Chesterton Tribune

 

 

Council and Commissioners to discuss use of hospital sale funds on Wednesday

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The big question of what to do with the $159 million in sale proceeds from the sale of Porter hospital will be discussed at a joint meeting of the Porter County Council and the County Commissioners, at 5 p.m. Wednesday in the Commissioners’ Chambers, 205, at the County Administration Center, 155 Indiana Ave. in Valparaiso.

The Commissioners announced in January that the Porter County Community Foundation can guarantee a return of 5 percent on the investment of those funds in an endowment. With $100 million of proceeds, the County could net $5 million of additional revenue per year, Commissioner Nancy Adams, R-Center, said.

In traditional U.S. Treasury bonds, the hospital sale money generates closer to $1 million per year annually. Since the sale in 2007, the proceeds have netted a total of approximately $11.6 million in interest.

The Council, for its part, has discussed the use of hospital interest to fund the basic functions of county government, as there is reportedly a $5 million hole in the 2014 General Fund.

Representatives from Hall Render Killian Heath & Lyman will be on hand at Wednesday’s meeting to discuss their memorandum on options for the investment of the hospital principal.

In that memorandum, Hall Render makes note of three options that would likely bring additional benefit to the county.

The first, and preferred, option would be the creation of a county-controlled non-profit corporation, which would establish its own endowment fund. That endowment would, by resolution, allow the council final say over how the income would be used, including any distribution to the General Fund.

Under this option, the county could award grants to non-profit organizations like Opportunity Enterprises, the Porter County Council on Aging, and the Family and Youth Services Bureau.

Investing the funds in the Porter County Community Foundation would be a second option, the memorandum states. This could be advantageous because the County would not have to go through the time and expense of obtaining tax-exempt status to create its own foundation.

While the council would have control over how the money from the endowment is spent, it would have limited control on how the endowment is invested.

The third option would be the investment of the funds in Indiana Municipal Securities, which would earn a higher rate of return while encouraging economic development, the memorandum said.

Other options include appropriating money to the Porter County Redevelopment Commission, using the funds to support economic development projects, and persuading the Indiana State Legislature to form a bond bank for the county.

Under Chapter 3.07 of the Porter County Code, the unanimous support of both the Commissioners and the Council is needed to spend or invest the sale proceeds.

 

Posted 3/10/2014