Tribune



Interest growth of County hospital sale investment slows in quarter

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Porter County Government continued to see returns coming in from its $138 million investment of the sale principal of the Porter Memorial Hospital in its third quarterly report, but they were not as impressive as the first two quarters.

From Oct. 1 to Dec. 31, the investments made a gain of $345,575, according to Amanda Black of Capital Cities LLC, the investment advisor chosen for the Porter County Government Nonprofit Charitable Foundation.

That is notably lower than the previous quarter’s earnings of $4,034,315, and $1,561,660 in the quarter before that.

The new increase did however push the Foundation .3 percent closer to its overall goal of earning 5 percent interest for one year of investment. The rate now is an average of 4.7 percent.

“That is strong for that nine-month period,” Black said at Tuesday’s Foundation meeting.

Market value of investment ended at $151,807,705 in the Foundation’s portfolio in the quarter ending Dec. 31.

The main reason for “modest return” had to do with complications in the fixed income market as the Federal Reserve raised its benchmark interest rate for the second time in three months, Black said. There is better opportunity however for the Foundation to earn more on cash returns.

The Foundation’s allocation is about 60 percent in the fixed income market and 40 percent in equity. U.S. equity returns are currently performing well and exceeding international returns.

Other factors affecting the investment market that Black mentioned include Britain’s withdrawal from the European Union and the U.S. election of President Donald Trump.

“There are some policies that could be favorable to markets and some that could be negative. Everything from lower regulation and lower taxes to immigration policies, those things could cause a wide range of effects on markets,” Black said.

Still, the Foundation continues to outpace its peer groups as it has used more flexible fixed income strategies, Black said, and the 2017 outlook is positive for the market as the economy keeps improving,

“It looks like we have a pretty strong showing for an uncertain, weird time,” said County Council member Dan Whitten, D-at large.

The County Council and Board of Commissioners formed the Foundation about two years ago when legislation was passed to allow Indiana counties to have more investment options on large assets. Use of interest earned has been advocated by some to bridge funding gaps in the County budget, while others have talked about distributing funds to nonprofits in the county.

Any interest earned past the rate of 5 percent is to be added to the investment amount.


After Black’s presentation the board undertook housekeeping duties, electing its officers for 2017.

Council President Mike Jessen, R-4th, and Whitten were named president and vice-president of the Foundation, respectively.

To do that, the Foundation voted unanimously on a change to the bylaws. The bylaws had stated that the president and vice-president had to be representatives of different boards. Council Attorney Harold Harper said there was talk days ago by Foundation members of having Whitten be vice-president so he prepared an amendment that changed the requirement that the two officers be from different boards and instead require they be of opposite political parties.

The change is so the leaders of the Foundation can be the most qualified members.

Council member Jeff Larson, R-at large, made the vice-chair nomination for Whitten as a sign of confidence in him being the most knowledgeable person. Whitten, who works as a bankruptcy attorney, had been president of the Foundation when it began.

‘One of the reasons we drafted this is as a whole, and I don’t mean to speak for everyone else, but for myself I would want our best foot forward. Aside from politics, the people that have the best ability to serve in those positions should serve in those positions,” Larson said.

Agreeing were Commissioner Jim Biggs, R-North, and Council member Karen Conover, R-3rd.

“I think it’s healthy that both parties be chair and vice chair,” Biggs said.

Whitten thanked his peers for their sentiments.

“I have certainly taken on a mantle of this Foundation since its inception with you guys. It’s been an interesting journey. We’ve come a long way and done some great things together with bipartisanship and cooperation. I will continue do the same,” he said.


The Foundation will meet next on June 27 for a review of the investment’s complete first year performance. It will also hire an independent firm to complete an audit as required by statute.

A request for proposals will go out a few weeks before the meeting and the Foundation will conduct interviews before the meeting.

County Auditor Vicki Urbanik said she and County Treasurer Michelle Clancy will have a report that compiles information for the audit. Urbanik said it will be “bare bones” since there has not been much movement of funds.



Posted 3/23/2017




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