By VICKI URBANIK

Saying that his bill has been misunderstood and unfairly attacked, State Rep. Ed Soliday, R-Valparaiso, said his proposal to transfer hospital sale proceeds to a new not-for-profit foundation would still keep essentially all control of the money in the hands of the Porter County Council.

Soliday on Friday afternoon outlined his intentions with his bill, H.B. 1486, in response to what appears to be strong opposition to the measure, at least from office holders who now have authority over the sale of Porter Memorial Hospital.

The bill would apply to any county that sells a county hospital after December of 2006. The bill calls for donating the hospital sale proceeds to a new charitable community foundation, with the county’s fiscal body serving as the foundation’s board of trustees. In its current form, the bill would set up five citizen advisory groups to come up with spending plans for five different uses of the earnings. The principal could not be touched unless through a voter referendum.

The bill states that the foundation would retain “all rights to the donation, including investment powers” and that it would agree to hold the donation as a permanent endowment. The bill also states that money from the new foundation must be distributed “in accordance with an expenditure plan developed by a citizens advisory group” and that “the county executive” is to appoint the citizen groups. The bill states that none of the hospital money could be placed in the county’s general fund, except under certain circumstances, such as the foundation losing its charitable status.

Those provisions have been interpreted by some to mean that the spending decisions for the money would come from the citizens groups appointed by the new county executive, who, under several other pending bills, would be a new elected official to replace the three county commissioners in each county.

Soliday said that interpretation is wrong.

First, he said, the text of the bill is in error when it states that the “county executive” would make the committee appointments. He said it was his intention that the county council would make those appointments. 

Soliday said that there is no consensus in the Indiana Legislature about the elimination of county commissioners, and he expressed doubts that those measures will pass. In any event, he said he will seek to change the appointment language. 

As for the advisory groups having control over the money, Soliday said that, too, is being misinterpreted. He said his intent is that the county council would have the final say. If, for example, one of the advisory groups suggested that a certain amount of the funds go toward mental health treatment, the council could refuse part or all of the recommendation. “They don’t have to give them the money,” he said.

But the council would be restricted from using the hospital proceeds for operating expenses. If the council were to refuse an advisory group recommendation, it could not then turn around and use the money for a completely different use. “It’s a checks and balance,” he said.

Soliday expressed frustration with the criticism directed at the bill so far. He said critics need to realize the legislative process and the fact that bills “can change a million times” throughout the session. He also said that critics didn’t bother to talk with him about their concerns but instead went to the media to complain. He also said “absolute lies” have been told about the bill, citing an e-mail he received erroneously accusing him of wanting to turn the hospital money over to certain business leaders in the county. “The dialogue could be civil,” he said.

Soliday also said that he isn’t concerned that the current commissioners or council would misuse the hospital proceeds, but that he is taking the long view in his effort to try to preserve the hospital principal. The commissioners and council have already agreed not to touch the principal even after the initially restricted five-year period after the hospital sale, but Soliday said a majority vote somewhere down the road could easily dismantle that agreement.

Another part of the bill would allow the hospital proceeds to be invested in mutual funds and pooled funds. Soliday said that in order to access greater yield markets, a foundation must be formed, since government units are very restricted in where they can invest public funds. 

Soliday said he’s open to amending the bill as warranted. For example, the five suggested expenditure areas -- hospital care for the indigent, adult education, property tax relief, economic development and behavioral health care for the indigent -- could be changed. “I don’t know if these five buckets are the right ones,” he said. “I’m willing to talk about making changes like that,” he said.

But one of the current council members doesn’t see the need for the bill in the first place.

Council member Dan Whitten, D-at large, said the county council has been extremely conservative with the hospital proceeds money, and doesn’t need state legislation to tell the county how to handle the money. “This is arrogance at its best,” Whitten said.

 Whitten said after the hospital was sold, a number of groups and individuals sought a share of the money. The council has resisted the efforts to start the spending, noting that “once you tap the can open, it’s open.”

 “We’ve shown nothing but responsibility,” he said. He said he takes the view that the money belongs to the taxpayers and the county shouldn’t rush into giving it out to “everybody who comes to the table.”

“We don’t need the tax and spend mentality,” he said.

The bill has been referred to the House Committee on Local Government. 

No hearing date has been set as of this morning.

Posted 1/19/2009