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Porter County mulls options for hospital sale money

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Updated: April 14, 2014 11:21AM



VALPARAISO — At a joint meeting Wednesday, the Porter County Council and the Board of Commissioners focused on how best to give some of the $159 million from the sale of the county hospital to a community foundation.

The choices include setting up a new foundation just for the new county hospital; using an existing foundation, such as the Porter County Community Foundation; or using a hybrid, where the money goes to a new entity that’s part of an existing foundation, said Jerimi Ullom and Doug Long, attorneys with an Indianapolis firm that issued a report in January outlining options for investing the money.

Any decision on the use of the funds requires a unanimous vote by the council and the commissioners, and that may pose the biggest challenge. Council President Dan Whitten, D-At-Large, said with “10 people with very different views” there was no way the group could get everything it wants.

“With that in mind, we have to try to find a consensus and come up with something we can all live with that works for the citizens of Porter County,” he said. “We need to reach deep to find the cooperation to work with each other.”

Porter County sold its former hospital in 2007 to a private company, and the building was torn down and the land sold to Valparaiso University for an undisclosed figure. The new county hospital opened in August 2012.

The council and commissioners on Wednesday peppered the attorneys with questions about setting up a foundation board, what happens to the money if the foundation dissolves and how an agreement should be structured.

The county will have $117 million of the money available by the end of the year, if the money isn’t reinvested as it rolls back to the county, said county Treasurer Mike Bucko.

“If you were us, what would you lean to, of the three choices?” Councilman Jim Biggs, R-1st District, asked the lawyers.

It’s about governance, Ullom said, adding that it was hard to answer the question on behalf of the elected officials.

The attorneys said a new foundation would require elected officials to establish a board, with clear guidelines to avoid any conflicts of interest. Using an existing foundation avoids that challenge but also yields some of the control of the foundation, they said.

“You have a fiduciary duty. You must be confident of the capability and character of those people (in charge of the existing foundation),” Long said.

While getting a letter of approval for a new foundation from the Internal Revenue Service can take six to 12 months, Long said that once the foundation is set up it could begin investing money immediately.

A contract could specify that if the foundation does not receive a favorable letter from the IRS within 12 months, “all bets are off,” he said.

The council agreed to set a date to receive requests for proposals from community foundations at its April meeting.



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