Porter County weighs where to put millions from hospital sale
BY AMY LAVALLEY Post-Tribune correspondent February 1, 2014 11:20PM
Exterior of Porter Memorial Hospital in Valparaiso, Monday, June 5. Post-Tribune Photo Lisa Schreiber
Updated: March 3, 2014 5:43PM
VALPARAISO — Between municipal bonds and other investments, a sizable chunk of Porter County’s $159 million in proceeds from the sale of the county hospital are tied up, but those funds will be rolling back to the county in the coming months.
The amount on hand is critical as the County Council and the Board of Commissioners decide how to invest a large portion of the proceeds — possibly $100 million — in the coming weeks.
“Roughly $41.3 million is available right now as cash that something can be done with,” Treasurer Mike Bucko said Friday.
He’s invested the money in agency notes, certificates of deposit and municipal bonds, including to the Munster parks, the Valparaiso schools, and the city of Hammond, among others.
The available amount jumps to $67.4 million by April 30, and almost $117.5 million by year’s end, if the county doesn’t invest anything that matures this year, Bucko said.
And that’s not likely. The county’s board of finance, composed of Bucko and the Board of Commissioners, agreed on Wednesday to hold off on any new investments.
“We made a motion for a moratorium on all investments until some sort of decision is made by the commissioners and the council on how to proceed,” he said.
Council President Dan Whitten, D-At-large, said he expected Bucko to invest the money to get the best return under current investment restrictions for municipalities.
“If he had kept it all unencumbered as ‘mattress money,’ we would have gotten no return,” he said.
The commissioners and council, along with representatives from the Porter County Community Foundation and the consultants who prepared a report on the investment options, will meet March 12 to discuss how best to invest the hospital proceeds.
County officials have said they want to generate a higher rate of return on the money to offset dropping revenue. The county faces a $5.3 million deficit this year, and could face an almost $8 million shortfall next year.
A decision on the proceeds requires unanimous votes by the council and the commissioners.
Options outlined by the consultants, from the Indianapolis law firm Hall, Render, Killian, Heath and Lyman, include the county creating its own non-for-profit community foundation; using the Porter County Community Foundation, as county officials have already discussed; and/or investing in Indiana municipal securities.
“We can assign the bonds and such to whatever investment strategy we opt for,” Whitten said, adding any investment strategy wouldn’t reap benefits for the county until next year, because of the time it takes to invest the money and see a return. “It will all work out.”
Commissioners and the council are already weighing what the best option might be, though commissioner John Evans, R-North, said the consultants’ report doesn’t have any suggestions that haven’t been offered before. Officials started talking in June about investing the proceeds with the Porter County Community Foundation.
“The commissioners are committed to working with the council to find the best investment option, as we were last year and the year before,” Evans said.
Councilwoman Karen Conover-R-3rd District, said she has a lot of faith in the community foundation, though given how big the investment decision is, elected officials must carefully weigh all the options.
“Everything boils down to dollars and cents,” she said, adding the county faces legal fees and other costs if it sets up its own foundation, though she is not opposed to putting the money in the community foundation as well as a county start-up.
Councilman Jim Biggs, R-1st District, said he doesn’t think there’s “a single best option” for an investment strategy.
“I do like the option of making some of the money available to local municipalities in the short term as low-interest loans for improving infrastructure and for economic development,” he said, adding the money belongs to the community.
He is concerned that investing $100 million will not generate enough money to offset the county’s financial concerns, even with keeping an eye on spending. “I just hope all 10 of us keep in mind, there is no such thing as the perfect answer.”