Porter County eyes buying Lake County debt
By Amy Lavalley Post-Tribune correspondent October 18, 2012 2:58PM
Bucko, Mike 2006 Office Sought: Porter County Council 4th District Name: Mike Bucko Party: Democrat Political Experience: 12 years Porter County Council at Large 1993-2000 Porter Township Board (President) 2003 & 2006 Northwest Indiana Regional Planning Commission 1993-1999 National Association of Regional Councils 6th District Minn., Wis., Ill., Ind. 1994-1998 Porter County Planning Commission 1993-94 2000-04 Occupation: Consumer & Community Development Northwestern Indiana Telephone Co. & NetNITCO Wireless Broadband
Updated: November 20, 2012 10:58AM
Porter County Treasurer Mike Bucko said Thursday his talks with the Lake County Board of Commissioners about purchasing that county’s municipal debt by way of bonds are preliminary, and only would come to fruition if there’s a benefit to Porter County.
“The Porter County Treasurer’s Office is investigating the possibility of buying municipal debt. That’s what it is,” he said, adding his office has made similar purchases, as a way of investing the $160 million in proceeds from the sale of the county hospital, for the city of Hammond and several school corporations, including Crown Point. “The purchase of municipal debt is part of Porter County’s investment policy.”
Bucko is allowed to make such investments by state statute, he said, and the Porter County Council gave him the authority over the summer to stretch those bond issues to five years.
The Lake County bond issue would be $15.5 million; the County Council there gave commissioners approval to go forward with the process of selling bonds to shore up a budget shortfall for 2013.
The transaction, Bucko said, would be done through a securities firm and would have to meet stringent guidelines from the state. From Porter County’s perspective, such investments yield higher interest rates than other options.
“The earnings that we can have are over what is traditionally available for county investments,” he said. “It is about three times better earnings than are out there with bonds, money markets, CDs, and those things.”
The interest rate on certificates of deposit, for example, is less than 1 percent for a two-year obligation, Bucko added. The sale of the hospital has generated about $11 million in interest.
Lake County is requesting a five-year bond issue and must have a financial plan to repay the bonds, if the deal were to go forward. Benefits to Lake County, Bucko said, include lower administrative costs for the bond issue, and the fact that it would not count against the county in terms of lending ability.
Ultimately, if Bucko doesn’t think the transaction will benefit Porter County, he won’t move forward with it.
“There is a great deal of discussion that has yet to occur,” he said.