Porter County councilman frets over offer to purchase Lake County bonds
By Amy Lavalley Post-Tribune correspondent October 23, 2012 7:56PM
Dan Whitten. | Provided Photo~Sun-Times Media
Updated: November 25, 2012 11:40AM
VALPARAISO — Porter County Council President Dan Whitten, D-At-large, said during Tuesday’s meeting that he has “great concerns” about an offer by Treasurer Mike Bucko to buy $15.5 million in municipal bonds to help Lake County meet its budget.
Whitten said he’s received several emails and calls “of an angry nature” about Bucko’s offer, which came last week. The money to purchase the bonds would come from the proceeds of the sale of the county hospital and, while Bucko has made several similar investments, including to the city of Hammond and several area school corporations, Whitten is concerned about Lake County’s ability to repay the money.
Bucko is entrusted with the authority to invest the county’s funds, a function of his office and not the council, Whitten said.
“Personally, I have great concerns about lending to Lake County. I’m not in favor of that,” he said.
He does not want to encourage Lake County’s deficit spending, and noted that county’s commissioners split on their vote to sell the bonds to make up a shortfall in its 2013 budget.
Whitten is concerned about repayment of the loan, especially because some Lake County municipalities, including Gary and East Chicago, have had trouble meeting their financial obligations to the Regional Development Authority.
“That gives me a great deal of pause,” he said.
Bucko, who was not at the meeting, said last week that the state sets stringent guidelines for the parties involved before such investments can be made, and the municipality on the receiving end of the deal must not have defaulted on any loans in 20 years.
Whitten said he knows Bucko is doing what he can to investigate the investment before it’s made, but “I want the treasurer here to make the public aware we don’t control investments.”
The meeting overall was routine, as the council worked its way through an assortment of transfers and additional appropriations with unanimous votes. The mood was vastly different from the Oct. 15 meeting, when the council approved the county’s budget in a tense 4-3 vote.
Despite the consternation over the budget, Whitten said the next council, which will be revamped by the election, would fund it.
“They’re going to be tasked with making the budget run,” he said, adding later that whether or not council members agree on the budget, they have to move forward.
In the version of the budget that was voted down, Board of Commissioners President John Evans, R-North, offered the council $2.5 million in county economic development income tax funds for each of the next four years, the maximum amount of time allowed by state law.
While Evans withdrew the offer when that version of the budget didn’t pass, Whitten and Councilman Jim Biggs, R-1st District, agreed that the commissioners should be invited to come before the council to discuss a long-term commitment of CEDIT funds for the county’s needs.
A recent financial evaluation of the county by H.J. Umbaugh and Associates said the county must step back from its reliance on property taxes, which are being hit by tax caps, and depend more on CEDIT funds.