Chesterton Tribune

 

 

County to form committee to advance endowment fund

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By JEFF SCHULTZ

A committee made up of citizens will be named in the next few weeks as the next step in forming a community endowment foundation to invest some of the principal fund from the sale of the county owned Porter Memorial Hospital. It is hoped the revenue generated can help fill Porter County Government’s budget gaps.

The idea of a committee was hatched by the County Board of Commissioners and the County Council at the end of a joint meeting Monday after discussions with Indianapolis attorney Brian Burdick of Barnes & Thornburg LLP on what may happen in the Indiana General Assembly next year regarding Indiana counties’ options in investing their revenue portfolios.

Commissioner President John Evans, R-North, said changes in legislation could be another method in addition to the community foundation to capture more interest on the hospital sale.

Burdick serves as legal counsel to the Indiana Association of County Treasurers and the Indiana Bond Bank and was instrumental in the state’s investment of Major Moves money, from the sale of the Indiana Toll Road.

Since the County sold the hospital for $160 million, Evans invited Burdick to inform his colleagues what the chances are that such legislation will be enacted.

Burdick said there are a number of other counties which have sold large assets and are looking toward investment as a way to offset the effect of the state imposed tax caps and the issue has come to the attention of state lawmakers.

“In order to make more money, you need some flexibility in your investment options,” Burdick said.

Currently, county treasurers don’t have many options for public investment that go beyond putting money in a coffee can and burying it in backyards, he said, but he advised county officials to lobby lawmakers to draft laws that would give them the same maximum investment parameters as state officials have for their capital, such as the Major Moves money. The County should be able to maintain its power over spending of those dollars, he added.

Burdick said the state is allowed to invest in many ways other than stocks.

Council member Robert Poparad, D-at large, asked Burdick “what are the odds” the legislators will pass such measures next year.

“If you don’t overreach, I think it’s pretty good,” Burdick responded. He would recommend controls be put in place to protect the public’s money, such as requiring working with a knowledgeable investor.

Sitting in the audience, local State Rep. Ed Soliday, R-Valparaiso, said that it won’t be known for certain what legislation will be coming from the Statehouse until the session gets underway, but from the conversations he’s had with others downstate over the past few months, “there is a lot of energy to do this” he said.

“I think this is good legislation, good for the state, good for you; but just because it looks good doesn’t mean it’s for certain,” said Soliday.

Council member Jim Biggs, R-1st, said he had doubts going into the meeting about the chances the state would expand investment options “because of the risk involved” but he felt more optimistic after hearing Burdick’s and Soliday’s comments. Councilman Jeremy Rivas, D-2nd, said he too was glad to hear Porter is not the only county trying to get lawmakers to work on their behalf.

Biggs said he felt the $5,000 a month that the Commissioners agreed to pay Burdick’s firm for each month the Indiana General Assembly is in session may be “money well spent” on the County’s part.

As for the Foundation, which both the Council and Commissioners supported creating, Council president Dan Whitten, D-at large, said he believes the County will be able to start putting as much money as they have available from the principal into the endowment fund.

County Treasurer Mike Bucko, who is retiring later this week, said that at the end of July the county should have $68 million available in cash on hand from the hospital sale principal that is not tied up in investments, and another $40 million or so by the end of this year. Bucko also said that the County is currently making about $1 million a year in interest off the hospital sale proceeds.

Council member Karen Conover, R-3rd, said that when a county sells an asset such as the hospital, the principal should be held on to and not used for operational expenses. The County has used some of the interest in the last year or two to shore up troubled funds.

Council attorney Scott McClure said he is working on an ordinance to set up the county Foundation and would need to know from the Council and Commissioners who would be appointed to a board of the foundation.

Whitten talked with the Commissioners last week and suggested there be an odd number of members, with appointments made by the Commissioners or the Council, and one by the Treasurer. Others on the Council felt that the appointments could be made jointly, as the County makes its appointment to the Regional Development Authority, and that one board could veto the other.

Biggs said minimum requirements should be written up and included before the board is formed. Poparad said the appointments should cut across party lines, while Councilman Jim Polarek, R-4th, said he would like all areas of the County represented.

In the end, it was decided among the boards that a committee be set up to explore what qualifications are needed to be appointed to the Foundation board and to advise the Council and Commissioners on what may be included in the investment policy.

The commissioners will announce that they are seeking applications for the committee at their next regular meeting on Tuesday, Aug. 5.

 

 

Posted 7/22/2014