Chesterton Tribune

 
 

Whitten advises against Porter County lending funds to Lake County

Back to Front Page
 

 

 
 

 

By JEFF SCHULTZ

At a much less rowdy meeting than last week’s final 2013 budget reading, the Porter County Council approved all requests put before them at its regular monthly meeting on Tuesday, including a $20,000 transfer to overtime for workers in the Voters Registration office and grant funding for paving sections of the Calumet trail, with nary a split vote.

Council President Dan Whitten, D-at large, did use the time however to speak out against last week’s announcement by County Treasurer Mike Bucko he was considering the possibility of loaning $15.5 million in County funds to Lake County.

“I’m not in favor of that,” said Whitten. “It’s not our job to shore up (Lake County’s) budget.”

Addressing numerous concerns expressed over the past week by the public, Whitten clarified it is not the decision of the County Council how the County should invest their money, that responsibility is entrusted solely to the county treasurer, the chief investment officer. Whitten did however voice his concern about Lake County’s ability to pay back the deficit bond and said he wished he could have discussed the matter in more detail with Bucko at the meeting which he was unable to attend.

Bucko last week said he has already loaned funds, or what is referred to as “buying municipal debt,” to the City of Hammond and the Crown Point, Lake Central and Hammond school districts with interest rates more than three times higher than what banks offer.

Bucko said he will continue to discuss rates with Lake County to determine if Porter County would profit from the loans, receiving a better return on its investment. If not, he would drop the consideration, he said.

The Lake County Council voted 5-2 last week to sell $15.5 million in bonds and for its board of commissioners to seek proposals from banks and Porter County.

Whitten said the fact that vote was split indicates there is some concern on whether or not the county will have the means of paying back the bonds.

Other evidence Whitten gave was that the Cities of East Chicago and Gary have been “woefully behind” in payments to the Northwest Indiana Regional Development Authority.

“That gives me a great deal of pause,” he said.

However, Lake County officials earlier this week said they are confident Lake County can handle its debt, even though the Department of Local Government Finance says the county has an outstanding debt obligation of more than $100 million. The Lake County Council is expected to decide early next month whether it will borrow from Porter County or from banks.

Bucko said in order for a unit to be loaned money, the state requires it must first have the assets in place to guarantee the debt will be paid and must not have defaulted on a loan in the last 20 years.

Council member Sylvia Graham, D-at large, shares in the skepticism and said that although it could be an opportunity for Porter County to get a better return, money should not be lent to a county that does not have the ability to balance its budget.

Fellow Council member Jim Biggs, R-1st, reiterated that both the County Commissioners and the Council have agreed that the hospital sale principal, which it has been speculated are the funds that would be lent out, should remain untouched.

Bucko told the Tribune this morning that no further discussions with Lake County officials have been held since last week and no money has been loaned.

“I haven’t heard from any of the taxing units yet on all of this. I would need to see the (interest) rates in reference to the bond before I do anything,” he said. It may not be until next year that anything is decided, he said, and he said he’d be willing to talk with Whitten or any other County officials.

The state now allows for counties to invest at most 25 percent of their portfolio in terms of up to five years to collect more revenue.

Also on Wednesday, County Commissioner John Evans, R-North, said that although the Treasurer is tasked with finding prudent ways to earn the most on investments with safeguards in place, “perception is everything” and since there is discomfort among county residents, buying Lake County’s debt may not be the way to go.

Meanwhile at the Council meeting, Whitten encouraged positive discussion between the Council and the Commissioners to figure out a long term funding strategy using county income tax money, which is essential to shore up the General Fund and projects such as opening up the Jail’s third pod.

“We’ve got to fund all these things. At the end of the day, we’re going to get it done,” he said.

 

 

 

 

 

 

 

Posted 10/24/2012